Document:

SALES AND PURCHASE AGREEMENT

Table of Contents

Exhibit 10.2

DATED: DECEMBER 19, 2003

THALES UNDERWATER SYSTEMS PTY LTD (1)

SERCEL AUSTRALIA PTY LTD (2)

SALE AND PURCHASE AGREEMENT

relating to the

MARINE SEISMIC BUSINESS

of

THALES UNDERWATER SYSTEMS PTY LTD

 

INDEX

	 	 	 	 	 	 	 	 	 
	CLAUSE
	 	 	 	Page

	 	1	 	 	Definitions and Interpretation
	 	 	1	 
	 	2	 	 	Agreement to Sell and Purchase
	 	 	10	 
	 	3	 	 	Purchase Price
	 	 	13	 
	 	4	 	 	Taxes
	 	 	13	 
	 	5	 	 	Completion
	 	 	13	 
	 	6	 	 	Business Contracts
	 	 	15	 
	 	7	 	 	Transferred Employees
	 	 	16	 
	 	8	 	 	Superannuation
	 	 	18	 
	 	9	 	 	Receivables
	 	 	18	 
	 	10	 	 	Warranties
	 	 	18	 
	 	11	 	 	Claims
	 	 	19	 
	 	12	 	 	Limitations of Liability
	 	 	23	 
	 	13	 	 	Seller’s Undertakings
	 	 	25	 
	 	14	 	 	Purchaser’s Undertakings
	 	 	27	 
	 	15	 	 	Further Assurances and Assistance
	 	 	28	 
	 	16	 	 	Confidential Information
	 	 	28	 
	 	17	 	 	Costs
	 	 	29	 
	 	18	 	 	Interest on Overdue Amounts
	 	 	29	 
	 	19	 	 	Entire Agreement
	 	 	29	 
	 	20	 	 	Continuing Effect
	 	 	29	 
	 	21	 	 	Severability
	 	 	29	 
	 	22	 	 	Amendments, Waivers and Rights
	 	 	30	 
	 	23	 	 	Assignment
	 	 	30	 
	 	24	 	 	Notices
	 	 	30	 
	 	25	 	 	Counterparts
	 	 	31	 
	 	26	 	 	Law And Settlement of Disputes
	 	 	32	 
	 	27	 	 	Rights of Third Parties
	 	 	32	 
	 	28	 	 	GST
	 	 	32	 
	 	29	 	 	Termination
	 	 	33	 
	 	30	 	 	Execution
	 	 	34	 
	 MIXED CAPITAL COMPANY
	 SALES AND PURCHASE AGREEMENT
	 REVOLVING CREDIT FACILITY AGREEMENT
	 CERTIFICATION
	 CERTIFICATION

 

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SCHEDULES

	 	 	 	 	 
	 	1
	 	Accounts
	 	 
	 	Part
1               – Accounts
	 	 
	 	Part
2               – Accounting Principles
	 	2
	 	Business Intellectual Property
	 	3
	 	Business Contracts and Leaseholds
	 	4
	 	Covered Employees
	 	5
	 	Plant, Fixtures and Fittings and Motor Vehicles
	 	 
	 	Part
1               – Plant, Fixtures and Fittings
	 	 
	 	Part
2               – Motor Vehicles
	 	6
	 	Offer Letters
	 	7
	 	The Property
	 	 
	 	Part
1               – Description of the Property
	 	 
	 	Part
2               – Lease Agreement
	 	8
	 	Employees
	 	 
	 	Part
1               – Relevant Australian Employees
	 	 
	 	Part
2               – Relevant U.K. Employees
	 	 
	 	Part
3               – Company Employees
	 	 
	 	Part
4               – Transferred Australian Employees
	 	 
	 	Part
5               – Transferred U.K. Employees
	 	 
	 	Part
6               – Schedule of certain accrued benefits
	 	9
	 	Seller Intellectual Property
	 	 
	 	Part
1               – Seller Intellectual Property
	 	 
	 	Part
2               – License Agreement
	 	10
	 	Transitional Service Agreement
	 	11
	 	Warranties
	 	 
	 	Part
1               – Seller’s Warranties
	 	 
	 	Part
2               – Purchaser’s Warranties
	 	12
	 	Apportionment of Closing Purchase Price
	 	13
	 	Earnout
	 	14
	 	Instruments of Conveyance
	 	 
	 	Part
1               – Deed of Sale and General Assignment

 

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	 	 	 	Part 2       - Deed of Sale and General Assignment
	 	 	 	Part 3       - Trade Mark Assignment Deed

 

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SALE AND PURCHASE AGREEMENT

DATE: DECEMBER 19, 2003

PARTIES:

	1	 	THALES UNDERWATER SYSTEMS PTY LTD, a company incorporated in New South
Wales, Australia, with registered number ACN073 076 212, whose registered
office is at 274 Victoria Road, Rydalmere, NSW 2116, AUSTRALIA (the
“Seller”); and
	 
	2	 	SERCEL AUSTRALIA PTY LTD, a company incorporated in New South Wales,
Australia, with registered number ACN 107 312 041, whose registered office
is at Level 17, The Chifley Tower, 2 Chifley Square, Sydney, NSW 2000,
AUSTRALIA (the “Purchaser”), acting on its own behalf and on behalf of the
Purchaser’s Designees (as such term is defined below);

BACKGROUND:

	A.	 	The Seller is engaged, inter alia, in the Business (as such term, and
such other capitalized terms as are used without definition in these
recitals, are defined in clause 1.1 below) both directly and through the
Company.
	 
	B.	 	The Purchaser wishes to (i) purchase the Assets and the Shares, and (ii)
acquire the right to use all other properties, assets and rights of the
Seller’s Group which are used or held for use in connection with the
Business, such that, on the terms herein set forth, the Purchaser will, on
and as of the Completion Date, acquire, as a going concern, ownership of
or the right to use the properties, assets and rights of the Seller’s
Group which are used or held for use in connection with the conduct of the
Business as currently conducted, and, in such connection, is willing, on
and as of the Completion Date, to assume responsibility and liability for
the Assumed Liabilities, provided that the Seller retains responsibility
and liability for the Excluded Liabilities.
	 
	C.	 	In furtherance of the foregoing, it is contemplated that on the
Completion Date, the Seller and the Purchaser will enter, inter alia, into
a Lease Agreement in respect of the Property, a Licence Agreement in
respect of the Seller Intellectual Property and a Transitional Services
Agreement.

TERMS AGREED:

	1	 	DEFINITIONS AND INTERPRETATION
	 
	1.1	 	In this Agreement, the following words and expressions shall have the
following meanings:

	 	“Accounts” 	 	the unaudited management accounts of the Business comprising a
pro forma balance sheet as at November 30, 2003 and a pro forma
profit and loss account for the period which commenced on January 1,
2003 and ended on November 30, 2003, a copy of which is attached as
Part 1 of Schedule 1;

 

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	 	“Accounting Principles” 	 	the Thales accounting policies and principles
applied consistently to the audited annual financial statements of
the Seller and described in Part 2 of Schedule 1;
	 
	 	“Advance Receipts” 	 	all sums received by or on behalf of the Seller prior
to the Completion Date in respect of the Business but relating or
attributable to or paid in respect of any period on or after the
Completion Date;
	 
	 	“Assets” 	 	the assets of the Business described in clause 2.1;
	 
	 	“Assumed Liabilities”	 	the obligations, liabilities and duties of the
Seller relating to the Business agreed to be assumed by the
Purchaser under this Agreement, as described in clause 2.5;
	 
	 	“Balance Sheet” 	 	the pro forma balance sheet of the Business as at
November 30, 2003 included in the Accounts;
	 
	 	“Business” 	 	such part of the business of the Seller’s Group as is specific
to civilian marine seismic oil and gas exploration equipment and
systems, including the researching into, development, design,
manufacture, marketing, sale and maintenance of the said equipment
and systems at the Completion Date, excluding any defence, naval,
security and military business or application of the Seller’s Group;
	 
	 	“Business Contracts” 	 	the Customer Contracts, the Supplier Contracts, the
Maintenance Contracts, the Equipment Contracts, the Computer
Agreements, the Intellectual Property Contracts, the Leasehold
Contracts and all other Contracts (including equipment and machinery
leases, service agreements, non-compete agreements and options to
purchase or sell any properties, assets or rights) entered into by
the Seller exclusively in connection with the Business to the extent
that they remain to be performed or remain in force at the
Completion Date (but specifically excluding any loan agreements,
guarantees or similar financing arrangements (other than the
customer and Equipment Contracts)), including the Contracts so
identified in Schedule 3;
	 
	 	“Business Day” 	 	any day other than a Saturday or a Sunday or a day which
is a bank or public holiday in New South Wales, Australia, and/or
France, and/or the United States;

 

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	 	“Business Intellectual
Property” 	 	all Intellectual Property owned by the Seller and used or held
for use exclusively in connection with the Business at the
Completion Date, including the Intellectual Property specified in
Schedule 2;
	 
	 	“Business Name(s)” 	 	the names THOMSON MARCONI, THALES, THALES UNDERWATER
SYSTEMS, THALES UNDERWATER SYSTEMS PTY LTD, THALES UNDERWATER
SYSTEMS SEISMIC Inc. or any name including the word THALES,
GEC-MARCONI, THOMSON, MARCONI or TUS or any colourable imitation of
it;
	 
	 	“Company” 	 	THALES UNDERWATER SYSTEMS SEISMIC Inc., a company incorporated
under the laws of Delaware, having its place of business in Houston,
Texas, USA, wholly owned by the Seller;
	 
	 	“Completion” 	 	completion of the sale and purchase of the Assets and the
Shares pursuant to and in accordance with the terms of this
Agreement, as described in clause 5;
	 
	 	“Completion Date” 	 	the date on which Completion actually occurs;
	 
	 	“Computer Systems
Agreements” 	 	all arrangements, agreements and other Contracts (including
without limitation, licences of software) entered into by the Seller
exclusively in connection with the Business pursuant to which any
third party provides any element of systems installed on the
Computers to the Business (including all arrangements relating to
the provision of maintenance and support, security, disaster
recovery, facilities management, bureau and on-line services to the
Business) to the extent that they remain to be performed or remain
in force at the Completion Date, including the Contracts so
identified in Schedule 3;
	 
	 	“Computers”	 	all computer hardware owned or used by the Seller in the
Business at the Completion Date;
	 
	 	“Contract” 	 	any contract, agreement, obligation, promise, commitment, note
or other undertaking in writing;
	 
	 	“Covered Employees” 	 	the employees of the Seller’s Group listed in
Schedule 4;

 

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	 	“Customer Contracts” 	 	all engagements, orders or other Contracts entered
into by the Seller exclusively in connection with the Business for
the sale or supply of goods or equipment or the provision of
services by the Seller to third parties to the extent that they
remain to be performed or remain in force at the Completion Date,
including the Contracts so identified in Schedule 3;
	 
	 	“Disclosed Information” 	 	information fairly disclosed to the Purchaser in
reasonable detail in the data room prepared by the Seller and
contained in the disclosure binders signed for identification
purposes by the Seller and the Purchaser on the date hereof;
	 
	 	“Equipment Contracts” 	 	all hire purchase agreements, leasing agreements,
lease purchase agreements, credit sale agreement and agreements or
other Contracts for conditional sale or sale by instalments entered
into by the Seller exclusively in connection with the Business and
to which any of the Assets are subject as at the Completion Date,
including the Contracts so identified in Schedule 3;
	 
	 	“Fixed Assets” 	 	all tangible assets included in the Plant and the Fixtures
and Fittings;
	 
	 	“Fixtures and Fittings” 	 	all fixtures (other than the Plant) and all
fittings, furniture, utensils, templates, implements, chattels and
equipment wherever situated owned by the Seller and used or held for
use exclusively in connection with the Business at the Completion
Date, including the items listed in Part 1 of Schedule 5;
	 
	 	“Goodwill” 	 	the goodwill, custom and connection of the Seller in relation
to the Business, together with the exclusive right for the Purchaser
and its successors and assigns to carry on the Business and
respectively to represent themselves as carrying on the Business in
succession to the Seller but excluding the Business Names and the
Seller Intellectual Property;
	 
	 	“Governmental Authorization” 	 	any approval, consent, permit, ruling,
waiver, exemption, concession or other authorization issued or
granted by a governmental authority;
	 
	 	“Group” 	 	the Purchaser’s Group and/or the Seller’s Group, as the context
requires;

 

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	 	“Intellectual Property” 	 	all rights of industrial or intellectual
property, including:

	 	 	 	a)	patents, trade marks, service
marks, trade names, registered
designs and copyrights and
applications for any of the above
and the right to apply for these or
similar rights in any country in any
part of the world; and
	 
	 	 	 	b)	rights in inventions, discoveries,
improvements, processes, formulae,
trade secrets, technology and
know-how (whether patentable or
not), data, drawings, designs,
specifications, manufacturing files
and technical information of all
kinds;

	 	“Intellectual Property Contracts” 	 	all Contracts entered into by the
Seller exclusively in connection with the Business in relation to
the licensing or use of Intellectual Property to the extent that
they remain to be performed or remain in force at the Completion
Date, including the Contracts so identified in Schedule 3;;
	 
	 	“Judgement” 	 	any award, decision, injunction, judgement, order or ruling
entered, issued, made or rendered by any court or other governmental
authority;
	 
	 	“Law” 	 	any law, statute, regulation, rule, ordinance, principle of
common law, order, judgement or decree of any governmental
authority;
	 
	 	“Lease Agreement” 	 	an agreement in the form attached as Part 2 of Schedule
7 providing for the terms and conditions upon which the Seller shall
let the Property to the Purchaser at Completion;
	 
	 	“Leasehold Contracts” 	 	all Contracts pursuant to which the Seller has any
leasehold interest in real property and entered into by the Seller
exclusively in connection with the Business to the extent that they
remain to be performed or remain in force at the Completion Date,
including the Contract listed in Schedule 3;
	 
	 	“Leaseholds” 	 	leasehold interests in any property held by the Seller
pursuant to the Leasehold Contracts;
	 
	 	“License Agreement” 	 	an agreement in the form attached as Part 2 of
Schedule 9 providing for the terms and conditions upon which the
Seller (on its own behalf and on behalf of any other relevant member
of the Seller’s Group) shall license the

 

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	 	 	 	Seller Intellectual Property to the Purchaser at Completion;
	 
	 	“Licences and Permits” 	 	all Governmental Authorizations that are held by
the Seller and specifically relate to the conduct of the Business;
	 
	 	“Maintenance Contracts” 	 	all Contracts entered into by the Seller
exclusively in connection with the Business for the servicing,
maintenance or repair of goods and equipment sold or supplied by the
Seller prior to the Completion Date or of any of the Assets to the
extent that they remain to be performed or remain in force at the
Completion Date, including the Contracts so identified in Schedule 3;
	 
	 	“Motor Vehicles” 	 	the vehicles owned by the Seller and used exclusively in
connection with the Business, as listed in Part 2 of Schedule 5;
	 
	 	“Offer Letters” 	 	the form of employment offer made by the Purchaser and/or
it Designees before and in view of Completion to the Relevant
Employees attached as Schedule 6;
	 
	 	“Plant” 	 	all items of fixed plant, equipment and machinery, wherever
situated, owned by the Seller and used or held for use exclusively
in connection with the Business at the Completion Date, including
those items listed in Schedule 5;
	 
	 	“Prepayments” 	 	all amounts paid on or prior to the Completion Date by or
on behalf of the Seller so far as the same relate to liabilities and
obligations in connection with the carrying on of the Business in
its ordinary course in respect of any period after the Completion
Date (but excluding, for the avoidance of doubt, liabilities in
respect of Taxation);
	 
	 	“Property” 	 	the premises owned by the Seller and occupied by and used for
the purposes of the Business to be let to the Purchaser at
Completion, particulars of which are set out in Part 1 of Schedule 7;
	 
	 	“Purchaser’s Designees” 	 	(x) Sercel Inc., an Oklahoma corporation, in
respect of the Shares, and (y) Sercel England Ltd., an English
company, in respect of the assets and rights included in the Assets
which are held by TUS UK;
	 
	 	“Purchaser’s Group” 	 	the Purchaser, its holding company and all companies
and undertakings which now or from

 

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	 	 	 	time to time are subsidiaries of the
Purchaser or of any such holding company;
	 
	 	“Receivables” 	 	all trade and other debts owing to or accrued in favour of
the Seller as at the Completion Date in respect of the Business
(whether or not then invoiced and whether or not then due and
payable) together with the benefit of any security in relation to
such debts;
	 
	 	“Records” 	 	all lists of customers and suppliers, all manufacturing files,
all operating manuals and all books and records relating exclusively
to the Business or to any of the Assets (including all files and
correspondence with governmental authorities or other third parties
related to the Business or any of the Assets) and all sales
literature which is used, or capable of being used, exclusively in
connection with the Business as at the Completion Date;
	 
	 	“Relevant Australian Employees” 	 	the employees of the Seller employed in
Australia in connection with the Business on the date hereof and
listed in Schedule 8;
	 
	 	“Relevant Employees”	 	the Relevant Australian Employees and the Relevant
U.K. Employees, collectively;
	 
	 	“Relevant U.K. Employees” 	 	the employees of TUS UK employed in the United
Kingdom in connection with the Business on the date hereof and
listed in Schedule 8;
	 
	 	“Security Interest” 	 	any encumbrance, mortgage, charge, assignment for the
purpose of security, pledge, lien or any other security interest of
any kind (other than liens arising or incurred in the ordinary
course of trading including provisions constituting reservation or
retention of title clauses) and any agreement, whether conditional
or otherwise, to create any of the foregoing;
	 
	 	“Seller’s Funds” 	 	the complying superannuation funds operated by third
parties in Australia which provide accumulation benefits only in
respect of the Relevant Australian Employees and to which the Seller
contributes in respect of the Relevant Australian Employees
(including the Superannuation Trust of Australia);
	 
	 	“Seller’s Group” 	 	the Seller, its holding companies and all companies and
undertakings which now or from time to time are subsidiaries of the
Seller or of any such holding company (excluding, where the context
so requires, the Company);

 

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	 	“Seller Intellectual
Property” 	 	all Intellectual Property (other than the Business Intellectual
Property) owned by the Seller or any other member of the Seller’s
Group and used or held for use in the Business at the Completion
Date but not exclusively, as listed in Schedule 9, (but excluding
any positioning and steering device for streamer (BIRDs and BIRDs 2D
Intellectual Property));
	 
	 	“Shares” 	 	one thousand (1,000) shares, par value U.S.$ 1.00 per share, in
the share capital of the Company;
	 
	 	“Stock” 	 	all the stock in trade, finished stocks, partly finished stocks,
work in progress, raw materials, stores and components of the Seller
in connection with the Business at the Completion Date (including
any rights under warranties given by suppliers);
	 
	 	“Supplier Contracts” 	 	all engagements, orders and other Contracts entered
into by the Seller in connection with the Business for the sale or
supply of goods or equipment or the provision of services to the
Seller by third parties in connection with the Business to the
extent they remain to be performed or remain in force at the
Completion Date, including the Contracts so identified in Schedule
3;
	 
	 	“Tax” or “Taxation” 	 	all taxes, levies, duties, imports, charges
and withholdings of any nature whatsoever or wheresoever imposed and
all penalties, charges and interest relating thereto;
	 
	 	“Transitional Services Agreement” 	 	an agreement in the form attached to this document as Schedule
10 providing for the terms and conditions of the support services to
be supplied to the Purchaser in relation to the Business by the
Seller (or the relevant member of the Seller’s Group) further to
Completion;
	 
	 	“TUS UK” 	 	Thales Underwater Systems Ltd., a company organized under
the laws of England and Wales and a member of the Seller’s Group;
and
	 
	 	“Warranties” 	 	the warranties set out in Schedule 11 and “Warranty” shall
be construed accordingly.

 

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	1.2	 	Each of the following additional terms has the meaning specified therefor
in the clause indicated below opposite such term:

	 	 	 	 	 
	Term
	 	Clause

	Claim Notice
	 	 	11.3.1	 
	Closing Purchase Price
	 	 	3.1	 
	Cumulative Threshold Amount
	 	 	12.3.2	 
	Direct Claim
	 	 	11.3.1	 
	Direct Claim Review Period
	 	 	11.3.4	 
	Earnout
	 	 	3.4	 
	Excluded Assets
	 	 	2.2	 
	Excluded Liabilities
	 	 	2.5	 
	GST
	 	 	28	 
	GST Act
	 	 	28	 
	Indemnified Party
	 	 	11.3	 
	Indemnifying Party
	 	 	11.3	 
	Individual Claim Threshold Amount
	 	 	12.3.1	 
	Losses
	 	 	11.1	 
	Offers
	 	 	7.1	 
	Maximum Purchaser Warranty Amount
	 	 	12.1	 
	Maximum Seller Warranty Amount
	 	 	12.1	 
	Purchaser’s Warranties
	 	 	10.2	 
	Reduction Amount
	 	 	7.4	 
	relevant claim
	 	 	12.2	 
	second batch
	 	 	2.2	 
	Seller’s Warranties
	 	 	10.1	 
	Settlement Offer
	 	 	11.3.3.4	 
	Thales Undertaking
	 	 	5.2.11	 
	third batch
	 	 	2.1	 
	Third Party
	 	 	11.3.1	 
	Third Party Claim
	 	 	11.3.1	 
	Third Party Claim Review Period
	 	 	11.3.3	 
	Transferred Australian Employees
	 	 	7.2	 
	Transferred Employee
	 	 	7.2	 
	Transferred U.K. Employees
	 	 	7.2	 
	Veritas/Viking Agreement
	 	 	2.1	 

	1.3	 	In this Agreement, unless the context requires otherwise, any reference to:

	 	1.3.1	 	a “party” or “the parties” is to a party or the parties (as
the case may be) to this Agreement;
	 
	 	1.3.2	 	a clause or Schedule is to a clause of or schedule to this
Agreement and any reference made in a Schedule to a Part or a
Paragraph is to a part or paragraph of that Schedule;
	 
	 	1.3.3	 	“this Agreement” includes the Schedules which form part of
this Agreement for all purposes;
	 
	 	1.3.4	 	a statute or statutory provision shall, unless otherwise
expressly provided, be construed as references to such provisions as
respectively amended, consolidated, extended or re-enacted as at the
date of this Agreement (as the context requires) and to any orders,
regulations, instruments or other subordinate legislation made under
the relevant statute;

 

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	 	1.3.5	 	words denoting any gender shall include the other genders,
references to the singular include the plural (and vice versa) and
references to persons include firms, corporations and unincorporated
associations;
	 
	 	1.3.6	 	the words “include”, “includes” and “including” shall be
deemed to be followed by the phrase “without limitation”; and
	 
	 	1.3.7	 	the word “liabilities” shall be deemed to be followed by the
phrase “(whether known or unknown, accrued, absolute, contingent or
otherwise)”.

	1.4	 	Any statement qualified by the expression “to the best of the knowledge,
information and belief of the Seller” or “so far as the Seller is aware”
or any similar expression shall be construed as being limited to matters
of which the Covered Employees have knowledge, having made all usual and
reasonable enquiries, and shall not have imported to it any wider meaning
or interpretation.
	 
	1.5	 	The words “holding company” and “subsidiary” have the same meanings as in
the Corporations Act 2001 (Cth).
	 
	1.6	 	The index and headings are included for convenience only and shall not
affect the interpretation or construction of this Agreement.
	 
	1.7	 	When calculating the period of time within which or following which any
act is to be done or step taken, the date which is the reference day in
calculating such period shall be excluded and if the last day of such
period is not a Business Day, the period shall end on the next day which
is a Business Day.
	 
	1.8	 	In the event that any provision of the Lease Agreement, the License
Agreement or the Transitional Services Agreement is in direct conflict and
incompatible with a provision of clauses 1 through 30 of this Agreement
(including the Schedules referenced therein (other than Schedule 7 (Part
2), Schedule 9 (Part 2) and Schedule 10)), the provision of this Agreement
(including such Schedules other than Schedule 7 (Part 2), Schedule 9 (Part
2) and Schedule 10) shall prevail.

	2	 	AGREEMENT TO SELL AND PURCHASE
	 
	2.1	 	Subject to the terms of this Agreement, at Completion, the Seller shall
sell (or procure the sale) with full title guarantee and transfer (or
procure the transfer), and the Purchaser (or the Purchaser’s Designees, in
respect of the Shares and the Assets located in the UK only) shall
purchase, free from all Security Interests (x) the Shares, and (y) all of
the right, title and interest of the Seller (or TUS UK in the case of the
Assets located in the U.K.) in the following properties, rights and assets
(the “Assets”):

	 	2.1.1	 	the Goodwill;
	 
	 	2.1.2	 	the Business Contracts;
	 
	 	2.1.3	 	the Business Intellectual Property;
	 
	 	2.1.4	 	the Stock;
	 
	 	2.1.5	 	the Records;

 

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	 	2.1.6	 	the Computers;
	 
	 	2.1.7	 	the Motor Vehicles;

	 	2.1.8	 	the Receivables and all cheques, bills, notes and securities
relating to the Receivables;
	 
	 	2.1.9	 	the Plant and the Leaseholds;
	 
	 	2.1.10	 	the Fixtures and Fittings;
	 
	 	2.1.11	 	the Licences and Permits (to the extent transferable); and
	 
	 	2.1.12	 	any other properties, assets or rights of any type or nature
(tangible or intangible) used or held for use exclusively in
connection with the Business at the Completion Date (excluding any
assets specified in clauses 2.2.1 through 2.2.7);

	 	 	(it being agreed that notwithstanding any other provision of this
Agreement: (x) the Assets shall be deemed to include all trade
receivables, Receivables and Advance Receipts related to the delivery of
the third batch of products amounting to USD $ 2,809,000 (the “third
batch”) under the Veritas/Viking Agreement referenced in Schedule 3 (the
“Veritas/Viking Agreement”); and (y) the Assumed Liabilities shall, for
the purposes of clause 2.5, be deemed to include any and all obligations,
liabilities and duties of the Seller under the Veritas/Viking Agreement
in relation to the delivery of the third batch, provided that prior to
Completion, the Seller shall have taken all steps necessary so as to
fulfil the delivery date for the third batch).
	 
	 	 	For the avoidance of doubt, it is acknowledged that none of the services
or leaseholds provided by the Seller’s Group under the Transitional
Services Agreement or the Lease shall be considered to form part of the
Assets.
	 
	2.2	 	There shall be excluded from the sale and purchase subject of this
Agreement and retained by the Seller the following assets (the “Excluded
Assets”):

	 	2.2.1	 	cash in hand (including cash floats held in relation to the
Business at the Completion Date) and cash at bank (whether on
current or deposit account) relating to the Business including
uncleared cheques received on the Completion Date;

	 	2.2.2	 	the Advance Receipts;
	 
	 	2.2.3	 	the benefit of the Prepayments;
	 
	 	2.2.4	 	all the Business Names and the Seller’s Intellectual Property;
	 
	 	2.2.5	 	all assets or rights related directly to “birds” or “birds
2D” (positioning and steering device for streamer);
	 
	 	2.2.6	 	all real property or leasehold interests in any real
property owned or held by the Seller except for the Real Property
Leaseholds;
	 
	 	2.2.7	 	all securities or other interests in any entities (other
than the Shares) owned or held by the Seller; and

 

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	 	2.2.8	 	all other property, rights and assets of the Seller not
specified in clause 2.1;

	 	 	(it being agreed that notwithstanding any other provision of this
Agreement: (x) the Excluded Assets shall be deemed to include all trade
receivables, Receivables and Advance Receipts related to the delivery of
the second batch of products amounting to USD$ 3,301,000 (the “second
batch”) under the Veritas/Viking Agreement, even if the delivery of the
second batch occurs after the Completion Date; and (y) the Excluded
Liabilities shall be deemed to include any and all obligations,
liabilities and duties of the Seller under the Veritas/Viking Agreement
in relation to the delivery of the second batch).
	 
	2.3	 	At Completion, the Property shall be let upon and subject to the terms
and conditions set out or referred to in the Lease Agreement.
	 
	2.4	 	At Completion, the Seller Intellectual Property will be licensed to the
Purchaser upon and subject to the terms and conditions set out or referred
to in the Licence Agreement.
	 
	2.5	 	At Completion, the Purchaser shall be deemed to have assumed
responsibility and liability for the following obligations, liabilities
and duties of the Seller (the “Assumed Liabilities”) and shall pay,
discharge or perform the same when due:

	 	2.5.1	 	any and all obligations, liabilities and duties of the
Seller relating exclusively to the Business and the Assets (i)
existing as of the date of the Balance Sheet, but only if and to the
extent that the same are accrued or reserved for on the Balance
Sheet and remain unpaid and undischarged on the Completion Date; or
(ii) incurred in the ordinary course of business after the date of
the Balance Sheet, to the extent that the same remain unpaid and
undischarged on the Completion Date; except in each case, for: (A)
liabilities for Taxes relating to or arising out of the Business
accruing, or pertaining to any event or time period occurring at or
prior to Completion, (B) liabilities in respect of employees or
employee benefit or pension plans, except to the extent specifically
provided in clause 2.5.3 below with respect to the Transferred
Australian Employees, and (C) any liabilities in respect of money
borrowed or other financial indebtedness (other than pursuant to the
Equipment Contracts) and any intercompany payables owed to other
members of the Seller’s Group which do not represent ordinary course
trade payables;
	 
	 	2.5.2	 	any and all obligations, liabilities and duties of the
Seller arising after the Completion Date under the Business
Contracts identified in Schedule 3; and
	 
	 	2.5.3	 	any and all liabilities of the Seller in respect of
Transferred Australian Employees to the extent specifically provided
in clause 7.6.

	 	 	Notwithstanding any other provision of this Agreement or any
disclosure made to the Purchaser, the Purchaser shall not assume, and the
Seller shall retain responsibility and liability for and shall pay,
discharge or perform when due, any obligations, liabilities or duties of
the Seller relating to (x) the Excluded Assets, or (y) the operation of
the Business or the ownership of the Assets prior to Completion other
than the Assumed Liabilities (all obligations, liabilities and duties of
the Seller other than the Assumed Liabilities are hereinafter referred to
as the “Excluded Liabilities”).

 

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	2.6	 	The sale and purchase of each of the Assets and the Shares shall be
interdependent and completed simultaneously.

	3	 	PURCHASE PRICE
	 
	3.1	 	The aggregate purchase price payable at Completion for the Assets and the
Shares, exclusive of GST, shall be € 21,689,392 (twenty one million six
hundred eighty-nine thousand three hundred ninety-two euro) (the “Closing
Purchase Price”), being the amount equal to the excess of (x) €22,000,000
(twenty-two million euro) over (y) 70% of the Reduction Amount computed in
accordance with Section 7.4.
	 
	3.2	 	The Closing Purchase Price shall be apportioned in accordance with
Schedule 12.
	 
	3.3	 	In addition to the Closing Purchase Price, and subject to the Completion
having occurred, the Seller shall be entitled to receive an earnout
payable in relation to calendar years 2004 and 2005 (the “Earnout”),
determined and paid in accordance with the provisions of Schedule 13, as
additional consideration for the Assets and the Shares, provided that in
no event shall the cumulative aggregate amount of the Earnout exceed the
amount of € 4,400,000 (four million four hundred thousand euro).

	4	 	TAXES
	 
	4.1	 	The Seller shall bear any liability for Tax arising from its or the
Company’s conduct of the Business or ownership of the Shares or Business
before the Completion Date.
	 
	4.2	 	Any Taxes whatsoever payable in respect of the sale of the Assets and the
Shares, including income taxes on capital gains, in any jurisdiction shall
be borne by the party legally liable to pay such tax(es). Stamp duties,
if applicable, shall be borne and paid exclusively by the Purchaser.

	5	 	COMPLETION
	 
	5.1	 	Provided that the conditions to the respective obligations of the parties
set forth below in this clause 5.1 have been satisfied or waived by the
appropriate parties, Completion shall take place at the offices of
Tavernier Tschanz, 11-bis rue Toepffer, 1206 Geneva, Switzerland, at 9
a.m. on January 2, 2004 (or at such other time, date or location as the
parties may agree). Subject to the provisions of clause 29, failure to
consummate the Completion at the time, date and location determined
pursuant to this clause 5.1 shall not result in the termination of this
Agreement and will not relieve any party of any obligation under this
Agreement.

	 	5.1.1	 	The obligation of the Seller to sell the Assets and the
Shares and to take the other actions required to be taken by the
Seller at Completion is subject to the satisfaction, at or prior to
Completion, of each of the following conditions (any one or more of
which may be waived by the Purchaser, in whole or in part, in its
sole discretion):

	 	5.1.1.1	 	all the Seller’s Warranties shall have been accurate in
all material respects as of the date of this Agreement, and
shall be accurate in all material respects as of the
Completion Date as if made on the Completion Date; and

 

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	 	5.1.1.2	 	the Seller shall have duly performed and complied with, in
all material respects, all the covenants, obligations and
other undertakings that the Seller is required to perform or
to comply with pursuant to this Agreement at or prior to the
Completion.

	 	5.1.2	 	The obligation of the Purchaser to purchase the Assets and
the Shares, to assume the Assumed Liabilities and to take the other
actions required to be taken by the Purchaser at Completion is
subject to the satisfaction, at or prior to Completion, of each of
the following conditions (any one or more of which may be waived by
the Seller, in whole or in part, in its sole discretion):

	 	5.1.2.1	 	all the Purchaser’s Warranties shall have been accurate in
all material respects as of the date of this Agreement, and
shall be accurate in all material respects as of the
Completion Date as if made on the Completion Date; and
	 
	 	5.1.2.2	 	the Purchaser shall have duly performed and complied with,
in all material respects, all the covenants, obligations and
other undertakings that the Purchaser is required to perform
or to comply with pursuant to this Agreement at or prior to
the Completion.

	 	5.1.3	 	The waiver of any condition based on the accuracy of any
Warranty, or on the performance of or compliance with any covenant,
obligation or undertaking, will not affect the right to
indemnification or other remedy based on such Warranties, covenants,
obligations or undertakings.

	5.2	 	At Completion, the Seller shall deliver to (or procure the delivery to)
the Purchaser (or to the Purchaser’s Designees, as agreed) of:

	 	5.2.1	 	duly executed copies of deeds of sale and general assignment
in the forms attached as Parts 1 and 2 of Schedule 14;
	 
	 	5.2.2	 	all the Assets which are capable of passing by delivery
when, by virtue of such delivery, title to those Assets shall pass
to the Purchaser;
	 
	 	5.2.3	 	all the Business Contracts and the Records;
	 
	 	5.2.4	 	a duly executed copy of the deed of assignment of the
Business Intellectual Property in the form attached as Part 3 of
Schedule 14;
	 
	 	5.2.5	 	a share certificate representing the Shares along with duly
executed stock powers sufficient to transfer good title to the
Shares to Sercel Inc., as the Purchaser’s Designee, together with
(i) the share register, ledger, books and records of the Company,
(ii) a certified copy of an extract of the minutes of a meeting of
board of directors of the Seller, as the shareholder of the Company,
authorising the execution and performance by the Seller of this
Agreement, and (iii) resignation of Mr. Antoine Lagomarsino as
member of the Company’s board of directors, effective at Completion;
	 
	 	5.2.6	 	a certified copy of an extract of the minutes of a meeting
of the board of directors of the Seller authorising the execution by
the Seller of this Agreement

	 	5.2.7	 	duly executed notices of disposition of all Motor Vehicles;

 

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	 	5.2.8	 	a duly executed copy of the Lease Agreement;
	 
	 	5.2.9	 	a duly executed copy of the License Agreement; and
	 
	 	5.2.10	 	a duly executed copy of the Transitional Services Agreement.

	5.3	 	At Completion, the Seller shall permit the Purchaser to enter into the
Property made available under the Lease Agreement and to take possession
of the Business.
	 
	5.4	 	At Completion, the Purchaser (on its own behalf and on behalf of the
Purchaser’s Designees) shall pay the Closing Purchase Price to the Seller
by wire transfer of immediately available funds to such bank account as
the Seller shall have previously indicated to the Purchaser, and shall
deliver to the Seller:

	 	5.4.1	 	a duly executed copy of the Lease Agreement;
	 
	 	5.4.2	 	a duly executed copy of the License Agreement;
	 
	 	5.4.3	 	a duly executed copy of the Transitional Services Agreement; and

	 	5.4.4	 	a certified copy of an extract of the minutes of a meeting
of the board of directors of the Purchaser authorising the execution
by the Purchaser of this Agreement.

	6	 	BUSINESS CONTRACTS
	 
	6.1	 	The Purchaser undertakes to the Seller with effect from the Completion
Date to assume the obligations, liabilities and duties and become entitled
to the benefits of the Seller under the Business Contracts and to carry
out and perform and complete all the obligations, liabilities and duties
created by or arising under the Business Contracts after the Completion
Date (in each case, to the extent provided by clause 2.5).
	 
	6.2	 	The Seller undertakes with effect from the Completion Date to assign to
the order of the Purchaser, or to procure the assignment to the order of
the Purchaser of, all the Business Contracts which are capable of
assignment without the consent of other parties.
	 
	6.3	 	Insofar as any of the Business Contracts are not assignable to the
Purchaser without the agreement of or novation by or consent to the
assignment from another party, this Agreement shall not constitute an
assignment or attempted assignment if such assignment or attempted
assignment would constitute a breach of such Business Contracts. In the
event that consent or novation is required for such assignment:

	 	6.3.1	 	the Seller at the Purchaser’s request shall use all
reasonable endeavours with the co-operation of the Purchaser to
procure such novation or assignment as aforesaid;
	 
	 	6.3.2	 	unless and until any such Business Contract shall be novated
or assigned as aforesaid, the Seller shall hold such Business
Contract on trust for the Purchaser and its successors in title
absolutely and the Purchaser shall (if such sub-contracting is
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	 	 	 	in question) as the Seller’s sub-contractor perform all the
obligations of the Seller under such Business Contract; and
	 
	 	6.3.3	 	unless and until any such Business Contract shall be novated
or assigned, the Seller will (so far as it lawfully may) give all
such assistance to the Purchaser and at the Purchaser’s cost as the
Purchaser may reasonably require to enable the Purchaser to enforce
the Seller’s rights under such Business Contract and (without
limitation) will provide information in relation to such Business
Contract as the Purchaser may reasonably require from time to time.

	6.4	 	To the extent that any payment is made to the Seller in respect of a
Business Contract on or after the Completion Date, the Seller shall
receive the same as trustee and shall account to the Purchaser for the
same on the Completion Date or, if received thereafter, within ten (10)
Business Days of receipt.

	7	 	TRANSFERRED EMPLOYEES
	 
	7.1	 	Prior to the date of this Agreement, the Purchaser has offered the
Relevant Employees employment to commence on the Completion Date pursuant
to the Offer Letters in the form attached as Schedule 6 (adapted as
appropriate for the Relevant U.K. Employees) (the “Offers”).
	 
	7.2	 	The Relevant Employees who have accepted an Offer prior to the date
hereof (respectively, the “Transferred Australian Employees” and the
“Transferred U.K. Employees” and, collectively, the “Transferred
Employees”) are identified as such in Parts 4 and 5 of Schedule 8.
Relevant Australian Employees who decide to accept their Offer after the
date hereof, whether in writing or by coming to the Property to work after
Completion in accordance with the Offer Letters shall also be deemed to be
Transferred Australian Employees. The Purchaser shall inform the Seller
in writing of any Relevant Australian Employees who shall so accept their
Offers after the date hereof.
	 
	7.3	 	On the Completion Date, the Seller shall

	 	7.3.1	 	with respect to the Transferred Australian Employees:

	 	7.3.1.1	 	release the Transferred Australian Employees from
employment with the Seller, with effect immediately prior to
the Completion Date;
	 
	 	7.3.1.2	 	pay the Transferred Australian Employees all monies owed
to them by the Seller as of the Completion Date, with the
exception of accrued annual leave, long service leave and
sick leave; and
	 
	 	7.3.1.3	 	provide the Purchaser with copies of all records relating
to the employment of the Transferred Australian Employees
with the Seller, including leave records and employment
terms.

	 	7.3.2	 	with respect to the Transferred U.K. Employees, procure that
TUS UK:

	 	7.3.2.1	 	releases the Transferred U.K. Employees from employment
with TUS UK, with effect immediately at the Completion Date;

 

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	 	7.3.2.2	 	pays the Transferred U.K. Employees all monies owed to
them by TUS UK as of the Completion Date, with the exception
of accrued annual leave, long service leave and sick leave;
and
	 
	 	7.3.2.3	 	provides the Purchaser with copies of all records relating
to the employment of the Transferred U.K. Employees with TUS
UK, including leave records and employment terms.

	7.4	 	In connection with the computation of the Closing Purchase Price, the
Seller has previously delivered to the Purchaser a computation of the
value of accrued annual leave (including applicable loadings) and long
service leave in respect of the Transferred Employees (the “Reduction
Amount”), a copy of which is attached as Part 6 of Schedule 8. To the
extent that it is determined within ninety (90) days after the Completion
that such computation of the Reduction Amount was incomplete or inaccurate
in any respect, the parties shall promptly make any payments required to
put the parties in the same position as they would have been in had such
computation of the Reduction Amount been made fully and accurately prior
the date hereof and reflected in the computation of the Closing Purchase
Price.
	 
	7.5	 	After Completion, the Seller (x) with respect to the Transferred
Australian Employees, shall be responsible (and shall indemnify the
Purchaser against all claims) for, and (y) with respect to the Transferred
U.K. Employees, shall procure that TUS UK shall be responsible (and shall
indemnify the Purchaser against all claims) for:

	 	7.5.1	 	the salary, wages, sales commission, bonuses and all other
employment related payments or benefits (including any allowances or
benefits) of all such Transferred Employees for the period up to and
including the Completion Date (excluding the value of accrued annual
leave (including applicable loadings) and long service leave taken
into account in the computation required by clause 7.4), from which
date the Purchaser will be responsible for them; and
	 
	 	7.5.2	 	all Taxes (including fringe benefits tax and payroll tax)
payable on the amounts referred to in clause 7.5.1 in respect of the
period up to and including the Completion Date (whether such Taxes
become due before, on or after the Completion Date).

	7.6	 	After Completion, and subject to performance by the Seller of its
obligations under clause 7.5, the Purchaser shall be responsible (and
shall indemnify the Seller or TUS UK, as applicable, against all claims)
for salary, wages, sales commission, bonuses and all other
employment-related payments or benefits (including any allowances or
benefits), holiday pay (including applicable loadings), and other leave
entitlements which are or may become payable after the Completion Date to
any Transferred Employee under any contract of employment, industrial
instrument (including award) or statutory entitlement.
	 
	7.7	 	Notwithstanding anything to the contrary in clauses 7.5 and 7.6, it is
understood and agreed that the Purchaser or the relevant member of the
Purchaser’s Group shall be responsible for any redundancy payments which
may become due to any of the Transferred Employees by reason of their
eventual termination by the Purchaser or any member of the Purchaser’s
Group after the Completion Date (including any portion of any such payment
resulting from or attributable to a Transferred Employee’s prior service
with the Seller’s Group), and that the Seller (and TUS UK in respect of
the Transferred U.K. Employees) shall have no liability for any such
payments.

 

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	8	 	SUPERANNUATION
	 
	 	 	The applicable Australian statutory rules at the date of Completion shall
apply with regard to the pensions and related benefits of the Transferred
Australian Employees (Superannuation rules). As far as practicable and
subject to third parties rights, each of the parties shall execute all
documents and do all things necessary to substitute the Purchaser for the
Seller as the contributing employer to the Seller’s Funds in respect of
the Transferred Australian Employees with effect from Completion.

	9	 	RECEIVABLES
	 
	9.1	 	The Seller shall on or after Completion execute or procure the execution
of any assignment or other instrument of transfer necessary to assign or
transfer the Receivables to the Purchaser, and unless and until any such
assignment or other instrument of transfer shall be executed will:

	 	9.1.1	 	As soon as practicable after Completion despatch letters to
all persons from whom the Receivables are owing, instructing such
persons to account in respect of the Receivables to the Purchaser or
as the Purchaser may direct and shall provide copies of all such
letters to the Purchaser;
	 
	 	9.1.2	 	Account to the Purchaser or as the Purchaser may direct in
respect of any payment received by the Seller in respect of the
Receivables (including any interest payment received) after
Completion Date and, pending such accounting, shall hold all sums so
received in trust for the Purchaser; and
	 
	 	9.1.3	 	Not after Completion engage in any correspondence or
discussion concerning any Receivable with any person from whom such
Receivable shall be due and shall forward to the Purchaser all
correspondence or other communications received by the Seller from
any such person or any person acting on its behalf.

	10	 	WARRANTIES
	 
	10.1	 	The Seller warrants to the Purchaser that the Warranties set out in Part
1 of Schedule 11 (the “Seller’s Warranties”) are true and accurate on and
as of the date hereof and will be true and accurate on and as of the
Completion Date.
	 
	10.2	 	The Purchaser warrants to the Seller that the Warranties set out in Part
2 of Schedule 11 (the “Purchaser’s Warranties”) are true and accurate on
and as of the date hereof and will be true and accurate on and as of the
Completion Date.
	 
	10.3	 	Each of the parties hereby acknowledges that it is not entering into this
Agreement in reliance on any warranties or representations except insofar
as the same are set forth in the Warranties.
	 
	10.4	 	The Seller’s Warranties are given subject to the information contained in
the Disclosed Information to the extent that such information is
sufficient on its face to reasonably inform the Purchaser of a specific
exception to a Warranty, except that, notwithstanding any other provision
of this Agreement, the Seller’s Warranties set

 

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	 	 	forth in clauses 1.1 and 2.3 of the Seller’s Warranties shall not be
qualified or limited in respect by any information contained in the
Disclosed Information.
	 
	10.5	 	Each of the Warranties shall be separate and independent and save as
expressly provided to the contrary shall not be limited by reference to
any other Warranty or any other term of this Agreement.
	 
	10.6	 	The Warranties, together with any other provisions of this Agreement
which shall not have been fully performed at Completion, shall remain in
force notwithstanding Completion.

	11	 	CLAIMS
	 
	11.1	 	Subject to the provisions and limitations of clauses 11 and 12, the
Seller shall indemnify and hold harmless the Purchaser from and against,
and pay or reimburse the Purchaser for, any damages, losses, liabilities,
claims, reasonable costs or expenses (including interest, reasonable costs
of investigation and defence and reasonable attorneys’ fees) (“Losses”)
actually suffered or incurred by the Purchaser or the Company resulting or
arising from or in connection with:

	 	11.1.1	 	any breach of any of the Seller’s Warranties; and
	 
	 	11.1.2	 	any Excluded Liabilities, including any claim by any party against
the Purchaser with respect to any Excluded Liabilities.

	11.2	 	Subject to the provisions and limitations of clauses 11 and 12, the
Purchaser shall indemnify and hold harmless the Seller from and against,
and pay or reimburse the Seller for, any Losses actually suffered or
incurred by the Seller resulting or arising from or in connection with:

	 	11.2.1	 	any breach of any the Purchaser’s Warranties; and
	 
	 	11.2.2	 	any Assumed Liabilities, including any claim by any party against
the Seller with respect to any Assumed Liabilities.

	11.3	 	The party making a claim for indemnification under this clause 11 is
hereinafter referred to as the “Indemnified Party” and the party against
whom such claims are asserted under this clause 11 is hereinafter referred
to as the “Indemnifying Party”. All claims by any Indemnified Party under
this clause 11 shall be asserted and resolved as follows:

	 	11.3.1	 	In the event that (i) any claim, demand or other proceeding is
asserted or instituted by any person (including a governmental
authority) other than the parties hereto and members of their
respective Groups (a “Third Party”) which, if successful, could give
rise to Losses for which an Indemnifying Party would be liable to an
Indemnified Party hereunder (any such claim, demand or proceeding, a
“Third Party Claim”), or (ii) any Indemnified Party hereunder shall
have a claim to be indemnified by any Indemnifying Party hereunder
which does not involve a Third Party Claim (any such claim, a
“Direct Claim”), the Indemnified Party shall deliver to the
Indemnifying Party a written notice (a “Claim Notice”) specifying in
reasonable detail, to the extent known to the Indemnified Party, the
factual basis of such Third Party Claim or Direct Claim and the
amount or estimated amount of related Losses (which estimate shall
not be conclusive of the final amount thereof) and shall

 

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	 	 	 	provide such available supporting evidence as may reasonably be
required by the Indemnifying Party to assess the merits of the
Third Party Claim or Direct Claim and the computation or estimate
of Losses.
	 
	 	 	 	The Indemnified Party shall send a Claim Notice: (i) in the case
of a Third Party Claim, by no later than twenty-one (21) days (or
such shorter period as may be warranted under the circumstances)
after its receipt of actual notice of such Third Party Claim; and
(ii) in the case of a Direct Claim, by no later than sixty (60)
days after the Managing Director (or if none, the person
exercising substantially equivalent functions) of the Indemnified
Party becomes aware that a basis exists for making a claim for
indemnification under this clause 11.
	 
	 	11.3.2	 	From and after the delivery of a Claim Notice, the Indemnified
Party shall:

	 	11.3.2.1	 	at the reasonable request of the Indemnifying Party,
grant the Indemnifying Party and its professional advisors
reasonable access to the books, records and properties of the
Indemnified Party (or of the Company, if the Seller is the
Indemnifying Party) to the extent reasonably related to the
matters to which the Claim Notice relates and as permitted by
the Laws, regulations or rules applicable to the Indemnified
Party, and
	 
	 	11.3.2.2	 	subject to the Indemnifying Party providing an indemnity
to the Indemnified Party in respect of all costs,
liabilities, claims and reasonable expenses which may be
incurred by the Indemnified Party as a result of the same, at
the reasonable request of the Indemnifying Party and to the
extent reasonably related to the claim in question, make (or
if the Purchaser is the Indemnified Party, procure that the
Company makes) any counterclaim against any person asserting
a Third Party Claim or any cross-claim against any other
person which may be liable, provided that the Indemnified
Party shall not be obligated to take any such action as it
may reasonably consider to be, directly or indirectly,
detrimental or contrary to its own interest or that of its
Group.

	 	11.3.3	 	In the event of a Third Party Claim:

	 	11.3.3.1	 	The Indemnifying Party shall have twenty-one (21) days
following its receipt of the relevant Claim Notice (or such
shorter period as may be warranted under the circumstances)
(the “Third Party Claim Review Period”) to make such
investigation of the underlying claim as it considers
necessary or desirable and to notify the Indemnified Party
whether or not it disputes its liability to the Indemnified
Party in respect of such Third Party Claim (which notice
shall set forth in reasonable detail the basis for such
objection). If the Indemnifying Party so notifies the
Indemnified Party during the Third Party Claim Review Period
that it disputes its liability to the Indemnified Party in
respect of the relevant Third Party Claim, the Indemnified
Party shall have the right to initiate proceedings against
the Indemnifying Party in accordance with clause 26. If the
Indemnifying Party fails to so notify the Indemnified Party
during the Third Party Claim Review Period that it disputes
its liability to the Indemnified Party in respect of the
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	 	 	 	deemed to have acknowledged its liability to the
Indemnified Party in respect of such Third Party Claim.
	 
	 	11.3.3.2	 	In the event that a Third Party Claim is made against an
Indemnified Party for which the sole relief demanded is money
damages which are fully covered by the Indemnifying Party’s
indemnification obligations under this Agreement and as to
which (x) no conflict of interest exists between the
interests of the Indemnified Party and the members of its
Group and those of the Indemnifying Party and the members of
its Group, (y) the Indemnified Party has not made a good
faith determination that there is a reasonable probability
that the underlying claim may adversely affect it or members
of its Group other than as a result of monetary damages for
which it would be entitled to indemnification under this
Agreement, and (z) the Indemnifying Party has expressly
acknowledged in writing to the Indemnified Party that it is
within the scope of and subject entirely to its
indemnification obligations, the Indemnifying Party, if it so
elects by giving written notice to such effect to the
Indemnified Party, may assume control the defence of such
Third Party Claim and retain (at its expense) legal counsel
of its choice, reasonably acceptable to the Indemnified
Party, to represent the Indemnified Party (including the
Company, if the Purchaser is the Indemnified Party). If the
Indemnifying Party shall have so elected to assume control of
the defence of a Third Party Claim: (a) the Indemnifying
Party shall diligently conduct the defence of such Third
Party Claim, keep the Indemnified Party reasonably informed
of the development of the underlying claim, and with
reasonable promptness provide the Indemnified Party with
copies of all material notices, written communications and
filings (including court papers) made by or on behalf of any
of the parties to the Third Party Claim; and (b) the
Indemnified Party shall have the right to participate, at its
expense, in the defence of such Third Party Claim with legal
counsel of its choice.
	 
	 	11.3.3.3	 	In the event that the Indemnifying Party: (x) shall fail
to notify the Indemnified Party pursuant to clause 11.3.3.2
that it has elected to assume control of the defence of a
Third Party Claim (or shall notify the Indemnified Party that
it has elected not to assume control of the defence of a
Third Party Claim), or (y) at any time after it shall have
notified the Indemnified Party pursuant to clause 11.3.3.2
that it has elected to assume control of the defence of a
Third Party Claim, shall fail to diligently conduct the
defence of such Third Party Claim, the Indemnified Party (or
if the Purchaser is the Indemnified Party, the Company) shall
have the right to conduct the defence of such Third Party
Claim and shall have the right to retain counsel of its
choice, reasonably acceptable to the Indemnifying Party. If
the Indemnified Party shall have assumed control of the
defence of a Third Party Claim: (a) the Indemnified Party
shall keep the Indemnifying Party reasonably informed of the
development of the underlying claim and with reasonable
promptness provide the Indemnifying Party with copies of all
material notices, written communications and filings
(including court papers) made by or on behalf of any of the
parties to the Third Party Claim; and (b) the Indemnifying
Party shall have the

 

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	 	 	 	right to participate, at its expense, in the defence of
any such Third Party Claim with legal counsel of its
choice, reasonably acceptable to the Indemnified Party.
	 
	 	11.3.3.4	 	The Indemnifying Party shall not be liable for any Third
Party Claim settled or otherwise compromised without its
prior written consent. In such connection, if (x) the
Indemnified Party (or the Company, if the Purchaser is the
Indemnifying Party) shall receive from a Third Party or (y)
the Indemnified Party shall propose to make to a Third Party,
an offer to compromise or settle such Third Party Claim (a
“Settlement Offer”), the Indemnified Party shall notify the
Indemnifying Party of such Settlement Offer with reasonable
promptness following receipt thereof from the Third Party and
reasonably in advance of responding thereto, or reasonably in
advance of making such Settlement Offer, and shall provide
with such notice all related supporting documentation
reasonably required to enable the Indemnifying Party to
assess the relative merits of the Settlement Offer. At the
request of either of the parties, the parties will consult in
good faith with respect to any such Settlement Offer. The
Indemnifying Party shall then determine in the exercise of
its business judgement whether or not to consent to the
Settlement Offer, but shall not unreasonably withhold or
delay any such consent (with such consent being deemed given
if the Indemnifying Party shall not have responded in writing
within fifteen (15) days (or such shorter period as may be
reasonable under the circumstances) of its receipt of a
request for consent). If a Settlement Offer is received (for
which the sole relief provided is monetary damages), which
the Indemnifying Party, but not the Indemnified Party, is
willing to accept, the Indemnified Party may elect to
continue the defence of the Third Party Claim at its own
expense, in which case the liability of the Indemnifying
Party shall be limited to the lesser of: (x) Losses
calculated as if the Third Party Claim were settled in
accordance with the proposed Settlement Offer, or (y) the
Losses actually suffered by the Indemnified Party taking into
account the final resolution of the Third Party Claim.
	 
	 	 	 	If the Indemnifying Party shall have assumed control of
the defence of a Third Party Claim pursuant to clause
11.3.3.2, the Indemnifying Party shall not agree to any
Settlement Offer in respect of such Third Party Claim
without the consent of the Indemnified Party, which
consent shall not be unreasonably withheld or delayed
(and which consent shall be deemed given if the
Indemnified Party shall not have responded in writing
within fifteen (15) days (or such shorter period as may
be reasonable under the circumstances) of its receipt of
a request for consent), unless the Settlement Offer: (i)
releases the Indemnified Party (and, if the Purchaser is
the Indemnified Party, the Company) completely in
connection with such Third Party Claim; (ii) does not,
and cannot be reasonably expected to, otherwise adversely
affect the Indemnified Party (and, if the Purchaser is
the Indemnified Party, the Company), and (iii) is fully
funded by the Indemnifying Party.

 

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	 	 	 	Any final settlement by the Indemnifying Party of a Third
Party Claim (provided that the Indemnifying Party has
performed all of its obligations under the relevant
settlement agreement) in accordance with the provisions
of the foregoing paragraph and paragraph 11.3.3.2 shall
release the Indemnifying Party from any further
obligation to indemnify the Indemnified Party in respect
of amounts claimed by the relevant third party pursuant
to such Third Party Claim.

	 	11.3.4	 	In the event of a Direct Claim, the Indemnifying Party shall have
forty-five (45) days following its receipt of the relevant Claim
Notice (the “Direct Claim Review Period”) to make such investigation
of the corresponding claim as it considers necessary or desirable.
If the Indemnified Party and the Indemnifying Party agree, on or
prior to the expiration of the Direct Claim Review Period, upon the
validity and amount of such claim, the Indemnifying Party shall pay
to the Indemnified Party, within fifteen (15) days following the
date of such agreement, the full agreed amount of such claim. If
the Indemnified Party and the Indemnifying Party fail to agree on or
prior to the date of the expiration of the Direct Claim Review
Period upon the validity or the amount of the Direct Claim, or if
the Indemnifying Party notifies the Indemnified Party that it
disputes its liability to the Indemnified Party in respect of the
corresponding claim, the Indemnified Party shall have the right to
initiate proceedings against the Indemnifying Party in accordance
with clause 26.

	11.4	 	Each party shall (and in the case of the Purchaser, shall procure that
the Company shall) in relation to any loss or liability which might give
rise to a claim for indemnification under this Agreement against the other
party, use its commercially reasonable endeavours to take all available
steps to avoid or mitigate such loss or liability, provided that no party
shall be obligated to take any such action that it reasonably considers to
be, directly or indirectly, detrimental or contrary to its own interest or
that of its Group.
	 
	11.5	 	If, notwithstanding any other provision of this Agreement, any payment is
made by the Seller in or towards the settlement of any claim made under
this Agreement and the Purchaser subsequently recovers or procures the
recovery from a third party (including insurers) of an amount which is
referable to that claim (and in the event that the Purchaser becoming
entitled subsequent to such payment by the Seller to make such recovery
the Purchaser undertakes (having due regard for the interests of the
Purchaser and the Company) to procure that all reasonable steps are taken
to enforce such recovery), the Purchaser shall forthwith repay to the
Seller an amount equal to whichever is the lesser of:

	 	11.5.1	 	the amount recovered from the third party after deduction of all
reasonable and evidenced expenses of recovery; and
	 
	 	11.5.2	 	the amount paid by the Seller in or towards settlement of the
claim.

	12	 	LIMITATIONS OF LIABILITY
	 
	12.1	 	The aggregate liability of the Seller in respect of claims brought by the
Purchaser for breach of the Seller’s Warranties shall not exceed 17.5%
(seventeen and one-half per cent) of the sum of (i) the Closing Purchase
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	 	 	the Purchaser to the Seller pursuant to clause 3.4 (the “Maximum Seller
Warranty Amount”).
	 
	 	 	The aggregate liability of the Purchaser in respect of claims brought by
the Seller for breach of the Purchaser’s Warranties shall not exceed the
17.5% (seventeen and one-half per cent) of the sum of (i) the Closing
Purchase Price, and (ii) any amounts owed by the Purchaser to the Seller
pursuant to clause 3.4 (the “Maximum Purchaser Warranty Amount”).
	 
	 	 	Neither the Seller nor the Purchaser shall be liable towards the other
for any indirect or consequential damage under this Agreement (such
as but not limited to loss of profit or loss of revenue to the
extent that the same would constitute indirect or consequential
damages under Australian law) for which neither party shall incur
any liability towards the other whatsoever.
	 
	12.2	 	The Purchaser shall not be entitled to make any claim for breach of
Warranty against the Seller under this Agreement (a “relevant claim”) or
to recover any Losses in respect of any such claim:

	 	12.2.1	 	if the matter, event or circumstance giving rise to the relevant
claim was provided as Disclosed Information and, pursuant to clause
10.4, qualifies or limits the relevant Warranty; or
	 
	 	12.2.2	 	unless notice in writing (containing the information referred to
in clause 11.3.1) has been received by the Seller on or before:

	 	i)	 	in the case of a relevant claim relating to
Taxes, June 30, 2009; and
	 
	 	ii)	 	in the case of a relevant claim relating to any
matter other than Taxes, June 30, 2005.

	 	 	 	If at any time prior to the relevant expiration date specified above, a
Claim Notice is delivered in accordance with the terms of this Agreement,
the corresponding claim shall survive until such time as it is fully and
finally resolved.

	12.3	 	The Seller shall be under no liability in respect of a relevant claim
unless:

	 	12.3.1	 	the amount of the Losses in respect of which the Purchaser is
entitled to be indemnified as a result of such claim exceeds €
75,000 (seventy five thousand euro) (the “Individual Claim Threshold
Amount”) (it being understood that if the amount of such Losses
exceeds the Individual Claim Threshold Amount, the Seller’s payment
obligation shall extend to the entire amount of such Losses,
including the amount up to the Individual Claim Threshold Amount,
subject however to clause 12.3.2 below and clause 12.1 above);
	 
	 	12.3.2	 	the aggregate amount of Losses in respect of which the Seller is
obligated to indemnify the Purchaser under clause 12.3.1 in respect
of all relevant claims made by the Purchaser exceeds € 750,000
(seven hundred fifty thousand euro) (the “Cumulative Threshold
Amount”) (it being understood that if the amount of such Losses
shall exceed the Cumulative Threshold Amount, the Seller’s payment
obligation shall extend to the entire amount of such Losses,
including the amount up to the Cumulative Threshold Amount however
subject to clause 12.1 above).

 

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	 	 	For the purposes of the foregoing clause 12.3.1, in the event of a series
of relevant claims based on the same or a related set of facts, events or
circumstances, such series of claims shall be treated as a single claim
and the aggregate total of the Losses resulting from such series of
claims shall be used to determine whether the Individual Claim Threshold
Amount has been exceeded.
	 
	12.4	 	If a relevant claim arises in respect of a matter event or circumstance
where the Purchaser recovers from some other person (including insurers)
any loss or damage arising therefrom, then the liability of the Seller
(after taking into account the limitations on the liability of the Seller
referred to in this clause 12) shall be reduced by the amount so recovered
after deduction of all reasonable expenses of recovery.
	 
	12.5	 	No liability shall attach to the Seller in respect of any relevant claim
if and to the extent that:

	 	12.5.1	 	the relevant claim would not have arisen or would have been less
but for any act, omission, transaction or arrangement (or any
combination of any of the same) of the Purchaser or any member of
the Purchaser’s Group or any successor in title to the Shares or
their respective directors, employees or agents taken other than in
good faith after Completion;
	 
	 	12.5.2	 	the relevant claim arises or is increased as a result of the
passing of, or any change in, or any change in the interpretation
of, any Law, rule, regulation or administrative practice of any
government, government department, local or state agency, authority
regulatory or fiscal body after the date of this Agreement;
	 
	 	12.5.3	 	the relevant claim arises or is increased as a result of the
Purchaser not complying with its obligations under this Agreement;
or
	 
	 	12.5.4	 	the Losses suffered or incurred by the Purchaser have been made
good or have been otherwise compensated for without cost to the
Purchaser or any member of the Purchaser’s Group.

	12.6	 	The amount of any successful claim against the Seller for breach of
Warranty under this Agreement shall constitute or be deemed to constitute
a reduction in the Purchase Price.
	 
	12.7	 	No claims of the Purchaser under this clause shall be set off against any
sum due to the Seller by the Purchaser under this Agreement, under any
circumstances whatsoever.

	13	 	SELLER’S UNDERTAKINGS
	 
	13.1	 	During the period from the date hereof through to Completion (or the
earlier termination of this Agreement pursuant to clause 29), the Seller
shall conduct (and shall procure that the Company conducts) the Business
solely in the ordinary course and on a basis consistent with past
practices, and shall not take any action or omit to take any action within
its control (and shall procure that the Company does not take any action
or omit to take any action within its control) which action or omission
would result in a breach of any of the Seller’s Warranties as of the
Completion Date.

 

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	13.2	 	For the sole purpose of protecting the Purchaser in respect of the
Goodwill and the value of the Shares, as from the Completion, the Seller
shall not, and shall procure that no other companies or undertakings which
now or from time to time are subsidiaries of the Seller:

	 	13.2.1	 	for a period of:

	 	i)	 	2 years after the Completion Date;
	 
	 	ii)	 	2 years after the second anniversary of the Completion Date;
	 
	 	iii)	 	2 years after the fourth anniversary of the Completion Date; and
	 
	 	iv)	 	1 year after the sixth anniversary of the Completion Date;

	 	 	 	and within:

	 	a)	 	Australia and the United States;
	 
	 	b)	 	Europe excluding the territory of the European
Union (as it may be defined from time to time);
	 
	 	c)	 	Asia; or
	 
	 	d)	 	anywhere else in the world except the territory
of the European Union (as it may be defined from time to
time),

	 	 	 	either on its own account or in conjunction with or on behalf of
any person, and whether directly or indirectly, carry on,
participate in or be engaged, concerned or interested in setting
up or acquiring any business similar to or competitive or likely
to be competitive with the Business; and

	 	13.2.2	 	for a period of:

	 	i)	 	2 years after the Completion Date;
	 
	 	ii)	 	1 year after the second anniversary of the
Completion Date;

	 	 	 	and within the European Union (as it may be defined from time to
time), either on its own account or in conjunction with or on
behalf of any person, and whether directly or indirectly, carry
on, participate in or be engaged, concerned or interested in
setting up or acquiring any business similar to or competitive or
likely to be competitive with the Business; and
	 
	 	13.2.3	 	for a period of two (2) years after the Completion Date, either on
its own account or in conjunction with or on behalf of any person,
and whether directly or indirectly, employ, solicit or entice away
from the employment of the Purchaser, the employer of any
Transferred U.K. Employee or the Company any Transferred Australian
Employee, any Transferred U.K. Employee or any other officer,
manager or employee employed by any of them in connection with the
Business at or after the Completion Date (whether or not such person
would commit a breach of his contract of employment by reason of
leaving service).

 

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	13.3	 	Nothing set forth in clause 13.2 shall operate to prevent the Seller’s
Group (collectively) from owning not more than 5% of any class of the
issued share capital of a company if such securities are listed and
regularly dealt in on any internationally recognised investment exchange.
	 
	13.4	 	The Seller acknowledges that each of the prohibitions and restrictions
contained in the provisions of clause 13.2:

	 	(a)	 	must be read and construed and will have effect as a
separate, severable and independent prohibition or restriction and
will be enforceable accordingly;
	 
	 	(b)	 	is reasonable as to period, territorial limitation and
subject matter; and
	 
	 	(c)	 	confers a benefit on the Purchaser which is no more than that
which is reasonably and necessarily required by the Purchaser for
the maintenance and protection of the Goodwill and the value of the
Shares sold to the Purchaser under this Agreement.

	 	 	It is the intention of the parties that all combinations of the
prohibitions and restrictions will apply and be enforceable and that only
those which a court, in exercising its discretion, may hold to be an
unreasonable restraint of trade will be severed.
	 
	13.5	 	As from the Completion Date, the Seller will sell and deliver hydrophones
to the Purchaser, as and when ordered by the Purchaser, on reasonable
terms and conditions and at market prices on a basis consistent with
deliveries performed by the Seller to the Business prior to Completion
Date.

	14.	 	PURCHASER’S UNDERTAKINGS
	 
	14.1	 	As from the Completion, and in respect of Business Names:

	 	14.1.1	 	The Purchaser undertakes that it shall not, and will procure that
the members of the Purchaser’s Group shall not make use of the
Business Names or any other name or mark confusingly similar to any
of them or any logos and colours associated with such names, trade
names or trade marks at any time after the Completion Date, save
only that the Purchaser and the Company shall be entitled, solely in
connection with the Business:

	 	14.1.1.1	 	for a period of thirty (30) days after Completion, to use
the name “Thales” as part of the company name of the Company
subject to clause 14.1.2 and to use up existing inventories
of letter paper, invoices, general stationery, trade
literature, labels, manuals, packaging and other printed
materials bearing the Business Names;
	 
	 	14.1.1.2	 	for a period of sixty (60) days after Completion, to
continue to display the Business Names as they appear on any
existing nameplate, building sign, vehicle, or any other
equipment or instruments part of the Assets or belonging to
the Company;

 

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	 	14.1.1.3	 	for a period of one hundred eighty (180) days after
Completion to dispose of any existing inventories of products
to which the Business Names have been applied and remain
visible.

	 	14.1.2	 	Promptly after the Completion Date but not later than thirty days
after such date, the Purchaser shall procure that the corporate name
of the Company is changed and shall provide to Thales as soon as
reasonably practicable evidence, reasonably satisfactory to Thales
of the Purchaser’s compliance with this clause.

	14.2	 	The Purchaser acknowledges that it has been informed by the Seller that
all insurance cover for the Business will cease as at the Completion, and
undertakes to procure that as of Completion, the Purchaser, the Company
and the Property benefit, to the extent available on commercially
reasonable terms, from insurance cover of the types, on terms, and in such
amounts as are substantially consistent (in view of their size, locations
and activities) with the insurance cover currently applicable to the
Sercel Group generally, except that until January 31, 2004, the Seller
shall maintain its current insurance coverage for the Property in
accordance with the terms of the Lease.

	15	 	FURTHER ASSURANCES AND ASSISTANCE
	 
	15.1	 	On and after the Completion Date, the Seller shall:

	 	15.1.1	 	do, execute and perform all such acts, assignments, transfers,
deeds, documents and things (or procure the doing, execution or
performance of them) as the Purchaser may from time to time
reasonably require for the purpose of vesting in it the full benefit
of the Business and Assets;
	 
	 	15.1.2	 	from time to time supply to the Purchaser such information and
assistance as the Purchaser may reasonably require for the purpose
of implementing the provisions of this Agreement; and
	 
	 	15.1.3	 	give to the Purchaser all reasonable assistance to enable the
Purchaser to enforce or obtain the full benefit of any rights
against third parties hereby transferred to the Purchaser.

	15.2	 	As from the Completion Date, the Seller and the Purchaser shall each give
to the other such reasonable access to the books, accounts, records and
returns of the other relating to or in connection with the Business as
conducted up to the Completion Date as the other may reasonably require
for legitimate business purposes (including the right to take copies and
extracts on reasonable advance notice) within the period of five (5)
calendar years from the Completion Date and will during the said period
keep the same in good order.

	16	 	CONFIDENTIAL INFORMATION
	 
	 	 	The Seller shall not, after Completion, and shall procure that no other
member of the Seller’s Group, disclose or use for any purpose any
confidential or proprietary information concerning the Business, any of
the Assets or the Company, except: (i) to the extent required by
applicable Law or stock exchange regulations or by any competent
governmental authority; (ii) to its professional advisers under
circumstances of confidentiality; or (iii) to the extent that such
information is at the

 

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	 	 	date hereof or hereafter becomes public knowledge otherwise than through
improper disclosure by any person.

	17	 	COSTS
	 
	 	 	Except as otherwise expressly provided in this Agreement, each party
shall be responsible for all the costs and expenses incurred by it in
connection with and incidental to the preparation and completion of this
Agreement and the sale and purchase under this Agreement.

	18	 	INTEREST ON OVERDUE AMOUNTS
	 
	 	 	Interest shall be payable by any party on any amount which shall not be
paid by it to the other party by the due date for its payment, as
determined in accordance with the terms of this Agreement. Such interest
shall accrue and be calculated on a daily basis, both before and after
any Judgement, at a per annum rate equal to EURIBOR plus 2%, for the
period from the due date for its payment until the date on which it shall
actually be paid. Interest shall be compounded annually and shall be
payable on demand. All payments required to be made under the terms of
this Agreement shall be made in euro.

	19	 	ENTIRE AGREEMENT
	 
	19.1	 	This Agreement, and the documents referred to in it, constitutes the
entire agreement and understanding of the parties and supersedes all prior
negotiations, discussions, correspondence, communications, understandings
and agreements between the parties relating to the subject matter of this
Agreement and all prior drafts of this Agreement.
	 
	19.2	 	Each of the parties acknowledges and agrees that in entering into this
Agreement, and the documents referred to in it, it does not rely on, and
shall have no remedy in respect of, any statement, representation,
warranty or understanding (whether negligently or innocently made) of any
person (whether party to this Agreement or not) other than as expressly
set out in this Agreement or in any other documents delivered in
connection herewith.

	20	 	CONTINUING EFFECT
	 
	 	 	Each provision of this Agreement shall continue in full force and effect
after Completion, unless such provision has been fully performed on or
before Completion.

	21	 	SEVERABILITY
	 
	 	 	If at any time any part of any provision of this Agreement shall be or
become invalid or unenforceable in any respect, then such provision shall
be deemed to be severed from this Agreement and the remainder of the
provisions of this Agreement shall remain valid and enforceable.

 

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	22	 	AMENDMENTS, WAIVERS AND RIGHTS
	 
	22.1	 	No amendment or variation of the terms of this Agreement shall be
effective unless it shall be made or confirmed in a written document
signed by both parties.
	 
	22.2	 	No delay in exercising or non-exercise by either party of any of its
rights under or in connection with this Agreement shall operate as a
waiver or release of that right. Rather, any such waiver or release must
be specifically granted in writing signed by the party granting it.
	 
	22.3	 	The rights and remedies of each party under this Agreement shall be
cumulative and not exclusive of any rights or remedies of that party under
the general Law, subject to the limitations set forth in Article 12. Each
party may exercise each of its rights as often as it shall think
necessary.

	23	 	ASSIGNMENT
	 
	 	 	Neither party may assign any of its rights under this Agreement without
the prior written consent of the other party. Except to the extent that
the Purchaser shall have assigned all or any of its rights to
indemnification under the terms of this Agreement to a permitted assign,
the Purchaser shall be deemed to have retained its right to
indemnification pursuant to the provisions of this Agreement in respect
of all the Shares and Assets (but shall not be allowed to transfer or
assign them without the prior written consent of the Seller),
notwithstanding the purchase of any Shares or Assets by the Purchaser’s
Designees or any sale, transfer or other disposition of all or a part of
the Shares or Assets after the Completion, as if it had at all times
retained ownership of all the Shares and Assets, for the duration set
forth in this Agreement.

	24	 	NOTICES
	 
	24.1	 	Any notice required to be given under this Agreement shall be in writing
signed on behalf of the party giving it and may be served by (i)
delivering it by hand against an acknowledgement of delivery dated and
signed by the recipient, (ii) sending it by registered mail (postage
prepaid, return receipt requested) to the address of the relevant party
set out in clause 24.2 or (iii) sending it by facsimile transmission
confirmed by registered mail (postage prepaid, return receipt requested)
posted no later than the following Business Day (with any such facsimile
transmission to be deemed received at the time indicated on the
corresponding activity report, a copy of which shall be included in the
confirmation by mail) (provided that any notice or communication which is
received after 5:15 p.m. (local time in the place of receipt) on a
Business Day or on any day which is not a Business Day shall be deemed
received only at 8:30 a.m. (local time in the place of receipt) on the
next Business Day). Any such notice or other communication shall be
effective only upon actual receipt thereof by its intended recipient.

 

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	24.2	 	Any notice required to be given under this Agreement shall be sent to:

	 	24.2.1	 	the Seller at:
	 
	 	274	 	Victoria Road

Rydalmere, NSW 2116

Australia

Facsimile No:              +61 2 9848 3888

For the attention of:   Managing Director
	 
	 	 	 	with a copy to:
	 
	 	 	 	THALES Corporate Legal Services

45, rue de Villiers

92526 Neuilly sur Seine

France

Facsimile No:              +33 (0)1 57 77 84 77

For the attention of:   Alexandre de Juniac
	 
	 	24.2.2	 	the Purchaser at:
	 
	 	 	 	c/o Sercel Holding

16 rue de Bel Air

44470 Carquefou

France

Facsimile No:              +33 (0)2 40 30 31 32

Attention:                   Managing Director
	 
	 	 	 	with a copy to:
	 
	 	 	 	Sercel Holding

16 rue de Bel Air

44470 Carquefou

France

Facsimile No:              +33 (0)2 40 30 31 32

Attention:                    Mr. Thierry Le Roux

        
                           Ms. Valérie Féry

	 	 	or to such other address or facsimile number as may be validly notified
from time to time by either party to the other party.

	25	 	COUNTERPARTS
	 
	 	 	This Agreement may be entered into in any number of counterparts and by
the parties to it on separate counterparts, each of which when so
executed and delivered shall be an original, but all counterparts
together shall constitute one and the same instrument.

 

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	26	 	LAW AND SETTLEMENT OF DISPUTES
	 
	26.1	 	This Agreement shall be governed by, and construed and enforced in
accordance with, the Laws of New South Wales, Australia.
	 
	26.2	 	Any dispute that the Parties shall fail to resolve amicably shall be
finally settled in accordance with the Rules of Arbitration of the
International Chamber of Commerce, by one (1) or more arbitrator(s)
designated in accordance with the said Rules. The Arbitration shall be
held in Sydney, New South Wales, Australia.

	27	 	RIGHTS OF THIRD PARTIES
	 
	 	 	Except as expressly provided herein, a person who is not a party to this
Agreement shall have no right to enforce any of its terms. This
Agreement is for the sole and exclusive benefit of the parties to
this Agreement and their successors and permitted assigns.

	28	 	GST

	 	(a)	 	The Seller and the Purchaser agree that it is their intention
that the supply of the Assets and the Business pursuant to this
Agreement be the supply of a going concern for the purposes of
section 38-325 of the GST Act and that the supply be GST-free for
the purposes of the GST law.
	 
	 	(b)	 	The Seller will supply to the Purchaser all of the things
necessary for the continued operation of the enterprise for the
purposes of that section and the Seller will carry on the enterprise
until the day of the supply.
	 
	 	(c)	 	The supply is for consideration, and the Purchaser warrants
that it is registered or required to be registered for GST.
	 
	 	(d)	 	If GST is payable by reference to or in connection with this
Agreement on a Taxable Supply (other than the supply of the Assets
and the Business) made under, by reference to or in connection with
this Agreement, the amount of GST payable in respect of that supply
must be paid as additional consideration. This clause does not apply
if the supplier chooses to apply the margin scheme.
	 
	 	(e)	 	Any reference in the calculation of any amount payable under
this Agreement to a cost, expense or other liability incurred by a
party must exclude the amount of any input tax credit in relation to
that cost, expense or other liability.
	 
	 	(f)	 	No additional amount is payable under clause 28(d) until the
recipient of the supply has received a tax invoice or adjustment
note.
	 
	 	(g)	 	For the purpose of this clause the following words have the
following meaning or meanings:
	 
	 	 	 	‘GST’ means the tax that is payable under the GST law and imposed
as goods and services tax as set out in the GST Act.
	 
	 	 	 	‘GST Act’ means the A New Tax System (Goods and Services Tax) Act
1999, as amended, or if that Act does not exist for any reason, any
other Act

 

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	 	 	 	imposing or relating to the imposition or administration of a goods
and service tax in Australia.
	 
	 	 	 	‘adjustment note’; ‘consideration’; ‘enterprise’; ‘GST-free’; ‘GST
law’; ‘input tax credit’; ‘margin scheme’; ‘registered’; ‘required
to be registered’; ‘supply’; ‘supply of a going concern’; ‘tax
invoice’; and ‘taxable supply’ have the respective meanings given
to each of those terms in the GST Act.

	29	 	TERMINATION
	 
	29.1	 	This Agreement may be terminated, and the transactions contemplated
hereby may be abandoned, at any time prior to the Completion Date:

	 	29.1.1	 	by the written agreement of the Seller and the Purchaser;
	 
	 	29.1.2	 	by either the Seller or the Purchaser if a court of competent
jurisdiction or any governmental authority shall have issued an
order or other Judgement or taken any other action (which order or
other Judgement the parties hereto shall use their commercially
reasonable endeavours to lift), which permanently restrains, enjoins
or otherwise prohibits the transactions contemplated by this
Agreement;
	 
	 	29.1.3	 	by either the Seller or the Purchaser if a material breach of any
provision of this Agreement has been committed by the other party
and such breach has not been waived;
	 
	 	29.1.4	 	(i) by the Seller if any of the conditions in clause 5.1.1 has not
been satisfied as of the Completion Date or if satisfaction of such
condition is or becomes impossible (other than through the failure
of the Seller to comply with its obligations under this Agreement),
and the Seller has not waived such condition on or prior to the
Completion Date, or (ii) by the Purchaser if any of the conditions
in clause 5.1.2 has not been satisfied as of the Completion Date or
if satisfaction of such condition is or becomes impossible (other
than through the failure of the Seller to comply with its
obligations under this Agreement), and the Seller has not waived
such condition on or prior to the Completion Date; or
	 
	 	29.1.5	 	by either the Seller or the Purchaser if Completion shall not have
occurred (other than through the failure of any party seeking to
terminate this Agreement to comply fully with the obligations
hereunder) on or prior to 12:00 p.m. (Geneva time) on January 2,
2004.

	 	 	provided, however, that for purposes of this clause 29, (x) the Purchaser
shall be deemed to be in compliance with its obligations under clause 5.4
hereof through and until 12:00 p.m. (Geneva time) on January 8, 2004, and
(y) the time and date set forth in clause 29.1.5 shall be deemed to read
“12:00 p.m. (Geneva time) on January 8, 2004”, if the Purchaser is able
to demonstrate that prior to 12:00 p.m. (Geneva time) on January 2, 2004
it (or another member of its Group) gave irrevocable instructions to a
first class bank in France to pay the Closing Purchase Price in
immediately available funds to the account specified for such purpose by
the Seller.
	 
	29.2	 	Upon any termination of this Agreement pursuant to clause 29.1, all
further obligations of the parties hereunder, other than pursuant to
clause 17, shall

 

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	 	 	terminate, except that nothing herein shall relieve any party from
liability for any antecedent breach of this Agreement.

	30	 	EXECUTION
	 
	 	 	The parties have shown their acceptance of the terms of this Agreement by
executing it at the end of the Schedules, in Geneva, Switzerland, on the
date first above written.

EXECUTION:

	 	 	 	 	 
	SIGNED by

	 	 	)	 
	duly authorised for and on behalf of

	 	 	)	 
	THALES UNDERWATER

	 	 	)	 
	SYSTEMS PTY LTD
	 	 	 	 
	 
	 
	SIGNED by

	 	 	)	 
	duly authorised for and on behalf of

	 	 	)	 
	SERCEL AUSTRALIA PTY LTD

	 	 	)	 

 

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STATEMENT OF INCOME (NOVEMBER 2003)

	 	 	 	 	 	 	 	 	 	 	 	 	 
	THALES UNDERWATER SYSTEMS Pty
	 	Seismic
	 	 	 	 
	Currency = kAUD	 	 	 	 	 	 
	 	 	CURRENT MONTH	 	CUMULATIVE (2003)	 	YEAR END
	 	 	Actual
	 	Actual
	 	Forecast

	Total Sales
	 	 	7,076	 	 	 	16,992	 	 	 	26,324	 
	of which Inter-TUS Sales
	 	 	—	 	 	 	97	 	 	 	67	 
	Cost of Sales
	 	 	(5,121	)	 	 	(12,502	)	 	 	(19,271	)
	 
	 	 	
 	 	 	 	
 	 	 	 	
 	 
	Gross Profit
	 	 	1,955	 	 	 	4,490	 	 	 	7,053	 
	% of Sales
	 	 	27.6	%	 	 	26.4	%	 	 	26.8	%
	 
	 	 	
 	 	 	 	
 	 	 	 	
 	 
	Positive Cost Variances Traded
	 	 	191	 	 	 	386	 	 	 	252	 
	Negative Cost Variances Traded
	 	 	(1	)	 	 	(208	)	 	 	(220	)
	(Under)/Over Recoveries
	 	 	—	 	 	 	(400	)	 	 	(200	)
	Provisions (Created & Applied)/Released
	 	 	48	 	 	 	1,323	 	 	 	769	 
	 
	 	 	
 	 	 	 	
 	 	 	 	
 	 
	Adjusted gross profit
	 	 	2,192	 	 	 	5,592	 	 	 	7,654	 
	% of Sales
	 	 	31.0	%	 	 	32.9	%	 	 	29.1	%
	 
	 	 	
 	 	 	 	
 	 	 	 	
 	 
	Self Funded Research & Development
	 	 	8	 	 	 	(1,736	)	 	 	(1,756	)
	Bid & Demonstration Expenses
	 	 	—	 	 	 	(642	)	 	 	(686	)
	Business Line Development
	 	 	(107	)	 	 	(597	)	 	 	(708	)
	 
	 	 	
 	 	 	 	
 	 	 	 	
 	 
	BL Contribution
	 	 	2,093	 	 	 	2,616	 	 	 	4,504	 
	% of Sales
	 	 	29.6	%	 	 	15.4	%	 	 	17.1	%
	 
	 	 	
 	 	 	 	
 	 	 	 	
 	 
	Thales Research & Technologies Fees
	 	 	—	 	 	 	—	 	 	 	—	 
	Thint Fees
	 	 	—	 	 	 	—	 	 	 	—	 
	Lobbying & DAFI Fees
	 	 	—	 	 	 	 	 	 	 	—	 
	Sales & Marketing Expenses
	 	 	—	 	 	 	(122	)	 	 	(109	)
	Net Cost of Warranties & Customer Depr.
	 	 	—	 	 	 	 	 	 	 	—	 
	G&A Expenses
	 	 	—	 	 	 	(2,469	)	 	 	(1,884	)
	Thales Group Corporate Fees
	 	 	(106	)	 	 	(253	)	 	 	(394	)
	 
	 	 	
 	 	 	 	
 	 	 	 	
 	 
	Income from operations
	 	 	1,987	 	 	 	(228	)	 	 	2,117	 
	% of Sales
	 	 	28.1	%	 	 	(1.3	%)	 	 	8.0	%
	 
	 	 	
 	 	 	 	
 	 	 	 	
 	 

 

Table of Contents

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Seismic (Rydalmere)
	 	Balance Sheet as at 30 November 2003

	Assets
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Current	 	 	 	 	 	 	 	 	 	 	 	 	 	Seismic
	 
	 	 	 	 	 	Cash	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	1000	 	 	CASH-HAND	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	1010	 	 	CASH-BANK	 	 	1,112,664.66	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	
 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,112,664.66	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 
	 
	 	 	 	 	 	Inventories	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	1100	 	 	RAW MAT&SUB	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	1110	 	 	CIP	 	 	2,857,547.05	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	
 	 
	 
	 	 	 	 	 	 	 	 	 	 	1145	 	 	PROG PAYMENT	 	 	(353,664.73	)
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	
 	 
	 
	 	 	 	 	 	 	 	 	 	 	1150	 	 	INVENTORY PROV	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2,503,882.32	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 
	 
	 	 	 	 	 	Receivables	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	1200	 	 	TDEBTORS	 	 	1,407,983.14	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	
 	 
	 
	 	 	 	 	 	 	 	 	 	 	1210	 	 	PROVN TDEBTS	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	1220	 	 	SUBCONTRACT DEP	 	 	621,017.40	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	
 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2,029,000.54	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 
	 
	 	 	 	 	 	Other Assets	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	1300	 	 	UNREAL EXCH VAR	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	1310	 	 	STAFF ADV	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	1315	 	 	STAFF LOAN	 	 	1,483.50	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	
 	 
	 
	 	 	 	 	 	 	 	 	 	 	1330	 	 	SUND DEBTOR	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	1340	 	 	FITB	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	1350	 	 	PREPAY	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	1360	 	 	RECOVERABLE DEPOSITS	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	1370	 	 	GST (INPUT)	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	1371	 	 	GST RECEIPT FROM ATO	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	1380	 	 	INTERCOMPANY DEBTORS	 	 	120,396.82	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	
 	 
	 
	 	 	 	 	 	 	 	 	 	 	1390	 	 	INVESTMENTS IN SUBS	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	121,880.32	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 
	 
	 	Non-Current	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Fixed Assets	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	1400	 	 	FA COST-DEPRECIABLE	 	 	6,692,777.41	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	1401	 	 	FA COST-NOT DEPREC.	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	1405	 	 	ACCRUED FA	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	1410	 	 	FA ACC DEPN	 	 	(2,846,196.00	)
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	
 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	3,846,581.41	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 
	 
	 	 	 	 	 	Intangibles	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	1500	 	 	GOODWILL	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	1510	 	 	AMORT GW	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	1520	 	 	IP	 	 	4,204,000.00	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	
 	 
	 
	 	 	 	 	 	 	 	 	 	 	1530	 	 	AMORT IP	 	 	(1,558,983.50	)
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	
 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2,645,016.50	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 
	Total Assets
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	12,259,025.75	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 

 

Table of Contents

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Seismic (Rydalmere)
	 	Balance Sheet as at 30 November 2003

	Liabilities
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Current	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Accounts Payable	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	2000	 	 	TCREDITORS	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	2010	 	 	TACCRUAL	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	2020	 	 	ACC EXPENSE	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	2030	 	 	GRN NO INV-non proj	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	2031	 	 	GRN NO INV-proj	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	Provisions	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	2100	 	 	BONUS PROV	 	 	(78,047.83	)
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	
 	 
	 
	 	 	 	 	 	 	 	 	 	 	2110	 	 	AL PROV	 	 	(326,370.00	)
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	
 	 
	 
	 	 	 	 	 	 	 	 	 	 	2120	 	 	ON-COSTS PROV	 	 	(111,476.52	)
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	
 	 
	 
	 	 	 	 	 	 	 	 	 	 	2130	 	 	FBT PROV	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	2140	 	 	ITP	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	2150	 	 	PAYROLL TAX PROV	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	2160	 	 	RESTRUCTURING PROV	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	2170	 	 	LOSS ON CONTRACTPROV	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(515,894.36	)
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 
	 
	 	 	 	 	 	Other Liabilities	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	2200	 	 	PAY CLEARING	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	2220	 	 	DITL	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	2250	 	 	GST (OUTPUT)	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	2251	 	 	GST PAYMENT TO ATO	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	Non-Current	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Payables	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	2300	 	 	ADV PAYMENT	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	2310	 	 	LOANS	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	2320	 	 	LSL PROV	 	 	(338,759.00	)
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	
 	 
	 
	 	 	 	 	 	 	 	 	 	 	2330	 	 	WARRANTY	 	 	(710,590.85	)
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	
 	 
	 
	 	 	 	 	 	 	 	 	 	 	2340	 	 	LONG TERM LIABILITY	 	 	(885,000.00	)
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	
 	 	 	
 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(1,934,349.85	)
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 
	Total Liabilities
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(2,450,244.21	)
	 
	Net Assets
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	9,808,781.54	 

 

Table of Contents

	 	 	 	 	 
	THALES	 	ACCOUNTING PRINCIPLES

AND METHODS

	 	CORPORATE CONTROL

	ACCOUNTING

STANDARDS AND

PROCEDURES

	 	CONTENTS DESCRIPTIVE

SUMMARY
	 	Issue : 14/06/2002

Page : 1/4

	A   —	 	Introduction and presentation
	 
	 	 	This chapter explains how to use the manual, and describes the
importance and scope of each part.
	 
	B   —	 	Conceptual framework
	 
	 	 	This chapter indicates and defines the purpose and primary qualitative
characteristics of the financial statements, and their content. The
theoretical basis of each accounting principle refers to this
framework.
	 
	C   —	 	Financial statement format and content
	 
	 	 	This chapter contains both standard and French formats for the
individual financial statements. It consequently includes the balance
sheet, statements of income analyzed by function and by nature of
revenues and expenses, and statements of cash flow and variation in
shareholders’ equity and other equity and other equity instruments. The
content of each statement line is described. Rules to be followed for
preparation of the notes to the financial statements are also given.
	 
	D   —	 	Intangible and tangible assets
	 
	 	 	This chapter covers the elements constituting these balance sheet
lines, and reporting procedures for lease contract transactions.
	 
	E     —	 	Investments of manufacturing companies
	 
	 	 	This chapter is concerned with investments in subsidiaries, other
investments (other securities and long-term loans), marketable
securities, cash and receivables due from other Group companies.
	 
	F     —	 	Investments and liabilities of financial institutions
	 
	G     —	 	Foreign currency transactions of financial institutions
	 
	 	 	These chapters are largely linked to the same theoretical bases as
Chapters E and S. Their purpose is to consider accounting for financial
instruments in detail, and Chapters F and G are consequently relevant
with respect to transactions conducted by financial institutions.
However, any unit directly involved in the financial markets should
also refer to these chapters.
	 
	H     —	 	Inventories and work in process
	 
	 	 	This chapter deals with all operating assets in general. The
particularities of accounting for inventories of Consumer Electronics
products and goods-for-resale are included. Valuation and the treatment
of work in process for long-term contracts, which represent
the greater part of Defense Electronics business, are dealt with in
more detail in Chapter O « Accounting for long-term contracts ».

 

Table of Contents

	 	 	 	 	 
	THALES	 	ACCOUNTING PRINCIPLES

AND METHODS

	 	CORPORATE CONTROL

	ACCOUNTING

STANDARDS AND

PROCEDURES

	 	CONTENTS DESCRIPTIVE

SUMMARY
	 	Issue : 14/06/2002

Page : 2/4

	I     —	 	Provisions for contingencies and losses

	 	 	This chapter is essentially devoted to the theory of cost
accrual and reserves for contingencies. Accrued warranty
costs and restructuring costs are also considered, together
with reserves for contingencies.

	 	 	Pension costs are dealt with in a separate chapter, given the
particularities of this subject (extended maturity dates,
actuarial valuation, etc.) (see Chapter L).

	 	 	Accrued costs on long-term contracts are included in Chapter
O « Accounting for long-term contracts ».

	 	 	Note : Depreciation and valuation allowances are dealt with in
the chapters concerning the assets to which they relate.

	J     —	 	Operating assets and liabilities
	 
	 	 	This chapter deals with the principles to be applied for accounting for
receivables and payables, tax, social and miscellaneous receivables and
debts, and accrued and deferred costs and revenues.
	 
	K     —	 	Shareholders’ equity, other equity instruments and debt
	 
	 	 	This chapter covers the various elements included on these balance
sheet lines. In particular, the accounting principles define the
criteria to be adopted, to establish the distinctions made between
these three forms of funding, and the various resultant reporting
standards to be followed. Details of accounting for stock option plans
are also included in this chapter.
	 
	L     —	 	Pension costs
	 
	 	 	This reserve is merely a special type of reserve for contingencies.
However, it embodies a sufficient number of particular features
(extended maturity, multiple parameters, determination by actuarial
valuation, possibility of pension scheme operation by an external
authority) to merit a separate chapter.
	 
	M     —	 	Revenue recognition
	 
	 	 	This chapter deals with criteria to be applied for the financial
reporting of revenue items in the income statement. It deals with sales
of products, goods-for-resale and services. This capter also deals with
other operating revenues, such as subsidies and royalties.
	 
	N     —	 	Cost of sales and expenses of the period
	 
	 	 	This chapter defines the principles for matching expenses with revenue
(cost of sales), or period. This chapter constitutes the reporting
reference for the statement of income analyzed by function.

 

Table of Contents

	 	 	 	 	 
	THALES	 	ACCOUNTING PRINCIPLES

AND METHODS

	 	CORPORATE CONTROL

	ACCOUNTING

STANDARDS AND

PROCEDURES

	 	CONTENTS DESCRIPTIVE

SUMMARY
	 	Issue : 14/06/2002

Page : 3/4

	O     —	 	Accounting for long-term contracts
	 
	 	 	This chapter deals with problems arising in connection with long-term
contracts, and notification of completion, and consequently refers, in
particular, to the principles governing the valuation of work in
process (Chapter H), revenue recognition (Chapter M), cost of sales
(Chapter N), and accrued costs and reserves for contingencies (Chapter
I).
	 
	P     —	 	Research and development
	 
	 	 	This chapter covers accounting methods concerning R&D work (sponsored,
partially sponsored and self-funded), and consequently refers, in
particular, to the principles governing valuation of work in process
(Chapter H), revenue recognition (Chapter M), cost of sales (Chapter N)
and accrued costs and reserves for contingencies (Chapter I). This
chapter provides a complement to Chapter D (Intangible assets).
	 
	Q     —	 	Extraordinary items and other non-current income
	 
	 	 	This chapter sets out the criteria for the classification of, and
distinction between income before tax, non-current income and
extraordinary items, together with corresponding reporting standards to
be applied for preparation of the financial statements.
	 
	R1    —	 	Income tax
	 
	 	 	This chapter indicates basic theory, and accounting and determination
principles for deferred income tax.
	 
	R2    —	 	Profit-sharing and financial charge on other equity
	 
	 	 	This chapter concerns reporting standards for inclusion of these items
in the statement of income.
	 
	S     —	 	Foreign currency transactions of manufacturing companies
	 
	 	 	This chapter deals with the problems of conversion for transactions
denominated in foreign currencies, and financial statements for units
located outside France.
	 
	T    —	 	Commitments, contingencies and other off-balance-sheet information
	 
	 	 	This chapter covers financial reporting standards for liabilities and
contingencies to which the company is subject, by which are not
reflected in the book of account, and other information of practical
use to readers of the financial statements.
	 
	U     —	 	Comparability of financial statements
	 
	 	 	This chapter is devoted to reporting standards for reflecting the
impact of changes in accounting methods, and correction of errors or
omissions made during previous operating periods.
	 
	V     —	 	Related party transactions
	 
	 	 	This chapter deals with information which it is appropriate to publish
with the financial statements, in order to reflect the impact of
intra-Group transactions.

 

Table of Contents

	 	 	 	 	 
	THALES	 	ACCOUNTING PRINCIPLES

AND METHODS

	 	CORPORATE CONTROL

	ACCOUNTING

STANDARDS AND

PROCEDURES

	 	CONTENTS DESCRIPTIVE

SUMMARY
	 	Issue : 14/06/2002

Page : 4/4

	W     —	 	Doctrine references
	 
	 	 	This chapter comprises a reference table, correlating the different
chapters of the manual with International, American and French
accounting doctrine sources. These include texts published by IASC
(International Accounting Standard Committee), FASB (Financial
Accounting Standards Board — USA), and its predecessors (ARB and APB),
OECCA (Ordre des Experts-Comptables — France), CNC (Conseil National de
la Comptabilité — France), SEC (Securities Exchange Commission — USA)
and COB (Commission des Opérations de Bourse — France).

 

Table of Contents

SCHEDULE 3 — BUSINESS CONTRACTS/AGREEMENTS LIST

	 	 	 	 	 	 	 	 	 
	CONTRACTOR
	 	TYPE OF DOCUMENT
	 	DATE SIGNED
	 	EXPIRY DATE
	 	Contract Type

	ANZ BANK

	 	Agreement for Export Credit Backed Lease Facility for Seismic Array
	 	17-Oct-02
	 	17-Mar-05
	 	Customer Contract
	 
	I/O MARINE SYSTEMS INC.

	 	Licence Agreement
	 	19-Jun-03
	 	19-Jun-08
	 	Intellectual Property Contract
	 
	JDR CABLES SYSTEMS

	 	Contract for the repair and Maintenance
of solid seismic cables
	 	15-Dec-00
	 	31-Dec-05
	 	Supplier Contract and Leasehold Agreement
	 
	PROFOCUS SYSTMS AS

	 	Deed — Initial development licence for an Argus System
	 	18-Dec-01
	 	 	 	Intellectual Property Contract
	 
	SEND-SIGNAL ELECTRONIK

UND NETZ-DIENSTE GMBH

	 	Agreement — Basis of collaboration for
integration of Send’s products in
Seismic Seabed System
	 	20-Dec-02
	 	20-Dec-03
	 	Supplier Contract
	 
	VERITAS DGC ASIA

PACIFIC LTD

	 	Insurance Indemnity Agreement sale of VIP
	 	16-Apr-02
	 	 	 	Customer Contract
	 
	VIKING MARITIME INC

	 	Equipment Loan Agreement
	 	21-Dec-02
	 	 	 	Customer Contract
	 
	WESTERN GECO

	 	Permission to Publish and distribute
information on web sites in the
Schlumberger intranet
	 	10-Mar-03
	 	 	 	Customer Contract
	 
	WESTERN GECO

	 	Master Service Agreement for Repair of
Sentry Cables-USA
	 	23-Sep-03
	 	22-Sep-05
	 	Customer Contract
	 
	WESTERN GECO

	 	Master Service Agreement for Repair of
Sentry Cables-Rest of World
	 	23-Sep-03
	 	22-Sep-05
	 	Customer Contract
	 
	SEND-SIGNAL ELECTRONIK UND NETZ-DIENSTE GMBH

	 	Technology Transfer Agreement
	 	8-Aug-03
	 	7-Aug-06
	 	Intellectual Property Contract
	 
	SEND-SIGNAL ELECTRONIK UND NETZ-DIENSTE GMBH

	 	License Agreement
	 	2-Dec-03
	 	perpetual
	 	Intellectual Property Contract
	 
	WESTERN GECO

	 	Purchase of 30 x 100m Guardian Section
	 	7-Nov-03
	 	 	 	Customer Contract
	 
	WESTERN GECO

	 	Purchase of 20 x 100m Guardian Section
	 	18-Nov-03
	 	 	 	Customer Contract

 

Table of Contents

	 	 	 	 	 
	Covered Employees

	Andrew	 	Gallagher
	Bob	 	Dowle
	Don	 	Wallace

 

Table of Contents

PTY Seismic Project Assets Not Included in FAR listing as at 30 June 2003

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Asset Ref
	 	Cost
	 	Date Acquired
	 	 	 	 	 	 	 	 	 	 
	6422
	 	$	2,319.23	 	 	23-Jul-02	 	 	100.00	%	 	S.Line	 	Static Half/Full size racks to upgrade KANBAN materials	 	Reflex Pty Ltd.
	6178
	 	$	1,497.80	 	 	01-Feb-02	 	 	100.00	%	 	S.Line	 	Switchboard Guardian Twinax (Veritas) Sections Add'l Costs	 	Simplex Engineering
	5797
	 	$	1,500.00	 	 	16-Aug-01	 	 	100.00	%	 	S.Line	 	Bender Curing Dwell System upgrade	 	J & D Thompson  Engineering
	6420
	 	$	1,738.00	 	 	01-Jul-02	 	 	100.00	%	 	S.Line	 	Packing Drum Winder Drive (high rated) Unit used in Ballast	 	Bonfiglioli Transmission
	4220
	 	$	2,400.00	 	 	15-Jun-00	 	 	100.00	%	 	S.Line	 	Load cell and digital indicator (Kevlar Termination)	 	Hi-Weigh Australia P/L
	6460
	 	$	3,312.00	 	 	02-Aug-02	 	 	100.00	%	 	S.Line	 	Memor 2000 LF RFID Handheld Terminal/1MB Memory for Streamer	 	Electro-Com
	5794
	 	$	2,472.45	 	 	27-Aug-01	 	 	100.00	%	 	S.Line	 	Supply 3M Jet-Weld TMII Applicator -Order code 0372342	 	3M Australia P/L
	6231
	 	$	8,076.14	 	 	07-Mar-02	 	 	100.00	%	 	S.Line	 	Crimp Tool Amphinol no. 827400004-501 & 8274006-501	 	Amphenol Australia P/L
	4363
	 	$	4,898.00	 	 	01-Sep-00	 	 	100.00	%	 	S.Line	 	PCI-MO-18E Multifunction PCI Board/S/Ware for WinNT-Adelaide	 	National Instruments
	6084
	 	$	8,948.80	 	 	09-Dec-01	 	 	100.00	%	 	S.Line	 	(2) Jacket Welding Controller/(4) Jacket Welding Lead	 	Simplex Engineering
	5500
	 	$	11,225.00	 	 	08-Jan-01	 	 	100.00	%	 	S.Line	 	Overhaul the existing Rework Bench	 	All Type Jolnery
	4079
	 	$	10.056.00	 	 	13-Mar-00	 	 	100.00	%	 	S.Line	 	Complete ATE Relay box & conformed coating of PCB’s	 	Qualited Ltd.
	4460
	 	$	5,579.07	 	 	01-Nov-00	 	 	100.00	%	 	S.Line	 	Dell AW-Precision 420 Minitower - S/N 4R5521S	 	Dell Computer
	4461
	 	$	5,579.07	 	 	01-Nov-00	 	 	100.00	%	 	S.Line	 	Dell Precision 420 Minitower
— S/N 5R5521S	 	Dell Computer
	4462
	 	$	5,579.07	 	 	01-Nov-00	 	 	100.00	%	 	S.Line	 	Dell Precision 420 Minitower
— S/N 6R5521S	 	Dell Computer
	4463
	 	$	5,579.07	 	 	01-Nov-00	 	 	100.00	%	 	S.Line	 	Dell Precision 420 Minitower
— S/N 7R521S	 	Dell Computer
	4464
	 	$	5,579.07	 	 	01-Nov-00	 	 	100.00	%	 	S.Line	 	Dell Precision 420 Minitower
— S/N 8R5521S	 	Dell Computer
	4465
	 	$	5,579.07	 	 	01-Nov-00	 	 	100.00	%	 	S.Line	 	Dell Precision 420 Minitower
— S/N 9R5521S	 	Dell Computer
	4466
	 	$	5,579.07	 	 	01-Nov-00	 	 	100.00	%	 	S.Line	 	Dell Precision 420 Minitower
— S/N BR5521S	 	Dell Computer
	2795
	 	 	972	 	 	07-Jan-99	 	 	100.00	%	 	S.Line	 	LCR Meter LSCORT LLC-131D/Digital Multimeter Textron	 	Emona Instruments
	2833
	 	 	4.058	 	 	01-Mar-99	 	 	100.00	%	 	S.Line	 	Helios Electroheat/Machining of jackett welding Jigs	 	SMR Pty Ltd.
	2930
	 	 	3.430	 	 	01-Sep-99	 	 	100.00	%	 	S.Line	 	Vibration Test Facility
add’l Costs — Adelaide	 	Refer CWIP details
	2999
	 	 	4.653	 	 	10-Oct-99	 	 	100.00	%	 	S.Line	 	PC for sales/Mktg Office in USA with Docking station/Monitor	 	B. Ling Exp.—(Best Buy)
	3016
	 	 	2.500	 	 	30-Sep-99	 	 	100.00	%	 	S.Line	 	Cable Sheath Planer-Modifications	 	EAS Toolcraft, PA.
	3049
	 	 	3.800	 	 	01-Dec-99	 	 	100.00	%	 	S.Line	 	PC-Pentium	 	B. Ling Expenses (Best Buy)
	3062
	 	 	5.847	 	 	10-May-99	 	 	100.00	%	 	S.Line	 	Latitude CPIA366XT 13.3°.TFT.YS/WW	 	Dell Receivable, L.P.—USA
	3063
	 	 	785	 	 	12-Nov-99	 	 	100.00	%	 	S.Line	 	Digital Camera	 	Benny Ling Expenses Claim
	3088
	 	 	1.009	 	 	18-Oct-99	 	 	100.00	%	 	S.Line	 	Installation of pew Eye Wash Stations for production area	 	Walsh Plumbing Co. P/L
	3099
	 	 	9.373	 	 	13-Jan-00	 	 	100.00	%	 	S.Line	 	Automated Test Equipments (ATE’s) for Seismic	 	National Instruments
	4000
	 	 	5.098	 	 	01-Jan-00	 	 	100.00	%	 	S.Line	 	2xAutomated test Equipments (ATE’s) for Seismic Houston	 	Dell Computer Pty Ltd
	4008
	 	 	2.474	 	 	01 Feb 00	 	 	100.00	%	 	S.Line	 	Intel PC 610P4/250-E Pentium	 	Priority Electronics
	4009
	 	 	3.230	 	 	22 Feb 00	 	 	100.00	%	 	S.Line	 	Acoustic Test Job 19547-1(2) Test Equipment	 	SMR Pty Ltd.
	4025
	 	 	410	 	 	27-Jan-00	 	 	100.00	%	 	S.Line	 	Deck trolleys 760x410W & 100m deeptray-Seismic Production	 	Reflex Pty Ltd
	4026
	 	 	410	 	 	27-Jan-00	 	 	100.00	%	 	S.Line	 	Deck trolleys 760x410W & 100m deeptray-Seismic Production	 	Reflex Pty Ltd
	4027
	 	 	410	 	 	27-Jan-00	 	 	100.00	%	 	S.Line	 	Deck trolleys 760x410W & 100m deeptray-Seismic Production	 	Reflex Pty Ltd
	4028
	 	 	410	 	 	27-Jan-00	 	 	100.00	%	 	S.Line	 	Deck trolleys 760x410W & 100m deeptray-Seismic Production	 	Reflex Pty Ltd
	4029
	 	 	410	 	 	27-Jan-00	 	 	100.00	%	 	S.Line	 	Deck trolleys 760x410W & 100m deeptray-Seismic Production	 	Reflex Pty Ltd
	4030
	 	 	410	 	 	27-Jan-00	 	 	100.00	%	 	S.Line	 	Deck trolleys 760x410W & 100m deeptray-Seismic Production	 	Reflex Pty Ltd
	4077
	 	 	16.336	 	 	17-Feb-00	 	 	100.00	%	 	S.Line	 	(2) Automated test Equipments 43398 High Resistance Meter	 	Aglient Technologies

 

Table of Contents

PTY Seismic Project Assets Not Included in FAR listing as at 30 June 2003

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Asset Ref
	 	Cost
	 	Date Acquired
	 	 	 	 	 	 	 	 	 	 
	4078
	 	 	2.622	 	 	23-Feb-00	 	 	100.00	%	 	S.Line	 	IPC-610P4/250-E610 VER E Pentium CPU Card	 	Priority Electronics
	4118
	 	 	7.730	 	 	13-Mar-03	 	 	100.00	%	 	S.Line	 	(2) Automated Test Equipments
(ATE’s) for Seismic Housl	 	Trio Electrix P/L
	4119
	 	 	6.590	 	 	27-Mar-00	 	 	100.00	%	 	S.Line	 	(2) Automated test Equipmentq for Seismic	 	Trio Electrix P/L
	4120
	 	 	60	 	 	29-Mar-00	 	 	100.00	%	 	S.Line	 	Complete ATE Relay box &
conformed coating of PCB’s	 	Qualitec Ltd.
	4133
	 	 	3.800	 	 	01-May-00	 	 	100.00	%	 	S.Line	 	RFP9188 Pipe Assembly lig	 	SMS Pneumatics
	4134
	 	 	2.845	 	 	01-May-00	 	 	100.00	%	 	S.Line	 	Thermal incubarot with 50 mm access port R155-351-D Model	 	Thermoline Scientific
	4135
	 	 	1.799	 	 	03-May-00	 	 	100.00	%	 	S.Line	 	Nikno Coopix 950 Digital Camera	 	Camera House
	4173
	 	 	142	 	 	30-May-00	 	 	100.00	%	 	S.Line	 	(1) Grey Ergotek Bookcase 1800H-Seismic	 	Affordable Office Furniture
	4219
	 	 	3.990	 	 	01-June-00	 	 	100.00	%	 	S.Line	 	New Ergonomic chair with special
casters — Seismic	 	Total Package Mangement
	4222
	 	 	1.140	 	 	08-June-00	 	 	100.00	%	 	S.Line	 	(10) Grey Table Tops 25 mm for Seismic training room	 	Affordable Office Furniture
	4235
	 	 	85	 	 	30-June-00	 	 	100.00	%	 	S.Line	 	Kodak Battery Charger (Seismic) Petty cash	 	Petty cash
	4271
	 	 	220	 	 	17-Jul-00	 	 	100.00	%	 	S.Line	 	Load cell and digital indicator (Kevlar Termination)	 	All States Industries P/L
	4284
	 	 	6.015	 	 	01-Aug-00	 	 	100.00	%	 	S.Line	 	Labview Professional Developers Suite Adelaide	 	National Instruments
	4298
	 	$	15,285.00	 	 	01-Aug-00	 	 	100.00	%	 	S.Line	 	Camalot glue dispensing station	 	Suba Engineering
	4303
	 	 	1.566	 	 	04-Aug-00	 	 	100.00	%	 	S.Line	 	Magger Insulation &
Continuity Tester — Seismic	 	RS Components
	4304
	 	 	416	 	 	08-Aug-00	 	 	100.00	%	 	S.Line	 	A Bug Model 240 Tone Probe Kit
Complete — Seismic	 	TestCom Data
	4305
	 	 	1.170	 	 	10-Aug-00	 	 	100.00	%	 	S.Line	 	Microscope 320x with gilded
& Universal adaptor — Seism/	 	Ausoptic Pty Ltd.
	4356
	 	 	979	 	 	01-Sep-00	 	 	100.00	%	 	S.Line	 	Precision Digital Balance Model SDDJ 800P for Seismic	 	Wedderbum Scales
	4357
	 	 	1.594	 	 	08-Sep-00	 	 	100.00	%	 	S.Line	 	Acoustics Black Box for Seismic	 	Qualitec Limited
	4358
	 	 	2.146	 	 	11-Sep-00	 	 	100.00	%	 	S.Line	 	RZ 4500 Self supporting Fume arm/Extention Hood-Seismic	 	Pyrotek Pty Ltd
	4359
	 	 	1.594	 	 	08-Sep-00	 	 	100.00	%	 	S.Line	 	Assemble Acoustic Black
Box/Eng’g PCB for Adelaide	 	Qualitec Limited
	4360
	 	 	1.594	 	 	08-Sep-00	 	 	100.00	%	 	S.Line	 	Assemble Acoustic Black
Box/Eng’g PCB for Seismic UK	 	Qualitec Limited
	4361
	 	 	1.120	 	 	01-Sep-00	 	 	100.00	%	 	S.Line	 	SIM to Billet Moulds tooling and
controller unit — Seismic	 	Hellos Electroheat Pty Lty
	4362
	 	 	1.594	 	 	08-Sep-00	 	 	100.00	%	 	S.Line	 	Assemble Acoustic Black
Box/Eng’g PCB for BSI Houston	 	Qualitec Limited
	4367
	 	$	99,260.38	 	 	01-Sep-00	 	 	100.00	%	 	S.Line	 	Camalot glue dispensing station
— Acoustics	 	Suba Eng’g/Speedline Tech.
	4396
	 	 	1.594	 	 	01-Oct-00	 	 	100.00	%	 	S.Line	 	Materials/Assemble Acoustic
Black box/Eng’g PCB for BSI Ho	 	Qualitec Limited
	4397
	 	 	300	 	 	10-Oct-00	 	 	100.00	%	 	S.Line	 	MS Project 2000 Win 32 Eng MVL for Seismic Prod Supervisor	 	Volante Integrated Technology
	4413
	 	 	2.390	 	 	24-Nov-00	 	 	100.00	%	 	S.Line	 	Avery H400 industrial Digital
Platform Scale — TA/Seismic	 	Accuweigh AWS Pty Ltd.
	4459
	 	 	2.000	 	 	01-Nov-00	 	 	100.00	%	 	S.Line	 	Seismic repairs — data collection (feasibility study)	 	Quality Management Products
	5530
	 	 	2.018	 	 	29-Jan-01	 	 	100.00	%	 	S.Line	 	Megger Meter BM80/2 model — Seismic	 	Farnell Electronic Components
	5679
	 	 	123	 	 	04-May-00	 	 	100.00	%	 	S.Line	 	48X IDE DC Drive for Franois Luc	 	Volante Integrated Technology
	5748
	 	 	2.500	 	 	12-Jul-00	 	 	100.00	%	 	S.Line	 	Install (19) x 100 ma RCD’s
for Drum Winders — Seismic	 	Combined Electrical & Mechanic
	5977
	 	 	4.800	 	 	01-Oct-01	 	 	100.00	%	 	S.Line	 	Repairs to Seismic Potting Cup Die, tooling modification	 	Dolphin Products P/L
	6033
	 	 	9.500	 	 	21-Nov-01	 	 	100.00	%	 	S.Line	 	50% payment — Steel Support structure Skinning table	 	Morad & Partners
	6034
	 	 	1.268	 	 	01-Nov-01	 	 	100.00	%	 	S.Line	 	AS Masterbinder Super & Laminator for Seismic Dept.	 	Masterbind
	6085
	 	 	549	 	 	17-Dec-01	 	 	100.00	%	 	S.Line	 	Windows XP 2000 Prof/PC Anywhere for Symantec	 	Citisoft Software 2U
	6132
	 	 	9.500	 	 	08-Jan-02	 	 	100.00	%	 	S.Line	 	Install/Supply Support Structure
for skinning Rig — Seismic	 	Morad & Partners
	6342
	 	 	337	 	 	13-May-02	 	 	100.00	%	 	S.Line	 	Mitsubishi CD Burner 40Rx32Wx10RW Internal IDE Kit Seismic	 	Volante Integrated Technology
	6377
	 	 	1.728	 	 	26-Jun-02	 	 	100.00	%	 	S.Line	 	Sony MVC-FD75 Digital Camera for TSS sea Trial bulid	 	Corporate Express
	6419
	 	 	1.889	 	 	01-Jul-02	 	 	100.00	%	 	S.Line	 	Sony MVC-FD75 Digital Camera for TSS sea Trial bulid	 	G & V Imaging P/L
	6421
	 	$	18,135.00	 	 	08-Jul-02	 	 	100.00	%	 	S.Line	 	Syntrak 150 metres Cable Manufacture 25x Billet/billet/Assemb	 	 

 

Table of Contents

PTY Seismic Project Assets Not Included in FAR listing as at 30 June 2003

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Asset Ref
	 	Cost
	 	Date Acquired
	 	 	 	 	 	 	 	 	 	 
	6459
	 	 	6.972	 	 	18-Jul-02	 	 	100.00	%	 	S.Line	 	Seismic Protting Cup die insert
modification — Acoustics Arrays	 	Dolphin Products P/L
	6488
	 	 	1.742	 	 	13-Sep-02	 	 	100.00	%	 	S.Line	 	Fume Extraction Hood for Alcohol
Cleaning station — Seismic	 	Seltronics Pty Ltd.
	6582
	 	 	1.927	 	 	01-Oct-02	 	 	100.00	%	 	S.Line	 	Grey Ergotek hutch 1800mm for Seismic Telemetry Team	 	Affordable Office Furniture
	6581
	 	 	541	 	 	01-Nov-02	 	 	100.00	%	 	S.Line	 	Software package Acrobat Adobe V5.0 Win CD for Seismic suppo	 	Volante Systems
	6599
	 	 	720	 	 	01-Dec-02	 	 	100.00	%	 	S.Line	 	Spring Forming Tool for Stretch
Mig — Seismic	 	Gidd Pty Ltd
	6610
	 	 	886	 	 	20-Jan-03	 	 	100.00	%	 	S.Line	 	CAT6 VGA Video Splitter 2CH & emote CAT5VGA Video Splitter	 	Black box Network P/L
	6623
	 	 	2.700	 	 	02-Jan-03	 	 	100.00	%	 	S.Line	 	Existing Overflow Tank in Seismic Skinning	 	W.C. Lesler & Sons Pty Ltd
	6628
	 	 	600	 	 	21 Feb 03	 	 	100.00	%	 	S.Line	 	40m of ESD Anti-Static Matting for Military Towed Array Stee	 	Okay Electronic Solutions
	6644
	 	 	293	 	 	17-Mar-03	 	 	100.00	%	 	S.Line	 	License for upgrade from NT4 for
windows 2000 — Seismic	 	Volante Systems P/L
	6645
	 	 	14	 	 	21-Mar-03	 	 	100.00	%	 	S.Line	 	ESD Bench Kits for FFG Production Work	 	Henchman Production
	6854
	 	 	276	 	 	09-Apr-03	 	 	100.00	%	 	S.Line	 	CD RW KL-C610 24x CD-RW for T. Lindars Laptop	 	Dell Computer Pty Ltd.
	 
	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	$	404,173.32	 	 	Total Project Specific Assets not included in FAR Listing
	 
	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

Table of Contents

	 	 	 
	Thales Underwater Systems Seismic Inc

	 	Location: Houston
	Fixed Assets Acquired By Month of Acquisition – as at 30 June 2003

Currency: USD

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Acc.	 	Net Book
	 	 	 	 	 	 	Month	 	 	 	 	 	Depreciation	 	Value
	 	 	 	 	 	 	Acquired
	 	Asset Value
	 	USD
	 	USD

	1401.Furniture – 7Yrs	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Yr1
	 	 	0.1429	 	 	Jan-00	 	$	5,863.90	 	 	$	3,665.82	 	 	$	2,198.08	 
	Yr2
	 	 	0.2449	 	 	Jul-00	 	$	5,021.54	 	 	$	2,804.70	 	 	$	2,216.84	 
	Yr3
	 	 	0.1749	 	 	Aug-00	 	$	171.64	 	 	$	94.08	 	 	$	77.56	 
	Yr4
	 	 	0.1249	 	 	Nov-00	 	$	1,916.03	 	 	$	966.45	 	 	$	949.58	 
	 
	 	 	 	 	 	Jan-02	 	$	216.49	 	 	$	57.45	 	 	$	159.04	 
	 
	 	 	 	 	 	Mar-02	 	$	97.35	 	 	$	21.86	 	 	$	75.49	 
	 
	 	 	 	 	 	May-02	 	$	536.92	 	 	$	98.64	 	 	$	438.28	 
	 
	 	 	 	 	 	Jun-02	 	$	450.44	 	 	$	73.56	 	 	$	376.88	 
	 
	 	 	 	 	 	Oct-02	 	$	941.74	 	 	$	100.93	 	 	$	840.81	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 
	Total Furniture	 	 	 	 	 	$	15,216.05	 	 	$	7,883.48	 	 	$	7,332.57	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 
	1402.Equipment – 7Yrs	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Yr1
	 	 	0.1429	 	 	Jan-00	 	$	2,668.06	 	 	$	1,667.94	 	 	$	1,000.12	 
	Yr2
	 	 	0.2449	 	 	Feb-00	 	$	7,893.31	 	 	$	4,852.35	 	 	$	3,040.96	 
	Yr3
	 	 	0.1749	 	 	Mar-00	 	$	1,186.19	 	 	$	716.85	 	 	$	469.34	 
	Yr4
	 	 	0.1249	 	 	May-00	 	$	250.01	 	 	$	145.89	 	 	$	104.12	 
	 
	 	 	 	 	 	Jun-00	 	$	4,249.00	 	 	$	2,435.14	 	 	$	1,813.86	 
	 
	 	 	 	 	 	Jul-00	 	$	923.64	 	 	$	519.73	 	 	$	403.91	 
	 
	 	 	 	 	 	Sep-00	 	$	14.86	 	 	$	7.93	 	 	$	6.93	 
	 
	 	 	 	 	 	Nov-00	 	$	573.68	 	 	$	289.36	 	 	$	284.32	 
	 
	 	 	 	 	 	Dec-00	 	$	3,288.64	 	 	$	1,745.14	 	 	$	1,543.50	 
	 
	 	 	 	 	 	Jul-01	 	$	178.61	 	 	$	69.26	 	 	$	109.53	 
	 
	 	 	 	 	 	Dec-02	 	$	4,811.10	 	 	$	401.05	 	 	$	4,410.05	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 
	Total Equipment	 	 	 	 	 	$	26,037.10	 	 	$	12,850.64	 	 	$	13,186.46	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 
	1403.Computer Software – 3yrs	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Yr1
	 	 	0.3333	 	 	Dec-99	 	$	541.24	 	 	$	541.21	 	 	$	0.03	 
	Yr2
	 	 	0.4445	 	 	Jan-00	 	$	291.19	 	 	$	291.18	 	 	$	0.01	 
	Yr3
	 	 	0.1481	 	 	Feb-00	 	$	330.10	 	 	$	326.01	 	 	$	4.09	 
	 
	 	 	 	 	 	Jul-00	 	$	757.74	 	 	$	701.59	 	 	$	56.15	 
	 
	 	 	 	 	 	Sep-00	 	$	627.82	 	 	$	565.80	 	 	$	62.02	 
	 
	 	 	 	 	 	Oct-00	 	$	39.68	 	 	$	35.27	 	 	$	4.41	 
	 
	 	 	 	 	 	Dec-01	 	$	260.55	 	 	$	154.40	 	 	$	106.15	 
	 
	 	 	 	 	 	Mar-02	 	$	389.52	 	 	$	173.10	 	 	$	216.42	 
	 
	 	 	 	 	 	Dec-02	 	$	749.63	 	 	$	145.75	 	 	$	603.88	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 
	Total Computer Software	 	 	 	 	 	$	3,987.47	 	 	$	2,934.31	 	 	$	1,053.16	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 

 

Table of Contents

	 	 	 
	Thales Underwater Systems Seismic Inc

	 	Location: Houston
	Fixed Assets Acquired By Month of Acquisition – as at 30 June 2003

Currency: USD

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	1404.Building Improvements - 5yrs*	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Yr1
	 	 	0.2	 	 	May-00	 	$	26,000.00	 	 	 	 	 	 	$	19,011.20	 	 	$	6,988.80	 
	Yr2
	 	 	0.32	 	 	Jul-00	 	$	5,738.45	 	 	 	 	 	 	$	4,085.78	 	 	$	1,652.67	 
	Yr3
	 	 	0.192	 	 	Aug-00	 	$	194.16	 	 	 	 	 	 	$	135.14	 	 	$	59.02	 
	Yr4
	 	 	0.1152	 	 	Oct-00	 	$	9,388.65	 	 	 	 	 	 	$	6,234.06	 	 	$	3,154.59	 
	 
	 	 	 	 	 	Jul-01	 	$	85.75	 	 	 	 	 	 	$	44.59	 	 	$	41.16	 
	* Term of Lease
	 	Aug-01	 	$	56.46	 	 	$	0.90	 	 	$	27.85	 	 	$	28.61	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
 	 	 	 	
 	 
	Total Building Improvements	 	 	 	 	 	$	41,463.47	 	 	 	 	 	 	$	29,538.62	 	 	$	11,924.85	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
 	 	 	 	
 	 
	1405.Factory Equipment	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	General	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Yr1
	 	 	0.1429	 	 	Jun-00	 	$	44,557.65	 	 	 	 	 	 	$	25,536.36	 	 	$	19,021.29	 
	Yr2
	 	 	0.2449	 	 	Jul-00	 	$	23,076.46	 	 	 	 	 	 	$	12,985.12	 	 	$	10,091.34	 
	Yr3
	 	 	0.1749	 	 	Aug-00	 	$	31,152.94	 	 	 	 	 	 	$	17,075.71	 	 	$	14,077.23	 
	Yr4
	 	 	0.1249	 	 	Sep-00	 	$	50,648.19	 	 	 	 	 	 	$	27,023.34	 	 	$	23,624.85	 
	 
	 	 	 	 	 	Oct-00	 	$	4,227.39	 	 	 	 	 	 	$	2,193.91	 	 	$	2,033.48	 
	 
	 	 	 	 	 	Nov-00	 	$	151.78	 	 	 	 	 	 	$	76.56	 	 	$	75.22	 
	 
	 	 	 	 	 	Dec-00	 	$	994.56	 	 	 	 	 	 	$	487.16	 	 	$	507.40	 
	 
	 	 	 	 	 	Jan-01	 	$	2,240.14	 	 	 	 	 	 	$	1,064.63	 	 	$	1,175.51	 
	 
	 	 	 	 	 	Mar-01	 	$	1,638.66	 	 	 	 	 	 	$	731.01	 	 	$	907.65	 
	 
	 	 	 	 	 	May-01	 	$	1,160.90	 	 	 	 	 	 	$	484.04	 	 	$	676.86	 
	 
	 	 	 	 	 	Jun-01	 	$	285.80	 	 	 	 	 	 	$	115.00	 	 	$	170.80	 
	 
	 	 	 	 	 	Jul-01	 	$	33.88	 	 	 	 	 	 	$	13.14	 	 	$	20.74	 
	 
	 	 	 	 	 	Sep-01	 	$	854.00	 	 	 	 	 	 	$	296.32	 	 	$	557.68	 
	 
	 	 	 	 	 	Oct-01	 	$	324.34	 	 	 	 	 	 	$	105.92	 	 	$	218.42	 
	 
	 	 	 	 	 	Nov-01	 	$	927.49	 	 	 	 	 	 	$	283.97	 	 	$	643.52	 
	 
	 	 	 	 	 	Mar-02	 	$	80.63	 	 	 	 	 	 	$	18.10	 	 	$	62.53	 
	 
	 	 	 	 	 	Apr-02	 	$	1,666.00	 	 	 	 	 	 	$	340.07	 	 	$	1,325.93	 
	Yr1
	 	 	0.3333	 	 	Oct-02	 	$	40,703.95	 	 	 	 	 	 	$	10,174.97	 	 	$	30,528.98	 
	Yr2
	 	 	0.4445	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	—	 	 	$	—	 
	Yr3
	 	 	0.1481	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	—	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	—	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
 	 	 	 	
 	 
	Total Factory Equipment	 	 	 	 	 	$	204,724.76	 	 	 	 	 	 	$	99,005.32	 	 	$	105,719.44	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
 	 	 	 	
 	 
	1407.Trade Show Equipment - 3yrs	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Yr1
	 	 	0.3333	 	 	Apr-01	 	$	18,062.50	 	 	 	 	 	 	$	14,717.78	 	 	$	3,344.72	 
	Yr2
	 	 	0.4445	 	 	May-01	 	$	23,168.29	 	 	 	 	 	 	$	18,590.56	 	 	$	4,575.73	 
	Yr3
	 	 	0.1481	 	 	Jun-01	 	$	97.43	 	 	 	 	 	 	$	76.98	 	 	$	20.45	 
	 
	 	 	 	 	 	Jul-01	 	$	1,655.88	 	 	 	 	 	 	$	1,287.94	 	 	$	367.94	 
	 
	 	 	 	 	 	Aug-01	 	$	98.37	 	 	 	 	 	 	$	72.87	 	 	$	25.50	 
	 
	 	 	 	 	 	Oct-02	 	$	4,703.25	 	 	 	 	 	 	$	1,175.69	 	 	$	3,527.56	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	—	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
 	 	 	 	
 	 
	Total Trade Show Equipment	 	 	 	 	 	$	47,783.72	 	 	 	 	 	 	$	34,746.13	 	 	$	13,037.59	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
 	 	 	 	
 	 
	Total	 	 	 	 	 	$	339,212.57	 	 	 	 	 	 	$	186,958.51	 	 	$	152,254.06	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
 	 	 	 	
 	 

 

Table of Contents

Thales Underwater systems (Location: UK)

Fixed Assets Data Extract

As at 28th June 2003

Currency: GBP

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Asset	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Number
	 	Date in Service
	 	GBV
	 	NBV
	 	Accum Depo
	 	Category
	 	Description
	 	Site
	 	Units

	•

	 	27-Apr-98
	 	 	343.48	 	 	 	-	 	 	 	343.48	 	 	COMPUTERS.HARDWARE
	 	WATCHMAN SERVICE
	 	SITE-TE
	 	 	1	 
	•

	 	23-Nov-98
	 	 	5,839.00	 	 	 	-	 	 	 	5,839.00	 	 	COMPUTERS.HARDWARE
	 	MW90708/01 MINI OTDR C/W FLOPPY DISC DRIVE
	 	SITE-TE
	 	 	4	 
	•

	 	28-Apr-01
	 	 	630.00	 	 	 	-	 	 	 	630.00	 	 	COMPUTERS.HARDWARE
	 	DELL APEX 8 PORT SWITCH WITH 4 CABLES - DELL PART
NUMBER 4C673
	 	SITE-TE
	 	 	1	 
	•

	 	08-Aug-02
	 	 	624.97	 	 	 	494.77	 	 	 	130.20	 	 	COMPUTERS.HARDWARE
	 	CAMCORDER
	 	SITE-TE
	 	 	1	 
	•

	 	11-Oct-02
	 	 	230.48	 	 	 	-	 	 	 	230.48	 	 	COMPUTERS.HARDWARE
	 	1 PORT ISDN CARD FO UK USE IN CISCO 3620 ROUTER

QUOTE REF JS_8254
	 	SITE-TE
	 	 	1	 
	•

	 	11-Oct-02
	 	 	367.83	 	 	 	-	 	 	 	367.83	 	 	COMPUTERS.HARDWARE
	 	ISDN/ETHERNET ROUTER CISCO 801 AS PER QUOTE JS_8254
	 	SITE-TE
	 	 	1	 
	•

	 	28-Apr-01
	 	 	696.12	 	 	 	-	 	 	 	696.12	 	 	COMPUTERS.LICENCE
	 	MS OFFICE 2000 PROFESSIONAL LICENSE, WINDOWS NT4
SERVER AND CLIENT ACCESS LICENC
	 	SITE-TE
	 	 	2	 
	•

	 	27-Oct-01
	 	 	194.00	 	 	 	-	 	 	 	194.00	 	 	COMPUTERS.LICENCE
	 	MS OFFICE PROFESSIONAL - REF. 1049787 (LICENSE ONLY)
	 	SITE-TE
	 	 	1	 
	•

	 	21-Nov-97
	 	 	2,036.00	 	 	 	-	 	 	 	2,036.00	 	 	COMPUTERS.PC
	 	DIGITAL VENTURIS FX2,(FR-DW001AH) PENTIUM P200 MMX
PROCESSOR,2.1GB DISK DRIVE (
	 	SITE-TE
	 	 	2	 
	•

	 	21-Nov-97
	 	 	1,596.00	 	 	 	-	 	 	 	1,596.00	 	 	COMPUTERS.PC
	 	DIGITAL VENTURIS FX-2(FR-DW001AH),PENTIUM P200MMX
PROCESSOR,2.1GB HARDDISK DRIV
	 	SITE-TE
	 	 	1	 
	•

	 	29-Jan-98
	 	 	1,940.00	 	 	 	-	 	 	 	1,940.00	 	 	COMPUTERS.PC
	 	DIGITAL PC3100(FX-2) PENTIUM P166 MMX

PROCESSOR,32MB RAM,2GB HARD DISC DRIVE,31
	 	SITE-TE
	 	 	2	 
	•

	 	28-Apr-01
	 	 	1,031.40	 	 	 	472.69	 	 	 	558.71	 	 	COMPUTERS.PC
	 	DELL POWEREDGE 300 / PIII 800 CPU / 256MB RAM / NO MONITOR / 20GB HARD DISK & 4
	 	SITE-TE
	 	 	1	 
	•

	 	27-Oct-01
	 	 	1,363.72	 	 	 	795.51	 	 	 	568.21	 	 	COMPUTERS.PC
	 	DELL LATITUDE C600 AS PER QUOTE 50053455
	 	SITE-TE
	 	 	1	 
	•

	 	26-May-01
	 	 	615.00	 	 	 	-	 	 	 	615.00	 	 	COMPUTERS.SOFTWARE
	 	EMULATION SOFTWARE
	 	SITE-TE
	 	 	1	 
	•

	 	02-Jun-98
	 	 	19.96	 	 	 	-	 	 	 	19.96	 	 	FIXTURES.FITTINGS
	 	42000.80 SIZE 3X JUBILEE CLIPS
	 	SITE-TE
	 	 	22	 
	•

	 	02-Jun-98
	 	 	16.16	 	 	 	-	 	 	 	16.16	 	 	FIXTURES.FITTINGS
	 	INDUSTRIAL CLEANING RAGS ASSORTED. STK NO 10012
	 	SITE-TE
	 	 	2	 
	•

	 	24-Feb-01
	 	 	209.88	 	 	 	-	 	 	 	209.88	 	 	FIXTURES.FITTINGS
	 	VISE GRIP 10”
	 	SITE-TE
	 	 	18	 
	•

	 	31-Mar-01
	 	 	316.00	 	 	 	-	 	 	 	316.00	 	 	FIXTURES.FITTINGS
	 	TONE PROBE MODEL 240
	 	SITE-TE
	 	 	2	 
	•

	 	31-Mar-01
	 	 	888.87	 	 	 	-	 	 	 	888.87	 	 	FIXTURES.FITTINGS
	 	PLIERS, SIDE CUTTERS, SCREWDRIVERS, 12” RULES,
KNIFES + VARIOUS OTHER TOOLS
	 	SITE-TE
	 	 	1	 
	•

	 	31-Mar-01
	 	 	2,025.29	 	 	 	1,113.99	 	 	 	911.30	 	 	FIXTURES.FITTINGS
	 	TROLLEY (MODEL 2) + BLADES, WIRE STRIPPERS,

HAMMERS, VARIOUS OTHER TOOLS
	 	SITE-TE
	 	 	12	 
	•

	 	31-Mar-01
	 	 	2,260.97	 	 	 	1,243.58	 	 	 	1,017.39	 	 	FIXTURES.FITTINGS
	 	MULTIMETER, ELECTRIC SCREWDRIVER, BATTERY + PLUS VARIOUS OTHER TOOLS FOR SEISMIC
	 	SITE-TE
	 	 	12	 
	•

	 	31-Mar-01
	 	 	241.93	 	 	 	-	 	 	 	241.93	 	 	FIXTURES.FITTINGS
	 	SOLDERING IRONS
	 	SITE-TE
	 	 	3	 
	•

	 	31-Mar-01
	 	 	6.44	 	 	 	-	 	 	 	6.44	 	 	FIXTURES.FITTINGS
	 	RASP MEDIUM
	 	SITE-TE
	 	 	1	 
	•

	 	31-Mar-01
	 	 	22.99	 	 	 	-	 	 	 	22.99	 	 	FIXTURES.FITTINGS
	 	TAPE MEASURE
	 	SITE-TE
	 	 	11	 
	•

	 	31-Mar-01
	 	 	467.28	 	 	 	-	 	 	 	467.28	 	 	FIXTURES.FITTINGS
	 	FACE GUARD, REPIRATOR, FILTER AND KELVAR GLOVES
	 	SITE-TE
	 	 	12	 
	•

	 	31-Mar-01
	 	 	19.32	 	 	 	-	 	 	 	19.32	 	 	FIXTURES.FITTINGS
	 	RASP MEDIUM
	 	SITE-TE
	 	 	3	 
	•

	 	31-Mar-01
	 	 	38.65	 	 	 	-	 	 	 	38.65	 	 	FIXTURES.FITTINGS
	 	RASP MEDIUM
	 	SITE-TE
	 	 	6	 
	•

	 	31-Mar-01
	 	 	14.30	 	 	 	-	 	 	 	14.30	 	 	FIXTURES.FITTINGS
	 	FILTER (SEISMIC TOOL KIT)
	 	SITE-TE
	 	 	3	 
	•

	 	31-Mar-01
	 	 	220.93	 	 	 	-	 	 	 	220.93	 	 	FIXTURES.FITTINGS
	 	CARRY POUCH + VARIOUS TOOLS FOR SEISMIC TOOL KITS
	 	SITE-TE
	 	 	12	 
	•

	 	31-Mar-01
	 	 	191.46	 	 	 	-	 	 	 	191.46	 	 	FIXTURES.FITTINGS
	 	TROLLEY (MODEL 2)
	 	SITE-TE
	 	 	1	 
	•

	 	31-Mar-01
	 	 	191.46	 	 	 	-	 	 	 	191.46	 	 	FIXTURES.FITTINGS
	 	TROLLEY (MODEL 2)
	 	SITE-TE
	 	 	1	 
	•

	 	31-Mar-01
	 	 	4,313.00	 	 	 	2,372.20	 	 	 	1,940.80	 	 	FIXTURES.FITTINGS
	 	1 X 100M WORK BENCH
	 	SITE-TE
	 	 	1	 
	•

	 	31-Mar-01
	 	 	2,632.00	 	 	 	1,447.55	 	 	 	1,184.45	 	 	FIXTURES.FITTINGS
	 	SUPPLY & FIT 1.5MM VINYL TO 100M WORK BENCH
	 	SITE-TE
	 	 	1	 
	•

	 	31-Mar-01
	 	 	3,890.00	 	 	 	2,139.55	 	 	 	1,750.45	 	 	FIXTURES.FITTINGS
	 	REFURBISH TWO OFF EXISTING 100M BENCH TOPS & COVER
WITH 1.5MM VINYL
	 	SITE-TE
	 	 	1	 
	•

	 	31-Mar-01
	 	 	1,582.40	 	 	 	870.37	 	 	 	712.03	 	 	FIXTURES.FITTINGS
	 	SUPPLY & FIT SKIRT ON ONE SIDE OF 100M BENCH
	 	SITE-TE
	 	 	1	 
	•

	 	31-Mar-01
	 	 	840.00	 	 	 	-	 	 	 	840.00	 	 	FIXTURES.FITTINGS
	 	FIT IN POSITION 100M BENCH
	 	SITE-TE
	 	 	1	 

1 of 4

Table of Contents

Thales Underwater systems (Location: UK)

Fixed Assets Data Extract

As at 28th June 2003

Currency: GBP

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Asset	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Number
	 	Date in Service
	 	GBV
	 	NBV
	 	Accum Depo
	 	Category
	 	Description
	 	Site
	 	Units

	•

	 	31-Mar-01
	 	 	1,574.73	 	 	 	866.19	 	 	 	708.54	 	 	FIXTURES.FITTINGS
	 	REFURBISH TWO OFF EXISTING 100M BENCH TOPS &
COVER WITH 1.5MM VINYL
	 	SITE-TE
	 	 	1	 
	•

	 	31-Mar-01
	 	 	-92.96	 	 	 	-51.12	 	 	 	-41.84	 	 	FIXTURES.FITTINGS
	 	NECK CORD + HEX DRIVE BIT
	 	SITE-TE
	 	 	1	 
	•

	 	28-Apr-01
	 	 	319.96	 	 	 	—	 	 	 	319.96	 	 	FIXTURES.FITTINGS
	 	LAMINATE CUTTER, RASPS AND FILES FOR TOOLKIT
	 	SITE-TE
	 	 	1	 
	•

	 	28-Apr-01
	 	 	811.98	 	 	 	—	 	 	 	811.98	 	 	FIXTURES.FITTINGS
	 	HOT AIR GUN & REDUCTION NOZZLES
	 	SITE-TE
	 	 	9	 
	•

	 	28-Apr-01
	 	 	366.62	 	 	 	—	 	 	 	366.62	 	 	FIXTURES.FITTINGS
	 	BLOW GUN, MIKALOR CLAMPS, NOZZLES
	 	SITE-TE
	 	 	12	 
	•

	 	26-May-01
	 	 	673.96	 	 	 	—	 	 	 	673.96	 	 	FIXTURES.FITTINGS
	 	TROLLEY (MODEL 2)
	 	SITE-TE
	 	 	4	 
	•

	 	26-May-01
	 	 	-191.46	 	 	 	-111.70	 	 	 	-79.76	 	 	FIXTURES.FITTINGS
	 	TROLLEY (MODEL 2)
	 	SITE-TE
	 	 	1	 
	•

	 	30-Jun-01
	 	 	354.76	 	 	 	—	 	 	 	354.76	 	 	FIXTURES.FITTINGS
	 	TOOLS – MICROSCOPE 200X HAND HELD
	 	SITE-TE
	 	 	1	 
	•

	 	30-Jun-01
	 	 	1,711.71	 	 	 	1,010.61	 	 	 	701.10	 	 	FIXTURES.FITTINGS
	 	INSERT PLIERS, DIAMETER TAPE,
PLIERS, AIR KNIFES, CABLE AND BILLET CLAMPS – SEIS
	 	SITE-TE
	 	 	13	 
	•

	 	18-Jul-01
	 	 	37.89	 	 	 	—	 	 	 	37.89	 	 	FIXTURES.FITTINGS
	 	108-390 WORK VICE
	 	SITE-TE
	 	 	1	 
	•

	 	18-Jul-01
	 	 	368.15	 	 	 	—	 	 	 	368.15	 	 	FIXTURES.FITTINGS
	 	708-3166 SCALES
	 	SITE-TE
	 	 	1	 
	•

	 	18-Jul-01
	 	 	258.88	 	 	 	—	 	 	 	258.88	 	 	FIXTURES.FITTINGS
	 	P/N233688 3202 MODEL 55 GUN
	 	SITE-TE
	 	 	1	 
	•

	 	18-Jul-01
	 	 	27.09	 	 	 	—	 	 	 	27.09	 	 	FIXTURES.FITTINGS
	 	P/N232649 3M HOSE ASSY WITH FILLED 1/4” MPT
	 	SITE-TE
	 	 	1	 
	•

	 	28-Jul-01
	 	 	50.93	 	 	 	—	 	 	 	50.93	 	 	FIXTURES.FITTINGS
	 	65,00 +0.33MM PLAIN SNAP GAUGES-
	 	SITE-TE
	 	 	1	 
	•

	 	28-Jul-01
	 	 	48.88	 	 	 	—	 	 	 	48.88	 	 	FIXTURES.FITTINGS
	 	37.00 +-0.3MMPLAIN CALIPER
	 	SITE-TE
	 	 	1	 
	•

	 	28-Jul-01
	 	 	57.08	 	 	 	—	 	 	 	57.08	 	 	FIXTURES.FITTINGS
	 	77.50 +-0.3MM PLAIN CALIPERS
	 	SITE-TE
	 	 	1	 
	•

	 	28-Jul-01
	 	 	2,586.00	 	 	 	1,594.70	 	 	 	991.30	 	 	FIXTURES.FITTINGS
	 	GRAVITY ROLLER CONVEYOR 16 X 3M AND
1X2M LONG SECTIONS COMPLETE WITH 34 STANDS
	 	SITE-TE
	 	 	1	 
	•

	 	24-Nov-01
	 	 	1,631.20	 	 	 	1,114.63	 	 	 	516.57	 	 	FIXTURES.FITTINGS
	 	REFURBISH TWO OFF EXISTING 100M BENCH TOPS &
COVER WITH 1.5MM VINYL
	 	SITE-TE
	 	 	1	 
	•

	 	24-Nov-01
	 	 	3,890.00	 	 	 	2,658.19	 	 	 	1,231.81	 	 	FIXTURES.FITTINGS
	 	ADDITIONAL WORK TO THIS PURCHASE ORDER. FIT
ADDITIONAL BENCHES, REFURBISH AND C
	 	SITE-TE
	 	 	1	 
	•

	 	16-Jan-02
	 	 	248.65	 	 	 	—	 	 	 	248.65	 	 	FIXTURES.FITTINGS
	 	PN EXTRACTION TOOL 59180950
	 	SITE-TE
	 	 	2	 
	•

	 	16-Jan-02
	 	 	264.26	 	 	 	—	 	 	 	264.26	 	 	FIXTURES.FITTINGS
	 	FEMALE TERMINI SLEEVE INSERTION TOOL/56929417
	 	SITE-TE
	 	 	2	 
	•

	 	16-Jan-02
	 	 	247.86	 	 	 	—	 	 	 	247.86	 	 	FIXTURES.FITTINGS
	 	FEMALE TERMINI SLEEVE EXTRACITON TOOL/56929416
	 	SITE-TE
	 	 	2	 
	•

	 	16-Jan-02
	 	 	115.08	 	 	 	—	 	 	 	115.08	 	 	FIXTURES.FITTINGS
	 	FIBRE OPTIC POLISHING PLUG/5692773
	 	SITE-TE
	 	 	4	 
	•

	 	16-Jan-02
	 	 	1,447.33	 	 	 	1,037.27	 	 	 	410.06	 	 	FIXTURES.FITTINGS
	 	TERMINATION JIG/56929355
	 	SITE-TE
	 	 	2	 
	•

	 	16-Jan-02
	 	 	761.28	 	 	 	545.58	 	 	 	215.70	 	 	FIXTURES.FITTINGS
	 	ELECTROLUBE POTTING JIG150/56927305
	 	SITE-TE
	 	 	2	 
	•

	 	16-Jan-02
	 	 	247.86	 	 	 	—	 	 	 	247.86	 	 	FIXTURES.FITTINGS
	 	FEMALE TERMINI INSERTION TOOL/56929415
	 	SITE-TE
	 	 	2	 
	•

	 	27-Oct-01
	 	 	2,995.75	 	 	 	1,997.16	 	 	 	996.59	 	 	FIXTURES.FURNITURE
	 	OAK FURNITURE & CHAIRS FOR PERSONNEL

DEPARTMENT, PEDSTALS, TAMBOUR UNITS, TABLES
	 	SITE-TE
	 	 	1	 
	•

	 	26-May-01
	 	 	1,946.00	 	 	 	594.69	 	 	 	1,351.31	 	 	LAB & TEXT.ELEC EQUIP
	 	MINI OTDR INCLUDES FDD+1 OFF MZ5018A
	 	SITE-TE
	 	 	1	 
	•

	 	26-May-01
	 	 	3,558.00	 	 	 	1,087.21	 	 	 	2,470.79	 	 	LAB & TEXT.ELEC EQUIP
	 	GIF 850/1300NM MULTIMODE PLUG IN

UNIT –FC
	 	SITE-TE
	 	 	1	 
	•

	 	27-Sep-02
	 	 	49.82	 	 	 	—	 	 	 	49.82	 	 	LAB & TEXT.ELEC EQUIP
	 	COMPLETE SIM REMOVAL TOOL
	 	SITE-TE
	 	 	1	 
	•

	 	27-Sep-02
	 	 	7,430.08	 	 	 	5,572.57	 	 	 	1,857.51	 	 	LAB & TEXT.ELEC EQUIP
	 	4 OFF TRANSTION REPAIR MOULD BILLET TO SIM240
@ A$ 5213.07 EA.
	 	SITE-TE
	 	 	1	 
	•

	 	08-Oct-02
	 	 	103.50	 	 	 	—	 	 	 	103.50	 	 	LAB & TEXT.ELEC EQUIP
	 	WEBB SLINGS
	 	SITE-TE
	 	 	1	 
	•

	 	13-Sep-02
	 	 	518.00	 	 	 	—	 	 	 	518.00	 	 	LAB & TEST.SM TOOLS
	 	PROOF TEST ADAPTOR BODY
	 	SITE-TE
	 	 	2	 
	•

	 	13-Sep-02
	 	 	1,868.16	 	 	 	1,401.14	 	 	 	467.02	 	 	LAB & TEST.SM TOOLS
	 	1 OFF TRANSTION REPAIR MOULD BILLET TO BILLET
40 @ A$ 5213.07 EA.
	 	SITE-TE
	 	 	1	 
	•

	 	13-Sep-02
	 	 	1,925.00	 	 	 	1,443.77	 	 	 	481.23	 	 	LAB & TEST.SM TOOLS
	 	1 OFF TRANSTION REPAIR MOULD BILLET TO
PROGRAM MODULE 240 @ A$ 5371.70 EA.
	 	SITE-TE
	 	 	1	 
	•

	 	13-Sep-02
	 	 	1,903.58	 	 	 	1,427.67	 	 	 	475.91	 	 	LAB & TEST.SM TOOLS
	 	1 OFF TRANSTION REPAIR MOULD GUARDIAN BEND
RESTRICTOR TO BILLET 240V @ A$ 531.9
	 	SITE-TE
	 	 	1	 

2 of 4

Table of Contents

Thales Underwater systems (Location: UK)

Fixed Assets Data Extract

As at 28th June 2003

Currency: GBP

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Asset	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Number
	 	Date in Service
	 	GBV
	 	NBV
	 	Accum Depo
	 	Category
	 	Description
	 	Site
	 	Units

	•

	 	13-Sep-02
	 	 	1,868.16	 	 	 	1,401.14	 	 	 	467.02	 	 	LAB & TEST.SM TOOLS
	 	1 OFF TRANSTION REPAIR MOULD GUARDIAN COIL TO
BILLET 240V @ A$ 5213.07 EA.
	 	SITE-TE
	 	 	1	 
	•

	 	13-Sep-02
	 	 	1,297.86	 	 	 	973.41	 	 	 	324.45	 	 	LAB & TEST.SM TOOLS
	 	I OFF TRANSTION REPAIR MOULD CONTROLLER UNIT
GUARDIAN DUAL VOLTAGE @ A$ 3621.67
	 	SITE-TE
	 	 	1	 
	•

	 	27-Sep-02
	 	 	138.00	 	 	 	—	 	 	 	138.00	 	 	LAB & TEST.SM TOOLS
	 	1 OFF 1/2” HOSE TAIL WITH KF25 CONNECTION @ L
18.00 1 OFF RECONDITIONED CG3 DIA
	 	SITE-TE
	 	 	1	 
	•

	 	22-Oct-02
	 	 	173.16	 	 	 	—	 	 	 	173.16	 	 	LAB & TEST.SM TOOLS
	 	2 NO SUPPORTS TO DWG NO 59180905/003
	 	SITE-TE
	 	 	2	 
	•

	 	22-Oct-02
	 	 	254.80	 	 	 	—	 	 	 	254.80	 	 	LAB & TEST.SM TOOLS
	 	1 NO CLAMP LOWER HALF TO DWG NO 59740868/003
	 	SITE-TE
	 	 	1	 
	•

	 	22-Oct-02
	 	 	228.80	 	 	 	—	 	 	 	228.80	 	 	LAB & TEST.SM TOOLS
	 	1 NO CLAMP UPPER HALF TO DWG NO 59740869/003
	 	SITE-TE
	 	 	1	 
	•

	 	24-Feb-01
	 	 	4,363.25	 	 	 	3,345.17	 	 	 	1,018.08	 	 	PLANT.HEAVY PLANT
	 	P32IS 3 PHASE SWAGING MACHINE, 3KW MOTOR EXCLUDING
DIE SETS. P32IS/3-PH
	 	SITE-TE
	 	 	1	 
	•

	 	26-May-01
	 	 	180.27	 	 	 	—	 	 	 	180.27	 	 	PLANT.HEAVY PLANT
	 	1 TOONE SWL SPREADER BEAM CENTRE LIFT OPERATING
LIFT CENTRES 1.5 METRE COMPLETE
	 	SITE-TE
	 	 	1	 
	•

	 	26-May-01
	 	 	1,175.00	 	 	 	930.23	 	 	 	244.77	 	 	PLANT.HEAVY PLANT
	 	ONE TONNE WORKING LOAD MOBILE FRAME
	 	SITE-TE
	 	 	1	 
	•

	 	26-May-01
	 	 	1,230.00	 	 	 	973.75	 	 	 	256.25	 	 	PLANT.HEAVY PLANT
	 	ONE TONNE ELECTRIC CHAIN HOIST AND TROLLEY
	 	SITE-TE
	 	 	1	 
	•

	 	26-May-01
	 	 	1,195.00	 	 	 	946.02	 	 	 	248.98	 	 	PLANT.HEAVY PLANT
	 	DRUM HANDLING PALLET TRUCK
	 	SITE-TE
	 	 	1	 
	•

	 	30-Jun-01
	 	 	5,684.00	 	 	 	4,547.16	 	 	 	1,136.84	 	 	PLANT.HEAVY PLANT
	 	STAINLESS STEEL REELS 1600MM X 1300MM X 1500
	 	SITE-TE
	 	 	4	 
	•

	 	30-Jun-01
	 	 	900.00	 	 	 	—	 	 	 	900.00	 	 	PLANT.HEAVY PLANT
	 	BALLAST TANK PLATFORD
	 	SITE-TE
	 	 	1	 
	•

	 	18-Jul-01
	 	 	1,830.00	 	 	 	1,479.25	 	 	 	350.75	 	 	PLANT.HEAVY PLANT
	 	ASSUPPLY AND FIT A TRAVEL HOIST SWL
1 TONN
	 	SITE-TE
	 	 	1	 
	•

	 	18-Jul-01	 	-1,230.00	 	 	 	-994.25	 	 	 	-235.75	 	 	PLANT.HEAVY PLANT
	 	ONE TONNE ELECTRIC CHAIN HOIST AND
TROLLEY
	 	SITE-TE
	 	 	1	 
	•

	 	17-Sep-01	 	 	5,756.00	 	 	 	4,748.67	 	 	 	1,007.33	 	 	PLANT.HEAVY PLANT
	 	COMPACT TIRAK WINCH WITH 6M OF WIRE
	 	SITE-TE
	 	 	1	 
	•
	 	17-Sep-01	 	 	2,160.00	 	 	 	1,782.00	 	 	 	378.00	 	 	PLANT.HEAVY PLANT	 	FRAME ITEM 9 OF REF EN144	 	SITE-TE	 	 	4	 
	•

	 	17-Sep-01	 	 	7,925.00	 	 	 	6,538.14	 	 	 	1,386.86	 	 	PLANT.HEAVY PLANT
	 	150M ROLER CONVEYOR
	 	SITE-TE
	 	 	1	 
	•

	 	24-Nov-01
	 	 	1,127.63	 	 	 	949.07	 	 	 	178.56	 	 	PLANT.HEAVY PLANT
	 	50M OF ACOUSTIC ROLLER BENCHES, 6 METAL FRAMES & 30 X 3 MTR ROLLER TRACKING
	 	SITE-TE
	 	 	1	 
	•

	 	16-Jan-02
	 	 	5,950.00	 	 	 	5,107.11	 	 	 	842.89	 	 	PLANT.HEAVY PLANT
	 	BASE MOUNTED REELING MACHINE AS PER
REF EN144 TO HOLD REELS 1600MM DIA X 1600MM
	 	SITE-TE
	 	 	1	 
	•

	 	15-Mar-02
	 	 	3,195.00	 	 	 	2,795.66	 	 	 	399.34	 	 	PLANT.HEAVY PLANT
	 	ELECTRIC WINCH 1140272
	 	SITE-TE
	 	 	1	 
	•

	 	15-Mar-02
	 	 	744.99	 	 	 	651.86	 	 	 	93.13	 	 	PLANT.HEAVY PLANT
	 	MODIFY WINCH WITH F4 CONVERTER 2KN
SIZE, ENCLOSURE BOX, CONTACTORS, BRACE ACTUAT
	 	SITE-TE
	 	 	1	 
	•

	 	22-May-02
	 	 	518.00	 	 	 	—	 	 	 	518.00	 	 	PLANT.HEAVY PLANT
	 	PROOF TEST ADAPTOR BODY
	 	SITE-TE
	 	 	2	 
	•

	 	14-Jul-02
	 	 	664.37	 	 	 	597.92	 	 	 	66.45	 	 	PLANT.HEAVY PLANT
	 	LIFTING STRAPS
	 	SITE-TE
	 	 	1	 
	•

	 	21-Jun-02
	 	 	14.02	 	 	 	—	 	 	 	14.02	 	 	PLANT.HEAVY PLANT
	 	SHAKLES
	 	SITE-TE
	 	 	1	 
	•

	 	23-Jul-02
	 	 	526.21	 	 	 	477.95	 	 	 	48.26	 	 	PLANT.HEAVY PLANT
	 	JET-WELD
	 	SITE-TE
	 	 	1	 
	•

	 	02-Aug-02
	 	 	123.50	 	 	 	—	 	 	 	123.50	 	 	PLANT.HEAVY PLANT
	 	ONE ANCHOR BLOCK TO THE DRG IN YOUR POSSESSION
	 	SITE-TE
	 	 	1	 
	•

	 	02-Aug-02
	 	 	1,592.93	 	 	 	1,460.22	 	 	 	132.71	 	 	PLANT.HEAVY PLANT
	 	JACKET WELDING JIG – SENTRY 240V
	 	SITE-TE
	 	 	1	 
	•

	 	02-Aug-02
	 	 	3,185.86	 	 	 	2,920.37	 	 	 	265.49	 	 	PLANT.HEAVY PLANT
	 	JACKET WELDING JIG – GUARDIAN 240V
	 	SITE-TE
	 	 	2	 
	•

	 	16-Aug-02
	 	 	54.56	 	 	 	—	 	 	 	54.56	 	 	PLANT.HEAVY PLANT
	 	‘C’ TYPE SNAP GUAGE SET TO SIZE 62.0/62.5MM
	 	SITE-TE
	 	 	1	 
	•

	 	21-Aug-02
	 	 	520.26	 	 	 	476.88	 	 	 	43.38	 	 	PLANT.HEAVY PLANT
	 	JET-WELD
	 	SITE-TE
	 	 	1	 
	•

	 	25-Oct-02
	 	 	578.72	 	 	 	540.16	 	 	 	38.56	 	 	PLANT.HEAVY PLANT
	 	PROOF TEST ADAPTOR BODY NOTE RADIUS 3.9 ON BORE END.
	 	SITE-TE
	 	 	1	 
	•

	 	22-Dec-97
	 	 	725.00	 	 	 	—	 	 	 	725.00	 	 	PLANT.SM PLANT
	 	PANASONIC UF550 FAX MACHINE C/W IYR SITE WARRANTY
	 	SITE-TE
	 	 	1	 
	•

	 	07-Jan-98
	 	 	1,425.00	 	 	 	—	 	 	 	1,425.00	 	 	PLANT.SM PLANT
	 	AT-MIO-16E-2 DAC
	 	SITE-TE
	 	 	1	 
	•

	 	29-Jan-98
	 	 	2,624.50	 	 	 	—	 	 	 	2,624.50	 	 	PLANT.SM PLANT
	 	FLUKE LCR METER PM6304/064 GP1B DC OPTION, RACK
MOUNT KIT. CALIBRATED TO NATIO
	 	SITE-TE
	 	 	1	 
	•

	 	29-Jan-98
	 	 	3,353.92	 	 	 	—	 	 	 	3,353.92	 	 	PLANT.SM PLANT
	 	HP 4339B RESISTANCE METER. CALIBRATED TO NATIONAL
STANDARDS
	 	SITE-TE
	 	 	2	 

3 of 4

Table of Contents

Thales Underwater systems (Location: UK)

Fixed Assets Data Extract

As at 28th June 2003

Currency: GBP

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Asset	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Number
	 	Date in Service
	 	GBV
	 	NBV
	 	Accum Depo
	 	Category
	 	Description
	 	Site
	 	Units

	•

	 	29-Jan-98
	 	 	5,323.80	 	 	 	—	 	 	 	5,323.80	 	 	PLANT.SM PLANT
	 	CHARGE AMP 2634
	 	SITE-TE
	 	 	11	 
	•

	 	27-Apr-98
	 	 	250.00	 	 	 	—	 	 	 	250.00	 	 	PLANT.SM PLANT
	 	SHELF TROLLEY. STK NO 422 657 73
	 	SITE-TE
	 	 	3	 
	•

	 	27-Apr-98
	 	 	38.00	 	 	 	—	 	 	 	38.00	 	 	PLANT.SM PLANT
	 	SHELF & 2 BRACKETS. STK NO 422 797 73
	 	SITE-TE
	 	 	2	 
	•

	 	27-Apr-98
	 	 	57.81	 	 	 	—	 	 	 	57.81	 	 	PLANT.SM PLANT
	 	OTHER EXPENSES
	 	SITE-TE
	 	 	1	 
	•

	 	27-Apr-98
	 	 	26.60	 	 	 	—	 	 	 	26.60	 	 	PLANT.SM PLANT
	 	SUPER CLAMPS 73-79MM DIA HOSE
	 	SITE-TE
	 	 	20	 
	•

	 	27-Apr-98
	 	 	152.70	 	 	 	—	 	 	 	152.70	 	 	PLANT.SM PLANT
	 	GTS1000/1-R25 GELTEK TAPE
	 	SITE-TE
	 	 	7	 
	•

	 	27-Apr-98
	 	 	79.90	 	 	 	—	 	 	 	79.90	 	 	PLANT.SM PLANT
	 	BARREL (LUER LOK). STK NO 361016
	 	SITE-TE
	 	 	301	 
	•

	 	02-Jun-98
	 	 	1,100.00	 	 	 	—	 	 	 	1,100.00	 	 	PLANT.SM PLANT
	 	TO SUPPLY & INSTALLATION OF VINYL COVERING TO
WORKBENCH 106MTR X 1.2MTR
	 	SITE-TE
	 	 	1	 
	•

	 	02-Jun-98
	 	 	240.26	 	 	 	—	 	 	 	240.26	 	 	PLANT.SM PLANT
	 	BRASS STUDDING M4. STK NO 522-875
	 	SITE-TE
	 	 	11	 
	•

	 	02-Jun-98
	 	 	724.00	 	 	 	—	 	 	 	724.00	 	 	PLANT.SM PLANT
	 	ARALDITE 420A RESIN (1.4KG PK)
	 	SITE-TE
	 	 	21	 
	•

	 	02-Jun-98
	 	 	230.00	 	 	 	—	 	 	 	230.00	 	 	PLANT.SM PLANT
	 	PV350 PRESSURE TRANSDUCER
	 	SITE-TE
	 	 	1	 
	•

	 	02-Jun-98
	 	 	165.00	 	 	 	—	 	 	 	165.00	 	 	PLANT.SM PLANT
	 	PM9564 MOUNTING RACK
	 	SITE-TE
	 	 	1	 
	•

	 	02-Jun-98
	 	 	600.00	 	 	 	—	 	 	 	600.00	 	 	PLANT.SM PLANT
	 	SL102316 ADAPTOR PROOF TEST TOOL MATERIAL TOOL STEEL
	 	SITE-TE
	 	 	2	 
	•

	 	02-Jun-98
	 	 	64.00	 	 	 	—	 	 	 	64.00	 	 	PLANT.SM PLANT
	 	5062/3971 RACK MOUNTING KIT
	 	SITE-TE
	 	 	1	 
	•

	 	02-Jun-98
	 	 	138.58	 	 	 	—	 	 	 	138.58	 	 	PLANT.SM PLANT
	 	MAKITA 1/4
	 	SITE-TE
	 	 	3	 
	•

	 	02-Jun-98
	 	 	196.27	 	 	 	—	 	 	 	196.27	 	 	PLANT.SM PLANT
	 	CODE 2271 ISOPROPANOL (25KG)
	 	SITE-TE
	 	 	3	 
	•

	 	02-Jun-98
	 	 	289.70	 	 	 	—	 	 	 	289.70	 	 	PLANT.SM PLANT
	 	ISOPAR M (205 LTR DRUM)
	 	SITE-TE
	 	 	206	 
	•

	 	02-Jun-98
	 	 	800.00	 	 	 	—	 	 	 	800.00	 	 	PLANT.SM PLANT
	 	DEPTH TANSDUCER TESTING FIXTURE
	 	SITE-TE
	 	 	2	 
	•

	 	02-Jun-98
	 	 	685.50	 	 	 	—	 	 	 	685.50	 	 	PLANT.SM PLANT
	 	TURFOR T532 MACHINE. SWL 3200KG
	 	SITE-TE
	 	 	2	 
	•

	 	29-Jun-98
	 	 	232.50	 	 	 	—	 	 	 	232.50	 	 	PLANT.SM PLANT
	 	AIR SAW. STK NO 28-5144
	 	SITE-TE
	 	 	2	 
	•

	 	23-Jul-02
	 	 	470.80	 	 	 	—	 	 	 	470.80	 	 	PLANT.SM PLANT
	 	50 BLUE STAINED TIMBER CHOCS
	 	SITE-TE
	 	 	1	 
	

	 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	151,952.09	 	 	 	75,786.66	 	 	 	76,165.43	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 

4 of 4

Table of Contents

SCHEDULE 7

1 — Description of the Property

A.   PROPERTY OWNED BY THE SELLER TO BE LET TO THE PURCHASER

	 	 	 	 	 	 	 	 	 
	 	 	ADDRESS
	 	DESCRIPTION
	 	AREA
	 	 
	 	 	274 Victoria Road
RYDALMERE
NSW 2116 AUSTRALIA	 	Arrays Production/Manufacturing area
Office space

Storage area
Total
Note. Areas can be changed depending on purchasers requirements.	 	7,063 sq meters	 	 

B.   PROPERTY LEASED BY THE SELLER TO BE SUBLEASED TO THE PURCHASER

	 	 	 	 	 	 	 	 	 
	ADDRESS
	 	DESCRIPTION
	 	TERMS OF OCCUPANCY
	 	AREA
	 	PRICE OF RENT

	Avondale Business Park

6225 B W Sam Houston

Pkwy.N

Houston, TEXAS 77041,

United States of America

	 	A concrete tilt wall
manufacturing
and office building
together with
exterior storage area.
	 	Subleased until July 1, 2006
	 	Total is 31,310 sq.ft divided in

[24,161] sq.ft manufacturing

[1,764] sq.ft office space

[5,385] sq.ft exterior storage
	 	608,625.00 USD
per annum,
payable in monthly
installments of
16,906.25 USD
	 
	Littleport Innovation Park

Wisbech Road,

Littleport, Ely Cambs.

AB12 4Y, United Kingdom

	 	Office space
	 	Rented by TUS Ltd and used
by the Business. Lease
expires [31 Dec 2005]
	 	60 sq. meters
	 	10,000.00 GBP
per annum, payable
quarterly.

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[SCHEDULE 7]

[PART 2]

LEASE DATED

FROM THALES UNDERWATER SYSTEMS PTY LTD (LANDLORD) TO SERCEL AUSTRALIA PTY LTD (TENANT)

GLOSSARY

	 	 	 	 	 	 	 
	ITEM
	       	TERM
	       	DEFINITIONS

	1.
	 	Landlord	 	The Seller as defined in this Agreement
	 
	2.
	 	Tenant	 	The Purchaser as defined in this Agreement
	 
	3.
	 	Land	 	The whole of the land in Folio Identifier 2/231264
	 
	4.
	 	Building	 	The building on the Land located at 274 Victoria
Road, Rydalmere, NSW, 2116, Australia
	 
	5.
	 	Premises	 	7,086 sq. meters in the Building shown as the
crossed area on the attached plan, comprising:
	 
	
	 	 	 	(a)	 	6,160 sq. meters of arrays
Production/manufacturing/storage area;
	 
	
	 	 	 	(b)	 	926 sq. meters of office space.
	 
	6.
	 	Term	 	Three (3) years initial period from the
Commencing Date.
	 
	6A
	 	Option Term	 	one (1) year after the Term or each subsequent
one (1) year period.
	 
	7.
	 	Commencing Date	 	January 2nd, 2004
	 
	8.
	 	Terminating Date	 	December 31st, 2006
	 
	9.
	 	Rent	 	AUD$801,821.00 per annum payable in monthly
instalments of AUD$68,818.42
	 
	10.
	 	Review Dates	 	Market Review Date
	 
	11.
	 	Market Review Date	 	On each anniversary of the Commencing Date.
	 
	12.
	 	Permitted Use	 	“Research, manufacturing, repairing and sale of
marine seismic equipment, office uses and storage
area and all ancillary uses.
	 
	13.
	 	Public Risk Insurance	 	$10,000,000.00	 
	 
	14.
	 	Redecoration Dates	 	Not applicable.
	 
	15.
	 	Outgoings Year	 	Lack period of 12 months ending December 31st.

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	ITEM
	       	TERM
	       	DEFINITIONS

	16.
	 	Tenant’s Proportion of Outgoings	 	31%
	 
	17.
	 	Deposit	 	The amount representing 2 months of rent payable
to the Landlord at the Commencing date
	 
	18.
	 	Default Rate	 	10%

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	1.	 	DEFINITIONS AND INTERPRETATION

	 	1.1	 	Definitions
	 
	 	 	 	The following definitions and those in the Glossary apply to
this Schedule unless the context requires otherwise.
	 
	 	 	 	Appurtenance includes any drain, basin, sink, toilet or urinal.
	 
	 	 	 	Australian Institute means The Australian Property Institute
(Inc.) (New South Wales Division).
	 
	 	 	 	Authorised Officer means:

	 	(a)	 	in respect of the Tenant, any director or
secretary, or any person from time to time nominated as an
Authorised Officer by the Tenant by a notice to the
Landlord accompanied by specimen signatures of all new
persons so appointed; and
	 
	 	(b)	 	in respect of the Landlord, a director or
secretary or any person from time to time nominated as an
Authorised Officer by the Landlord by a notice to the
Tenant accompanied by specimen signatures of all new
persons so appointed.

	 	 	 	Authority includes:

	 	(a)	 	any government in any jurisdiction,
whether federal, state, territorial or local;
	 
	 	(b)	 	any provider of public utility services,
whether statutory or not; and
	 
	 	(c)	 	any other person, authority,
instrumentality or body having jurisdiction, rights,
powers, duties or responsibilities over the Premises or
any part of them or anything in relation to them
(including the Insurance Council of Australia Limited).

	 	 	 	Building means the building specified in Item 4 of the
Glossary.
	 
	 	 	 	Business Day means any day except Saturday or Sunday or a day
that is a public holiday throughout New South Wales.
	 
	 	 	 	Claim includes any claim, demand, remedy, suit, injury, damage,
loss, Cost, liability, action, proceeding, right of action,
claim for compensation and claim for abatement of rent
obligation.
	 
	 	 	 	Common Areas means those parts of the Land and the Building not
leased or licensed to any person designated by the Landlord
from time to time for use in common by the Landlord and
occupants of the Building and their respective employees,
invitees, licensees and any other person authorised expressly
or impliedly by the Landlord.
	 
	 	 	 	Consent means prior written consent.
	 
	 	 	 	Cost includes any cost, charge, expense, outgoing, payment or
other expenditure of any nature, including where appropriate,
all legal fees (including inhouse lawyers charged at their
usual rates) on a full indemnity

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	 	 	 	basis or a solicitor/client basis, whichever is the greater and
fees of other experts and consultants.
	 
	 	 	 	Date of Termination means:-

	 	(a)	 	the date specified in Item 8 of the
Glossary;
	 
	 	(b)	 	the end of any period of renewal under
Clause 3.2,

	 	 	 	as appropriate.
	 
	 	 	 	Default Rate means the rate referred to in Item 18 of the
Glossary.
	 
	 	 	 	Environment means components of the earth, including:

	 	(a)	 	land, air and water;
	 
	 	(b)	 	any layer of the atmosphere;
	 
	 	(c)	 	any organic or inorganic matter and any living organism; and
	 
	 	(d)	 	human-made or modified structures and
areas, and includes interacting natural ecosystems that
include components referred to in paragraphs (a) to (c).

	 	 	 	Environmental Law means a provision of Law, or a Law, which
provision or Law relates to any aspect of the Environment,
safety, health or the use of Substances or activities which may
harm the Environment or be hazardous or otherwise harmful to
health.
	 
	 	 	 	Essential Services Equipment means that equipment installed in
the Premises and used for the protection of people or property
including, without limitation, equipment and plant used for
fire prevention or fire fighting.
	 
	 	 	 	Event of Default means any event referred to in Clause 12.1.
	 
	 	 	 	Keys means keys, access cards and other means of access from
time to time used to gain access to the Building or any part of
it.
	 
	 	 	 	Land means the land described in Item 3 of the Glossary and
includes all buildings and other improvements thereon.
	 
	 	 	 	Landlord’s Fixtures includes:-

	 	(a)	 	all plant and equipment, mechanical or
otherwise, fittings, fixtures, furniture, furnishings of
any kind, including window coverings, blinds and light
fittings from time to time on the Premises or any part of
them and owned or supplied by the Landlord; and
	 
	 	(b)	 	all stop cocks, fire hoses, hydrants,
other fire prevention aids and all fire fighting systems
from time to time located on the Premises or which may
service the Premises.

	 	 	 	Law includes any requirement of any statute, rule, regulation,
proclamation, ordinance or by-law present or future, and
whether state, federal or otherwise.
	 
	 	 	 	Lease Year means every 12 month period commencing on the
Commencing Date or on an anniversary of that date.

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	 	 	 	Liquidation includes liquidation, official management,
receivership, compromise, arrangement, amalgamation,
administration, reconstruction, winding up, dissolution,
assignment for the benefit of creditors, arrangement or
compromise with creditors, bankruptcy or death.
	 
	 	 	 	Market Review Date means that date or those dates referred to
in Item 11 of the Glossary.
	 
	 	 	 	Occupant means any lessee, licensee or any other occupant of
any part of the Land but excluding the Tenant.
	 
	 	 	 	Outgoings means all amounts paid by the Landlord acting
reasonably (or for the payment of which the Landlord acting
reasonably may be or become liable) in any Lease Year in
respect of the Building, whether by direct assessment or
otherwise,
	 
	 	 	 	all existing or future levies, charges and contributions
imposed under strata title, community title or similar
legislation including administrative, ordinary levies, but
excluding any sinking fund or special levies and any liability
or expenditure of a structural or capital nature other than
replacement of component parts (but not the whole) of the
Landlord’s Fixtures-other than those already paid for by the
Tenant pursuant to the Transitional Service Agreement signed on
this day between the parties,
	 
	 	 	 	but in all cases excluding any Costs of a structural or capital
nature.
	 
	 	 	 	Outgoings Year means each year described in Item 15 of the
Glossary.
	 
	 	 	 	PCA means the Property Council of Australia Limited (New South
Wales Division).
	 
	 	 	 	PCA Method of Measurement means the Method for the Measurement
of Buildings (1997 edition) utilised by PCA for commercial
buildings. The PCA Method of Measurement shall remain fixed
for the Term despite any subsequent editions or variations that
may be issued.
	 
	 	 	 	Permitted Use means the use for the Premises described in Item
12 of the Glossary.
	 
	 	 	 	Premises means the premises specified in Item 5 of the
Glossary, and includes all of the Landlord’s Fixtures in the
Premises.
	 
	 	 	 	Proposed Work includes any proposed work, alteration, addition
or installation in or to the Premises and/or to the existing
Tenant’s Fittings by the Tenant and/or by the Tenant’s
Employees.
	 
	 	 	 	Redecorate includes:-

	 	(a)	 	the washing down of the whole of the
interior of the Premises and the Tenant’s Fittings,
including all partitions or additions made to the
Premises;
	 
	 	(b)	 	the treatment as previously treated of
all internal surfaces of the Premises by painting,
staining, polishing or otherwise to a specification
previously approved in writing by the Landlord; and/or

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	 	(c)	 	the replacing of all floor coverings,
window coverings or blinds which in the reasonable opinion
of the Landlord are worn or damaged, otherwise than by
fair wear and tear, and in need of replacement.

	 	 	 	Rent means rent at the rate specified in Item 9 of the Glossary
as varied from time to time.
	 
	 	 	 	Requirement includes any requirement, notice, order, direction,
recommendation, stipulation or similar notification received
from or given by any Authority or under any Law, whether in
writing or otherwise whether addressed to the Lessor or the
Lessee.
	 
	 	 	 	Review Date means each date described in Item 10 of the
Glossary.
	 
	 	 	 	Services means all services from time to time provided to the
Premises, the Building and/or to the Land or available for use,
and includes those of the following which are part of the Land
on the Commencing Date, namely:-

	 	(a)	 	any electronic medium, energy source,
lighting, gas, fuel, power, water, sewerage, drainage,
loading docks, plant rooms, storage areas, fire services,
sprinkler systems or devices, lifts, escalators and
air-conditioning;
	 
	 	(b)	 	fittings, fixtures, appliances, plant and
equipment utilised for any of these Services; and
	 
	 	(c)	 	any services or systems from time to time
utilised for access to the buildings on the Land.

	 	 	 	Tenant’s Employees includes subtenants, licensees and
concessionaires and the employees, agents, contractors,
consultants, customers, workmen, invitees, clients and visitors
of the Tenant, its subtenants, licensees and concessionaires.
	 
	 	 	 	Tenant’s Fittings includes all fixtures, fittings, plant,
equipment, partitions or other articles and chattels of all
kinds (other than stock-in-trade) in the Premises which are
owned by the Tenant.
	 
	 	 	 	Tenant’s Outgoings Contribution means the part of the Outgoings
payable by the Tenant calculated in accordance with clause 5.1.
	 
	 	 	 	Tenant’s Proportion of Outgoings means the percentage specified
in Item 16 of the Glossary.
	 
	 	 	 	Term means the term of this Lease specified in Item 6 of the
Glossary and includes the period of any holding over under this
Lease.
	 
	 	 	 	Year means calendar year.
	 
	 	1.2	 	Interpretation
	 
	 	 	 	Headings are for convenience only and do not affect
interpretation. The following rules of Interpretation apply
unless the context requires otherwise.

	 	(a)	 	The singular includes the plural and
conversely.

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	 	(b)	 	A gender includes all genders.
	 
	 	(c)	 	Where a word or phrase is defined, its
other grammatical forms have a corresponding meaning.
	 
	 	(d)	 	A reference to a person, corporation,
trust, partnership, unincorporated body or other entity
includes any of them.
	 
	 	(e)	 	A reference to any party to this Lease or
any other agreement or document includes the party’s
successors and substitutes or assigns.
	 
	 	(f)	 	A reference to a right or obligation of
any two or more Tenants confers that right, or imposes
that obligation, as the case may be, jointly and
severally.
	 
	 	(g)	 	A reference to legislation or to a
provision of legislation includes a modification,
re-enactment of or substitution for it and a regulation or
statutory instrument issued under it.
	 
	 	(h)	 	A reference to dollars or $ is to
Australian currency.
	 
	 	(i)	 	A reference to conduct includes any
omission, statement or undertaking, whether or not in
writing.
	 
	 	(j)	 	A reference to writing includes a
facsimile transmission and any means of reproducing words
in a tangible and permanently visible form.
	 
	 	(k)	 	An Event of Default subsists until it has
been waived in writing by, or remedied to the satisfaction
of, the Landlord.
	 
	 	(l)	 	A reference to includes or including
means includes, without limitation, or including, without
limitation, respectively.
	 
	 	(m)	 	Reference to the whole includes part.

	 	(n)	 	(i)	 	Where a reference is made to any
person, body or Authority that reference, if the person,
body or Authority has ceased to exist, will be to the
person, body or Authority as then serves substantially the
same objects as that person, body or Authority.

	 	(ii)	 	Any reference to the
President of that person, body or Authority, in
the absence of a President, will be read as a
reference to the senior officer for the time being
of the person, body or Authority or any other
person fulfilling the duties of President.

	 	(o)	 	Where anything is permitted in an
emergency the opinion of the Landlord (acting reasonably)
as to the existence or non-existence of that state of
affairs is conclusive.
	 
	 	(p)	 	Where the day or last day for doing
anything or on which an entitlement is due to arise is not
a Business Day that day or last day will be the
immediately following Business Day.

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	 	(q)	 	Month means calendar month.

	 	(r)	 	(i)	 	Subject to Paragraph (ii), every obligation under this Lease:-

	 	(A)	 	regardless of the form or context of the
wording, is a covenant by the party
undertaking that obligation; and
	 
	 	(B)	 	continues
throughout the Term and after that so far
as the obligation remains to be observed
or performed.

	 	(ii)	 	(A)	 	Every obligation of
the Landlord under this Lease binds that person
only while that person is entitled to receive Rent
under this Lease.

	 	(B)	 	Subject
to Paragraph (A), the covenants on the
part of the Landlord bind the person from
time to time immediately entitled to the
Premises at the end of this Lease.

	 	(iii)	 	Every covenant by the
Tenant includes a covenant by the Tenant to ensure
compliance with the covenant by each of the
Tenant’s Employees.

	 	(s)	 	The expression Premises and the
respective rights and obligations of the Parties shall be
determined on the basis that the Premises extend to and
include the internal faces of:-

	 	(i)	 	exterior walls and glass;
	 
	 	(ii)	 	internal walls and doors
of the cores containing the lifts and stairs; and
	 
	 	(iii)	 	the centre line of any
glass or partitions or walls which separate the
Premises from other premises or the Common Areas,

	 	 	 	but (for the avoidance of doubt) does not include the
roof areas.
	 
	 	(t)	 	Where the Landlord’s Consent or approval
is required under this Lease, that Consent or approval
shall not be unreasonably withheld, conditional or
delayed.

	2.	 	EXCLUSION OF STATUTORY PROVISIONS

	 	2.1	 	Laws Excluded
	 
	 	 	 	To the extent permitted by Law, the covenants, powers and
provisions (if any) implied in leases by virtue of any Law are
expressly negatived.
	 
	 	2.2	 	Moratorium

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	 	 	 	To the extent permitted by Law, any Law, Requirement or
moratorium which at any time directly or indirectly:-

	 	(a)	 	extends or reduces the Term;
	 
	 	(b)	 	lessens, varies or affects in favour of
the Tenant any obligation under this Lease;
	 
	 	(c)	 	delays, prevents or prejudicially affects
the exercise by the Landlord of any right, power or remedy
given by this Lease; or
	 
	 	(d)	 	reduces or postpones the payment of Rent
or any part of it,

	 	 	 	is excluded from this Lease and may not be enforced by the
Tenant against the Landlord.

	3.	 	TERM

	 	3.1	 	Term of Lease
	 
	 	 	 	Subject to this Lease, the Landlord leases to the Tenant and
the Tenant takes the Premises for the Term specified in Item 6.
	 
	 	3.2	 	Option of renewal

	 	(a)	 	At the Tenant’s option, this Lease may be
renewed on the Terminating Date for further periods of
one (1) year.
	 
	 	(b)	 	Whichever the decision of the Tenant
under clause 3.2(a), the Tenant must notify the Landlord
of its decision no later than 6 months before the
Terminating Date.
	 
	 	(c)	 	Upon giving notice of exercise of the
option(s) term under clause 3.2(b), the Landlord will
grant and the Tenant will enter into a new lease starting
on the day following the Terminating Date on the same
terms as this Lease, except that:

	 	(i)	 	The Rent set out in Item
9 of the Glossary will be replaced with the
current market rent of the Premises at the
commencing date of the relevant option term,
calculated in accordance with clauses 4.3 and 4.4;
and
	 
	 	(ii)	 	The dates specified in
Items 7 and 8 of the Glossary will be replaced
with the commencing date and the terminating date
of the relevant option term.

	4.	 	RENT

	 	4.1	 	Payment of Rent
	 
	 	 	 	The Tenant must pay Rent to the Landlord at the relevant rate
from time to time:-

	 	(a)	 	without demand;
	 
	 	(b)	 	without any deduction or right of set-off
at all; and

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	 	(c)	 	by equal monthly instalments (and
proportionately for any part of a month) in advance on the
first day of each month.

	 	4.2	 	Payment of instalments

	 	(a)	 	The first instalment of Rent must be paid
on the Commencing Date.
	 
	 	(b)	 	All instalments must be paid to the place
and in the manner directed by the Landlord from time to
time.

	 	4.3	 	Market Review of Rent
	 
	 	 	 	At any time during the period of twelve (12) months prior to
and six (6) months following each Market Review Date the
Landlord may (but is not obliged to) review the Rent by
notifying the Tenant of the Landlord’s assessment of the Rent
for the Premises as at the Market Review Date. This assessment
shall take into account the criteria contained in clause 4.4(c)
as assessed to apply.
	 
	 	4.4	 	Tenant’s dispute of Rent
	 
	 	 	 	If the Tenant disagrees with the Landlord’s assessment of the
Rent under clause 4.3 and the Landlord and the Tenant are
unable to agree on the Rent to apply from a particular Market
Review Date then the following procedure applies:

	 	(a)	 	the Tenant shall within 14 days of being
notified of the Landlord’s assessment of the Rent under
clause 4.3 notify the Landlord in writing (Dispute Notice)
that the Tenant disputes the Landlord’s assessment and
requires the Rent to be reviewed in accordance with this
clause 4.4;
	 
	 	(b)	 	if the Tenant gives the Dispute Notice,
either party may, as soon as practicable, refer the matter
for determination to an independent Valuer appointed by
the President of the Australian Institute (the Nominated
Valuer);
	 
	 	(c)	 	the Landlord and Tenant will use their
reasonable endeavours to cause the Nominated Valuer to
determine the current market rent of the Premises as at
that particular Market Review Date within 28 days after
being nominated;
	 
	 	(d)	 	if the Tenant does not give the Dispute
Notice to the Landlord within the time required under
clause 4.4(a) (time being of the essence), the Rent
payable on and from the Market Review Date will be the
Rent assessed by the Landlord under clause 4.3(a);
	 
	 	(e)	 	In determining the Rent the Nominated
Valuer will be taken to be acting as an expert and not as
an arbitrator, will determine the current market rent for
the Premises as at the particular Market Review Date
having regard to this Lease and applying all relevant
principles of valuation and the current market rent must
be determined:-

	 	(i)	 	as between a willing
landlord, and a willing tenant; and

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	 	(ii)	 	with vacant possession.

	 	(f)	 	the cost of the Nominated Valuer shall be
borne by the Landlord and the Tenant equally; and
	 
	 	(g)	 	any variation in the Rent resulting from
a determination under clause 4.3 and/or 4.4 (as
appropriate) will be effective on and from that particular
Market Review Date.

	 	4.5	 	Rent payable after Review
	 
	 	 	 	The Rent payable by the Tenant from a Market Review Date is the
higher of the Rent determined pursuant to clause 4.3 and 4.4
(as appropriate) and the Rent payable immediately before the
Market Review Date up to a maximum increase of 10%.

	5.	 	OUTGOINGS

	 	5.1	 	Tenant’s Outgoings
	 
	 	 	 	As an additional rent, the Tenant shall pay
to the Landlord at the agreed Proportion of the Outgoings
for each Outgoings Year.
	 
	 	5.2	 	Landlord’s estimate
	 
	 	 	 	The Landlord may:-

	 	(a)	 	as soon as reasonably practicable before
each Outgoings Year, notify the Tenant of the Landlord’s
reasonable estimate of the Tenant’s Outgoings Contribution
for the Outgoings Year; and
	 
	 	(b)	 	from time to time during the Outgoings
Year, by written notice to the Tenant, adjust the
reasonable estimate of the Tenant’s Outgoings Contribution
as may be appropriate to take account of changes in any of
the Outgoings.

	 	5.3	 	Payments on account
	 
	 	 	 	The Tenant shall pay on account of the Tenant’s Outgoings
Contribution the estimates provided for in clause 5.2 by equal
monthly instalments in advance on the same days and in the same
manner as the Tenant is required to pay Rent under this Lease
(at all times assuming there is no Rent free period).
	 
	 	5.4	 	Yearly adjustment

	 	(a)	 	As soon as practicable after the end of
each Outgoings Year the Landlord shall give to the Tenant
a notice with reasonable detail of the Tenant’s Outgoings
Contribution for that Outgoings Year (the Outgoings
Notice).
	 
	 	(b)	 	The Tenant shall within 14 days after the
date of the Outgoings Notice pay to the Landlord or the
Landlord shall credit to the Tenant’s account (as
appropriate) the difference between the amount paid on
account of the Tenant’s Outgoings Contribution

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	 	 	 	during that Outgoings Year and the amount actually payable in
respect of it by the Tenant, so that the Tenant shall
have paid the correct amount of the Tenant’s Outgoings
Contribution for that Outgoings Year. In the absence
of obvious error the Outgoings Notice will be evidence
of the matters contained in it unless proved otherwise.

	 	5.5	 	Termination of lease

	 	(a)	 	Subject to clause 5.6, the Tenant’s
Outgoings Contribution shall be payable even if the Term
has expired or been determined.
	 
	 	(b)	 	On the termination of this Lease, the
Tenant shall pay the Landlord’s reasonable estimate of the
Tenant’s Outgoings Contribution as at the Date of
Termination. Any amount paid by the Tenant must be taken
into account in the yearly adjustment to be made under
clause 5.4 in relation to the Outgoings Year in which such
termination occurs.

	 	5.6	 	Landlord’s rights not affected
	 
	 	 	 	Nothing in clauses 5.1 to 5.5 prevents the Landlord from:-

	 	(a)	 	recovering from the Tenant the Tenant’s
Outgoings Contribution where the Landlord has failed to
notify the Tenant of an estimate or of the actual amount
of the Tenant’s Outgoings Contribution in a timely manner,
including failure to notify before the Date of
Termination; or
	 
	 	(b)	 	requiring the Tenant to pay to the
Landlord a lump sum in respect of the Tenant’s Outgoings
Contribution for a period which pre-dates the Outgoings
Notice.

	 	5.7	 	Cleaning of Premises

	 	(a)	 	The Tenant must at its cost and expense
keep the Premises clean and free of dirt and rubbish.
	 
	 	(b)	 	If, acting reasonably, the Landlord
determines that the Tenant is not complying with its
obligations under Clause 5.7(a), the Landlord must give
the Tenant 14 days written notice. If the Tenant fails to
comply with its obligations within the 14 day period, the
Landlord may, at the cost of the Tenant, arrange for the
Premises to be cleaned by the Landlord’s cleaning
contractors.

	 	5.8	 	Garbage
	 
	 	 	 	The Tenant will be responsible for ensuring that all garbage is
properly contained and removed from the Premises during the
term of this Lease and acknowledges that the Landlord is not
responsible for providing any service in respect to the
Tenant’s garbage.
	 
	 	5.9	 	Cost of Services
	 
	 	 	 	The Tenant must pay promptly all usage charges for all
Services, including for all sources of energy, electricity,
gas, oil, water and telephone separately

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	 	 	 	supplied, metered, consumed or connected (as appropriate) to,
in or on the Premises.

	6.	 	USE OF PREMISES

	 	6.1	 	Permitted Use
	 
	 	 	 	The Tenant must not use the Premises for any purpose other than
the Permitted Use without the Landlord’s Consent (which may not
be unreasonably withheld or delayed).
	 
	 	6.2	 	No warranty as to use
	 
	 	 	 	The Tenant:-

	 	(i)	 	accepts this Lease with
full knowledge of and subject to any prohibitions
or restrictions on the use of the Premises from
time to time under any Law or Requirement;
	 
	 	(ii)	 	must obtain, maintain and
comply with (at its Cost) any consent or approval
from any Authority necessary or appropriate for
the Tenant’s particular use of the Premises under
any Requirement or Law; and
	 
	 	(iii)	 	must not by any act or
omission cause or permit any consent or approval
referred to in paragraph (b) to lapse or be
revoked.

	 	6.3	 	Compliance with Laws and Requirements

	 	(a)	 	The Tenant must comply with and observe
(at its Cost) all Laws and Requirements:-

	 	(i)	 	in relation to the
Tenant’s Fittings installed in the Premises;
and/or
	 
	 	(ii)	 	in relation to or arising
as a result of the Tenant’s particular use or
occupation of the Premises from time to time,
including those which arise as a result of the
gender or number of persons employed in the
Premises,

	 	 	 	whether or not those Laws or Requirements are addressed
to or are required to be complied with by either or
both of the Landlord and the Tenant.
	 
	 	(b)	 	Where any Law or Requirement is notified
to or served on the Tenant, the Tenant must give a
complete copy of the Notice to the Landlord as soon as
reasonably practicable.
	 
	 	(c)	 	Before complying with any Law or
Requirement referred to in this clause 6.3, the Tenant
must obtain the Landlord’s Consent and must otherwise
observe the provisions of this Lease.
	 
	 	(d)	 	The Landlord may:-

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	 	(i)	 	(without prejudice to any
of the Landlord’s other rights) elect at the
Tenant’s Cost to comply with any Law or Requirement (referred to in this Clause 6.3)
either in part or whole, where the Tenant fails
to comply with the Law or Requirement within
the appropriate time; and
	 
	 	(ii)	 	where the Landlord does
exercise any rights referred to in paragraph (i),
elect to have the balance of any Law or
Requirement complied with by the Tenant.

	 	(e)	 	Despite anything in this Lease, the
Tenant is not required under this Clause 6.3 to effect
structural alterations or additions except those caused
by, contributed to or arising from:-

	 	(i)	 	the particular use of the
Premises by the Tenant;
	 
	 	(ii)	 	the number or gender of
the Tenant and the Tenant’s Employees; and/or
	 
	 	(iii)	 	any deliberate or
negligent act or omission on the part of the
Tenant or of the Tenant’s Employees.

	 	(f)	 	The Tenant must, on demand, pay to the
Landlord all reasonable Costs incurred in good faith by or
on behalf of the Landlord in complying with any Law or
Requirement referred to in this Clause 6.3 which the
Tenant was obliged to comply with as if that money were
rent in arrears.

	 	6.4	 	Overloading

	 	(a)	 	The Tenant must not place or store any
heavy articles or materials (Heavy Equipment) on any floor
of the Premises without the Landlord’s Consent.
	 
	 	(b)	 	The Landlord’s Consent will only be given
where the Heavy Equipment is:-

	 	(i)	 	reasonably necessary and
proper for the conduct of the Tenant’s business in
accordance with the Permitted Use; and
	 
	 	(ii)	 	of a nature and size as
will not in the Landlord’s reasonable opinion
cause or be likely to cause any structural or
other damage to the floors or walls or any other
part of the Premises.

	 	(c)	 	The Landlord (acting reasonably) is
entitled to prescribe the maximum weight for and proper
location of Heavy Equipment on the Premises. Any damage
done to the Premises or any part of it during the time the
Heavy Equipment is in the Premises or when it is taken or
removed from the Premises must be made good and/or paid
for on demand by the Tenant (as appropriate).
	 
	 	(d)	 	The Tenant must not install any equipment
or system on the Premises that overloads or may overload
the electrical or other Services to the Premises.

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	 	(e)	 	If the Landlord at the request of the
Tenant upgrades the Services to accommodate any equipment
or system which the Tenant wishes to install, the Tenant
must pay to the Landlord:-

	 	(i)	 	on demand, the reasonable
Cost to the Landlord of those alterations
(including consultants’ fees); and
	 
	 	(ii)	 	if required by the
Landlord, the estimated reasonable Cost of those
alterations before they are commenced.

	 	 	 	The Landlord gives no warranty as to the suitability of
any such alteration.

	 	6.5	 	Other activities by Tenant
	 
	 	 	 	The Tenant must:-

	 	(a)	 	in respect of Appurtenances on the
Premises:-

	 	(i)	 	not use any of them for
any purpose other than those for which they were
designed;
	 
	 	(ii)	 	not place any of in them
any substance which they were not designed to
receive; and
	 
	 	(iii)	 	pay to the Landlord all
reasonable Costs of making good any damage to any
of them arising from any misuse by or caused by
the Tenant or the Tenant’s Employees;

	 	(b)	 	where any air-conditioning or fire alarm
system of the Landlord is installed on the Premises, not
interfere with that system nor obstruct or hinder access
to it;
	 
	 	(c)	 	not without the Landlord’s Consent, affix
any television or radio mast, antennae or satellite dish
to any part of the Premises;
	 
	 	(d)	 	not use or operate any musical
instrument, instrument or other sound or picture producing
equipment on the Premises if that equipment is audible or
visible from the outside of the Premises;
	 
	 	(e)	 	not erect or install window coverings,
blinds, screens or awnings without the Landlord’s Consent.
Any window covering, blind, screen or awning hung,
erected or installed in the Premises must be of
non-flammable materials and must comply with all relevant
prescribed or recommended standards of the Standards
Association of Australia and of all other Authorities;
	 
	 	(f)	 	not deface or mark or drive any nails,
screws or hooks into any part of the Premises. If any
part or parts of the Premises are damaged, defaced or
marked by the Tenant or the Tenant’s Employees, the Tenant
must immediately on demand pay to the Landlord all Costs
in repairing and/or reinstating that part or parts of the
Premises to their former condition;

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	 	(g)	 	keep the Premises clean and not permit
any accumulation of useless property or rubbish in them.
No rubbish or waste may at any time be burned on the
Premises by the Tenant;
	 
	 	(h)	 	not throw anything out of the windows or
doors of the Premises or down the lift shafts, passages or
skylights or into the light areas of the Premises, or
deposit waste paper or rubbish anywhere except in proper
receptacles, or place anything on any sill, ledge or other
similar part of the exterior of the Premises;
	 
	 	(i)	 	if any infectious illness occurs on the
Premises:-

	 	(i)	 	immediately notify the
Landlord and all proper Authorities; and
	 
	 	(ii)	 	where that illness is
confined to the Premises, at its Cost, thoroughly
fumigate and disinfect the Premises to the
reasonable satisfaction of the Landlord and all
relevant Authorities;

	 	(j)	 	not permit tobacco smoking within the
Premises;
	 
	 	(k)	 	not keep any animals or birds in the
Premises;
	 
	 	(l)	 	at its Cost keep the Premises free and
clear of pests, insects and vermin;
	 
	 	(m)	 	not do or carry on in the Premises any
harmful or offensive trade, business or occupation or
anything which causes or may cause annoyance, nuisance,
damage or disturbance to the occupiers or owners of any
nearby premises or to the Landlord;
	 
	 	(n)	 	not hold any auction, bankrupt or fire
sale on the Premises;
	 
	 	(o)	 	not prepare or cook food except in areas
which may be provided and which are approved by the
Landlord for that purpose; and
	 
	 	(p)	 	if the Premises are air-conditioned, and
while such air-conditioning is operating, not open any
external windows.

	 	6.6	 	Signs

	 	(a)	 	The Tenant may display some visitor’s
identification signs on certain parts of the Premises
(other than inside the Premises) subject to the Landlord’s
Consent which should not be unreasonably withheld, and
then only of a colour, size and style and in a place or
places approved by the Landlord.
	 
	 	(b)	 	At the Date of Termination, the Tenant
must at its Cost remove all lettering, signs and other
distinctive marks from the Premises and must make good any
damage caused by that removal.

	 	6.7	 	For sale/to let
	 
	 	 	 	The Landlord may when the Landlord reasonably considers
appropriate:-

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	 	(a)	 	place advertisements and signs on any
part of the Premises as it reasonably considers
appropriate where the Premises are either for sale or
available for lease; and
	 
	 	(b)	 	show interested persons through the
Premises in the presence of a responsible officer of the
Tenant.

	 	 	 	The Landlord in exercising its rights under this clause 6.7
must endeavour to minimise any inconvenience to the Tenant or
the Tenant’s business. The Landlord shall not be entitled to
advertise the Premises for lease or show prospective tenants
through the Premises except during the last 6 months of the
Term and then only if the Tenant has not exercised its option
for renewal under this Lease.
	 
	 	6.8	 	Safety and security of Building

	 	(a)	 	The Tenant shall:-

	 	(i)	 	comply with all
reasonable requirements of the Landlord for the
Tenant and the Tenant’s Employees to participate
in emergency evacuation procedures and emergency
evacuation drills from the Building (if any); and
	 
	 	(ii)	 	not make or permit any of
the Tenant’s Employees to make any Claim against
the Landlord, and the Tenant indemnifies the
Landlord against any Claim, arising from
participation in any of those procedures or
drills.

	 	 	 	The Tenant acknowledges that the Landlord is not
required at Law or under this Lease to undertake any
emergency evacuation procedures or drills in respect to
the Building however if it does so the Landlord shall
use its reasonable endeavours to minimise any
disturbance caused to the Tenant in its occupation and
use of the Premises and shall consult with the Tenant
in advance in relation to the need for and timing of
any such procedures or drills.
	 
	 	(b)	 	The Landlord may close the Building or
any part of it in an emergency or where the Landlord
acting reasonably considers such action necessary for the
safety of any person or property in the Building and/or on
the Land.
	 
	 	(c)	 	The Tenant:-

	 	(i)	 	shall ensure that all
exterior doors and windows in the Premises are
securely locked and fastened at all times when the
Premises are not occupied; and
	 
	 	(ii)	 	authorises the Landlord
or any agent or employee of the Landlord to enter
the Premises whenever necessary for the purpose of
locking any door or window left unlocked or
unfastened.

	 	(d)	 	The Tenant:-

	 	(i)	 	shall not make any
duplicate of any Keys;

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	 	(ii)	 	shall only provide Keys
to employees of the Tenant and shall keep current
a list of the recipients of Keys and their status
from time to time;
	 
	 	(iii)	 	shall immediately upon
request from the landlord provide the Landlord
with an up-to-date copy of the list referred to in
Sub-paragraph (ii);
	 
	 	(iv)	 	shall pay immediately
upon demand by the Landlord the reasonable Costs
of replacing any Key where any Key is lost,
stolen, destroyed or mutilated, including any Cost
to or Claim against the Landlord arising from
anything done with any stolen or lost Key;
	 
	 	(v)	 	shall pay for the change
of locks in respect to any Common Areas which have
locks where the Tenant or Tenant’s Employees have
lost a key to any Common Area;
	 
	 	(vi)	 	agree that the provisions
of clause 9.5 and 9.6 apply to any Claim or other
matters arising from the issue of Keys to the
Tenant or to any of the Tenant’s Employees; and
	 
	 	(vii)	 	agrees that all Keys
held by the Tenant during its occupancy must be
surrendered to the Landlord on the expiration of
earlier determination of its tenancy.

	7.	 	MAINTENANCE, REPAIRS, ALTERATIONS AND ADDITIONS

	 	7.1	 	State of the Premises

	 	a)	 	Within 10 (ten) days of the Commencing
Date, the Tenant and the Landlord shall conduct a common
inspection of the Premises, and shall jointly establish
and sign a certificate evidencing the state of the
Premises at the Commencing Date (the Condition Report).
	 
	 	b)	 	The same document shall be jointly
established and signed on the Terminating Date.
	 
	 	c)	 	The Tenant shall at its own expenses
restore the Premises to their initial state in accordance
with clause 13

	 	7.2	 	Repairing obligations

	 	(a)	 	The Tenant must, during the Term, keep
the Premises, Essential Services Equipment installed in
the Premises by or on behalf of the Tenant) to comply with
any requirement of an Authority or for the Tenant’s
particular use of the Premises and the Tenant’s Fittings
in good repair and condition having regard to their state
of repair and condition at the commencement of this Lease
(or, if this Lease is one of a sequence of leases, to
their state of repair and condition at the commencement of
the first lease) as set out in the Condition Report. That
obligation excludes:-

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	 	(i)	 	fair wear and tear; and
	 
	 	(ii)	 	damage to the Premises
caused by fire, storm or tempest or any other risk
covered by any insurance taken out by the Landlord
in respect of the Premises (other than where any
insurance money is irrecoverable through the act,
omission, neglect, default or misconduct of the
Tenant or the Tenant’s Employees).

	 	(b)	 	Despite anything in this Lease, this
Clause 7.1 does not oblige the Tenant to carry out any
structural or capital maintenance, replacement or repair
except where rendered necessary by any act, omission,
neglect, default or misconduct of the Tenant or the
Tenant’s Employees or by its or their use or occupancy of
the Premises or by the installation, use or removal of the
Tenant’s Fittings.
	 
	 	(c)	 	The Tenant must, at its Cost:-

	 	(i)	 	immediately make good any
damage to the Premises caused by any act or
omission of the Tenant or of the Tenant’s
Employees or by its or their use or occupancy of
the Premises or by the installation use or removal
of the Tenant’s Fittings;
	 
	 	(ii)	 	immediately replace all
glass broken by the Tenant or by any of the
Tenant’s Employees;
	 
	 	(iii)	 	repair or, where
appropriate, replace any of the Landlord’s
Fixtures which are broken or damaged by the Tenant
or by any of the Tenant’s Employees except that,
unless the Landlord notifies the Tenant to the
contrary, those repairs or replacements must only
be carried out by the Landlord but at the Tenant’s
reasonable Cost
	 
	 	(iv)	 	Keep those Landlord’s
Fixtures or Services located within and
exclusively serving the Premises in good repair,
and enter into and keep current at the Tenant’s
Cost any maintenance contract as is reasonably
required by the Landlord for that purpose with
contractors approved by the Landlord. The Tenant
must give to the Landlord a copy of every contract
entered into under this Paragraph.

	 	(d)	 	The Landlord is responsible for and shall
promptly carry out when reasonably necessary all
maintenance and repair of Essential Services Equipment
installed in the Building and the Premises, other than
Essential Services Equipment referred to in Clause 7.1(a).

	 	7.3	 	Landlord’s right of inspection
	 
	 	 	 	The Landlord may in the presence of a responsible officer of
the Tenant at all reasonable times on giving to the Tenant
reasonable notice (except in the case of an emergency when no
notice is required) enter the Premises and view the state of
repair and condition.

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	 	7.4	 	Enforcement of repairing obligations
	 
	 	 	 	The Landlord may:-

	 	(a)	 	notify the Tenant of the Tenant’s failure
to carry out any repair, replacement, cleaning or
Redecoration of the Premises which the Tenant is obliged
to do under this Lease; and
	 
	 	(b)	 	require the Tenant to carry out that
repair, replacement, cleaning or Redecoration within a
reasonable time.

	 	7.5	 	Landlord may enter to repair
	 
	 	 	 	If:-

	 	(a)	 	the Landlord wishes to carry out any
repairs to the Premises, (including the Essential Services
Equipment referred to in Clause 7.1(d)) it considers
necessary or desirable or in relation to anything which
the Landlord is obliged to do under this Lease; and/or
	 
	 	(b)	 	any Authority requires any repair work to
be undertaken on the Premises which the Landlord must or
in its absolute discretion elects to do and for which the
Tenant is not liable under this Lease,

	 	 	 	then the Landlord, its architects, workmen and others
authorised by the Landlord may at all reasonable times on
giving to the Tenant reasonable notice (except in the case of
an emergency when no notice is required) enter and carry out
any of those works and repairs. In so doing the Landlord will
endeavour not to cause undue inconvenience (given the nature
and extent of the works and repairs) to the Tenant and the
conduct of the Tenant’s business.
	 
	 	7.6	 	Alterations to Premises

	 	(a)	 	The Tenant must not make or permit any
Proposed Work without the Landlord’s Consent.
	 
	 	(b)	 	In seeking the Landlord’s Consent, the
Tenant must submit to the Landlord plans and
specifications of the Proposed Work.
	 
	 	(c)	 	The Landlord may (unless it notifies the
Tenant otherwise) require, as a condition of the
Landlord’s Consent, that:-

	 	(i)	 	any Proposed Work be
supervised by a person approved by the Landlord;
	 
	 	(ii)	 	any Proposed Work be
carried out by contractors or tradesmen approved
by the Landlord;
	 
	 	(iii)	 	the Tenant pays on
demand all reasonable Costs incurred by the
Landlord in considering the Proposed Work and its
supervision, including the fees of architects or
other building consultants engaged by or on behalf
of the Landlord;
	 
	 	(iv)	 	the Tenant obtains and
keeps current all necessary approvals and permits
from all Authorities necessary to

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	 	 	 	enable any Proposed Work to be lawfully carried out, and
on request by the Landlord gives for inspection
by the Landlord copies of all those approvals
and permits;
	 
	 	(v)	 	on completion of the
Proposed Work the Tenant immediately obtains and
gives to the Landlord a copy of any certificates
of compliance or satisfactory completion issued by
the appropriate Authority;
	 
	 	(vi)	 	the Tenant on demand
reimburses the Landlord for any reasonable Cost
incurred by the Landlord as a result of the
Proposed Work being carried out, including any
resulting modification or variation to the
Premises; and
	 
	 	(vii)	 	prior to the Date of
Termination the Tenant restores the Premises and
all Services to them to their configuration and
condition immediately before the Proposed Work was
carried out.

	 	(d)	 	The Tenant will at its own Cost comply
with all conditions on which the Landlord Consents to any
Proposed Work.

	 	7.7	 	Alterations or additions to Landlord’s Fixtures and Services
	 
	 	 	 	Subject to Clause 7.6, the Tenant must not, without the
Landlord’s Consent, install, interfere with or make any
connections to the Landlord’s Fixtures, Services and/or
Appurtenances.
	 
	 	7.8	 	Notice to Landlord of damage, accident etc.
	 
	 	 	 	The Tenant must as soon as reasonably practicable, notify the
Landlord of any:-

	 	(a)	 	damage, accident or defects to or in the
Premises; and/or
	 
	 	(b)	 	circumstances likely to cause any damage
or injury to occur within the Premises,

	 	 	 	of which the Tenant has notice (actual or constructive).

	8.	 	ASSIGNMENT AND SUB-LETTING

	 	8.1	 	No disposal of Tenant’s interest
	 
	 	 	 	The Tenant must not assign, transfer, sublet or otherwise deal
with or part with possession of the Premises or this Lease, any
part of them or any interest in them or attempt to do so. For
this purpose, Clause 23 of the Agreement shall not apply to the
Lease..
	 
	 	8.2	 	Assignment and subleases
	 
	 	 	 	The Tenant will not be in breach of Clause 8.1 if:

	 	(a)	 	there is no subsisting Event of Default
by the Tenant at the date of proposed assignment or
sublease;

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	 	(b)	 	subject to the Landlord’s prior written
consent, which should not be unreasonably withheld, the
assignee or transferee is a Tenant’s Affiliated companies
	 
	 	(c)	 	the Tenant pays to the Landlord all
reasonable Costs incurred by the Landlord (whether or not
the proposed assignment or sublease proceeds to
completion) of and incidental to the proposed assignment
or sublease including but not limited to the Landlord’s
legal costs and the Landlord’s managing agent’s charges
calculated on an hourly basis;
	 
	 	(d)	 	the Tenant proves to the satisfaction of
the Landlord that the incoming tenant is respectable,
responsible and solvent;
	 
	 	(e)	 	in the case of a proposed sublease:-

	 	(i)	 	the Tenant proves to the
satisfaction of the Landlord (by valuation or
valuations if required) that the rent payable by
the incoming tenant under the sublease is at a
rate not less than the then current market rent
for the Premises; and
	 
	 	(ii)	 	the Landlord may in its
absolute discretion approve a sublease at a rate
less than the then current market rent for the
Premises if the Tenant provides a written
acknowledgement in a form satisfactory to the
Landlord that the rate is below current market
rent for the Premises;

	 	(f)	 	the Tenant and the incoming tenant enter
into a deed with the Landlord in the form required by the
Landlord which includes provisions that the incoming
tenant:-

	 	(i)	 	if an assignee, will
comply with all the Tenant’s obligations under
this Lease on and from the date of assignment; or
	 
	 	(ii)	 	if a subtenant, will not
cause or contribute to a breach of this Lease;

	 	(g)	 	the Tenant and the incoming tenant comply
with the Landlord’s requirements in relation to the
documentation, stamping and registration of the proposed
assignment or sublease; and
	 
	 	(h)	 	if the incoming tenant is a company,
other than a company whose shares are listed on any
Australian Stock Exchange the Tenant gives in favour of
the Landlord a guarantee or guarantees, in a form and by a
person or persons acceptable to the Landlord, in respect
of the obligations and covenants of the incoming tenant.

	 	8.3	 	Corporate ownership
	 
	 	 	 	If the Tenant is a company, other than a company whose shares
or that of its parent or ultimate holding company are listed on
any recognised Stock Exchange, any change in the shareholding
of the Tenant effectively altering
the control of the Tenant is an assignment of this Lease. In
that case the Tenant must not:-

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	 	(a)	 	register, record or enter in its books
any transfer of any share or shares in the capital of the
Tenant;
	 
	 	(b)	 	deal with any beneficial interest in any
such share or shares;
	 
	 	(c)	 	issue any new share or shares; or
	 
	 	(d)	 	take or attempt to take any action having
the effect:-

	 	(i)	 	or effectively altering
the control of the Tenant; or
	 
	 	(ii)	 	that the shareholders of
the Tenant at the date of this Lease together
beneficially hold or control less than 51% of the
voting rights of capital in the Tenant,

	 	 	 	until after the Tenant has complied with the conditions
of Clause 8.2(a), (b), (c), (f) and (g).

	 	8.4	 	Mortgaging Tenant’s interest in Premises
	 
	 	 	 	The Tenant must not mortgage or charge this Lease or the
Tenant’s interest in the Premises without the Landlord’s
Consent (not to be unreasonably withheld) where the Tenant is a
company and wishes to enter into a proper fixed and/or floating
charge over its assets in good faith as a means of securing a
bank overdraft facility.
	 
	 	8.5	 	Leasing and charging Tenant’s Fittings
	 
	 	 	 	The Tenant must not mortgage, charge, lease or otherwise deal
with any Tenant’s Fittings (or anything else which requires or
may require the Landlord to sign a landlord’s waiver or any
similar written material) without the Landlord’s Consent, not
to be unreasonably withheld where:-

	 	(a)	 	the Tenant wishes to enter into a proper
mortgage, charge or lease in good faith as a means of
financing those Tenant’s Fittings; and
	 
	 	(b)	 	any waiver required to be signed by the
Landlord will not detrimentally affect the Landlord’s
rights under this Lease and the Tenant’s costs in relation
to it.

	9.	 	INSURANCE AND INDEMNITIES

	 	9.1	 	Insurance to be taken out by Tenant

	 	 	 	To ensure proper insurance coverage of the risks related to its occupancy
or use of the Premises, The Tenant must:-

	 	(a)	 	take out in any case before January 31st,
2004 and keep current during the Term a public risk
insurance policy covering the Premises That policy must:-

	 	(i)	 	bear an endorsement by
which the indemnity under the policy is extended
to include the risks referred to in
Clause 9.6 and all other Claims arising out of
or in connection with this Lease; and

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	 	(ii)	 	be for an amount in
respect of any single accident of not less than
the amount specified in Item 13 of the Glossary

	 	(b)	 	insure all plate glass windows, doors and
display show-cases forming part of or within the Premises
for not less than their full insurable value;
	 
	 	(c)	 	ensure that all insurance policies taken
or to be taken out under this Clause 9;

	 	(i)	 	are taken out with an
independent and reputable insurer;
	 
	 	(ii)	 	contain conditions
reasonably acceptable to the Landlord and/or the
Landlord’s insurer;
	 
	 	(iii)	 	are on an occurrence,
not a claims made, basis;
	 
	 	(iv)	 	are taken out in the name
of the Tenant include the Landlord as additional
insured;

	 	(d)	 	whenever reasonably required by the
Landlord, give to the Landlord with respect to every
policy of insurance to be effected by the Tenant under
this Clause 9 the receipt for the last premium and a
certificate of currency;
	 
	 	(e)	 	notify the Landlord of any cancellation
within thirty days or notification thereof by the insurer;
	 
	 	(f)	 	inform the Landlord of any exclusions,
endorsement or alterations Should the Tenant be unable to
find additional cover to setoff such exclusions and
endorsements, the Landlord shall be able to subscribe and
maintain the necessary coverage on behalf of the Tenant at
reasonable conditions and the Tenant shall reimburse the
Landlord the relevant premiums and
	 
	 	(g)	 	pay all premiums and other money payable
in respect of any policy whenever they are due and
payable.

	 	 	 	The Parties acknowledge that for the period
commencing on the Commencing Date up to the earlier of (i)
Tenant having subscribed an insurance covering the
Premises and (ii) January 31, 2004. the Landlord will
maintain the insurance coverage in force immediately
before Completion.
	 
	 	 	 	The Landlord agrees that the Tenant’s obligation to insure
under this clause 9.1 will be met by any global insurance
policies the Tenant holds, provided that the Tenant gives the
Landlord a copy of the relevant certificate of currency which
contains reasonable details of the cover provided.
	 
	 	9.2	 	Effect on Landlord’s insurances

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	 	 	 	The Tenant must pay to the Landlord on demand all extra
justified Costs of insurance on the Premises and on any
property in them (if any are required) on account of the extra
risk caused by Tenant’s particular use or occupation of the
Premises.
	 
	 	9.3	 	Inflammable substances
	 
	 	 	 	The Tenant must not:-

	 	(a)	 	other than as is necessary and proper and
in accordance with the Permitted Use, and then only in
quantities which are reasonably appropriate, store
inflammable or explosive substances on or in the Premises;
or
	 
	 	(b)	 	use any of those substances on the
Premises for any purpose other than as required given the
Permitted Use.

	 	9.4	 	Compliance with fire regulations
	 
	 	 	 	The Tenant must:-

	 	(a)	 	comply with insurance, sprinkler or fire
alarm regulations in respect of any partitions which may
be erected by or on behalf of the Tenant in the Premises;
and
	 
	 	(b)	 	not interfere with the Essential Services
Equipment and in particular must not prop open fire doors
or leave or store goods or equipment in fire stairs or
exits or in passage ways leading to fire stairs or exits.
	 
	 	(c)	 	Not interfere or modify any fire
sprinkler on the premises
	 
	 	(d)	 	Allow the Landlord and its designated
suppliers or representatives to test and maintain the fire
sprinkler on the Premises as may be necessary and for this
purpose allow access to the Landlord and its suppliers and
representatives as may be requested.

	 	9.6	 	Indemnities

               The Parties agree that each of them shall be liable and responsible for
any damage, liability or loss (including any associated costs and claims) that
may be caused to third parties as a result of or in connection with its
occupancy or use of the Premises and will indemnify and hold harmless the other
party from the same (including any associated costs and claims).

	 	9.6.1	 	The Tenant shall indemnify and hold harmless the
Landlord in respect of all Claims in relation to any loss or
damage to any the Premises or any property and/or in relation to
any injury or death of the Tenant personnel and the Tenant waives
any right of recourse against the Landlord.
	 
	 	9.6.2	 	The Landlord shall indemnify and hold harmless the
Tenant in respect of all Claims in relation to any loss or damage
to any part of the Building, other than the Premises, or any
property and/or in relation to any injury or death of the
Landlord personnel and the Landlord waives any right of recourse
against the Tenant.

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	 	9.6.3	 	Each Party shall do their reasonable endeavours to
obtain from their respective insurers waivers of recourse and
rights of subrogation against the insurers of the other party.

	10.	 	DAMAGE, DESTRUCTION AND RESUMPTION

	 	10.1	 	Damage to or destruction of Premises
	 
	 	 	 	If the Premises or any part of them are damaged or destroyed so
that the Premises or any part of them are wholly or
substantially unfit for the occupation and use of the Tenant or
(having regard to the nature and location of the Premises and
the normal means of access) are wholly or substantially
inaccessible then:-

	 	(a)	 	until the Premises have been restored or
made fit for the occupation and use or accessible to the
Tenant (as appropriate);

	 	(i)	 	the Rent, the Tenant’s
Outgoings Contribution and any other monies
payable under this Lease or a proportionate part
of them according to the nature and extent of the
damage or destruction sustained, abates;
	 
	 	(ii)	 	all remedies for recovery
of those monies (or that proportionate part, as
the case may be) falling due after that damage or
destruction is suspended; and
	 
	 	(iii)	 	the Tenant is not
obliged to conduct the Tenant’s business in the
Premises or in that part of them which is so
damaged or destroyed (as the case may be).

	 	(b)	 	Unless the Landlord notifies the Tenant
within three months after that destruction or damage
occurs that it intends to reinstate the Premises and/or
make the Premises fit for occupation and use and/or
accessible to the Tenant (as appropriate), this Lease may
be determined by not less than one month’s notice by
either party.
	 
	 	(c)	 	If the Landlord notifies the Tenant of
its intention to make good the destruction or damage under
Paragraph (b) and:-

	 	(i)	 	after that does not do so
within a reasonable time (having regard to the
nature and extent of the damage or destruction and
the time expected to commence and to carry out the
necessary works), the Tenant may notify the
Landlord of its intention to determine this Lease
(the First Notice); and
	 
	 	(ii)	 	unless the Landlord,
after receiving that notice, proceeds with
reasonable expedition and diligence to commence or
carry out and then complete the necessary works,
the Tenant may determine this Lease by giving not
less than one month’s notice to the Landlord (the
Second Notice).
At the end of the period specified in the
Second Notice this Lease will be at an end.

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	 	(d)	 	The provisions of Paragraphs (a), (b) and
(c) do not apply where:-

	 	(i)	 	the damage or destruction
has been caused or contributed to, or arises from,
any act or omission of the Tenant or the Tenant’s
Employees; and
	 
	 	(ii)	 	any insurance policy or
policies for the Premises has been avoided, or
payment of the policy money refused or reduced, as
a result of that act or omission.

	 	(e)	 	If, in the Landlord’s opinion, formed
within 3 months of the damage and destruction in its
reasonable discretion, the damage to or destruction of the
Premises is such that it is impractical or undesirable to
reinstate the Premises or make them fit for the occupation
and use of, or render them accessible to, the Tenant, the
Landlord may determine this Lease by giving not less than
one month’s notice to the Tenant. At the end of that
notice this Lease will be at an end.

	 	10.2	 	Resumption of Premises

	 	(a)	 	If any part of the Premises is resumed so
that the residue of the Premises remains substantially fit
for the occupation and use of the Tenant have (having
regard to the nature and location of the Premises and the
normal means of access) remains wholly or substantially
accessible then:-

	 	(i)	 	a proportionate part of
the Rent, the Tenant’s Outgoings Contribution and
any other monies payable under this Lease
according to the nature and extent of the
resumption, abates; and
	 
	 	(ii)	 	all remedies for recovery
of that proportionate part of those monies falling
due after that resumption is suspended.

	 	(b)	 	If:-

	 	(i)	 	the whole of the Premises
are resumed; or
	 
	 	(ii)	 	part of the Premises is
resumed so that the residue of them is wholly or
substantially unfit for the occupation and use of
the Tenant or (having regard to the nature and
location of the Premises and the normal means of
access) is wholly or substantially inaccessible,

	 	 	 	either the Landlord or the Tenant may determine this
Lease by giving not less than one month’s notice to the
other party. At the end of that notice this Lease will
be at an end.

	 	10.3	 	Liability
	 
	 	 	 	Neither the Landlord or the Tenant is liable to the other
because of the determination of this Lease under Clauses 10.1
or 10.2. That determination will be without prejudice to the
rights of either part in respect of any preceding breach or
non-observance of this Lease.

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	 	10.4	 	Dispute

	 	(a)	 	Any dispute arising under Clauses 10.1 or
10.2 is to be determined by an appropriate independent
person who is:-

	 	(i)	 	agreed between the
Landlord and the Tenant; or
	 
	 	(ii)	 	if they cannot agree
within 14 days of notice that a dispute exists
being given, a member of a professional body
nominated at the request of either the Landlord or
the Tenant by the PCA (the Appointed Person),

	 	(b)	 	The Appointed Person:-

	 	(i)	 	must have substantial
experience in relation to premises of a similar
type within the area in which the Premises are
located or other comparable area; and
	 
	 	(ii)	 	in making his or her
determination acts as an expert and not as an
arbitrator.

	 	(c)	 	The determination of the Appointed Person
is final and binding on the parties.
	 
	 	(d)	 	The Cost of the determination is to be
borne by either or both of the parties (and if by both of
the parties in the proportion between them) as the
Appointed Person decides.

	 	10.5	 	Landlord not obliged to reinstate
	 
	 	 	 	Nothing in this Lease obliges the Landlord to reinstate the
Premises or the means of access to them.

	11.	 	LANDLORD’S COVENANT

	 	11.1	 	Quiet enjoyment
	 
	 	 	 	If the Tenant pays the Rent and other money payable under this
Lease and observes and performs when required its obligations
under this Lease, the Tenant may occupy and enjoy the Premises
during the Term without any unreasonable interruption by the
Landlord or by any person rightfully claiming through, under or
in trust for the Landlord, subject to the Landlord’s rights
under this Lease.
	 
	 	11.2	 	Use of Common Areas

	 	(a)	 	The Tenant and, as appropriate, the
Tenant’s Employees, together with any other persons
authorised by the Landlord, may use the Common Areas for
the purposes for which the Common Areas
were designed or intended to be used, subject to the
limitations and restrictions contained in this Lease.

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	 	(b)	 	The Landlord must ensure that at all
times during the Term appropriate areas are designated as
Common Areas to enable the Tenant to have access to the
Premises.
	 
	 	(c)	 	The Landlord covenants at its own Cost to
cause the Common Areas to be kept in good order and repair
and clean and tidy at all times.

	 	11.3	 	Rates and Land Tax
	 
	 	 	 	Except to the extent that this Lease otherwise provides, the
Landlord must pay when due all Rates, land taxes and taxes in
the nature of land tax assessed on the Land during the term.
	 
	 	11.4	 	Outgoings
	 
	 	 	 	The Landlord shall manage the Land and shall pay or cause to be
paid as and when they fall due any of the Outgoings not payable
by the Tenant or by any other tenant, including any amounts to
be paid in the first instance by the Landlord and subsequently
to be recovered from the Tenant either in whole or part.
	 
	 	11.5	 	Landlord access

	 	a)	 	Further and in
addition to the Landlords other rights to access
the Tenant acknowledges that the Landlord, its
agents, employees, contractors and occupiers of
part of the Building other than the Premises
will require access via the Premises to the roof
of the Building and to plant and other Common
Areas 24 hours a day.
	 
	 	b)	 	The Tenant
acknowledges this right in the Landlord and will
not hinder or prevent the access permitted under
clause 11.5 (a).
	 
	 	c)	 	The Landlord
undertakes to ensure that the Landlord’s agents,
employees and contractors will only be available
where those persons are accompanied by the
Landlord, its agents, employees or contractors.

	 	11.6	 	Landlord Access’s general obligation to repair
	 
	 	 	 	The Landlord covenants at its own Cost:

	 	(a)	 	to keep the structure of the Premises in
good, sound and watertight repair and condition and must
at its own Cost repair the structure or carry out any
works of a capital nature (including capital maintenance,
repair and replacement of the air conditioning, air
ventilation and fire fighting services for the Premises)
within a reasonable time following notification by the
Tenant of the need for
such repair, save where damage or loss is caused by the
wilful or negligent act or omission of the Tenant or
its Employees;
	 
	 	(b)	 	to keep all Services to the Premises and
the Building and the fire fighting services and equipment
for the Building functioning

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	 	 	 	properly at all times except
where periodic maintenance is required in which case such
maintenance must be carried out by the Landlord in such a
manner as will minimise prejudice to the Tenant in its use
of the Premises and the operation of the Tenant’s
business;
	 
	 	(c)	 	except where it is the Tenant’s
obligation under this Lease, comply with the Requirements
of any Authority and the Law with respect to the Premises
and the Land; and
	 
	 	(d)	 	wherever possible, to carry out its
obligations under this Clause 11.5 outside the usual
trading hours of the Tenant.

	 	11.7	 	Insurances

	 	(a)	 	(Landlord to effect insurances) The
Landlord shall effect and keep current during the Term
(and any extension or Further Term or holding over) with
respect to the Building the insurances referred to cover
its own risks.
	 
	 	(b)	 	(Insurance company) Such insurances
shall be taken out with an independent and reputable
insurer.
	 
	 	(c)	 	(Evidence of insurance) Whenever
reasonably required by the Tenant (but not more than once
annually) the Landlord shall give to the Tenant a copy of
a certificate of currency with respect to the insurances
referred to in this Clause 11.7.

	12.	 	DEFAULT AND DETERMINATION

	 	12.1	 	Default
	 
	 	 	 	Each of the following is an Event of Default (whether or not it
is in the control of the Tenant):-

	 	(a)	 	the Rent or any part of it is in arrears
and unpaid for 14 days after a notice of demand has been
served on the Tenant;
	 
	 	(b)	 	any money (other than Rent) payable by
the Tenant to the Landlord is not paid within 14 days of
the due date for payment a notice of demand has been
served on the Tenant;
	 
	 	(c)	 	the Tenant fails or refuses to carry out
any repairs properly required by any notice within the
reasonable time specified in that notice;
	 
	 	(d)	 	the Tenant fails to perform or observe
any of its other obligations under this Lease; and
	 
	 	(e)	 	the Liquidation of the Tenant.

	 	12.2	 	Essential terms
	 
	 	 	 	Each obligation of the Tenant to pay Rent or any other money to
the Landlord is an essential term of this Lease.
	 
	 	12.3	 	Forfeiture of Lease

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	 	 	 	If an Event of Default occurs the Landlord, without prejudice
to any other Claim which the Landlord has or may have or could
otherwise have against the Tenant or any other person in
respect of that default, may:-

	 	(a)	 	subject to any prior demand or notice as
is required by Law, re-enter into and take possession of
the Premises or any part of them (by force if necessary)
and eject the Tenant and all other persons from them, in
which event this Lease will be at an end;
	 
	 	(b)	 	by notice to the Tenant determine this
Lease, and from the date of giving that notice this Lease
will be at an end; and/or
	 
	 	(c)	 	by notice to the Tenant elect to convert
the unexpired portion of the Term into a tenancy from
month to month, in which event this Lease will be at an
end but after that, and until the new tenancy is
determined, the Tenant will be a monthly tenant on the
same terms as set out in Clause 3.2.

	 	12.4	 	Landlord may rectify
	 
	 	 	 	The Landlord may, but is not obliged to, remedy at any time
after 14 days notice, any default by the Tenant under this
Lease and do anything arising from the default that the
landlord considers necessary, and whenever the Landlord elects
to do so all reasonable. Costs incurred by the Landlord will be
a liquidated debt and must be paid by the Tenant to the
landlord on demand.
	 
	 	12.5	 	Waiver

	 	(a)	 	No:-

	 	(i)	 	failure to exercise or
delay in exercising any right, power or remedy
under this Lease; or
	 
	 	(ii)	 	custom or practice
existing between the parties in relation to this
Lease,

	 	 	 	operates as a waiver. Nor will any single or partial
exercise of any right, power or remedy preclude any
other or further exercise of that or any other right,
power or remedy.
	 
	 	(b)	 	No waiver by the Landlord of one breach
of a covenant under this Lease is a waiver of another
breach of that same covenant or of any other.
	 
	 	(c)	 	The demand by the Landlord for, or
acceptance by the Landlord of, Rent or any other money
payable under this Lease after default by the Tenant is
not a waiver of any earlier breach by the Tenant. The
subsequent acceptance by the Landlord of Rent or other
money (as appropriate) is a waiver by the Landlord only in
relation to the Tenant’s failure to make that particular
payment when due.

	 	12.6	 	Offer of money after determination
	 
	 	 	 	Any money offered by the Tenant after the determination of this
Lease under Clause 12.3(a) or (b) and accepted by the Landlord
may be and (in the absence of an express election of the
Landlord) will be applied on account of:-

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	 	(a)	 	first: any Rent and other money accrued
and due under this Lease but unpaid at the date of
determination of this Lease; and
	 
	 	(b)	 	second: the Landlord’s Costs in relation
to the determination.

	 	12.7	 	Interest on overdue money

	 	(a)	 	The Tenant must pay to the Landlord
interest at the Default Rate on any Rent or other money
due under this Lease (including money or Costs which are
expressed to be payable or reimbursable to the Landlord on
demand) but unpaid for 14 days.
	 
	 	(b)	 	That interest will:-

	 	(i)	 	accrue on a daily basis
and be calculated on daily rests;
	 
	 	(ii)	 	be payable on demand or,
if no earlier demand is made, on the first
Business Day of each month where an amount arose
in the preceding month or months;
	 
	 	(iii)	 	be calculated from the
due date for payment of the Rent or other money
(as appropriate) or, in the case of an amount
payable by way of reimbursement or indemnity, the
date of outlay or loss, if earlier, until the date
of actual payment; and
	 
	 	(iv)	 	be recoverable in the
same manner as Rent in arrears.

	 	12.8	 	Landlord’s entitlement to damages
	 
	 	 	 	The Landlord’s entitlement to recover damages from the Tenant
or any other person is not limited or affected by any of the
following:-

	 	(a)	 	the abandonment or vacation of the
Premises by the Tenant;
	 
	 	(b)	 	the Landlord’s election to re-enter the
Premises or determine this Lease;
	 
	 	(c)	 	the Landlord’s acceptance of the Tenant’s
repudiation; or
	 
	 	(d)	 	the parties’ conduct (or that of any of
their servants or agents) constituting a surrender by
operation of Law.

	13.	 	TERMINATION

	 	13.1	 	Tenant to yield up and remove its fittings
	 
	 	 	 	The Tenant must at the Date of Termination:-

	 	(a)	 	remove from the Premises all the Tenant’s
Fittings; and
	 
	 	(b)	 	deliver up the Premises to the standard
required by clause 7.2.

	 	13.2	 	Tenant not to cause damage
	 
	 	 	 	The Tenant must:-

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	 	(a)	 	use its best endeavours not to cause or
contribute to any damage to the Premises in the removal of
the Tenants Fittings, and make good any damage; and
	 
	 	(b)	 	leave the Premises in a clean state and
condition.

	 	 	 	If the Tenant fails to comply with this clause 13.2, the
Landlord may make good and/or clean the Premises at the
reasonable Cost of the Tenant and recover from the Tenant the
reasonable Cost to the Landlord of doing so as a liquidated
debt payable on demand.
	 
	 	13.3	 	Failure by Tenant to remove Tenant’s Fittings
	 
	 	 	 	If the Tenant fails to remove the Tenant’s Fittings as required
by Clause 13.1, or in the event of determination under Clause
12.3, the Landlord may:-

	 	(a)	 	cause the Tenant’s Fittings to be removed
and stored in the manner the Landlord (acting reasonably)
thinks fit at the risk and at the Cost of the Tenant; or
	 
	 	(b)	 	if they are not removed within 14 days of
notice to do so, treat the Tenant’s Fittings as if the
Tenant had abandoned its interest in them and they had
become the property of the Landlord, and deal with them in
the manner the Landlord thinks fit without being liable in
any way to account to the Tenant for them.

	 	13.4	 	Tenant to indemnify and pay Landlord’s Costs
	 
	 	 	 	The Tenant:-

	 	(a)	 	indemnifies the Landlord in respect of:-

	 	(i)	 	the removal and storage
of the Tenant’s Fittings; and
	 
	 	(ii)	 	all Claims which the
Landlord may suffer or incur at the suit of any
person (other than the Tenant) claiming an
interest in the Tenant’s Fittings by reason of the
Landlord acting in any manner permitted under
Clause 13.3;

	 	 	 	except to the extent caused by the negligence of the
Landlord or its employees, agents and contractors; and
	 
	 	(b)	 	must pay to the Landlord as a liquidated
debt on demand any reasonable Costs incurred by the
Landlord in exercising its rights under Clause 13.3,
including any excess of Costs over money received in the
disposal of the Tenant’s Fittings under Clause 13.3(b).
These costs may be deducted from the Security Deposit.

	 	13.5	 	Return of Deposit
	 
	 	 	 	Upon the termination or the term of the lease,
the Landlord shall return within one (1) month the
Security Deposit to the Tenant from which any amounts
remaining due to the Landlord under this Lease at such
date, if any, may be set off and deducted.

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	14.	 	SIGNS

	 	14.1	 	Definitions
	 
	 	 	 	In this clause:-

	 	(a)	 	Approved Installation Plans means the
plans for the installation of Signs as are approved by the
Landlord; and
	 
	 	(b)	 	Install means erect, affix or otherwise
attach or display; and
	 
	 	(c)	 	Sign means a neon light, sign or notice.

	 	14.2	 	Signs

	 	(a)	 	Subject to the terms of this clause, the
Tenant, during the Term and at its own Cost and risk, may
install, operate and maintain Signs on those parts of the
Premises, the Building and the Land approved in writing by
the Landlord.
	 
	 	(b)	 	Despite clause 14.2(a), all Signs must be
of a shape, size, colour and content as approved by the
Landlord in writing (which consent shall not be
unreasonably withheld or delayed) and must be installed in
accordance with the Approved Installation Plans.
	 
	 	(c)	 	The Tenant must:-

	 	(i)	 	not throw or drop any
rubbish in or around the Land while any Sign is
being installed or removed; and
	 
	 	(ii)	 	at all times ensure that
Signs are properly maintained and in good repair,
including, without limitation, replacing bulbs and
repairing electrical wiring in any illuminated
Signs as often as is reasonably necessary.

	 	14.3	 	Approvals

	 	(a)	 	The Tenant must:-

	 	(i)	 	obtain all approvals and
licences required by law or any local, statutory
or government authority in order to install,
maintain and operate the Signs in accordance with
the Approved Installation Plans prior to
commencing to install the Signs;
	 
	 	(ii)	 	ensure those approvals
and licences remain in force throughout the Term;
	 
	 	(iii)	 	promptly provide to the
Landlord copies of any approvals, licences or
renewals of approvals or licences
obtained by the Tenant for the purposes of this
clause 14.3(a); and
	 
	 	(iv)	 	at all times install,
maintain and operate the Signs in compliance with
all Laws and Requirements.

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	 	(b)	 	If at any time:-

	 	(i)	 	any approval or licence
obtained by the Tenant; or
	 
	 	(ii)	 	any law, regulation,
ordinance or order,

	 	 	 	related to the installation, maintenance or operation
of the Signs imposes an obligation on the Landlord in
relation to such installation, maintenance or use, the
Tenant shall:-

	 	(i)	 	comply with the
obligation on behalf of the Landlord to the extent
that the obligation on the Landlord is thereby
removed; and/or
	 
	 	(ii)	 	pay all costs incurred by
the Landlord in complying with or fulfilling the
obligation or assisting the Tenant to comply with
or fulfil the obligation; and
	 
	 	(iii)	 	indemnify the Landlord
against all Claims it may suffer or incur in
relation to the obligation or any attempt by or on
behalf of the Landlord or Tenant to comply with or
fulfil the obligation.

	 	14.4	 	Removal of Signs
	 
	 	 	 	At or before the Date of Termination the Tenant shall, at its
own Cost, remove all Signs installed by it pursuant to this
clause, together with any related fittings and attachments and
shall make good at its own Cost any damage caused to the
Premises by such removal.
	 
	 	14.5	 	Indemnity
	 
	 	 	 	The Tenant releases and indemnifies the Landlord against all
Claims whatsoever arising out of or in the course of the
installation, operation or removal of any Sign or otherwise
from the exercise by the Tenant of its rights under this
clause, except to the extent caused or contributed to by the
Landlord, its employees, agents and contractors.

	15.	 	MISCELLANEOUS

	 	15.1	 	Notices
	 
	 	 	 	All notices, requests, demands, consents, approvals, agreements
or other communications to or by a part or between the parties
to this Lease:-

	 	(a)	 	must be in writing;
	 
	 	(b)	 	must be signed by the sender, or if a
company, by its Authorised Officer; and
	 
	 	(c)	 	will be taken to be duly given or made:

	 	(i)	 	if in person, delivered
to or received at the address of the recipient
shown in this Lease or to any other address which
it may have notified the sender and where receipt
is acknowledged in writing by the recipient;

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	 	(ii)	 	if by registered post,
sent to the address of the recipient shown in this
Lease or to any other address which it may have
notified the sender; and
	 
	 	(iii)	 	if by fax, when recorded
on the transmission result report as a successful
transmission unless:

	 	(A)	 	within 24
hours of that time the recipient informs
the sender that the transmission was
received in an incomplete or garbled form;
or
	 
	 	(B)	 	the
transmission result report indicates a
faulty or incomplete transmission; and

	 	 	 	but if delivery or receipt is on a day on which
business is not generally carried on in the place which
the communication is sent or is later than 4pm (local
time), it will be taken to have been duly given or made
at the commencement of business on the next day on
which business is generally carried on in that place.

	 	15.2	 	Certificate from Authorised Officer of Landlord
	 
	 	 	 	A certificate signed by an Authorised Officer of the Landlord
is prima facie evidence against the Tenant and any Guarantor,
in the absence of manifest error, as to the amount of money or
rate of interest stated in that certificate.
	 
	 	15.3	 	Costs
	 
	 	 	 	The Tenant must pay to the Landlord on demand:-

	 	(a)	 	all stamp duty (including penalties and
fines other than those incurred due to the default of the
Landlord); and
	 
	 	(b)	 	all Costs of the Landlord in relation
to:-

	 	(i)	 	the actual enforcement
of, or actual exercise, preservation or
consideration of any rights, powers or remedies
under this Lease;
	 
	 	(ii)	 	any consent required
under this Lease;
	 
	 	(iii)	 	any actual or proposed
assignment or subletting;
	 
	 	(iv)	 	any surrender or
determination of this Lease otherwise than by
effluxion of time; and
	 
	 	(v)	 	an Event of Default.

	 	15.4	 	GST

	 	(a)	 	Capitalised expressions which are not
defined in this clause but which have a defined meaning in
the GST Law have the same meaning in this clause.
	 
	 	(b)	 	In this lease:

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	 	 	 	GST means the goods and services tax as imposed by the
GST Law including, where relevant, any related
interest, penalties, fines or other charge;
	 
	 	 	 	GST Amount means, in relation to a Payment, an amount
arrived at by multiplying the Payment (or the relevant
part of a Payment if only part of a Payment is the
consideration for a Taxable Supply) by the appropriate
rate of GST (being 10% when the GST Law commenced) or
any lower rate notified from time to time by the person
making the relevant Supply;
	 
	 	 	 	GST Law has the meaning given to that term in A New Tax
System (Goods and Services Tax) Act 1999, or, if that
Act is not valid or does not exist for any reason,
means any Act imposing or relating to the imposition or
administration of a goods and services tax in Australia
and any regulation made under that Act;
	 
	 	 	 	Payment means:

	 	(i)	 	the amount of any
monetary consideration (other than a GST Amount
payable under this clause); and
	 
	 	(ii)	 	the GST Exclusive Market
Value of any non-monetary consideration;

	 	 	 	paid or provided by the Lessee for this lease or by the
Lessor or the Lessee for any other Supply made under or
in connection with this lease and includes:

	 	(iii)	 	any Rent or Tenant’s
Outgoings Contribution; and
	 
	 	(iv)	 	any amount payable by way
of indemnity, reimbursement, compensation or
damages.

	 	(c)	 	Payment of GST
	 
	 	 	 	The Parties agree that:

	 	(i)	 	all Payments have been
set or determined without regard to the impact of
GST;
	 
	 	(ii)	 	if the whole or any part
of a Payment is the consideration for a Taxable
Supply, for which the payee is liable for GST, the
GST Amount in respect of the Payment must be paid
to the payee as an additional amount, either
concurrently with the Payment or as otherwise
agreed in writing; and
	 
	 	(iii)	 	the payee will provide
to the payer a Tax Invoice.

	 	(d)	 	Input Tax Credit
	 
	 	 	 	Despite any other provision of this Lease, if a Payment
due under this Lease (including the Tenant’s Outgoings
Contribution) is a reimbursement or indemnification by
one party of an expense, loss or liability incurred or
to be incurred by the other party, the Payment

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	 	 	 	shall
exclude any part of the amount to be reimbursed or
indemnified for which the other party can claim an
Input Tax Credit.
	 
	 	(e)	 	Trade Practices Act
	 
	 	 	 	Each party will comply with its obligations under the
Trade Practices Act 1974 in respect of any Payment to
which it is entitled under this Lease.

	 	15.5	 	Services
	 
	 	 	 	Subject to anything to the contrary in this Lease including the
Tenant’s rights to quiet enjoyment, the Landlord and all
persons claiming by, through or under the Landlord may, after
giving reasonable notice (except in the case of an emergency
when no notice is necessary) install, maintain, use, repair,
alter, service and replace any Services or any part of them
including any pipe, duct, wire and plant.
	 
	 	15.6	 	Right of Landlord to make Rules
	 
	 	 	 	The Landlord may from time to time make Rules and amend them by
notice given to the Tenant. The Tenant must comply with all
Rules. No Rule or amendment prejudices the rights of the
Tenant under this Lease, and in the event of any inconsistency
between the provisions of this Lease and the Rules as amended
the provisions of this Lease shall prevail.
	 
	 	15.7	 	Easements
	 
	 	 	 	The Landlord may for:-

	 	(a)	 	the purpose of the provision of public or
private access to the Premises;
	 
	 	(b)	 	the purpose of rectifying any
encroachment;
	 
	 	(c)	 	the support of structures in the future
erected on or from adjoining land; or
	 
	 	(d)	 	any Service,

	 	 	 	dedicate land or transfer, grant or create or take the benefit
of any easement or other right to or from, or enter into any
arrangement or agreement with, any owners, tenants or occupiers
or others having an interest in any land (including the Land)
near the Premises or with any Authority (under any valid and
enforceable requirement of that Authority) as the Landlord
thinks fit so long as the Tenant’s rights under this Lease and
its use and occupation of the Premises are not adversely
affected. This Lease will be taken to be subject to that
easement or other right as envisaged by this Clause 18.7, and
the Tenant will promptly upon request by the Landlord confirm
to the Land Titles Office or other relevant Authority its
consent to that easement or other right.
	 
	 	15.8	 	Severance
	 
	 	 	 	Any provision of this Lease which is prohibited or
unenforceable in any jurisdiction will be ineffective in that
jurisdiction to the extent of the

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	 	 	 	prohibition or
unenforceability. That will not invalidate the remaining
provisions of this Lease nor affect the validity or
enforceability of that provision in any other jurisdiction.
	 
	 	15.9	 	Entire agreement
	 
	 	 	 	This Lease contains all the contractual arrangements of the
parties with respect to the transactions to which it relates
and supersedes all earlier conduct by the parties with respect
to those transactions.
	 
	 	15.10	 	Reliance
	 
	 	 	 	The Tenant acknowledges and represents that it:-

	 	(a)	 	has had the opportunity to seek
disclosure of all material information relating to the
transactions dealt with by this Lease; and
	 
	 	(b)	 	has not relied to any extent on any
conduct by or on behalf of the Landlord in relation to
those transactions apart from those set out or referred to
in this Lease.

	16.	 	ENVIRONMENTAL CONTAMINATION

	 	16.1	 	Tenant’s responsibility
	 
	 	 	 	Despite any other provision of this Lease, the Tenant shall
only be responsible for Environmental contamination of the
Premises caused after the Commencing Date by the Tenant or its
Employees.
	 
	 	16.2	 	Landlord’s obligations and indemnity
	 
	 	 	 	The Landlord shall:

	 	(a)	 	without delay:

	 	(i)	 	Remediate any
environmental contamination on the Land or on the
Premises not caused by the Tenant or its Employees
after the Commencing Date and which:

	 	(A)	 	any
Authority requires remediation; or
	 
	 	(B)	 	prevents
the Tenant operating from the Premises; or
	 
	 	(C)	 	otherwise
constitutes a health and safety risk; and

	 	(ii)	 	comply with the
Requirements of any Authority and the Law with
respect to the environmental condition of the Land
or of the Premises (unless it is the Tenant’s
obligation to do so under clause 17.1); and

	 	(b)	 	indemnify the Tenant against all Claims
arising from the matters set out in clause 17.2(a) except
to the extent that:

	 	(i)	 	the Tenant or the
Landlord’s Employees have taken action with the
intention of causing a Claim to be made or a

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	 	 	 	notice or other Requirement issued and that action
directly or indirectly has a material effect in
causing the Claim to be made or the notice or
other Requirement to be issued;
	 
	 	(ii)	 	the Claim relates to
Remediation to a standard higher than that
required for industrial use (which the parties
agree is the standard appropriate for the
Permitted Use) whether arising from a rezoning of
the Premises or otherwise; and/or
	 
	 	(iii)	 	any disposition by the
Landlord of a legal or equitable interest which
the Lessee has in the Premises is made on terms
which include an indemnity in respect of the
Environment which is materially more advantageous
to the person receiving that interest from the
Landlord than the indemnity included in this
clause 17.2, including in respect of the
qualifications applicable to the indemnity
contained in this clause 17.2(b).

	 	16.3	 	Remediation by the Landlord if Tenant defaults
	 
	 	 	 	If:

	 	(a)	 	the Tenant fails to comply with clause
17.2(a) in accordance with the Requirements of any
Authority and the Law (or, if no time is specified, within
a reasonable time, having regard to the nature of the
remediation or the Law or Requirement and the period of
time reasonably required to carry out the remediation or
comply with the Law or Requirement, of notice from the
Landlord ); or
	 
	 	(b)	 	any emergency arises which requires the
immediate or urgent remediation of environmental
contamination or compliance with a Requirement or the Law
which the Tenant is required to remediate or comply with
under this Lease,

	 	 	 	then the Landlord may remediate the environmental contamination
or comply with the Law or the Requirement and the Cost of so
doing and Costs arising from temporary relocation of all or
part of the Landlord’s Business shall, at the Landlord’s option
be:

	 	(c)	 	payable by the Tenant to the Landlord on
demand on a full indemnity basis;
	 
	 	(d)	 	be set off against the Rent, the
Landlord’s Contribution to Outgoings and any other moneys
payable by the Landlord under this Lease; or
	 
	 	(e)	 	accounted for by a combination of the
above in the Landlord’s discretion,

	 	 	 	until all Costs incurred by the Landlord have been
recovered.

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Contents

	 	 	 	 	 	 	 	 	 
	[SCHEDULE 8]	 	 	1	 
	1.	 	DEFINITIONS AND INTERPRETATION	 	 	4	 
	 
	 	1.1	 	Definitions	 	 	4	 
	 
	 	1.2	 	Interpretation	 	 	7	 
	2.	 	EXCLUSION OF STATUTORY PROVISIONS	 	 	9	 
	 
	 	2.1	 	Laws Excluded	 	 	9	 
	 
	 	2.2	 	Moratorium	 	 	9	 
	3.	 	TERM	 	 	10	 
	 
	 	3.1	 	Term of Lease	 	 	10	 
	 
	 	3.2	 	Option of renewal	 	 	10	 
	4.	 	RENT	 	 	10	 
	 
	 	4.1	 	Payment of Rent	 	 	10	 
	 
	 	4.2	 	Payment of instalments	 	 	11	 
	 
	 	4.3	 	Market Review of Rent	 	 	11	 
	 
	 	4.4	 	Tenant’s dispute of Rent	 	 	11	 
	 
	 	4.5	 	Rent payable after Review	 	 	12	 
	5.	 	OUTGOINGS	 	 	12	 
	 
	 	5.1	 	Tenant’s Outgoings	 	 	12	 
	 
	 	5.2	 	Landlord’s estimate	 	 	12	 
	 
	 	5.3	 	Payments on account	 	 	12	 
	 
	 	5.4	 	Yearly adjustment	 	 	12	 
	 
	 	5.5	 	Termination of lease	 	 	13	 
	 
	 	5.6	 	Landlord’s rights not affected	 	 	13	 
	 
	 	5.7	 	Cleaning of Premises	 	 	13	 
	 
	 	5.8	 	Garbage	 	 	13	 
	 
	 	5.9	 	Cost of Services	 	 	13	 
	6.	 	USE OF PREMISES	 	 	14	 
	 
	 	6.1	 	Permitted Use	 	 	14	 
	 
	 	6.2	 	No warranty as to use	 	 	14	 
	 
	 	6.3	 	Compliance with Laws and Requirements	 	 	14	 
	 
	 	6.4	 	Overloading	 	 	15	 
	 
	 	6.5	 	Other activities by Tenant	 	 	16	 
	 
	 	6.6	 	Signs	 	 	17	 
	 
	 	6.7	 	For sale/to let	 	 	17	 
	 
	 	6.8	 	Safety and security of Building	 	 	18	 
	7.	 	MAINTENANCE, REPAIRS, ALTERATIONS AND ADDITIONS	 	 	19	 
	 
	 	7.1	 	State of the Premises	 	 	19	 
	 
	 	7.2	 	Repairing obligations	 	 	19	 
	 
	 	7.3	 	Landlord’s right of inspection	 	 	20	 
	 
	 	7.4	 	Enforcement of repairing obligations	 	 	21	 
	 
	 	7.5	 	Landlord may enter to repair	 	 	21	 
	 
	 	7.6	 	Alterations to Premises	 	 	21	 
	 
	 	7.7	 	Alterations or additions to Landlord’s Fixtures and Services	 	 	22	 
	 
	 	7.8	 	Notice to Landlord of damage, accident etc.	 	 	22	 
	8.	 	ASSIGNMENT AND SUB-LETTING	 	 	22	 

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	 	8.1	 	No disposal of Tenant’s interest	 	 	22	 
	 
	 	8.2	 	Assignment and subleases	 	 	22	 
	 
	 	8.3	 	Corporate ownership	 	 	23	 
	 
	 	8.5	 	Mortgaging Tenant’s interest in Premises	 	 	24	 
	 
	 	8.6	 	Leasing and charging Tenant’s Fittings	 	 	24	 
	9.	 	INSURANCE AND INDEMNITIES	 	 	24	 
	 
	 	9.1	 	Insurance to be taken out by Tenant	 	 	24	 
	 
	 	9.2	 	Effect on Landlord’s insurances	 	 	25	 
	 
	 	9.3	 	Inflammable substances	 	 	26	 
	 
	 	9.4	 	Compliance with fire regulations	 	 	26	 
	 
	 	9.5	 	Exclusion of Landlord’s liability	 	 	26	 
	 
	 	9.6	 	Indemnities	 	 	27	 
	10.	 	DAMAGE, DESTRUCTION AND RESUMPTION	 	 	27	 
	 
	 	10.1	 	Damage to or destruction of Premises	 	 	27	 
	 
	 	10.2	 	Resumption of Premises	 	 	28	 
	 
	 	10.3	 	Liability	 	 	28	 
	 
	 	10.4	 	Dispute	 	 	29	 
	 
	 	10.5	 	Landlord not obliged to reinstate	 	 	29	 
	11.	 	LANDLORD’S COVENANT	 	 	29	 
	 
	 	11.1	 	Quiet enjoyment	 	 	29	 
	 
	 	11.2	 	Use of Common Areas	 	 	29	 
	 
	 	11.3	 	Rates and Land Tax	 	 	30	 
	 
	 	11.4	 	Outgoings	 	 	30	 
	 
	 	11.5	 	Landlord Access	 	 	 	 
	 
	 	11.6	 	Landlord’s general obligation to repair	 	 	30	 
	 
	 	11.7	 	Insurances	 	 	31	 
	12.	 	DEFAULT AND DETERMINATION	 	 	31	 
	 
	 	12.1	 	Default	 	 	31	 
	 
	 	12.2	 	Essential terms	 	 	31	 
	 
	 	12.3	 	Forfeiture of Lease	 	 	31	 
	 
	 	12.4	 	Landlord may rectify	 	 	32	 
	 
	 	12.5	 	Waiver	 	 	32	 
	 
	 	12.6	 	Offer of money after determination	 	 	32	 
	 
	 	12.7	 	Interest on overdue money	 	 	33	 
	 
	 	12.8	 	Landlord’s entitlement to damages	 	 	33	 
	13.	 	TERMINATION	 	 	33	 
	 
	 	13.1	 	Tenant to yield up and remove its fittings	 	 	33	 
	 
	 	13.2	 	Tenant not to cause damage	 	 	33	 
	 
	 	13.3	 	Failure by Tenant to remove Tenant’s Fittings	 	 	34	 
	 
	 	13.4	 	Tenant to indemnify and pay Landlord’s Costs	 	 	 	 
	 
	 	13.5	 	Return of deposit	 	 	34	 
	14.	 	SIGNS	 	 	35	 
	 
	 	14.1	 	Definitions	 	 	35	 
	 
	 	14.2	 	Signs	 	 	35	 
	 
	 	14.3	 	Approvals	 	 	35	 
	 
	 	14.4	 	Removal of Signs	 	 	36	 
	 
	 	14.5	 	Indemnity	 	 	36	 
	15.	 	MISCELLANEOUS	 	 	36	 

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	 	15.1	 	Notices	 	 	36	 
	 
	 	15.2	 	Certificate from Authorised Officer of Landlord	 	 	37	 
	 
	 	15.3	 	Costs	 	 	37	 
	 
	 	15.4	 	GST	 	 	37	 
	 
	 	15.5	 	Services	 	 	39	 
	 
	 	15.6	 	Right of Landlord to make Rules	 	 	39	 
	 
	 	15.7	 	Easements	 	 	39	 
	 
	 	15.8	 	Severance	 	 	39	 
	 
	 	15.9	 	Entire agreement	 	 	40	 
	 
	 	15.10	 	Reliance	 	 	40	 
	16.	 	ENVIRONMENTAL CONTAMINATION	 	 	40	 
	 
	 	16.1	 	Lessee’s responsibility	 	 	40	 
	 
	 	16.2	 	Lessor’s obligations and indemnity	 	 	40	 
	 
	 	16.3	 	Remediation by the Lessee if Lessor defaults	 	 	41	 
	CONTENTS	 	 	I	 

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Dated January __, 2004

 

 

 

THALES UNDERWATER SYSTEMS PTY LTD

 

 

– and –

 

 

SERCEL AUSTRALIA PTY LTD

 

 

 

INTELLECTUAL PROPERTY

LICENCE AGREEMENT

 

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THIS INTELLECTUAL PROPERTY LICENSE AGREEMENT is made the day of January 2nd
2004

BETWEEN:

	(1)	 	THALES UNDERWATER SYSTEMS PTY LIMITED, whose registered office is at 274
Victoria Road, NSW 2116, AUSTRALIA, acting in its name and on behalf of
THALES UNDERWATER SYSTEMS SAS solely in connection with the TUS SAS
Patents (“the Seller”); and
	 
	(2)	 	SERCEL AUSTRALIA PTY LTD, whose registered office is at Level 17, The
Chifley Tower, 2 Chifley Square, Sydney, NSW 2000, Australia (the
“Purchaser”).

RECITALS:

	A.	 	By a Sale and Purchase Agreement dated December [19], 2003 (between the
Seller and the Purchaser (as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms, the
“Sale and Purchase Agreement” or “SPA”), the Seller has agreed, inter
alia, to sell or procure the sale, on the completion date as such term is
defined in the SPA (the “Completion Date”) of certain assets and shares
related to the Transferred Business to the Purchaser and to provide or
procure the provision of the right to use all other properties, assets and
rights of the Seller’s Group which are used or held for use in connection
with the Transferred Business and, in such connection, is willing to
assume responsibility and liability for the Assumed Liabilities, provided
that the Seller retains responsibility and liability for the Excluded
Liabilities at the Completion Date, each as set forth in the Sale and
Purchase Agreement. To this effect, the Parties have agreed to enter into
this Agreement to set forth the terms and conditions applicable to the
licensing to the Purchaser of the Seller Intellectual Property. The
transactions contemplated by the SPA are hereinafter collectively referred
to as the “Transaction”).
	 
	B.	 	It is an essential part of the Transaction, without which the Purchaser
would not have entered into the SPA, that the Purchaser receive from the
Seller an irrevocable, perpetual, worldwide, royalty-free and, except as
explicitly set forth herein, exclusive licence with respect to the Seller
Intellectual Property.

THE PARTIES AGREE AS FOLLOWS:

	1	 	DEFINITIONS
	 
	 	 	In this Agreement, unless the context otherwise requires:
	 
	 	 	"Affiliate” means, with respect to any person, any other person that
directly or indirectly controls, is controlled by, or is under common
control with, such first person. As used in this definition,
“control” (and derivatives thereof) means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of
voting securities, by contract or otherwise;

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	 	 	“Agreement” means this Intellectual Property License Agreement, as the
same may be amended or modified from time to time;
	 
	 	 	“Business Day” means any day other than a Saturday or a Sunday or a day
which is a bank or public holiday in New South Wales, Australia, and/or
France, and/or the United States;
	 
	 	 	“Design” means the registered design detailed in Schedule 1.
	 
	 	 	“Intellectual Property” means all rights of industrial or intellectual
property, including (a) patents, trade marks, service marks, trade names,
registered designs and copyrights and applications for any of the above
and the right to apply for these or similar rights in any country in any
part of the world and (b) rights in inventions, discoveries,
improvements, processes, formulae, trade secrets, technology and know-how
(whether patentable or not), data, drawings, designs, specifications,
manufacturing files and technical information of all kinds;
	 
	 	 	“Non-Exclusive Domain” means any domain other than the Purchaser Business
or the business of the Seller’s Group consisting of electronics for
defence, security and aerospace, communications components, and
positioning systems and components;
	 
	 	 	“Patents” means the patents and patent applications detailed in Schedule
1 relating to the Business and any other corresponding foreign patent
which may be granted thereon, and including the TUS SAS Patents;
	 
	 	 	“Purchaser Business” means the Purchaser’s civilian land, marine, sea-bed
and borehole seismic oil and gas exploration, mining equipment and
systems business (including the Transferred Business) and more generally
equipment and systems related to the earth and sea sciences (including
the Transferred Business) for civilian applications from and after the
Completion Date, including the researching into, development, design,
manufacture, marketing, sale and maintenance of said equipment and
systems, as such business is currently conducted and as it may be
conducted in the future;
	 
	 	 	“Purchaser Files” means the design and manufacturing files called Master
Record Index (MRI) and Development Documentation System (DDS) and
Intellectual Property embodied therein transferred by the Seller to the
Purchaser as Assets of the Business under the SPA.
	 
	 	 	“Security Interest” means any encumbrance, mortgage, charge, assignment
for the purpose of security, pledge, lien or any other security interest
of any kind (other than liens arising or incurred in the ordinary course
of trading including provisions constituting reservation or retention of
title clauses) and any agreement, whether conditional or otherwise, to
create any of the foregoing;
	 
	 	 	“Seller’s Group” means the Seller, its holding companies and all
companies or undertakings which now or from time to time are subsidiaries
of the Seller or of any such holding company; and
	 
	 	 	“Seller’s Field of Activities” means all activities of the Seller and
Affiliates in relation to sonars for military use except the Transferred
Business.

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	 	 	“Seller Intellectual Property” means all Intellectual Property (other
than the Business Intellectual Property being sold to the Purchaser
pursuant to the SPA) owned by the Seller or any other member of the
Seller’s Group and used or held for use in the Transferred Business at
the Completion Date (excluding any positioning and steering device for
streamer (BIRDs and BIRDs 2D Intellectual Property)) including the
Patents, the Design and the Software as listed in Schedule 1.
	 
	 	 	"Software” means the software developed by the Seller, as listed in Part
3 of Schedule 1.
	 
	 	 	"Transferred Business” means such part of the business of the Seller’s
Group immediately prior to Completion as is specific to civilian
marine seismic oil and gas exploration equipment and systems,
including the researching into, development, design, manufacture,
marketing, sale and maintenance of the said equipment and systems at
the Completion Date, excluding any defence, naval, security and
military business or application of the Seller’s Group;
	 
	 	 	“TUS SAS” means the French Company THALES UNDERWATER SYSTEMS SAS, part of
the Seller’s Group.
	 
	 	 	"TUS SAS Patents” means the patents owned by TUS SAS and relating to the
Business, as listed in Part 2 of Schedule 1.

	2	 	ACKNOWLEDGEMENT
	 
	 	 	The Purchaser acknowledges that all Seller Intellectual Property is
vested in and remains under the sole ownership of the Seller and, for the
TUS SAS Patents, of TUS SAS.
	 
	 	 	The Purchaser expressly agrees that no right of any kind is or will be
granted to the Purchaser with respect to any Seller Intellectual Property
related to the “Birds” or “Birds 2D” technology (positioning and steering
device for streamers).

	3	 	LICENSING OF SELLER INTELLECTUAL PROPERTY
	 
	3.1	 	The Seller hereby grants to the Purchaser, subject to the provisions of
this Agreement, a perpetual, exclusive (subject to the third parties’
rights listed in Schedule 2), worldwide, royalty-free licence with respect
to the Seller Intellectual Property solely for use in the Purchaser
Business, with (i) the right to sub-license such Seller Intellectual
Property to the Purchaser’s Affiliates and (ii) the right for the
Purchaser and its Affiliates to sub-license such Seller Intellectual
Property to their customers or subcontractors only to the extent
reasonably necessary to enable such customers or subcontractors to use,
manufacture or develop the Purchaser’s products, in each case solely for
applications in the Purchaser Business, including in particular and
without prejudice to the generality of the foregoing:

	 	–	 	the right to use, modify, translate, adapt, reproduce,
develop, maintain and commercialise any Software in whole or in
part, on all media and by all means, present or future solely for
any purpose in the Purchaser Business; and

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	 	–	 	the right to to use the Patents to manufacture, have
manufactured, use and sell the products covered by the Patents for
any purpose in the Purchaser Business; and
	 
	 	–	 	the right to make any improvement, translation or adaptation
of the inventions covered by the Patents, to patent such
improvements, translations and adaptations and to exploit such
patents.

	3.2	 	The Seller hereby grants to the Purchaser a licence with respect to the
Seller Intellectual Property for use in the Non-Exclusive Domain under the
same terms as those set forth in clause 3.1, except that this licence for
use in the Non-Exclusive Domain shall be non-exclusive.
	 
	3.3	 	No rights other than those expressly granted hereunder shall be construed
as being granted to the Purchaser, by implication or otherwise. In
particular, it is expressly agreed that Seller shall keep the exclusive
right to exploit in any manner Seller Intellectual Property in Seller’s
Group fields of activities (other than the Transferred Business), namely
electronics for defence, security and aerospace, communications
components, and positioning systems and components.

	4	 	WARRANTIES
	 
	4.1	 	The Seller warrants to the Purchaser that, on and as of the Completion
Date:

	 	(a)	 	The Seller (or, with respect to the TUS SAS Patents, TUS SAS)
owns, free and clear of any Security Interest, all the Seller
Intellectual Property and has the right to license it on the basis
contemplated by this Agreement;
	 
	 	(b)	 	the Seller Intellectual Property is not subject to any
license within the scope of the Transferred Business (save pursuant
to any Business Contracts under the SPA or to this Agreement) in
favour of any third party, except those listed in Schedule 2;
	 
	 	(c)	 	the Seller Intellectual Property does not infringe or
conflict with any Intellectual Property owned or used by any other
Person, and, to the Seller’s knowledge, is not at present being
infringed or under threat of infringement;
	 
	 	(d)	 	the Seller Intellectual Property is not subject to any event,
circumstance or dispute which could affect the full and quiet
enjoyment thereof by the Purchaser;
	 
	 	(e)	 	The renewal and registration fees for the protection of the
registered Seller Intellectual Property have been paid, and each
such registration is in full force and effect and so far as the
Seller is aware, has not been threatened or challenged by any
person; and
	 
	 	(f)	 	So far as the Seller is aware, no disclosure has been made to
any third parties of any confidential information with respect to
the Seller Intellectual Property, other than under circumstances
under which the Seller has taken appropriate steps to secure the
confidential nature of any such disclosure.

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	4.2	 	It is expressly agreed that in case of a claim by the Purchaser in
connection with a breach of any Seller’s warranties stated in 4.1 above,
the provisions of clauses 11 and 12 of the SPA shall apply mutatis
mutandis to this Agreement as if the warranties in clause 4.1 were
Seller’s warranties under the SPA. For the avoidance of doubt and
notwithstanding anything in this Agreement to the contrary, the aggregate
liability of the Seller in respect of claims for breaches of the
warranties given under this clause 4 shall not exceed the Maximum Seller
Warranty Amount (as defined in clause 12.1 of the SPA) less any amounts
actually paid by the Seller to the Purchaser in respect of breaches of the
Seller’s Warranties under the SPA and no claim may be made by the
Purchaser with respect to such warranties after June 30, 2005.
	 
	4.3	 	Notwithstanding anything in this Agreement to the contrary, it is
expressly agreed that the licence granted with respect to the TUS SAS
Patents and the non-exclusive licence granted with respect to the Seller
Intellectual Property in the Non-Exclusive Domain to the Purchaser are
granted without any warranty of any kind except that stated in clause 4.1
(a) above.
	 
	5	 	COVENANTS WITH RESPECT TO SELLER INTELLECTUAL PROPERTY AND PURCHASER
FILES
	 
	5.1	 	Protection of Seller Intellectual Property

	 	(a)	 	The Seller shall, at its cost and expense, maintain the
Patents, provided, that should the Seller at any time wish to cease
maintaining any of such Patents, the Seller shall inform the
Purchaser in due time. Upon request of the Purchaser made in writing
within thirty (30) days from receipt of the Seller’s notice of its
intent to abandon, the Seller agrees to sell such Patents to the
Purchaser for symbolic consideration. From and after the date of
such sale, or in case of refusal or absence of answer within said
30-day period by the Purchaser, the Seller shall have no further
obligation to maintain such Patents.
	 
	 	(b)	 	If the Purchaser becomes aware of any infringement or misuse
by a third party of any of the Seller Intellectual Property after
the Completion Date, the Purchaser shall give notice of the same to
the Seller and if the Seller decides to act against such
infringement or misuse the Purchaser shall at the Seller’s expense
(but having obtained prior approval of the expenditure) render all
such assistance to the Seller as it may reasonably request for the
purposes of any action brought by the Seller with respect to such
infringement or misuse. If, however, the Seller decides in its
absolute discretion not to take effective action within a reasonable
period to bring such infringement or misuse to an end the Purchaser
shall itself be authorised to act in the matter. In such event the
Seller shall at the Purchaser’s expense (but having obtained prior
approval of the expenditure) render all such assistance to the
Purchaser as the Purchaser may reasonably request for the purposes
of any action brought by the Purchaser with respect to such
infringement or misuse, including lending its name to the action if
so required, but the Purchaser shall be entitled to retain for
itself any damages, costs or other expenses awarded or recovered
through such action.

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	5.2	 	Improvements. The parties agree to discuss, within the framework of the
technical committee that they intend to establish, the conditions under
which they could exchange information on their respective improvements to
the Seller Intellectual Property after the Completion Date.
	 
	5.3	 	Restrictions on Transfer.

	 	(a)	 	The Seller may sell, assign or otherwise transfer any of the
Seller Intellectual Property to any third party subject to such
third party’s agreement in writing for the benefit of the Purchaser
to be bound by all terms of this Agreement as if such third party
had been an original party thereto. An original signed copy of such
agreement shall be sent to the Purchaser promptly after completion
of such sale, assignment or transfer.
	 
	 	(b)	 	The Purchaser may sell, assign or otherwise transfer any of
its rights or the license granted under this Agreement to any
Affiliate or third party acquiring all or substantially all of its
activities in the Transferred Business subject to such Affiliate’s
or third party’s agreement in writing for the benefit of the Seller
to be bound by all terms of this Agreement as if such Affiliates or
third party had been an original party thereto. An original signed
copy of such agreement shall be sent to the Seller promptly after
completion of such sale, assignment or transfer. Any other sale,
assignment or transfer of any rights or obligations hereunder by the
Purchaser, its Affiliates or its sub licensees shall be subject to
the Seller’s prior written approval, which approval shall not be
unreasonably withheld.

	5.4	 	Purchaser Files
	 
	 	 	The Purchaser hereby grants to the Seller a worldwide,
royalty-free, perpetual, non-exclusive right to use the Purchaser
Files solely for use in the Seller’s Field of Activities, with (i)
the right to sub-license such Purchaser Files to the Seller’s
Affiliates and (ii) the right for the Seller and its Affiliates to
sub-license such Purchaser Files to their customers or
subcontractors only to the extent reasonably necessary to enable
such customers or subcontractors to use, manufacture or develop the
Seller’s products, in each case solely for applications in the
Seller’s Field of Activities, including in particular and without
prejudice to the generality of the foregoing, the right to use,
modify, translate, adapt, reproduce, develop, and maintain any
Purchaser Files in whole or in part, on all media and by all means,
present or future solely for any purpose in the Seller’s Field of
Activities.
	 
	 	 	The Parties will review, in good faith within a reasonable period
of time after the Completion Date, whether the Seller needs a right
to use manufacturing files forming part of the Records, other than
the Purchaser Files. If the Seller reasonably demonstrates its need
of such a right, the Purchaser agrees to grant to the Seller a right
of use under conditions to be reasonably negotiated.

	6	 	DURATION
	 
	 	 	This Agreement shall remain in full force and effect with respect to
each item of Seller Intellectual Property until such time as such item
of Seller Intellectual Property ceases to benefit (through no fault of
the Seller) from legal or contractual protection

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	 	 	(including by registration, copyright or confidentiality obligations) and
becomes part of the public domain.

	7	 	CONFIDENTIALITY
	 
	7.1	 	The Software source code comprised in the Seller Intellectual Property
and any copies thereof in any media shall, with effect from the Completion
Date, be deemed to be confidential information of the Seller (“Seller
Information”).
	 
	7.2	 	The Purchaser undertakes to the Seller only to use the Seller Information
in the proper exercise of its rights under this Agreement and the license
granted hereby and not hereafter to disclose any Seller Information to any
third party for any purpose whatsoever without the prior written consent
of the Seller except that:

	 	(a)	 	the Purchaser may disclose such of the Seller Information as
shall be reasonably considered necessary or desirable by the
Purchaser to any person to whom such party is entitled to grant a
license or sub-licence of Seller Intellectual Property under the
provisions of this Agreement subject to such person entering into an
undertaking in favour of the Seller and the Purchaser on terms no
less onerous than the provisions of this clause 7;
	 
	 	(b)	 	nothing shall prevent the Purchaser or a sub-licensed person
from disclosing Seller Information to any third party as part of or
in preparation for the manufacture, development, modification,
adaptation, sale or supply of any products manufactured by or for
the Purchaser or sub-licensed person in accordance with the
provisions of this Agreement, where in the exercise of such rights
it is reasonably considered necessary or desirable by the Purchaser
or such sub-licensed person, subject to such third party entering
into a confidentiality undertaking with respect to such Seller
Information on terms no less onerous than the provisions of this
clause 7;
	 
	 	(c)	 	the Purchaser and any sub-licensed person may disclose Seller
Information to employees and professional advisers of the Purchaser
or sub-licensed person to the extent they need to know the same in
connection with the proper exercise of the Purchaser’s rights under
this Agreement; and
	 
	 	(d)	 	the Purchaser may disclose Seller Information to the extent
required by law or rule of any recognised stock exchange.

	7.3	 	The obligations of confidence in clause 7.2 above shall, subject to the
following provisions of this clause 7.3, continue indefinitely without
limit of time. The obligations of confidence in clause 7.2 above shall,
however, not apply to the Purchaser or its Affiliates where any Seller
Information:

	 	(a)	 	is in the possession of the Purchaser or an Affiliate of the
Purchaser before it is received from the Seller and the Purchaser or
such Affiliate is not subject to an obligation of confidence with
respect thereto;
	 
	 	(b)	 	is or becomes a matter of public knowledge through no fault
of the Purchaser or its Affiliates;
	 
	 	(c)	 	is rightfully received by the Purchaser or an Affiliate from
a third party that is not bound by a duty of confidentiality with
respect thereto; or

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	 	(d)	 	is developed by the Purchaser or an Affiliate of the
Purchaser independently without the use of Seller Information
disclosed by the Seller to the Purchaser pursuant to this Agreement.

	7.4	 	The Purchaser shall be liable to the Seller for any breach of the
provisions of this clause 7 by any employee or officer of the Purchaser or
any Affiliate or sub-licensee of the Purchaser as if such employee or
officer of an Affiliate or sub licensee were its own.
	 
	7.5	 	The provisions of this clause 7 shall apply mutatis mutandis to the
Seller with respect to the Purchaser Files which shall be deemed
confidential information of the Purchaser.
	 
	8	 	GENERAL

	8.1	 	Interpretation.

	 	(a)	 	In this Agreement, unless the context requires otherwise, any
reference to:

	 	(i)	 	a “party” or “the parties” is to a party or the
parties (as the case may be) to this Agreement;
	 
	 	(ii)	 	a clause or Schedule is to a clause of or
schedule to this Agreement and any reference made in a
Schedule to a Part or a Paragraph is to a part or paragraph of
that Schedule;
	 
	 	(iii)	 	“this Agreement” includes the Schedules which
form part of this Agreement for all purposes;
	 
	 	(iv)	 	words denoting any gender shall include the other
genders, references to the singular include the plural (and
vice versa) and references to persons include firms,
corporations and unincorporated associations; and
	 
	 	(v)	 	the words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without
limitation”

	 	(b)	 	Any statement qualified by the expression “to the best of the
knowledge, information and belief of the Seller” or “so far as the
Seller is aware” or any similar expression shall be construed as
being limited to matters of which the Covered Employees (as defined
in the SPA) have knowledge, having made all usual and reasonable
enquiries, and shall not have imported to it any wider meaning or
interpretation.
	 
	 	(c)	 	The words “holding company” and “subsidiary” have the same
meanings as in the Corporations Act 2001 (Cth).
	 
	 	(d)	 	The headings are included for convenience only and shall not
affect the interpretation or construction of this Agreement.
	 
	 	(e)	 	When calculating the period of time within which or following
which any act is to be done or step taken, the date which is the
reference day in calculating such period shall be excluded and if
the last day of such period is not a Business Day, the period shall
end on the next day which is a Business Day.

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	8.2	 	Entire Agreement

	 	(a)	 	This Agreement, and the documents referred to in it and in
the SPA, constitutes the entire agreement and understanding of the
parties and supersedes all prior negotiations, discussions,
correspondence, communications, understandings and agreements
between the parties relating to the subject matter of this Agreement
and all prior drafts of this Agreement.
	 
	 	(b)	 	Each of the parties acknowledges and agrees that in entering
into this Agreement, and the documents referred to in it, it does
not rely on, and shall have no remedy in respect of, any statement,
representation, warranty or understanding (whether negligently or
innocently made) of any person (whether party to this Agreement or
not) other than as expressly set out in this Agreement or in any
other documents delivered in connection herewith (including the
SPA).

	8.3	 	Severability. If at any time any part of any provision of this Agreement
shall be or become invalid or unenforceable in any respect, then such
provision shall be deemed to be severed from this Agreement and the
remainder of the provisions of this Agreement shall remain valid and
enforceable.
	 
	8.4	 	Amendments, Waivers and Rights

	 	(a)	 	No amendment or variation of the terms of this Agreement
shall be effective unless it shall be made or confirmed in a written
document signed by both parties.
	 
	 	(b)	 	No delay in exercising or non-exercise by either party of any
of its rights under or in connection with this Agreement shall
operate as a waiver or release of that right. Rather, any such
waiver or release must be specifically granted in writing signed by
the party granting it.
	 
	 	(c)	 	The rights and remedies of each party under this Agreement
shall be cumulative and not exclusive of any rights or remedies of
that party under the general Law subject to the limitations set
forth in clause 4.2 above and clause 11 of the SPA. Each party may
exercise each of its rights as often as it shall think necessary.

	8.5	 	Notices

	 	(a)	 	Any notice required to be given under this Agreement shall be
in writing signed on behalf of the party giving it and may be served
by (i) delivering it by hand against an acknowledgement of delivery
dated and signed by the recipient, (ii) sending it by registered
mail (postage prepaid, return receipt requested) to the address of
the relevant party set out in clause 8.5(b) or (iii) sending it by
facsimile transmission confirmed by registered mail (postage
prepaid, return receipt requested) posted no later than the
following Business Day (with any such facsimile transmission to be
deemed received at the time indicated on the corresponding activity
report, a copy of which shall be included in the confirmation by
mail) (provided that any notice or communication which is received
after 5:15 p.m. (local time in the place of receipt) on a Business
Day or on any day which is not a Business Day shall be deemed
received only at 8:30 a.m. (local time in the place of receipt) on

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	 	 	 	the next Business Day). Any such notice or other communication
shall be effective only upon actual receipt thereof by its
intended recipient.
	 
	 	(b)	 	Any notice required to be given under this Agreement shall be
sent to:

	 	 	 	the Seller at:

274 Victoria Road

Rydalmere, NSW 2116

Australia

Facsimile No: +61 2 9848 3888

For the attention of:  Managing Director
	 
	 	 	 	with a copy to:

THALES Corporate Legal Services

45, rue de Villiers

92526 Neuilly sur Seine

France

Facsimile No:+33 (0)1 57 77 84 77

Attention:  Alexandre de Juniac
	 
	 	 	 	the Purchaser at:

c/o Sercel Holding

16 rue de Bel Air

44470 Carquefou

France

Facsimile No: +33 (0)2 40 30 31 32

Attention:  Mr. Thierry Le Roux
	 	 	 	Ms. Valérie Féry

	 
	 	 	 	with a copy to:

Sercel Holding

16 rue de Bel Air

44470 Carquefou

France

Facsimile No: +33 (0)2 40 30 31 32

Attention:  Mr. Thierry Le Roux
	 	 	 	Ms. Valérie Féry

	 	 	or to such other address or facsimile number as may be validly notified
from time to time by either party to the other party.
	 
	8.6	 	Counterparts. This Agreement may be entered into in any number of
counterparts and by the parties to it on separate counterparts, each of
which when so executed and delivered shall be an original, but all
counterparts together shall constitute one and the same instrument.
	 
	8.7	 	Law and Settlement of Disputes

	 	(a)	 	This Agreement shall be governed by, and construed and
enforced in accordance with, the Laws of New South Wales, Australia.
	 
	 	b)	 	Any dispute that the Parties shall fail to resolve amicably
shall be finally settled in accordance with the Rules of Arbitration
of the International Chamber of Commerce, by one (1) or more
arbitrator(s) designated in

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	 	 	 	accordance with the said Rules. The Arbitration shall be held in
Sydney, New South Wales, Australia. Proceedings and awards shall
be in the English language.
	 
	 	(c)	 	Notwithstanding clause 8.7(b), either party may commence
court proceedings to obtain an injunction or other interim or
conservatory measures to protect its rights with respect to the
Seller Intellectual Property and Purchaser Files (including under
the license granted pursuant to this Agreement) or prevent any
breach of confidence.

	9	 	LEGAL FORMALITIES/FURTHER ASSURANCE
	 
	 	 	Full powers are granted to the bearer of an original of this Agreement to
carry out any legal formalities and make any required recordings and
registrations. At the request and expense of either party, the other
party will execute and do any further document, act or thing which is
reasonably necessary for more perfectly assuring or for recording at any
Patent Office or the like any rights assigned or licensed pursuant to
this Agreement.
	 
	10	 	EXECUTION
	 
	 	 	The parties have shown their acceptance of the terms of this Agreement by
executing it at the end of the Schedule.

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SCHEDULE 1

LIST OF SELLER INTELLECTUAL PROPERTY

1.   Patents & Design

PATENTS AND DESIGN OWNED BY TUS PTY

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Date of	 	Application.	 	Period for	 	 	 	Renewal	 	Next Renewal	 	Expiry
	File Ref.
	 	Title
	 	Patent No.
	 	Country
	 	Application
	 	No.
	 	renewal
	 	Status
	 	Due Date
	 	Date
	 	Date

	00 54
	 	HYDROPHONE CARRIER	 	 	680489	 	 	Australia	 	05/04/1994	 	 	64193/94	 	 	1 Year	 	In Force	 	5-avr-04	 	05-avr-04	 	05/04/2014
	 

	00 55
	 	HYDROPHONE CARRIER	 	 	(0)733217	 	 	Europe	 	05/04/1994	 	 	94911777,4	 	 	1 Year	 	In Force	 	5-avr-03	 	 	 	05/04/2014
	 

	00 55A
	 	HYDROPHONE CARRIER	 	 	(0)733217	 	 	Hong Kong	 	05/04/1994	 	 	98115004,5	 	 	1 Year	 	In Force	 	5-avr-03	 	 	 	05/04/2014
	 

	00 55B
	 	HYDROPHONE CARRIER	 	 	(0)733217	 	 	Germany	 	05/04/1994	 	 	94911777,4	 	 	1 Year	 	In Force	 	5-avr-04	 	05-avr-04	 	05/04/2014
	 

	00 55C
	 	HYDROPHONE CARRIER	 	 	(0)733217	 	 	France	 	05/04/1994	 	 	94911777,4	 	 	1 Year	 	In Force	 	5-avr-04	 	05-avr-04	 	05/04/2014

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	 	 	 	 	 	 	 	 	 	 	Date of	 	Application.	 	Period for	 	 	 	Renewal	 	Next Renewal	 	Expiry
	File Ref.
	 	Title
	 	Patent No.
	 	Country
	 	Application
	 	No.
	 	renewal
	 	Status
	 	Due Date
	 	Date
	 	Date

	00 55D
	 	HYDROPHONE CARRIER	 	 	(0)733217	 	 	Great Britain	 	05/04/1994	 	 	94911777,4	 	 	1 Year	 	In Force	 	5-avr-04	 	05-avr-04	 	05/04/2014
	 

	00 55E
	 	HYDROPHONE CARRIER	 	 	(0)733217	 	 	Netherlands	 	05/04/1994	 	 	94911777,4	 	 	1 Year	 	In Force	 	5-avr-04	 	05-avr-04	 	05/04/2014
	 

	00 56
	 	HYDROPHONE CARRIER	 	 	5600608	 	 	U.S.A	 	04/08/2004	 	 	08/521237	 	 	5 Year	 	In Force	 	4-aoû-04	 	04-aoû-04	 	30/08/2015
	 

	00 57
	 	HYDROPHONE CARRIER	 	 	46529	 	 	Singapore	 	05/04/1994	 	 	9605665. 0	 	 	1 Year	 	In Force	 	5-avr-04	 	05-avr-04	 	05/04/2014
	 

	00 58
	 	HYDROPHONE MODULE
FOR MARINE STREAMER
CABLE	 	 	132606	 	 	Australia
Registered
design	 	26/03/1996	 	 	924/96	 	 	5 Year	 	In Force	 	26-mar-07	 	26-mar-07	 	26/03/2012
	 

	00 59
	 	HYDROPHONE MODULE
FOR MARINE STREAMER	 	 	454880	 	 	France
Registered
design	 	26/09/1996	 	 	965399	 	 	 	25	 	 	In Force	 	26-sep-21	 	26-sep-21	 	26/09/2046
	 

	00 60
	 	CABLE PORTION WITH
HYDROPHONE MODULE	 	 	D401516	 	 	U.S.A
Registered
design	 	24/11/1998	 	 	29/060,250	 	 	 	N/A	 	 	In Force	 	24-nov-12	 	24-nov-12	 	24/11/2012
	 

	00 61
	 	HYDROPHONE MODULE
FOR MARINE STREAMER
CABLE	 	 	2059637	 	 	United Kingdom
Registered
design	 	26/03/1996	 	 	2 059 637	 	 	5 Year	 	In Force	 	26-mar-06	 	26-mar-06	 	26/03/2021
	 

	00 61A
	 	HYDROPHONE MODULE
FOR MARINE STREAMER
CABLE	 	DU2001/1184/H	 	Singapore
Registered
design	 	26/03/1996	 	DU2001/1184/H	 	5 Year	 	In Force	 	26-sep-06	 	26-sep-06	 	26/03/2021
	 

	00 62
	 	HYDROPHONE MODULE
FOR MARINE STREAMER
CABLE	 	 	27949-00	 	 	Benelux Union
Registered
design	 	25/09/1996	 	 	27949-00	 	 	5 Year	 	In Force	 	25-sep-06	 	25-sep-06	 	25/09/2011

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	 	 	 	 	 	 	 	 	 	 	Date of	 	Application.	 	Period for	 	 	 	Renewal	 	Next Renewal	 	Expiry
	File Ref.
	 	Title
	 	Patent No.
	 	Country
	 	Application
	 	No.
	 	renewal
	 	Status
	 	Due Date
	 	Date
	 	Date

	00 63
	 	HYDROPHONE MODULE
FOR MARINE STREAMER
CABLE	 	 	M9608553,3	 	 	Germany
Registered
Design	 	26/09/1996	 	 	M9608553.3	 	 	5 Year	 	In Force	 	26-sep-06	 	25-sep-06	 	26/09/2016
	 

	00 64
	 	HYDROPHONE MODULE
FOR MARINE STREAMER
CABLE	 	 	73991	 	 	Norway
Registered
design	 	26/09/1996	 	 	960692	 	 	5 Year	 	In Force	 	26-sep-06	 	25-sep-06	 	26/09/2011
	 

	
	 	HYDROPHONE
ARRANGEMENT	 	 	667298	 	 	Australia	 	21/02/1992	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	
	 	TOWED ARRAY STREAMER	 	 	627089	 	 	Australia
France
USA
UK

Singapore
Benelux Union
Germany
Norway	 	21/02/1992	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

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	 	 	 	 	 	 	 	 	 	 	Date of	 	 	 	 	 	 
	 	 	 	 	 	 	Assignment of	 	 	 	Application	 	 	 	 	 	 
	File Ref.
	 	Title
	 	Inventor(s)
	 	Invention
	 	Country
	 	(Filing Date)
	 	Application No.
	 	Status

	00 79
	 	ELECTRONICS CARRIER MODULE	 	Paul Lee and Robert Dowle	 	Signed by all	 	Australia	 	25/01/2002	 	 	PS0157	 	 	PROVISIONAL LAPSE
	 
	
	 	ELECTRONICS CARRIER MODULE	 	 	 	 	 	Australia/
PCT Appl’n	 	25/01/2002	 	 	2003201412	 	 	Pending (published)
	 
	
	 	 	 	 	 	 	 	 	 	 	 	 	PCT/AU03/00073	 	 	 
	 
	
	 	 	 	 	 	 	 	 	 	 	 	 	WO 03/06/062857	 	 	 
	 
	00 80
	 	IMPROVED SEISMIC SENSORS	 	Francois Luc	 	Signed by all	 	Australia	 	10/05/2002	 	 	PS2256	 	 	PROVISIONAL LAPSE
	 
	
	 	IMPROVED SEISMIC SENSORS	 	 	 	 	 	Australia/
PCT Appl’n	 	09/05/2003	 	 	2003225333	 	 	Pending (unpublished)
	 
	
	 	 	 	 	 	 	 	 	 	 	 	 	PCT/AU03/00562	 	 	 
	 
	00 81
	 	METHOD FOR DEPLOYING SEAFLOOR
EQUIPMENT	 	Francois Luc & Robert Dowle	 	Signed by all	 	Australia	 	10/05/2002	 	 	PS2255	 	 	PROVISIONAL LAPSE
	 
	
	 	METHOD FOR DEPLOYING SEAFLOOR
EQUIPMENT	 	 	 	 	 	Australia	 	20/01/2003	 	 	2003900266	 	 	Pending

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	 	 	 	 	 	 	 	 	 	 	Date of	 	 	 	 	 	 
	 	 	 	 	 	 	Assignment of	 	 	 	Application	 	 	 	 	 	 
	File Ref.
	 	Title
	 	Inventor(s)
	 	Invention
	 	Country
	 	(Filing Date)
	 	Application No.
	 	Status

	
	 	METHOD FOR DEPLOYING SEAFLOOR
EQUIPMENT
	 	 	 	 	 	Australia/
PCT Appl’n	 	09/05/2003	 	 	2003225332	 	 	Pending (unpublished)
	 
	
	 	 	 	 	 	 	 	 	 	 	 	 	PCT/AU03/00562	 	 	 
	 
	00 83
	 	AN IMPROVED HOUSING	 	Paul Lee, Goran Radovanovic, Kris
Buchanan, Lesley Gunaratanam, David
Wilkinson and Pushkin Rahman	 	Signed by all	 	Australia	 	05/08/2002	 	 	2002950573	 	 	PROVISIONAL
	 
	00 84
	 	IMPROVED SENSORS AND AN IMPROVED
DATA SENSING AND RECORDING
APPARATUS	 	Francois Luc, David L. Jones, Peter
Harvey, Paul Baker, Robert Khoo, Dusko
Peric, Nan Hai Wu, Doug Ford, Ed Murphy
and Geoffrey Engel	 	Signed by all	 	Australia	 	20/01/2003	 	 	 	 	 	PROVISIONAL

PATENTS OWNED BY TUS SAS

	 	 	 	 	 	 	 
	REF TPI
	 	TITLE
	 	N° DEPOT
	 	DATE

	60513
	 	Antenne verticale pour prospection sismique en mer	 	France
97 08206	 	30/06/97
	 
	
	 	 	 	USA
09/107 272	 	30/06/98
	 
	61785
	 	Systeme de prospection sismique sous-marine notamment pour grands fonds	 	FRANCE
99 07959	 	22/06/99
	 
	
	 	 	 	USA
09/594 088	 	15/06/2000

5

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2.   Software

VOBS/VIP

VOBS/SDAS

VOBS/NTS

VOBS/OBS

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SCHEDULE 2

THIRD PARTIES’ RIGHTS

	A)	 	All Patents are subject to a licence granted pursuant to cross-licences:

	 	•	 	To Alcatel and its Affiliates in the field of civilian Telecommunication;
	 
	 	•	 	To Thomson Multimedia and its Affiliates in the following fields:

	 	a)	 	All products relating to multimedia, leisure electronic, as well as the hardware
and software components, and related services aimed at the consumer market and
distributed by any means and listed in list A hereafter.
	 
	 	b)	 	Broad band digital distribution networks and equipment, and communication terminals.
	 
	 	c)	 	Professional systems and equipment used for the distribution of image and sound.

LIST A:

	—	 	Multimedia products sold in OEM to intermediaries so as to integrate them in a
global offer of products and services for consumer market;
	 
	—	 	Interactive products, systems and services for consumer use, (even a limited group
of users), as well as all the technologic elements constituting this type of
applications (editing tools, network servers, online servers, whole integration,
installation, exploitation of applications and data bases, exploitation of a customers
data base, ....).

	 	B)	 	All Patents are subject to a licence granted by THALES SA to each of its
subsidiaries in their respective field of activity (none of which relates to the
Transferred Business) in the framework of the Thales Intragroup Licensing.

None of the current licensees referred to in (A) and (B) above has the right to
sub-license such licenses.

2

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	Signed by

duly authorised for and on behalf of

THALES UNDERWATER SYSTEMS PTY LIMITED
	 	
Director/Secretary
	 
	 
	Signed by

duly authorised for and on behalf of

SERCEL AUSTRALIA PTY LTD
	 	
Authorized signatory

3

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SCHEDULE 11

Warranties

Part 1

Seller’s Warranties

	1.	 	Capacity and authority of Seller
	 
	1.1	 	The Seller has the requisite corporate power to execute, deliver and
perform, and has taken all necessary corporate or other action to
authorise the execution, delivery and performance of this Agreement and
the agreements entered into pursuant to it. This Agreement and the
agreements entered into pursuant to it constitute legal, valid and binding
obligations of the Seller enforceable in accordance with their terms.
	 
	1.2	 	The execution and delivery of, and the performance by the Seller of its
obligations under, this Agreement and the agreements entered into pursuant
to it do not and will not, directly or indirectly (with or without notice
or lapse of time, or both):

	 	1.2.1	 	result in a breach of any provision of its constitutional
documents or those of the Company;
	 
	 	1.2.2	 	result to the Seller’s knowledge in a breach of, or give any
governmental authority or other person the right to challenge any of
the transactions contemplated hereby or to exercise any remedy or
relief under, any Law or any Judgement to which the Seller or the
Company, or any of the properties or assets owned or used by the
Seller or the Company, may be subject;
	 
	 	1.2.3	 	result in a breach of, or give any governmental authority or
other person the right to revoke, terminate, withdraw, suspend,
modify, accelerate the maturity or performance of or declare a
default or exercise any remedy under: (i) any of the Licenses and
Permits (except for licenses for dual use goods that may be revoked
by the U.S. government or related agencies); (ii) any Governmental
Authorizations held by the Company or which otherwise relates to any
of the properties or assets owned or used by the Company; (iii) any
Business Contract; or (iv) any Contracts to which the Company is a
party; or
	 
	 	1.2.4	 	result in the imposition or creation of any Security
Interest upon or with respect to: (x) any of the Assets; or (y) any
of the properties or assets owned or used by the Company.

	1.3	 	All consents, permissions, approvals and agreements of third parties
(including governmental authorities) that are necessary or desirable for
the Seller to obtain in order to enter into and perform this Agreement and
the agreements entered into pursuant to it in accordance with their terms
have been obtained.
	 
	 	 	For the avoidance of doubt, this Warranty shall not apply to any
Governmental authorization, permission, approval, consent and
agreements of any competition, governmental or regulatory
authorities resulting from any merger control laws regulations or
decision required to be obtained by the Purchaser in connection with
the disposal of the Assets and the Shares as contemplated in this
Agreement.
	 
	2.	 	The Company
	 
	2.1	 	The Company is a corporation duly organized, validly existing and in good
standing under the Laws of the State of Delaware, U.S.A., and has all
requisite corporate

 

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	 	 	capacity, right and power to conduct its business as it is now being
conducted, to own or use the properties and assets that it purports to
own or use, and to perform its obligations under all Contracts to which
it is a party or by which it is bound. A true, accurate and complete
copy of the constitutional documents of the Company, as amended through
the date hereof, are included in the Disclosed Information.
	 
	2.2	 	The Company has not at any time had or conducted any businesses,
activities or operations not directly related to the Business.
	 
	2.3	 	The authorized share capital of the Company consists of one thousand
(1,000) shares, par value U.S.$ 1.00 per share, of which only the Shares
are issued and outstanding. The Seller is the record and beneficial owner
of, and has good and valid title to, all the Shares, free and clear of any
Security Interests. The Seller has the absolute right and capacity to
freely sell, assign, transfer and convey the Shares to the Purchaser in
accordance with the terms of this Agreement. The Shares are duly
authorized and validly issued, fully-paid and non-assessable. There are
no authorized, issued or outstanding subscriptions, options, conversion or
exchange rights, warrants, pre-emptive rights or other securities or other
Contracts pursuant to which: (x) the Seller or the Company is or may
become obligated to issue, sell, transfer or otherwise dispose of, redeem
or acquire any of the Shares or any other interest in the share capital of
the Company; or (y) the Company has granted, or may be obligated to grant,
to any person other than a registered holder of Shares a right to
participate in the revenues or profits of the Company.
	 
	2.4	 	Neither the Company nor the Seller (in respect of the Business): (i)
holds any interest in the share capital (or equivalent) of any person;
(ii) is obligated to make any future investment in or capital contribution
to any person; (iii) is or has been a shareholder, participant or member
of any person in respect of which it may have any liability, including any
obligation to contribute to the share capital of such person or to fund or
participate in the payment of its debts; or (iv) can, by virtue of any act
or omission in respect of another person, be held liable to pay all or any
part of the debts of such person.
	 
	2.5	 	After giving effect to the transactions contemplated by this Agreement,
except as expressly provided by this Agreement or the other agreements
entered into in connection with this Agreement, as at the Completion Date,
the Company will not have any material obligations or liabilities to the
Seller or to any other member of the Seller’s Group.
	 
	3.	 	Financial Information
	 
	3.1	 	The Accounts have been prepared in accordance with the Accounting
Principles, applied on a basis consistent with, and following the
procedures, policies and methods employed in preparing, the audited
consolidated financial statements of the Seller and its consolidated
subsidiaries for the fiscal year ended December 31, 2002, and give a true
and fair view in all respects, consistent with the purpose of the
management accounts as a reflection of the financial and trading position
of the Business on a periodic basis, of the assets and liabilities and
turnover and profit (or loss) of the Business as of the date and for the
period to which they relate.
	 
	3.2	 	The Accounts accurately state the value of sales and gross margins
achieved by the Business in the period for which they were prepared.

 

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	3.3	 	The allocated overheads reflected in Accounts represent an allocation of
the Seller’s overheads appropriate to the Business.
	 
	3.4	 	The accounting and other records of the Seller and the Company have been
fully and properly kept and have been maintained so as to comply with all
applicable Laws.
	 
	3.5	 	The Balance Sheet does not include any material assets or liabilities not
intended to constitute a part of the Business or the Assets to be acquired
by the Purchaser after giving effect to the transactions contemplated by
this Agreement.
	 
	3.6	 	Neither the Seller (in respect of the Business), nor the Company (i) has
any indebtedness for money borrowed, (ii) has given any guarantees for any
third party obligations, or (iii) has any liabilities which are not fully
reflected or provisioned in the Balance Sheet other than liabilities
incurred in the ordinary course of business since the date of the Balance
Sheet.
	 
	4.	 	Conduct of Business
	 
	4.1	 	Since December 31, 2002, the Seller and the Company have conducted the
Business in the ordinary course of business consistent with past practices
and neither the Seller (in respect of the Business) nor the Company has:

	 	4.1.1	 	entered into any material transaction or incurred any
material obligation or liability, except in the ordinary course of
business consistent with past practices;
	 
	 	4.1.2	 	subjected to a Security Interest any properties, assets or
rights used or held for use in the Business or made any sale, lease,
transfer or other disposition of any material properties, assets or
rights used or held for use in the Business (excluding Intellectual
Property) except for (i) dispositions made pursuant to the express
terms of the Business Contracts listed on Schedule 3, (ii)
dispositions of worn-out or obsolete equipment or machinery, and
(iii) dispositions of stock for fair or reasonable value in the
ordinary course of business;
	 
	 	4.1.3	 	disposed of any Intellectual Property used or held for use
in the operation of the Business or entered into any license
agreement as licensee with respect to Intellectual Property held by
a third party;
	 
	 	4.1.4	 	made or suffered any amendment or termination of any
Contract material to the Business to which it is or was a party or
by which it is or was bound, or cancelled, modified or waived any
substantial debts or claims held by it or otherwise waived any
rights material to the Business;
	 
	 	4.1.5	 	failed to pay, discharge or perform, when due, any material
obligation;
	 
	 	4.1.6	 	discontinued the manufacture or sale of any significant
product or product line;
	 
	 	4.1.7	 	entered into any research and development agreement or any
partnership arrangement;
	 
	 	4.1.8	 	made any material change in any sales procedures or selling
prices or policies or in its practices for the collection of
accounts receivable (including any acceleration of collections) or
the payment of suppliers (including any deferral of payments);

 

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	 	4.1.9	 	declared, set aside or paid any dividend or distribution in
respect of the Company share capital; or
	 
	 	4.1.10	 	committed itself (including, in the case of the Seller, the
Purchaser) to do any of the foregoing after Completion.

	4.2	 	Since December 31, 2002, there has not been any material loss, damage or
destruction to, or any material interruption in the use of, any of the
properties, assets or rights owned or used by the Seller (in respect of
the Business) or the Company.
	 
	5.	 	Taxes
	 
	5.1	 	All Taxes for which the Seller (in respect of the Business) and the
Company are liable have at all times been paid and all returns for Taxes
required to have been filed by or on behalf of the Seller (in respect of
the Business) or the Company have been filed, in each case, in accordance
with applicable Law. There are adequate provisions in the Balance Sheet
and in the accounting books and records of the Company with respect to all
Taxes which the Seller (in respect of the Business) or the Company is or
may be required to pay (or to withhold or collect) in respect of all
periods (or portions thereof) ending on the date of the Balance Sheet and
the Completion Date, respectively. Neither the Seller (in respect of the
Business) nor the Company is subject to any condition or restriction which
if it is no longer complied with, will or may directly or indirectly cause
the Business or the Company to incur any tax disadvantage. No claims or
investigations or other proceedings have been notified to the Seller (in
respect of the Business) or the Company, or to the knowledge of the Seller
threatened, related to Taxes for which the Seller or the Purchaser (in
respect of the Business) or the Company may become liable.
	 
	5.2	 	All transactions between the Company, on the one hand, and the Seller or
any other member of the Seller’s Group, on the other hand, have been
effected on terms and conditions which were no less favourable to the
Company than would have been obtained in arms’ length transactions with
independent third parties.
	 
	5.3	 	The Company is not, and has never been, a member of a tax consolidated
group or a party to any tax sharing arrangements for which it may have any
liability, including by reason of its exiting any such tax consolidated
group .
	 
	6.	 	Assets
	 
	6.1	 	The Seller owns and holds good and marketable title to all properties,
assets and rights included in the Assets (free and clear from any options,
charges, liens, encumbrances or other Security Interests other than, in
respect of the Fixed Assets, as expressly provided by the Equipment
Contracts identified on Schedule 3).
	 
	6.2	 	The Company owns and holds good and marketable title to all properties,
assets and rights purported to be owned by it, including all such
properties, assets and rights reflected on the Balance Sheet and all such
properties, assets and rights acquired by it since the date thereof,
except for any such properties, assets or rights disposed of in the
ordinary course of business since such date, free and clear of any
Security Interests.
	 
	6.3	 	The Assets together with (i) the properties, assets and rights owned by
the Company, (ii) the leasehold rights of the Purchaser under the Lease
Agreement, and (iii) the

 

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	 	 	rights granted to the Purchaser in respect of the Seller Intellectual
Property under the License Agreement, constitute all the properties,
assets and rights necessary to enable the Purchaser and the Company to
conduct the Business at Completion in the manner in which the Business is
currently conducted. No person, other than the Seller or the Company, as
appropriate, owns any material items of equipment, machinery, furniture
or other tangible property used or held for use in connection with the
conduct of the Business as currently conducted, except for any such items
leased by the Seller or the Company pursuant to valid leases disclosed in
the Disclosed Information and included, in the case of the Seller, in the
Business Contracts.
	 
	6.4	 	The Fixed Assets and all material items of tangible personal property
owned by the Company: (i) having regard to their age and normal wear and
tear, are in a good and safe state of repair and satisfactory working
order; (ii) are useable in the ordinary course of business; (iii) conform
in all material respects to all applicable Laws; and (iv) constitute all
material items of tangible personal property necessary to enable the
Purchaser and the Company to conduct the Business at Completion in the
manner in which the Business is currently conducted.
	 
	7.	 	Receivables
	 
	7.1	 	All (x) Receivables, and (y) accounts receivable and trade and other
debts owing to or accrued in favour of the Company as at the Completion
Date (whether or not invoiced and whether or not due and payable) together
with the benefit of any security therefore (for purposes of this Warranty,
the “Company Receivables”), represent valid obligations of customers of
the Business arising from bona fide transactions entered into in the
ordinary course of business, and to the extent invoiced or otherwise due
and payable on or prior to the Completion Date, are, as at the Completion
Date, current and collectible in the ordinary course of business
(consistent with past practices and without recourse to legal
proceedings), in amounts not less than the aggregate amount thereof.
There is no contest, claim or right of set-off contained in any written
agreement with any maker of a Receivable or Company Receivable relating to
the amount or validity of such Receivable or Company Receivable or any
cheques, bills, notes and securities relating thereto at the Completion
Date. No Receivable or Company Receivable has a contractual term in
excess of ninety (90) days.
	 
	7.2	 	Assuming that the Purchaser performs its obligations under the
Veritas/Viking Agreement in relation to the third batch in accordance with
the terms thereof, the Seller is not aware of any reason why the trade
receivables, Receivables and Advance Receipts related to the delivery of
the third batch included in the Assets to be acquired by the Purchaser
pursuant to clause 2.1 of the Agreement should not be in the total
aggregate amount of USD $ 2,809,000.
	 
	8.	 	Insurance
	 
	8.1	 	The Disclosed Information contains particulars of all insurance polices
or other coverage maintained by or on behalf of either the Seller (in
respect of the Business) or the Company since January 1, 2003.
	 
	8.2	 	There are no outstanding claims or, so far as the Seller is aware, any
circumstances likely to give rise to a claim under any policies of
insurance relating to the Business.

 

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	9.	 	Documents and records
	 
	 	 	None of the records, systems, data or information in relation to
the Business is recorded, stored, maintained, operated or otherwise
wholly or partly dependent upon or held by any means (including any
electronic, mechanical or photographic process whether computerised
or not) which (including all means of access thereto and therefrom)
are not under the exclusive ownership and direct control of the
Seller or the Company, as appropriate.
	 
	10.	 	Intellectual property rights
	 
	10.1	 	Details of all Business Intellectual Property are listed in Schedule 2
and are accurate in all respects. All the Business Intellectual Property:

	 	10.1.1	 	are used exclusively in the Business;
	 
	 	10.1.2	 	are owned by the Seller or the Company, free and clear of any
Security Interest;
	 
	 	10.1.3	 	together with the Seller Intellectual Property to be licensed to
the Purchaser pursuant to the License Agreement, will collectively
constitute at Completion all Intellectual Property necessary to
enable the Purchaser and the Company to conduct the Business in the
manner in which the Business is currently conducted;
	 
	 	10.1.4	 	are not subject to any exclusive license in favour of any third
party;
	 
	 	10.1.5	 	do not infringe or conflict with any Intellectual Property owned
or used by any other Person, and, to the Seller’s knowledge, are not
at present being infringed or under threat of infringement, and
neither the Seller (with respect to the Business) nor the Company
has infringed, misappropriated or made any unlawful use of, or
received any notice or communication in any form of any actual,
alleged or potential infringement, misappropriation or unlawful use
of, any Intellectual Property owned or used by any other person; and
	 
	 	10.1.6	 	are not subject to any event, circumstance or dispute which could
affect the full and quiet enjoyment thereof by the Purchaser or the
Company.

	10.2	 	The renewal and registration fees for the protection of the registered
Business Intellectual Property have been paid to the date of this
Agreement, and each such registration is in full force and effect and, so
far as the Seller is aware, has not been threatened or challenged by any
person.
	 
	10.3	 	So far as the Seller is aware, no disclosure has been made of any
confidential information of the Business, other than under circumstances
under which the Seller has taken appropriate steps to secure the
confidential nature of any such disclosure.
	 
	11.	 	Contracts
	 
	11.1	 	Each (x) Business Contract which is material to the Business is listed on
Schedule 3, and (y) each Contract to which the Company is a party (for
purposes of this Warranty, a “Company Contract”) and which is material to
the Company is identified in the Disclosed Information. Each Business
Contract which is material to the Business and each Company Contract which
is material to the Company (for purposes of this Warranty, collectively,
the “Material Contracts”): (i) was entered into in the ordinary

 

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	 	 	course of the Business, and (ii) was negotiated on an arm’s length basis.
A true and complete copy of each Material Contract (including all
amendments) has been included in the Disclosed Information.
	 
	11.2	 	So far as the Seller is aware, all the Business Contracts and Company
Contracts are now valid and subsisting.
	 
	11.3	 	The Seller is not aware of the invalidity of or any grounds for
rescission, avoidance or repudiation of any Business Contract or Company
Contract which is material to the financial or trading position of the
Business. Neither the Seller nor the Company has given or received any
notice of any intention to terminate any Business Contract or Company
Contract.
	 
	11.4	 	Each of the Seller and the Company is, and, so far as the Seller is
aware, each of the counterparties is in compliance with the provisions of
each Material Contract to which it is a party, and neither the Seller nor
the Company or, so far as the Seller is aware, any of the counterparties
to any of the Material Contracts is in default under the terms of any such
Material Contracts, and there are, so far as the Seller is aware, no
circumstances likely to give rise to such a default.
	 
	12.	 	Defective products
	 
	 	 	So far as the Seller is aware, the Seller and the Company have
not, in the course of carrying on the Business, manufactured, sold
or supplied products or provided services which were in any material
respect faulty or defective, or which did not comply in a material
respect with warranties or representations given in respect of the
sale or supply of that product or service.
	 
	13.	 	Trading
	 
	13.1	 	The Seller is not aware, and has no grounds for believing, at Completion,
that (whether by reason of an existing agreement or arrangement or as a
result of the acquisition of the Business by the Purchaser):

	 	13.1.1	 	a supplier of the Business will cease, or be entitled to cease,
supplying it or may substantially reduce its level of supplies; or
	 
	 	13.1.2	 	a customer of the Business will cease, or be entitled to cease, to
deal with it or may substantially reduce its level of business.

	13.2	 	The profits of the Business and financial position of the Seller and the
Company in relation to it have not been materially affected during the
past three (3) years by any agreement or arrangement in connection with
the Business which was not at arm’s-length.
	 
	13.3	 	Neither the Seller nor the Company is party to any Contract or other
arrangement limiting or restraining the Seller (in respect of the
Business) or the Company at Completion from engaging or competing in any
lines of business with any person or in any area or territory.
	 
	13.4	 	Neither the Seller nor the Company is subject to an undertaking or
assurance which it has given to a court or other government authority in
relation to the Business.

 

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	13.5	 	Neither the Seller (in respect of the Business) nor the Company has been
a party to an agreement, practice or arrangement which contravenes any
anti-trust, anti-monopoly or anti-cartel legislation or regulation.
	 
	13.6	 	Neither the Seller (in respect of the Business) nor the Company has made
use of a name other than its corporate name.
	 
	14.	 	Litigation, investigations and winding-up
	 
	14.1	 	Neither the Seller nor the Company is engaged in or the subject of any
existing or, to the Seller’s best knowledge, threatened, litigation,
arbitration, administrative or criminal or other proceedings in relation
to the Business, the Assets or the assets of the Company, and to the
Seller’s best knowledge, there are no facts or disputes not disclosed in
the Disclosed Information which may give rise to any such proceedings.
	 
	14.2	 	No order has been made, petition presented or resolution passed for the
liquidation or winding-up of the Seller or the Company; no distress,
execution or other process has been levied and remains undischarged in
respect of the Assets or the assets of the Company; and there is no
outstanding Judgement or court order against the Seller or the Company in
relation to the Business, the Assets or the assets of the Company.
	 
	14.3	 	The Seller has not received written notice of, and is not aware of, any
subsisting or pending investigations or enquiries by or on behalf of, a
governmental authority or other body in respect of, or which might affect,
the Business.
	 
	15.	 	Compliance with statutes
	 
	 	 	Each of the Seller (in respect of the Business) and the Company
has complied with all Laws, including all environmental Laws, that
are or were applicable to it or to the conduct or operation of its
business or the ownership or use of any of its properties or assets.
Neither the Seller (in respect of the Business) nor the Company has
received any notice or other communication from any governmental
authority or any other person regarding: (i) any actual, alleged,
possible or potential violation of, or failure to comply with, any
applicable Law; or (ii) any actual, alleged, possible or potential
obligation on the part of either the Seller (in respect of the
Business) or the Company to undertake, or to bear all or any portion
of the costs of, any remedial action.
	 
	16.	 	Documents stamped
	 
	 	 	All documents which affect the title or interest of the Seller to
any of the Assets, or which relate to Contracts included in the
Assets, have been duly stamped within the requisite period for
stamping.
	 
	17.	 	Licences and consents
	 
	17.1	 	The Seller (in respect of the Business) and the Company will have at
Completion all necessary Governmental Authorizations, licenses and
consents required for carrying on the Business in the manner in which it
is currently carried on (short particulars of each Governmental
Authorization, licence and consent being set out in the Disclosed
Information) and to permit each of the Seller (in respect of the Business)
and the Company to own and use its properties and assets in the manner in
which it currently own and use such properties and assets. All such
Governmental Authorizations,

 

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	 	 	licenses and consents are listed and described in the Disclosed
Information and each has been validly obtained and is in full force and
effect at Completion in the Seller’s name.
	 
	17.2	 	So far as the Seller is aware, neither the Seller (in respect of the
Business) nor the Company is in breach of a Governmental Authorization,
licence or consent; all Governmental Authorizations, licences and consents
are in full force and effect and there is nothing that might prejudice the
continuation or renewal of any Governmental Authorization, license or
consent by the Purchaser or the Company after Completion.
	 
	18.	 	Employment
	 
	18.1	 	Schedule 8 sets forth (i) in Part 1, a complete list of the employees of
the Seller employed in Australia in connection with the Business, (ii) in
Part 2, a complete list of the employees of TUS UK employed in the United
Kingdom exclusively in connection with the Business, and (iii) in Part 3,
a complete list of all the employees of the Company (for purposes of this
Warranty, the “Company Employees”).
	 
	18.2	 	In relation to each Relevant Employee and Company Employee set out in
Schedule 8, the Disclosed Information contains particulars or copies of:

	 	18.2.1	 	any current standard forms of particulars of employment applicable
to such employee;
	 
	 	18.2.2	 	name, date of commencement of employment with the Business, period
of notice, and the identity of his/her employer;
	 
	 	18.2.3	 	rate of remuneration, bonus and commission, any other benefit of
any kind to which he/she is entitled or which is regularly provided
or made available to him/her, entitlement to holidays and holiday
bonuses and other forms of supplemental, complementary or incentive
compensation and any other material information required by
applicable Law to be included in the particulars of his/her terms of
employment; and
	 
	 	18.2.4	 	particulars of any collective agreement affecting his/her terms of
employment, including disciplinary or grievance procedures and any
procedures to be followed in the case of redundancy or dismissal.

	18.3	 	Save as disclosed in the Disclosed Information there are no subsisting
contracts of service in favour of any Relevant Employee or any Company
Employee with the Seller or any member of the Seller’s Group, and no
subsisting contracts for the provision by any such person of any
consultancy or other services in relation to the Business.
	 
	18.4	 	Each of the Seller and the Company has in all material respects complied
with, discharged and fulfilled in relation to each Relevant Employee or
Company Employee, respectively, all requirements, liabilities and
obligations (whether statutory or contractual) (as defined in clause 7 of
this Agreement with respect to the Transferred Employees) for the period
up to the Completion Date.

 

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	18.5	 	Other than in the ordinary course of business, during the three-month
period immediately preceding this Agreement or (where employment commenced
after the beginning of that period) since commencement date of the
employment or holding of office:

	 	18.5.1	 	no change has been made in the rate of remuneration of any of the
Relevant Employees or Company Employees; and
	 
	 	18.5.2	 	no change has been made in the other terms of employment of any of
the Relevant Employees or Company Employees.

	18.6	 	Other than in the ordinary course of business, no negotiations for an
increase in the remuneration or benefits of any of the Relevant Employees
or Company Employees are current or (but for the sale of the Assets and
the Shares) would have been likely to take place within the next three
months.
	 
	18.7	 	None of the Relevant Employees or Company Employees has given or received
notice terminating his or her employment and none of them is entitled or,
so far as the Seller is aware, has announced his or her intention to leave
his or her employment prematurely as a result of the sale of the Assets
and the Shares.
	 
	18.8	 	No past employee of the Seller (in respect of the Business) or of the
Company has a right to return to work or has or may have a right to be
reinstated or re-engaged, except as disclosed in the Disclosed
Information.
	 
	18.9	 	Part 4 of Schedule 8 accurately and completely reflects the full amounts
for accrued annual leave and long-term service leave in respect of each
Transferred Employee.
	 
	19.	 	Australian Superannuation Matters
	 
	19.1	 	The Seller is not a party to any agreement with any union or industrial
organization in respect of superannuation benefits for any of the Relevant
Australian Employees.
	 
	19.2	 	Other than the Seller’s Funds, the Group Salary Continuance Plan provided
by ING to the Seller in respect of the Transferred Australian Employees
and the Group Life Insurance Plan provided by ING to the Seller in respect
of the Relevant Australian Employees:

	 	19.2.1	 	there are no superannuation, retirement or provident funds or
other arrangements providing for any payment to the Relevant
Australian Employees on their retirement or death or on the
occurrence of any permanent or temporary disability in operation by
or in relation to the Seller; and
	 
	 	19.2.2	 	the Seller does not contribute to any funds which will provide the
Relevant Australian Employees or their respective dependants with
pensions, annuities or lump sum payments on retirement or earlier
death or otherwise.

	19.3	 	The following applies with respect to the Seller’s Funds:

	 	19.3.1	 	otherwise than in the ordinary course of administration, there are
no outstanding and unpaid contributions on the part of the Seller or
any other person who is required to contribute to the Seller’s Funds
in respect of the

 

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	 	 	 	Relevant Australian Employees, and the Seller has at all times
complied with all Laws applicable to the Seller with respect to
the Seller’s Funds;
	 
	 	19.3.2	 	none of the Relevant Australian Employees who is a member of the
Seller’s Funds has any right or entitlement to have the amount or
rate of any contributions to the Seller’s Funds augmented, increased
or accelerated by reason of this Agreement or by reason of any other
arrangement, agreement or understanding;
	 
	 	19.3.3	 	a list of the names of the Relevant Australian Employees who are
members of the Seller’s Funds has been supplied to the Purchaser;
	 
	 	19.3.4	 	no undertaking or assurance has been given to the Relevant
Australian Employees as to the increase or improvement of the amount
or rate of any contributions to the Seller’s Funds; and
	 
	 	19.3.5	 	contributions to the Seller’s Funds satisfy the Seller’s
obligations to make superannuation contributions under relevant
industrial agreements and awards.

	19.4	 	The Seller will not be liable to pay the superannuation guarantee charge
in respect of any of the Relevant Australian Employees for any
contribution period (as defined in the Superannuation Guarantee
(Administration) Act 1992) up to Completion.
	 
	19.5	 	Except for the Seller’s Funds, the Seller is not under any present legal
liability or voluntary commitment (whether or not legally binding) to pay
to any person any pension, superannuation, allowance, retirement gratuity
or like benefits or any damages or compensation for loss of office or
employment or for unfair or wrongful dismissal in relation to the Relevant
Australian Employees.
	 
	20.	 	U.S. Pension and Benefit Matters
	 
	20.1	 	All Foreign Schemes (as defined below), all material terms of which are
fully disclosed in the Disclosed Information, have been established and at
all times administered and maintained in compliance with all Laws
applicable thereto (including, with respect to the Company, the United
States Employee Retirement Income Security Act of 1974, as amended from
time to time, and the rules and regulations promulgated thereunder
(“ERISA”)). All premiums, contributions and any other amounts required by
applicable Foreign Scheme documents or applicable Law to be paid or
accrued by the Seller’s Group (with respect to the Transferred U.K.
Employees) or the Company have been paid or accrued as required. For
purposes of this Warranty, the term “Foreign Schemes” means any (i)
pension, provident, benefit, superannuation or retirement fund or plan,
(ii) social security, medical, housing, unemployment or like insurance or
other fund, scheme or arrangement and (iii) fund, scheme or arrangement
established by the Seller’s Group (with respect to the Transferred U.K.
Employees) or the Company in which the Seller, the Company or any other
member of the Seller’s Group participates or to which the Seller, the
Company or any other member of the Seller’s Group makes contributions.
	 
	20.2	 	With respect to the Foreign Schemes applicable to the Company: (x) there
are no defined benefit plans and the only retirement plan currently
applicable to the Company is a defined contribution plan qualified
pursuant to section 401(k) of the United States Internal Revenue Code of
1986, as amended, in respect of which the Company has received a
determination letter from the United States Internal

 

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	 	 	Revenue Service; (y) the Company has never been a party to, and has no
liability with respect to, any defined benefit plan; and (z) the Company
has never been a member of, and has no liability with respect to, any
multiemployer plan.
	 
	21.	 	Stock
	 
	 	 	All (x) Stock, and (y) stock in trade, finished stocks, partly
finished stocks, work in progress, raw materials, stores or
components of the Company on the Completion Date will be owned by
the Seller or the Company, respectively, free and clear of any
Security Interests and does not include any items which are
obsolete, defective in manufacture or design, surplus or not usable
or saleable at current prices (in the case of finished goods) in the
lawful and ordinary course of business of the Business.

 

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SCHEDULE 11

Warranties

Part 2

Purchaser Warranties

	1	 	The Purchaser has the requisite corporate power to execute, deliver and
perform, and have taken all necessary corporate or other action to
authorise the execution, delivery and performance of this Agreement and
the agreements entered into pursuant to it. This Agreement and the
agreements entered into pursuant to it will constitute legal, valid and
binding obligations of the Purchaser enforceable in accordance with their
terms.
	 
	2	 	The execution and delivery of, and the performance by the Purchaser of
its obligations under, this Agreement and the agreements entered into
pursuant to it do not and will not, directly or indirectly (with or
without notice or lapse of time, or both):

	 	2.1.1	 	result in a breach of any provision of its constitutional
documents; or
	 
	 	2.1.2	 	result in a breach, or give any governmental authority or
other person the right to challenge any of the transactions
contemplated hereby or to exercise any remedy or relief under, any
Law or any Judgement to which the Purchaser, or any of the
properties or assets owned or used by the Purchaser, may be subject.

	3	 	All consents, permissions, approvals and agreements of third parties that
are necessary or desirable for the Purchaser to obtain in order to enter
into and perform this Agreement and the agreements entered into pursuant
to it in accordance with their terms have been unconditionally obtained in
writing.

 

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SCHEDULE 12

Apportionment of Closing Purchase Price

	 	 	 	 	 
	Assets
	 	€	21,199,392	 
	Assets (purchased by Purchaser)
	 	€	21,092,3922	 
	Assets (in U.K. purchased by Sercel England)
	 	€	107,000	 
	Shares
	 	€	490,000	 
	Total:
	 	€	21,689,392	 

The Purchaser shall notify the Seller with reasonable promptness following
Completion of the allocation of the Closing Purchase Price in respect of the
Assets purchased by the Purchaser which has been retained for financial and tax
reporting purposes.

 

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SCHEDULE 13

Earnout

The Earnout, if any, payable to the Seller shall be determined in accordance
with the following provisions:

     (i) The Earnout shall be paid on an annual basis for each of the Eligible
Years, and for each of the Eligible Years shall be equal to:

          (a) if the amount of the Consolidated Marine Revenues for such Eligible
Year is less than € 80 million, 1% of the amount of the Consolidated Marine
Revenues for such Eligible Year;

          (b) if the amount of the Consolidated Marine Revenues for such Eligible
Year is equal to or greater than €80 million but is less than €120 million, the
sum of (x) €800,000, and (y) 2% of the excess of (I) the amount of the
Consolidated Marine Revenues for such Eligible Year over (II) €80 million; and

          (b) if the amount of the Consolidated Marine Revenues for such Eligible
Year is equal to or greater than €120 million, the sum of (x) €1,600,000, and
(y) 4% of the excess of (I) the amount of the Consolidated Marine Revenues for
such Eligible Year over (II) €120 million.

provided that the cumulative aggregate amount of the Earnout payable in respect
of all Eligible Years shall not exceed the amount of € 4,400,000 (four million
four hundred thousand euro).

     (ii) As soon as reasonably practicable following the availability of the
Reference Financial Statements for an Eligible Year, and by no later than 120
days following the close of such Eligible Year, the Purchaser shall deliver to
the Seller (x) the Reference Financial Statements for such Eligible Year, (y) a
certificate (the “Earnout Certificate”), signed by an authorized representative
of Purchaser, setting forth in reasonable detail a computation of the
Consolidated Marine Revenues, a reconciliation of the Consolidated Marine
Revenues to the global turnover (chiffre d’affaires) of the Sercel Group and
the amount of the Earnout, if any, payable to the Seller in respect of such
Eligible Year, based on the information set forth in the Reference Financial
Statements, and (z) a letter delivered by one of the statutory auditors of the
Sercel Group confirming the computation of the Consolidated Marine Revenues.

     (iii) By no later than five (5) Business Days following delivery of the
Earnout Certificate to the Seller, the Purchaser shall pay to the Seller in
readily available funds (to such bank account as shall have previously been
notified to the Purchaser by the Seller for such purpose) the amount of the
Earnout indicated in the Earnout Certificate as being payable to the Seller.

     (iv) For the purposes hereof:

          (a) “Consolidated Marine Revenues” shall mean, for an Eligible Year, the
turnover (chiffre d’affaires) of the Sercel Group resulting from the sale of
marine seismic equipment, determined on a consolidated basis in accordance with
the Sercel Accounting Principles; provided, however, that in determinating
Consolidated Marine Revenues:

               (I) all turnover (chiffre d’affaires) related to the sale of air guns
shall be disregarded;

 

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               (II) in the event that any entity or business is acquired by the Sercel
Group after the Completion Date, the turnover (chiffre d’affaires) of any such
entity or business resulting from the sale of marine seismic equipment shall be
entirely disregarded; and

               (III) in the event that any entity or business is sold or otherwise
disposed of by the Sercel Group after the Completion Date, it shall assumed
that the turnover (chiffre d’affaires) resulting from the sale of marine
seismic equipment attributable to such entity or business for the Eligible Year
in which it is sold or otherwise disposed of, as well as for the subsequent
Eligible Year (if applicable), shall be equal to the product of (x) the
turnover (chiffre d’affaires) resulting from the sale of marine seismic
equipment attributable to such entity or business for the complete financial
year immediately preceding its sale or disposition (the “Base Year), and (y) a
fraction having (i) as numerator, the Consolidated Marine Turnover of the
Sercel Group (excluding the entity or business sold or otherwise disposed of)
for the relevant Eligible Year, and (ii) as denominator, the Consolidated
Marine Turnover of the Sercel Group (excluding the entity or business sold or
otherwise disposed of) for the Base Year.

          (b) “Eligible Years” shall mean the calendar years 2004 and 2005;

          (c) “Reference Financial Statements” shall mean the unaudited consolidated
statement of profit and loss (compte de résultat) of the Sercel Group for the
relevant Eligible Year, prepared in accordance with the Sercel Accounting
Principles and on a basis consistent with, and following the procedures,
policies and methods employed in preparing, the unaudited consolidated
statement of profit and loss (compte de résultat) of the Sercel Group for the
fiscal year ended December 31, 2002;

          (d) “Sercel Accounting Principles” shall mean the accounting principles
and methodologies consistently applied by Sercel Holding over the three (3)
fiscal years ended December 31, 2002 in the preparation of its consolidated
annual financial statements (other than as may be therein indicated);

          (e) “Sercel Group” shall mean, Sercel Holding and its consolidated
subsidiaries (including, in respect of the Eligible Years, the Purchaser and
the Company); and

          (f) “Sercel Holding” shall mean Sercel Holding S.A., a company (société
anonyme) incorporated in France.REVOLVING CREDIT FACILITY AGREEMENT

 

Exhibit 10.3

	 	 	 
	C  L  I  F  F  O  R  D	 	SOCIETE D’EXERCICE LIBERAL D’AVOCATS A FORME ANONYME
	 	 	 
	C  H  A  N  C  E	 	 

CONFORMED COPY

COMPAGNIE GENERALE DE GEOPHYSIQUE

as Principal Company

COMPAGNIE GENERALE DE GEOPHYSIQUE

CGG MARINE

SERCEL

as Borrowers

NATEXIS BANQUES POPULAIRES

as Arranger

 

NATEXIS BANQUES POPULAIRES

as Agent

and

THE LENDERS

 

$60,000,000

REVOLVING CREDIT FACILITY AGREEMENT

 

 

Dated 12 March 2004

 

 

CONTENTS

	 	 	 	 	 	 	 	 	 
	CLAUSE
	 	 	 	 	 	PAGE

	1.
	 	Definitions and interpretation	 	 	1	 
	2.
	 	The Facility	 	 	15	 
	3.
	 	Purpose	 	 	15	 
	4.
	 	Conditions of Utilisation	 	 	16	 
	5.
	 	Utilisation	 	 	18	 
	6.
	 	Currencies	 	 	19	 
	7.
	 	Repayment	 	 	21	 
	8.
	 	Prepayment and cancellation	 	 	21	 
	9.
	 	Interest	 	 	25	 
	10.
	 	Interest Periods	 	 	26	 
	11.
	 	Changes to the calculation of interest	 	 	26	 
	12.
	 	Fees	 	 	28	 
	13.
	 	Tax gross-up and indemnities	 	 	29	 
	14.
	 	Increased costs	 	 	32	 
	15.
	 	Other indemnities	 	 	33	 
	16.
	 	Mitigation by the Lenders	 	 	34	 
	17.
	 	Costs and expenses	 	 	34	 
	18.
	 	Representations	 	 	36	 
	19.
	 	Information undertakings	 	 	39	 
	20.
	 	Financial covenants	 	 	42	 
	21.
	 	General undertakings	 	 	45	 
	22.
	 	Events of Default	 	 	51	 
	23.
	 	Changes to the Lenders	 	 	55	 
	24.
	 	Changes to the Borrowers	 	 	58	 
	25.
	 	Role of the Agent and the Arranger	 	 	59	 
	26.
	 	Conduct of business by the Finance Parties	 	 	64	 
	27.
	 	Sharing among the Finance Parties	 	 	64	 
	28.
	 	Payment mechanics	 	 	66	 
	29.
	 	Set-off	 	 	68	 
	30.
	 	Notices	 	 	68	 
	31.
	 	Calculations and certificates	 	 	70	 

 

 

	 	 	 	 	 	 	 	 	 
	CLAUSE
	 	 	 	 	 	PAGE

	32.
	 	Partial invalidity	 	 	70	 
	33.
	 	Remedies and waivers	 	 	70	 
	34.
	 	Amendments and waivers	 	 	71	 
	35.
	 	Governing law	 	 	72	 
	36.
	 	Enforcement - Jurisdiction of French courts	 	 	72	 
	SCHEDULE 1 The Original Lenders	 	 	73	 
	SCHEDULE 2 Conditions Precedent	 	 	74	 
	SCHEDULE 3 Form of Utilisation Request	 	 	76	 
	SCHEDULE 4 Mandatory Cost Formulae	 	 	78	 
	SCHEDULE 5 Form of Transfer Agreement	 	 	81	 
	SCHEDULE 6 Form of Compliance Certificate	 	 	83	 
	SCHEDULE 7 Existing Security	 	 	85	 
	SCHEDULE 8 Existing Financial Indebtedness	 	 	86	 
	SCHEDULE 9 Timetables	 	 	87	 
	SCHEDULE 10 Form of Confidentiality Undertaking	 	 	88	 
	SCHEDULE 11 Allocation of Fees among the Borrowers	 	 	92	 
	SCHEDULE 12 Form of TEG letter	 	 	93	 
	SIGNATURES	 	 	95	 

 

 

THIS AGREEMENT is dated 12 March 2004 and made between:

	(1)	 	COMPAGNIE GENERALE DE GEOPHYSIQUE, a société anonyme incorporated in
France, having its registered office at 1 rue Léon Migaux, 91300 Massy and
registered at the Evry commercial registry under number 969 202 241 R.C.S.
Evry (the “Principal Company”);
	 
	(2)	 	CGG MARINE, a société par actions simplifée incorporated in France,
having its registered office at 1 rue Léon Migaux, 91300 Massy and
registered at the Evry commercial registry under number 403 256 944 R.C.S.
Evry (“CGG Marine”), SERCEL, a société anonyme incorporated in France,
having its registered office at 16 rue de Bel Air, 44470 Carquefou and
registered at the Nantes commercial registry under number 378 040 497
R.C.S. Nantes (“Sercel”) (together with the Principal Company, the
“Borrowers”, and “Borrower” means any one of them);
	 
	(3)	 	NATEXIS BANQUES POPULAIRES as mandated lead arranger (the “Arranger”);
	 
	(4)	 	NATEXIS BANQUES POPULAIRES as agent of the other Finance Parties (the
“Agent”); and
	 
	(5)	 	THE FINANCIAL INSTITUTIONS listed in Schedule 1 as lenders (the “Original
Lenders”).

IT IS AGREED as follows:

SECTION 1

INTERPRETATION

	1.	 	DEFINITIONS AND INTERPRETATION
	 
	1.1	 	Definitions

In this Agreement:
	 
	 	 	“Additional Cost Rate” has the meaning given to it in Schedule 4
(Mandatory Cost formulae).
	 
	 	 	“Affiliate” means, in relation to any person, at any time, a Subsidiary of
that person or a Holding Company of that person or any other Subsidiary of
that Holding Company.
	 
	 	 	“Argas Ltd” means Arabian Geophysical & Surveying Company LTD., a company
incorporated under the laws of Saudi Arabia under number 4056 on 5 July
1967, having its registered office at P.O. Box 535 Al-Khobar 31952, Saudi
Arabia.
	 
	 	 	“Authorisation” means an authorisation, consent, approval, resolution,
licence, exemption, filing, notarisation or registration.
	 
	 	 	“Authorised Signatory” means, in relation to any Borrower, any person who
is duly authorised in such manner as may be reasonably acceptable to the
Agent (and, in relation thereto, the Agent may request that the Borrower
provide a copy, certified as a true copy by an authorised signatory, of
any power of attorney or corporate decision necessary to provide such
authority) and in respect of whom the Agent has received a certificate
signed by a duly authorised representative of that Borrower setting out
the name and signature of such person and confirming such person’s
authority to act.

-1-

 

	 	 	“Availability Period” means the period from and including the Signing Date
to and including the date falling thirty five (35) Months after the
Signing Date.
	 
	 	 	“Available Commitment” means a Lender’s Commitment minus:

	 	(a)	 	the Dollar Amount of its participation in any outstanding
Loans; and
	 
	 	(b)	 	in relation to any proposed Utilisation, the Dollar Amount of
its participation in any Loans that are due to be made on or before
the proposed Utilisation Date,

	 	 	other than that Lender’s participation in any Loans that are due to be
repaid or prepaid on or before the proposed Utilisation Date.
	 
	 	 	“Available CGG Marine Facility” means thirty million dollars
($30,000,000).
	 
	 	 	“Available Facility” means the aggregate for the time being of each
Lender’s Available Commitment.
	 
	 	 	“Available Sercel Facility” means forty five million dollars
($45,000,000).
	 
	 	 	“Bordereaux Dailly” means each form named acte de cession de créances
professionnelles (form of assignment) executed by a Borrower and dated by
the Agent, acting on behalf of the Lenders, in accordance with the terms
and provisions of the Convention Cadre de Cession executed by that
Borrower and in accordance with articles L. 313-23 to L. 313-34 of the
Code monétaire et financier (and “Bordereau Dailly” means any one of
them).
	 
	 	 	“Break Costs” means the amount (if any) by which:

	 	(a)	 	the interest which a Lender should have received for the period
from the date of receipt of all or any part of its participation in a
Loan or Unpaid Sum to the last day of the current Interest Period in
respect of that Loan or Unpaid Sum, had the principal amount or
Unpaid Sum received been paid on the last day of that Interest
Period;

	 	 	exceeds:

	 	(b)	 	the amount which that Lender would be able to obtain by placing
an amount equal to the principal amount or Unpaid Sum received by it
on deposit with a leading bank in the Relevant Interbank Market for a
period starting on the Business Day following receipt or recovery and
ending on the last day of the current Interest Period.

	 	 	“Business Day” means a day (other than a Saturday or Sunday) on which
banks are open for general business in Paris and London and:

	 	(a)	 	in relation to any date for payment or purchase of dollars, New
York
	 
	 	(b)	 	in relation to any date for payment or purchase of euro, any
TARGET Day.

-2-

 

	 	 	“Commitment” means:

	 	(a)	 	in relation to an Original Lender, the amount in the dollars
set opposite its name under the heading “Commitment” in Schedule 1
(The Original Parties) and the amount of any other Commitment
transferred to it under this Agreement; and
	 
	 	(b)	 	in relation to any other Lender, the amount in the dollars of
any Commitment transferred to it under this Agreement,

	 	 	to the extent not cancelled, reduced or transferred by it under this
Agreement.
	 
	 	 	“Compliance Certificate” means a certificate substantially in the form set
out in Schedule 6 (Form of Compliance Certificate) and in form and
substance satisfactory to the Agent.
	 
	 	 	“Confidentiality Undertaking” means a confidentiality undertaking
substantially in the form set out in Schedule 10 (Form of Confidentiality
Undertaking) or any other form agreed between the Principal Company and
the Agent.
	 
	 	 	"Conventions Cadre de Cession” means each of (i) the master receivables
security assignment agreement (convention cadre de cession de créances
professionnelles à titre de garantie) dated on or about the Signing Date
between the Principal Company, the Agent and the Lenders, (ii) the master
receivables security assignment agreement (convention cadre de cession de
créances professionnelles à titre de garantie) dated on or about the
Signing Date between CGG Marine, the Agent and the Lenders and (iii) the
master receivables security assignment agreement (convention cadre de
cession de créances professionnelles à titre de garantie) dated on or
about the Signing Date between Sercel, the Agent and the Lenders (and
“Convention Cadre de Cession” means any one of them).
	 
	 	 	“Core Group” means each of the Borrowers and each of the Principal
Subsidiaries for the time being.
	 
	 	 	“Default” means an Event of Default or any event or circumstance specified
in Clause 22 (Events of Default) which would (with the expiry of a grace
period, the giving of notice, the making of any determination under the
Finance Documents or any combination of any of the foregoing) be an Event
of Default.
	 
	 	 	“Dollar Amount” means, in relation to a Loan, the amount specified in the
Utilisation Request delivered by a Borrower for that Loan (or, if the
amount requested is denominated in euros, that amount converted into
dollars at the Spot Rate of Exchange on the date which is three (3)
Business Days before the Utilisation Date or, if later, the date on which
the Agent receives the Utilisation Request) adjusted to reflect any
repayment, prepayment, consolidation or division of the Loan.
	 
	 	 	“Environmental Claim” means any claim, proceeding or investigation by any
person in respect of any Environmental Law.
	 
	 	 	“Environmental Law” means any applicable law in any jurisdiction in which
any member of the Core Group conducts business which relates to the
pollution or protection of the environment or harm to or the protection of
human health or the health of animals or plants.

-3-

 

	 	 	“Environmental Permits” means any permit, licence, consent, approval and
other authorisation and the filing of any notification, report or
assessment required under any Environmental Law for the operation of the
business of any member of the Core Group conducted on or from the
properties owned or used by the relevant member of the Core Group.
	 
	 	 	“EBITDA” has the meaning ascribed to it in Clause 20.1 (Financial
Definitions).
	 
	 	 	“Eligible Receivable” has the meaning ascribed to it in the Conventions
Cadre de Cession.
	 
	 	 	“Equity” has the meaning ascribed to it in Clause 20.1 (Financial
Definitions).
	 
	 	 	“EURIBOR” means, in relation to any Loan in euro:

	 	(a)	 	the applicable Screen Rate; or
	 
	 	(b)	 	(if no Screen Rate is available for the Interest Period of that
Loan) the arithmetic mean of the rates (rounded upwards to four
decimal places) as supplied to the Agent at its request quoted by the
Reference Banks to leading banks in the European interbank market,

	 	 	as of the Specified Time on the Quotation Day for the offering of deposits
in euro for a period comparable to the Interest Period of the relevant
Loan.
	 
	 	 	“Event of Default” means any event or circumstance specified as such in
Clause 22 (Events of Default).
	 
	 	 	“Existing Facility” means the facility made available under the Existing
Facility Agreement.
	 
	 	 	“Existing Facility Agreement” means the one hundred and eighty million
dollar ($180,000,000) multicurrency revolving credit facility dated 15
September 1999 between the Principal Company, Sercel and Petrosystems S.A.
as borrowers, Natexis Banque and Société Générale as arrangers, Natexis
Banque as agent and the Banks referred to therein, as amended and restated
on 31 August 2000 and as further amended from time to time.
	 
	 	 	“Existing Financial Indebtedness” means any Financial Indebtedness of a
Borrower listed in Schedule 8 (Existing Financial Indebtedness) except to
the extent the principal amount thereof exceeds the amount outstanding
(or, if higher, the maximum principal amount of the relevant facility) as
at 29 February 2004 as stated in that Schedule.
	 
	 	 	“Existing Lender” has the meaning ascribed to it in paragraph (a) of
Clause 23.1 (Assignments and transfers by the Lenders).
	 
	 	 	“Facility” means the revolving credit facility made available under this
Agreement as described in Clause 2 (The Facility).
	 
	 	 	“Facility Office” means the office or offices notified by a Lender to the
Agent in writing on or before the date it becomes a Lender (or, following
that date, by not less than five (5) Business Days’ written notice) as the
office or offices through which it will perform its obligations under this
Agreement.

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	 	 	“Fee Letter” means any letter or letters dated on or about the date of
this Agreement between the Arranger and the Principal Company (or the
Agent and the Principal Company) setting out any of the fees referred to
in Clause 12 (Fees).
	 
	 	 	“Finance Documents” means this Agreement, the Guarantee, each Convention
Cadre de Cession, each Bordereau Dailly, any Fee Letter, and any other
document designated as such by the Agent and the Principal Company (and
“Finance Document” means any one of them).
	 
	 	 	“Finance Party” means the Agent, the Arranger or a Lender.
	 
	 	 	“Financial Indebtedness” means any indebtedness for or in respect of:

	 	(a)	 	moneys borrowed;
	 
	 	(b)	 	any amount raised by acceptance under any acceptance credit
facility;
	 
	 	(c)	 	any amount raised pursuant to any note purchase facility or the
issue of bonds, notes, debentures, loan stock or any similar
instrument;
	 
	 	(d)	 	the amount of any liability in respect of any lease or hire
purchase contract which would, in accordance with GAAP, be treated as
a finance or capital lease;
	 
	 	(e)	 	receivables sold or discounted (other than any receivables to
the extent they are sold on a non-recourse basis);
	 
	 	(f)	 	any amount raised under any other transaction (including any
forward sale or purchase agreement) having the commercial effect of a
borrowing;
	 
	 	(g)	 	any derivative transaction (but excluding forward contracts
entered into in the ordinary course of business) entered into in
connection with protection against or benefit from fluctuation in any
rate or price (and, when calculating the value of any derivative
transaction, only the marked to market value shall be taken into
account);
	 
	 	(h)	 	any counter-indemnity obligation in respect of a guarantee,
indemnity, bond, standby or documentary letter of credit or any other
instrument issued by a bank or financial institution (but excluding,
other than for the purposes of Clause 22.5 (Cross default), any such
counter-indemnity obligation entered into in the ordinary course of
business);
	 
	 	(i)	 	any amount raised by the issue of redeemable shares which are
expressed to be redeemable other than at the sole option of the
issuer of such shares;
	 
	 	(j)	 	any amount of any liability under an advance or deferred
purchase agreement if one of the primary reasons behind the entry
into this agreement is to raise finance; and
	 
	 	(k)	 	the amount of any liability in respect of any guarantee or
indemnity for any of the items referred to in paragraphs (a) to (j)
above.

	 	 	“GAAP” means generally accepted accounting principles in France.

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	 	 	“Gearing” has the meaning ascribed to it in Clause 20.1 (Financial
Definitions).
	 
	 	 	“Gross Operating Cashflow” has the meaning ascribed to it in Clause 20.1
(Financial Definitions).
	 
	 	 	“Group” means the Principal Company and its Subsidiaries for the time
being.
	 
	 	 	“Guarantee” means the first demand guarantee (garantie à première demande)
dated on or about the Signing Date between the Principal Company, the
Agent and the Lenders.
	 
	 	 	“Holding Company” means, in relation to a company or corporation, any
other company or corporation in respect of which it is a Subsidiary.
	 
	 	 	“Information Memorandum” means the document in the form approved by the
Principal Company concerning the Group which, at the Principal Company’s
request and on its behalf, was prepared in relation to this transaction
and distributed by the Arranger to selected financial institutions before
the Signing Date.
	 
	 	 	“Interest Period” means, in relation to a Loan, each period determined in
accordance with Clause 10 (Interest Periods) and, in relation to an Unpaid
Sum, each period determined in accordance with Clause 9.3 (Default
interest).
	 
	 	 	“Lender” means:

	 	(a)	 	any Original Lender; and
	 
	 	(b)	 	any credit institution (établissement de crédit) in France (or
which is recognised as such in accordance with EU regulations) which
has become a Party in accordance with Clause 23 (Changes to the
Lenders),

	 	 	which in each case has not ceased to be a Party in accordance with the
terms of this Agreement.
	 
	 	 	“Leverage” has the meaning ascribed to it in Clause 20.1 (Financial
Definitions).
	 
	 	 	“LIBOR” means, in relation to any Loan:

	 	(a)	 	the applicable Screen Rate; or
	 
	 	(b)	 	(if no Screen Rate is available for the currency or Interest
Period of that Loan) the arithmetic mean of the rates (rounded
upwards to four decimal places) as supplied to the Agent at its
request quoted by the Reference Banks to leading banks in the London
interbank market,

	 	 	as of the Specified Time on the Quotation Day for the offering of deposits
in the currency of that Loan and for a period comparable to the Interest
Period for that Loan.
	 
	 	 	“Loan” means a loan made or to be made under the Facility or the principal
amount outstanding for the time being of that loan.

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	 	 	“Majority Lenders” means:

	 	(a)	 	if there are no Loans then outstanding, a Lender or Lenders
whose Commitments aggregate more than sixty five per cent. (65%) of
the Total Commitments (or, if the Total Commitments have been reduced
to zero, aggregated more than sixty five per cent. (65%) of the Total
Commitments immediately prior to the reduction); or
	 
	 	(b)	 	at any other time, a Lender or Lenders whose participations in
the Loans then outstanding aggregate more than sixty five per cent.
(65%) of all the Loans then outstanding.

	 	 	“Mandate Letter” means the mandate letter dated 19 January 2004 between
the Principal Company and the Arranger relating to the Facility.
	 
	 	 	“Mandatory Cost” means the percentage rate per annum calculated by the
Agent in accordance with Schedule 4 (Mandatory Cost formulae).
	 
	 	 	“Margin” means, at any time, in relation to a Loan:

	 	(a)	 	if at such time, the Principal Company has not delivered any
Compliance Certificates pursuant to Clause 19.2 (Compliance
Certificate), two point five per cent. (2.50%) per annum;
	 
	 	(b)	 	if at such time, the Principal Company has delivered a
Compliance Certificate pursuant to Clause 19.2 (Compliance
Certificate), then, from (and including) the date falling five (5)
Business Days after the date of the receipt by the Agent of the
latest such Compliance Certificate,

	 	(i)	 	one point five per cent. (1.50%) per annum if
Operational Leverage is less than 1.50:1;
	 
	 	(ii)	 	one point seven five per cent. (1.75%) per annum
if Operational Leverage is greater than or equal to 1.5:1 but
less than 2.00:1;
	 
	 	(iii)	 	two per cent. (2.00%) per annum if Operational
Leverage is greater than or equal to 2.00:1 but less than
2.50:1;
	 
	 	(iv)	 	two point two five per cent. (2.25%) per annum if
Operational Leverage is greater than or equal to 2.50:1 but
less than 3.00:1;
	 
	 	(v)	 	two point five per cent. (2.50%) per annum if
Operational Leverage is greater than or equal to 3.00:1 but
less than 3.50:1;
	 
	 	(vi)	 	two point seven five per cent. (2.75%) per annum
if Operational Leverage is greater than or equal to 3.50:1,

	 	 	 	in each case, Operational Leverage being calculated by reference to
the most recent Relevant Period for which the Principal Company has
delivered consolidated audited financial statements for a period
ending on the last day in such Relevant Period and that are
accompanied by a Compliance Certificate,

-7-

 

	 	 	and provided that (in relation to both paragraph (a) and (b) above) if, at
any time, an Event of Default (including, for the avoidance of doubt, any
Event of Default arising out of the failure of the Principal Company to
deliver any Compliance Certificate pursuant to the provisions set forth in
Clause 19.2 (Compliance Certificate)) has occurred which is continuing,
the Margin, at such time, shall be two point seven five per cent. (2.75%)
per annum.
	 
	 	 	“Material Adverse Effect” means a material adverse effect on:

	 	(a)	 	the business, operations, property or condition (financial or
otherwise) of any of the Borrowers or the Core Group taken as a whole
and the ability of any Borrower to perform its obligations under the
Finance Documents; or
	 
	 	(b)	 	the validity or enforceability of the Finance Documents.

	 	 	“Month” means a period starting on one day in a calendar month and ending
on the numerically corresponding day in the next calendar month, except
that:

	 	(a)	 	if the numerically corresponding day is not a Business Day,
that period shall end on the next Business Day in that calendar month
in which that period is to end if there is one, or if there is not,
on the immediately preceding Business Day;
	 
	 	(b)	 	if there is no numerically corresponding day in the calendar
month in which that period is to end, that period shall end on the
last Business Day in that calendar month.

	 	 	The above rules will only apply to the last Month of any period.
	 
	 	 	“Net Debt” has the meaning ascribed to it in Clause 20.1 (Financial
Definitions).
	 
	 	 	“New Lender” has the meaning ascribed to it in paragraph (a) of Clause
23.1 (Assignments and transfers by the Lenders).
	 
	 	 	“Operational Leverage” has the meaning ascribed to it in Clause 20.1
(Financial Definitions).
	 
	 	 	“Original Financial Statements” means:

	 	(a)	 	in relation to the Principal Company, the audited annual
consolidated financial statements of the Group for the financial year
ended 31 December 2002; and
	 
	 	(b)	 	in relation to each Borrower other than the Principal Company,
its audited financial statements for its financial year ended 31
December 2002.

	 	 	“Participating Member State” means any member state of the European
Communities that adopts or has adopted the euro as its lawful currency in
accordance with legislation of the European Union relating to Economic and
Monetary Union.
	 
	 	 	“Party” means a party to this Agreement.
	 
	 	 	“Permitted Shareholder Advances” has the meaning ascribed to it in Clause
20.1 (Financial Definitions).

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	 	 	“Principal Activity” means geophysical and seismic services and the
manufacture of seismic equipment around the world.
	 
	 	 	“Principal Subsidiary” means:

	 	(a)	 	CGG Americas, Inc. and CGG Marine Resources Norge A/S; and
	 
	 	(b)	 	any other Subsidiary of the Principal Company, from time to
time, which satisfies at least two the following:

	 	(i)	 	its total assets exceeds five per cent. (5%) of
the consolidated assets of the Group;
	 
	 	(ii)	 	its total external turnover exceeds five per
cent. (5%) of the consolidated turnover of the Group;
	 
	 	(iii)	 	its total external net profit or loss exceeds
five per cent. (5%) of the consolidated net profit or loss of
the Group,

	 	 	in each case as calculated by reference to the most recent audited
consolidated financial statements of the Group (and if such Subsidiary has
been acquired since the date as at which the most recent audited
consolidated financial statements of the Group were prepared, the
financial statements shall be adjusted to take into account the
acquisition of that Subsidiary).
	 
	 	 	“Qualifying Lender” has the meaning given to it in Clause 13 (Tax gross-up
and indemnities).
	 
	 	 	“Quotation Day” means, in relation to any period for which an interest
rate is to be determined:

	 	(a)	 	(if the currency is dollars) two Business Days before the first
day of that period; or
	 
	 	(b)	 	(if the currency is euro) two TARGET Days before the first day
of that period,

	 	 	unless market practice differs in the Relevant Interbank Market for a
currency, in which case the Quotation Day for that currency will be
determined by the Agent in accordance with market practice in the Relevant
Interbank Market (and if quotations would normally be given by leading
banks in the Relevant Interbank Market on more than one day, the Quotation
Day will be the last of those days).
	 
	 	 	“Reduction Date” means each of the days which are twenty four (24) Months
and thirty (30) Months after the Signing Date.
	 
	 	 	“Reduction Instalment” means each instalment for reduction of the Loans
referred to in Clause 7.2 (Reduction of the Facility).
	 
	 	 	“Reference Banks” means, in relation to LIBOR, the principal London
offices of The Royal Bank of Scotland plc, BNP Paribas and Société
Générale and, in relation to EURIBOR, the principal office in Paris of BNP
Paribas, Natexis Banques Populaires and Société Générale or such other
banks as may be appointed by the Agent in consultation with the Principal
Company.
	 
	 	 	“Reference EBITDA” has the meaning ascribed to it in Clause 20.1
(Financial Definitions).

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	 	 	“Reference Gross Operating Cashflow” has the meaning ascribed to it in
Clause 20.1 (Financial Definitions).
	 
	 	 	“Relevant Interbank Market” means in relation to dollars, the London
interbank market and, in relation to euro, the European interbank market.
	 
	 	 	“Repeating Representations” means each of the representations set out in
Clauses 18 (Representations) other than (i) insofar as such
representations relate to any Finance Document other than any Bordereaux
Dailly, Clause 18.5 (Authorisations) and Clause 18.8 (No filing or stamp
taxes) and (ii) Clause 18.7 (Taxes on payments), paragraphs (a), (b) and
(c) of Clause 18.10 (Full Disclosure), paragraphs (a) and (b) of Clause
18.11 (Financial statements), Clause 18.13 (Pari passu ranking), 18.15
(Immunity), 18.16 (Existing Security), 18.20 (Environmental compliance)
and Clause 18.21 (Control of CGG Marine and Sercel)).
	 
	 	 	“Required Threshold” has, in relation to a Borrower, the meaning ascribed
to it in paragraph (a) of Clause 21.8 (Bordereaux Dailly).
	 
	 	 	“Required Utilisation Threshold” has, in relation to a Borrower, the
meaning ascribed to it in paragraph (c) of Clause 4.2 (Further Conditions
Precedent).
	 
	 	 	“Rollover Loan” means one or more Loans:

	 	(a)	 	made or to be made on the same day that a maturing Loan is due
to be repaid;
	 
	 	(b)	 	the aggregate amount of which is equal to or less than the
maturing Loan;
	 
	 	(c)	 	in the same currency as the maturing Loan (unless it arose as a
result of the operation of Clause 6.2 (Unavailability of a
currency)); and
	 
	 	(d)	 	made or to be made to the same Borrower for the purpose of
refinancing the maturing Loan.

	 	 	“Screen Rate” means:

	 	(a)	 	in relation to LIBOR, the British Bankers Association Interest
Settlement Rate for the relevant currency and period; and
	 
	 	(b)	 	in relation to EURIBOR, the percentage rate per annum
determined by the Banking Federation of the European Union for the
relevant period,

	 	 	displayed on the appropriate page of the Telerate screen (being currently,
page “248” in relation to EURIBOR and page “3750” in relation to LIBOR).
If the agreed page is replaced or service ceases to be available, the
Agent may specify another page or service displaying the appropriate rate
after consultation with the Principal Company and the Lenders.
	 
	 	 	“Security” means a mortgage, charge, pledge, lien, an assignment by way of
security carried out in accordance with articles L. 313-23 et seq. of the
Code monétaire et financier or other security interest securing any
obligation of any person or any other agreement or arrangement having a
similar effect.

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	 	 	“Signing Date” means the date of this Agreement.
	 
	 	 	“Specified Time” means a time determined in accordance with Schedule 9
(Timetables).
	 
	 	 	“Spot Rate of Exchange” means, on any day, the spot rate of exchange
quoted by the European Central Bank (Banque Centrale Européenne) as the
rate offered for the purchase of the relevant currency with dollars at or
about 14:15 on that day for delivery three (3) Business Days later.
	 
	 	 	“Subsidiary” means, in relation to any company, another company which is
either (i) controlled by it within the meaning of article L.233-3 of the
French Code de commerce or (ii) fully consolidated in its consolidated
financial statements in accordance with article L.233-16 of the French
Code de commerce.
	 
	 	 	“TARGET” means Trans-European Automated Real-time Gross Settlement Express
Transfer payment system.
	 
	 	 	“TARGET Day” means any day on which TARGET is open for the settlement of
payments in euro.
	 
	 	 	“Tax” means any tax, levy, impost, duty or other charge or withholding of
a similar nature (including any penalty or interest payable in connection
with any failure to pay or any delay in paying any of the same).
	 
	 	 	“Termination Date” means the earlier of either the date falling thirty six
(36) Months after the Signing Date or 31 March 2007.
	 
	 	 	“Total Commitments” means the aggregate of the Commitments, being sixty
million dollars ($60,000,000) at the Signing Date.
	 
	 	 	“Transfer Agreement” means an agreement substantially in the form set out
in Schedule 5 (Form of Transfer Agreement) or any other form agreed
between the Agent and the Principal Company.
	 
	 	 	“Transfer Date” means, in relation to a transfer, the later of:

	 	(a)	 	the proposed Transfer Date specified in the Transfer Agreement;
and
	 
	 	(b)	 	the date on which the Agent executes the Transfer Agreement.

	 	 	“Unpaid Sum” means any sum due and payable but unpaid by a Borrower under
the Finance Documents.
	 
	 	 	“Utilisation” means a utilisation of the Facility.
	 
	 	 	“Utilisation Date” means the date of a Utilisation, being the date on
which the relevant Loan is to be made.
	 
	 	 	“Utilisation Request” means a notice substantially in the form set out in
Schedule 3 (Form of Utilisation Request).
	 
	 	 	“VAT” means value added tax and any tax of a similar nature.

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	1.2	 	Construction

	 	(a)	 	Unless a contrary indication appears, any reference in this Agreement to:

	 	(i)	 	the “Agent”, the “Arranger”, any “Finance Party”, any “Lender”,
any “Borrower” or any “Party” shall be construed so as to include its
successors in title, permitted assigns and permitted transferees;
	 
	 	(ii)	 	“assets” includes present and future properties, revenues and
rights of every description;
	 
	 	(iii)	 	“corporate reconstruction” includes in relation to any company
any contribution of part of its business in consideration of shares
(apport partiel d’actifs), any demerger (scission) implemented in
accordance with articles L.236-1 to L.236-24 of the French Code de
commerce, any merger and any transmission universelle de patrimoine;
	 
	 	(iv)	 	a “Finance Document” or any other agreement or instrument is a
reference to that Finance Document or other agreement or instrument
as amended, supplemented or novated;
	 
	 	(v)	 	“gross negligence” means “faute lourde”;
	 
	 	(vi)	 	a “guarantee” includes any “cautionnement”, “aval” and any
“garantie” which is independent from the debt to which it relates;
	 
	 	(vii)	 	“indebtedness” includes any obligation (whether incurred as
principal or as surety) for the payment or repayment of money,
whether present or future, actual or contingent;
	 
	 	(viii)	 	“merger” includes any fusion implemented in accordance with
articles L.236-1 to L.236-24 of the French Code de commerce;
	 
	 	(ix)	 	a “person” includes any person, firm, company, corporation,
government, state or agency of a state or any grouping (whether or
not having separate legal personality) or two or more of the
foregoing;
	 
	 	(x)	 	a “regulation” includes any regulation, rule, official
directive, request or guideline (whether or not having the force of
law) of any governmental, intergovernmental or supranational body,
agency, department or regulatory, self-regulatory or other authority
or organisation;
	 
	 	(xi)	 	a “security interest” includes any type of security (sûreté
réelle), including, but not limited to, and transfer by way of
security;
	 
	 	(xii)	 	“trustee”, “fiduciary” and “fiduciary duty” has in each case
the meaning given to such term under any applicable law;
	 
	 	(xiii)	 	“wilful misconduct” means “dol”;
	 
	 	(xiv)	 	a provision of law is a reference to that provision as amended or re-enacted; and
	 
	 	(xv)	 	unless a contrary indication appears, a time of day is a reference to Paris time.

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	 	(b)	 	Section, Clause and Schedule headings are for ease of reference only.
	 
	 	(c)	 	Unless a contrary indication appears, a term used in any other Finance
Document or in any notice given under or in connection with any Finance
Document has the same meaning in that Finance Document or notice as in
this Agreement.
	 
	 	(d)	 	A Default (other than an Event of Default) is “continuing” if it has not
been remedied or waived and an Event of Default is “continuing” if it has
not been remedied or waived.

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	1.3	 	Currency Symbols and Definitions
	 
	 	 	“$” and “dollars” denote lawful currency of the United States of
America and “EUR” and “euro” means the single currency unit of the
Participating Member States.

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SECTION 2

THE FACILITY

	2.	 	THE FACILITY
	 
	2.1	 	The Facility
	 
	 	 	Subject to the terms of this Agreement, the Lenders make a multicurrency
revolving loan facility in an aggregate amount equal to the Total
Commitments available to the Borrowers.
	 
	2.2	 	Finance Parties’ rights and obligations

	 	(a)	 	The obligations of each Finance Party under the Finance Documents are
several (conjointes et non solidaires). Failure by a Finance Party to
perform its obligations under the Finance Documents does not affect the
obligations of any other Party under the Finance Documents. No Finance
Party is responsible for the obligations of any other Finance Party under
the Finance Documents.
	 
	 	(b)	 	The rights of each Finance Party under or in connection with the Finance
Documents are separate and independent rights and any debt arising under
the Finance Documents to a Finance Party from a Borrower shall be a
separate and independent debt.
	 
	 	(c)	 	A Finance Party may, except as otherwise stated in the Finance Documents,
separately enforce its rights under the Finance Documents.

	2.3	 	Borrowers’ rights and obligations
	 
	 	 	Save as provided in any other Finance Document (or in Clause 12 (Fees)),
no Borrower shall be liable to (i) repay a Loan made to another Borrower
or (ii) pay any amount due and payable by another Borrower under any
Finance Document on behalf of that other Borrower.
	 
	2.4	 	Principal Company as Borrowers’ agent
	 
	 	 	Each Borrower irrevocably appoints the Principal Company to act as its
agent under and in connection with the Finance Documents with power to (i)
give or receive any notice (other than a Utilisation Request) on behalf of
such Borrower and (ii) give any consent required under the Finance
Documents (excluding any consent required in relation to any amendment of,
or waiver related to, any of the Finance Documents). Each Borrower
confirms that it will be bound by any action or decision taken by the
Principal Company under and in connection with the Finance Documents.
	 
	3.	 	PURPOSE
	 
	3.1	 	Purpose
	 
	 	 	Each Borrower shall apply all amounts borrowed by it under the Facility
towards general corporate purposes and the replacement of the Existing
Facility.
	 
	3.2	 	Monitoring
	 
	 	 	No Finance Party is bound to monitor or verify the application of any
amount borrowed pursuant to this Agreement.

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	4.	 	CONDITIONS OF UTILISATION
	 
	4.1	 	Initial conditions precedent

	 	(a)	 	No Borrower may deliver a Utilisation Request unless the Agent has
received all of the documents and other evidence listed in Schedule 2
(Conditions precedent) in form and substance satisfactory to the Agent.
	 
	 	(b)	 	Save as provided in paragraph (c) of this Clause 4.1, the Principal
Company shall procure that the Agent has received all of the documents and
other evidence listed in Schedule 2 (Conditions precedent) (other than the
legal opinion referred to in paragraph 2(a) of Schedule 2 (Conditions
precedent)), each in form and substance satisfactory to the Agent, no
later than the date falling five (5) Business Days after the Signing Date.
	 
	 	(c)	 	The Principal Company shall procure that the Agent has received (i) the
evidence referred to in paragraph 3(h) of Schedule 2 (Conditions
precedent), (ii) the resolution of the board of directors (conseil
d’administration) of the Principal Company referred to in paragraph 1 (d)
of Schedule 2 (Conditions precedent), (iii) the decision of the comité de
surveillance of CGG Marine referred to in paragraph 1(e) of Schedule 2
(Conditions precedent) and (iv) the resolution of the board of directors
(conseil d’administration) of Sercel referred to in paragraph 1 (f) of
Schedule 2 (Conditions precedent), each in form and substance satisfactory
to the Agent, no later than on the Signing Date.

	4.2	 	Further conditions precedent
	 
	 	 	The Lenders will only be obliged to comply with Clause 5.4 (Lenders’
participation) if on the date of the Utilisation Request and on the
proposed Utilisation Date:

	 	(a)	 	in the case of a Rollover Loan, no Event of Default is
continuing or would result from the proposed Loan and, in the case of
any other Loan, no Default is continuing or would result from the
proposed Loan; and
	 
	 	(b)	 	the Repeating Representations to be made by each Borrower are
true in all material respects; and
	 
	 	(c)	 	in the case of each Borrower, the aggregate nominal value of
the Eligible Receivables (if denominated in a currency other than
dollars, converted at the Spot Rate of Exchange on the Business Day
immediately preceding the date of the Utilisation Request) (and
having due date falling not earlier than the date on which the next
Bordereau Dailly is due to be delivered in accordance with Clause
21.8 (Bordereaux Dailly)) assigned by that Borrower pursuant to the
Bordereaux Dailly which are in effect as at the date of the
Utilisation Request (and, in relation to the proposed Utilisation
Date, the Bordereaux Dailly which are in effect as at the Utilisation
Date), exceeds one hundred and twenty per cent. (120%) of the
aggregate amount of (a), in relation to the Borrower to whom the
proposed Loan is to be made, the Dollar Amount of the proposed Loan
(or, if as at such time, the Dollar Amount of the proposed Loan has
not been determined, the amount of the proposed Loan converted into
dollars at the Spot Rate of Exchange at such time), (b) the Dollar
Amount in any outstanding Loans made to that Borrower (other than any
Loans that are due to be repaid or prepaid on or before the proposed
Utilisation Date),

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	 	 	 	and (c) the Dollar Amount of any other Loans to that Borrower that
are due to be made on or prior to the proposed Utilisation Date
(or, if as at such time, the Dollar Amount of any such other Loan
has not been determined, the amount of the proposed Loan converted
into dollars at the Spot Rate of Exchange at such time) (the
“Required Utilisation Threshold”),
	 
	 	 	 	provided that the nominal value of Eligible Receivables that
have not been paid on their due date and (i) are more than three
(3) Months overdue or (ii) are, in the reasonable opinion of the
Agent, likely to become overdue for more than three (3) Months
(having regard, among other factors, to the identity and
nationality of the debtor) shall not be included in the aggregate
nominal value of the Eligible Receivables assigned by the Borrowers
pursuant to the Bordereaux Dailly for the purpose of this
calculation; and
	 
	 	(d)	 	in the case of each Borrower, the aggregate nominal value of
Eligible Receivables assigned by that Borrower pursuant to the
Bordereaux Dailly executed by it (and which are in effect at such
time) (and if denominated in a currency other than dollars, converted
at the Spot Rate of Exchange at the relevant time) which are owed by
companies that are not members of the Group is no less than two
thirds of the Required Utilisation Threshold applicable to that
Borrower at such time.

	4.3	 	Maximum number of Loans

	 	(a)	 	A Borrower may not deliver a Utilisation Request if as a result of the
proposed Utilisation, nine or more Loans would be outstanding.
	 
	 	(b)	 	Any Loan made by a single Lender under Clause 6.2 (Unavailability of a
currency) shall not be taken into account in this Clause 4.3.

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SECTION 3

UTILISATION

	5.	 	UTILISATION
	 
	5.1	 	Delivery of a Utilisation Request

A Borrower may utilise the Facility by delivery to the Agent of a duly
completed Utilisation Request not later than the Specified Time.
	 
	5.2	 	Completion of a Utilisation Request

	 	(a)	 	Each Utilisation Request is irrevocable and will not be regarded as
having been duly completed unless:

	 	(i)	 	the proposed Utilisation Date is a Business Day within the
Availability Period;
	 
	 	(ii)	 	the currency and amount of the Utilisation comply with Clause
5.3 (Currency and amount);
	 
	 	(iii)	 	the proposed Interest Period complies with Clause 10 (Interest
Periods);
	 
	 	(iv)	 	it is signed by an Authorised Signatory of the relevant
Borrower; and
	 
	 	(v)	 	if the Borrower providing such Utilisation Request is CGG
Marine or Sercel, it is countersigned by an Authorised Signatory of
the Principal Company.

	 	(b)	 	Only one Loan may be requested in each Utilisation Request.

	5.3	 	Currency and amount

	 	(a)	 	The currency specified in a Utilisation Request must be dollars or euros.
	 
	 	(b)	 	The amount of the proposed Loan must be:

	 	(i)	 	if the currency selected is dollars, a minimum of five million
dollars ($5,000,000) (and an integral multiple of one million dollars
($1,000,000)) or, if less, the Available Facility; or
	 
	 	(ii)	 	if the currency selected is euros, a minimum of five million
euros (EUR 5,000,000) (and an integral multiple of one million euros
(EUR 1,000,000)) or, if less, for a Loan whose Dollar Amount is the
Available Facility; and
	 
	 	(iii)	 	if the proposed Interest Period for the proposed Loan would
extend beyond a Reduction Date, such that the aggregate of (i) its
Dollar Amount and (ii) the Dollar Amount of any Loans (a) that are
outstanding and (b) that are due to be made (in each case, other than
any Loans that are due to be repaid or prepaid on or before the
relevant Reduction Date), and (c) also have Interest Periods
extending beyond that Reduction Date, is less than or equal to the
amount of the Total Commitments as reduced on such Reduction Date;
and
	 
	 	(iv)	 	if the proposed Loan is to be made to CGG Marine, such that the
aggregate of (i) its Dollar Amount, (ii) the Dollar Amount of any
outstanding Loans to CGG Marine and (iii)

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	 	 	 	the Dollar Amount of any Loans to CGG Marine that are due to be
made on or before the proposed Utilisation Date (in each case other
than any Loans to CGG Marine that are due to be repaid or prepaid
on or before the proposed Utilisation Date), is less than or equal
to the Available CGG Marine Facility; and
	 
	 	(v)	 	if the proposed Loan is to be made to Sercel, such that the
aggregate of (i) its Dollar Amount, (ii) the Dollar Amount of any
outstanding Loans to Sercel and (iii) the Dollar Amount of any Loans
to Sercel that are due to be made on or before the proposed
Utilisation Date (in each case other than any Loans to Sercel that
are due to be repaid or prepaid on or before the proposed Utilisation
Date), is less than or equal to the Available Sercel Facility; and
	 
	 	(vi)	 	in any event, such that its Dollar Amount is less than or equal
to the Available Facility.

	5.4	 	Lenders’ participation

	 	(a)	 	If the conditions set out in this Agreement have been met, each Lender
shall make its participation in each Loan available by the Utilisation
Date through its Facility Office.
	 
	 	(b)	 	The amount of each Lender’s participation in each Loan will be equal to
the proportion borne by its Available Commitment to the Available Facility
immediately prior to making the Loan.
	 
	 	(c)	 	The Agent shall determine the Dollar Amount of each Loan which is to be
made in euro and shall notify each Lender of the amount, currency and the
Dollar Amount of each Loan and the amount of its participation in that
Loan, in each case by the Specified Time.

	6.	 	CURRENCIES
	 
	6.1	 	Selection of currency
	 
	 	 	A Borrower shall select the currency of a Loan in a Utilisation Request.
	 
	6.2	 	Unavailability of a currency
	 
	 	 	If before the Specified Time on any Quotation Day relating to a proposed
Loan in euros:

	 	(a)	 	a Lender notifies the Agent that euros are not readily
available to it in the amount required; or
	 
	 	(b)	 	a Lender notifies the Agent that compliance with its obligation
to participate in a Loan in euros would contravene a law or
regulation applicable to it,

	 	the Agent will give notice to the relevant Borrower to that effect by the
Specified Time on that day. In this event, any Lender that gives notice
pursuant to this Clause 6.2 will be required to participate in the Loan in
dollars (in an amount equal to that Lender’s proportion of the Dollar
Amount or, in respect of a Rollover Loan, an amount equal to that Lender’s
proportion of the Dollar Amount of the Rollover Loan that is due to be
made) and its participation will be treated as a separate Loan denominated
in dollars under the Facility.

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	6.3	 	Participation in a Loan
	 
	 	 	Each Lender’s participation in a Loan will be determined in accordance
with paragraph (b) of Clause 5.4 (Lenders’ participation).

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SECTION 4

REPAYMENT, PREPAYMENT AND CANCELLATION

	7.	 	REPAYMENT
	 
	7.1	 	Repayment of Loans

Each Borrower which has drawn a Loan shall repay that Loan on the last day
of its Interest Period or, if earlier, on the Termination Date.
	 
	7.2	 	Reduction of the Facility

	 	(a)	 	The Total Commitments shall be reduced in instalments by an amount equal
to twenty million dollars ($20,000,000) on each Reduction Date.
	 
	 	(b)	 	Each Borrower shall ensure that sufficient Loans are repaid on a
Reduction Date to the extent necessary so that the aggregate of the Dollar
Amounts of the outstanding Loans (after that repayment) is equal to or
less than the reduced amount of the Total Commitments.
	 
	 	(c)	 	Any reduction of the Total Commitments shall reduce rateably the
Commitment of each Lender.
	 
	 	(d)	 	If the Principal Company cancels the whole or any part of the Commitments
in accordance with Clause 8.3 (Voluntary cancellation), Clause 8.5 (Right
of repayment and cancellation in relation to a single Lender) or if the
Commitment of any Lender is reduced under Clause 8.1 (Illegality), then
the amount of the Reduction Instalment for each Reduction Date falling
after that cancellation will reduced pro rata by the amount cancelled.

	8.	 	PREPAYMENT AND CANCELLATION
	 
	8.1	 	Illegality
	 
	 	 	If, at any time, it is or becomes unlawful in any applicable jurisdiction
for a Lender to perform any of its obligations as contemplated by this
Agreement or to fund or maintain its participation in any Loan:

	 	(a)	 	that Lender shall promptly notify the Agent upon becoming aware
of that event;
	 
	 	(b)	 	upon the Agent notifying the Principal Company, the Commitment
of that Lender will be immediately cancelled; and
	 
	 	(c)	 	each Borrower shall repay that Lender’s participation in the
Loans made to that Borrower on the last day of the Interest Period
for each Loan occurring after the Agent has notified the Principal
Company or, if earlier, the date specified by the Lender in the
notice delivered to the Agent (being no earlier than the last day of
any applicable grace period permitted by law).

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	8.2	 	Change of control

	 	(a)	 	If any person or group of persons acting in concert gains control of the
Principal Company:

	 	(i)	 	the Principal Company shall promptly notify the Agent upon
becoming aware of that event; and
	 
	 	(ii)	 	if the Majority Lenders so require, the Agent shall, by not
less than thirty (30) days notice to the Borrowers, cancel the
Facility and declare all outstanding Loans, together with accrued
interest, and all other amounts accrued under the Finance Documents
immediately due and payable, whereupon the Facility will be cancelled
and all such outstanding amounts will become immediately due and
payable.

	 	(b)	 	For the purpose of paragraph (a) above “control” has the meaning given in
article L.233-3 of the French Code de commerce.
	 
	 	(c)	 	For the purpose of paragraph (a) above “acting in concert” has the
meaning given in article L.233-10 of the French Code de commerce.

	8.3	 	Voluntary cancellation
	 
	 	 	The Principal Company may, if it gives the Agent not less than thirty (30)
days’ (or such shorter period (being not less than ten (10) days) as the
Majority Lenders may agree) prior written notice, cancel, without premium
or penalty, the whole or any part (being a minimum amount of five million
dollars ($5,000,000) (and an integral multiple of one million dollars
($1,000,000)) of the Available Facility. Any cancellation under this
Clause 8.3 shall reduce the Commitments of the Lenders rateably.
	 
	8.4	 	Voluntary prepayment
	 
	 	 	A Borrower to which a Loan has been made may, if it gives the Agent not
less than ten (10) Business Days’ prior notice, prepay, the whole or any
part of any Loan (but, if in part, being an amount that reduces the Dollar
Amount of the relevant Loan by a minimum amount of five million dollars
($5,000,000) (and an integral multiple of one million dollars
($1,000,000)).
	 
	8.5	 	Right of repayment and cancellation in relation to a single Lender

	 	(a)	 	If:

	 	(i)	 	any sum payable to any Lender by a Borrower is required to be
increased under paragraph (c) of Clause 13.2 (Tax gross-up) or under
an equivalent provision of any Finance Document;
	 
	 	(ii)	 	any Lender claims indemnification from the Principal Company
under Clause 13.3 (Tax indemnity) or Clause 14.1 (Increased costs);
or
	 
	 	(iii)	 	any Lender notifies the Agent of its Additional Cost Rate
under paragraph 3 of Schedule 4 (Mandatory Cost formulae);

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	 	 	 	subject to a five (5) Business Days’ prior written notice, the Principal
Company may, whilst (in the case of paragraphs (i) and (ii) above) the
circumstance giving rise to the requirement or indemnification continues
or (in the case of paragraph (iii) above) that Additional Cost Rate is
greater than zero, give the Agent notice of cancellation of the Commitment
of that Lender and its intention to procure the repayment of that Lender’s
participation in the Loans.
	 
	 	(b)	 	On receipt of a notice referred to in paragraph (a) above, the Commitment
of that Lender shall immediately be reduced to zero.
	 
	 	(c)	 	On the last day of each Interest Period which ends after the Principal
Company has given notice under paragraph (a) above (or, if earlier, the
date specified by the Principal Company in that notice), each Borrower to
which a Loan is outstanding shall repay that Lender’s participation in
that Loan.

	8.6	 	Mandatory prepayment and cancellation in relation to a single Lender
	 
	 	 	If it becomes unlawful for a Borrower to perform any of its obligations to
any Lender under paragraph (c) of Clause 13.2 (Tax gross-up) or under an
equivalent provision of any Finance Document,

	 	(a)	 	to the extent that, and for such period as, it is unlawful for that
Borrower to perform its obligations to any Lender under paragraph (c) of
Clause 13.2 (Tax gross-up) or under an equivalent provision of any Finance
Document, notwithstanding such provisions, that Borrower shall not be
obliged to perform such obligations;
	 
	 	(b)	 	the relevant Borrower shall promptly notify the Agent upon becoming aware
of that event;
	 
	 	(c)	 	upon the Agent notifying that Lender, its Commitment will be immediately
cancelled; and
	 
	 	(d)	 	that Borrower shall repay that Lender’s participation in the Loans made
to that Borrower on the last day of each Interest Period which ends after
that Borrower has given notice under paragraph (b) above or, if earlier,
the date specified by that Lender in a notice delivered to the Agent
(being no earlier than the last day of any applicable grace period
permitted by law).

	8.7	 	Restrictions

	 	(a)	 	Any notice of cancellation or prepayment given by any Party under this
Clause 8 shall be irrevocable and, unless a contrary indication appears in
this Agreement, shall specify the date or dates upon which the relevant
cancellation or prepayment is to be made and the amount of that
cancellation or prepayment.
	 
	 	(b)	 	Any prepayment under this Agreement shall be made together with accrued
interest on the amount prepaid and, subject to any Break Costs, without
premium or penalty.
	 
	 	(c)	 	Unless a contrary indication appears in this Agreement, any part of the
Facility which is prepaid may be reborrowed in accordance with the terms
of this Agreement.
	 
	 	(d)	 	The Borrowers shall not repay or prepay all or any part of the Loans or
cancel all or any part of the Commitments except at the times and in the
manner expressly provided for in this Agreement.

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	 	(e)	 	No amount of the Total Commitments, or of any Commitment, cancelled under
this Agreement may be subsequently reinstated.
	 
	 	(f)	 	If the Agent receives a notice under this Clause 8 it shall promptly
forward a copy of that notice to either the Principal Company or the
affected Lender, as appropriate.

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SECTION 5

COSTS OF UTILISATION

	9.	 	INTEREST
	 
	9.1	 	Calculation of interest
	 
	 	 	The rate of interest on each Loan at any time is the percentage rate per
annum which is the aggregate of the applicable:

	 	(a)	 	Margin at such time;
	 
	 	(b)	 	LIBOR or, in relation to any Loan in euro, EURIBOR, for the
Interest Period applicable to such Loan; and
	 
	 	(c)	 	Mandatory Cost, if any.

	9.2	 	Payment of interest
	 
	 	 	The Borrower to which a Loan has been made shall pay accrued interest on
that Loan on the last day of each Interest Period (and, if the Interest
Period is longer than six Months, on the dates falling at six Monthly
intervals after the first day of the Interest Period).
	 
	9.3	 	Default interest

	 	(a)	 	If a Borrower fails to pay any amount payable by it under a Finance
Document on its due date, interest shall accrue to the fullest extent
permitted by law on the overdue amount from the due date up to the date of
actual payment (both before and after judgment) at a rate which, subject
to paragraph (b) below, is one per cent (1%) higher than the rate which
would have been payable if the overdue amount had, during the period of
non-payment, constituted a Loan in the currency of the overdue amount for
successive Interest Periods, each of a duration selected by the Agent.
Any interest accruing under this Clause 9.3 shall be immediately payable
by the Borrower on demand by the Agent.
	 
	 	(b)	 	If any overdue amount consists of all or part of a Loan which became due
on a day which was not the last day of an Interest Period relating to that
Loan:

	 	(i)	 	the first Interest Period for that overdue amount shall have a
duration equal to the unexpired portion of the current Interest
Period relating to that Loan; and
	 
	 	(ii)	 	the rate of interest applying to the overdue amount during that
first Interest Period shall be one per cent. (1%) higher than the
rate which would have applied if the overdue amount had not become
due.

	 	(c)	 	Default interest (if unpaid) arising on an overdue amount will be
compounded with the overdue amount only if, within the meaning of Article
1154 of the French Code civil, such interest is due for a period of at
least one year, but will remain immediately due and payable.

	9.4	 	Notification of rates of interest
	 
	 	 	The Agent shall promptly notify the Lenders and the relevant Borrower of
the determination of a rate of interest under this Agreement.

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	9.5	 	Effective Global Rate (Taux Effectif Global)
	 
	 	 	For the purposes of articles L. 313-1 et seq., R. 313-1 and R. 313-2 of
the Code de la consommation, the Parties acknowledge that by virtue of
certain characteristics of the Facility (and in particular the variable
interest rate applicable to Loans and the Borrower’s right to select the
currency and the duration of the Interest Period of each Loan) the taux
effectif global cannot be calculated at the date of this Agreement.
However, the Original Borrowers acknowledge that they have received from
the Agent a letter, substantially in the form of Schedule 12 (Form of TEG
letter), containing an indicative calculation of the taux effectif global,
based on figured examples calculated on assumptions as to the taux de
période and durée de période set out in that letter. The Parties
acknowledge that that letter forms part of this Agreement.
	 
	10.	 	INTEREST PERIODS
	 
	10.1	 	Selection of Interest Periods

	 	(a)	 	A Borrower shall select an Interest Period for a Loan to that Borrower in
the Utilisation Request for that Loan.
	 
	 	(b)	 	Subject to this Clause 10, a Borrower may select an Interest Period of
one (1), two (2), three (3) or six (6) Months or any other period agreed
between the Principal Company and the Agent (acting on the instructions of
all the Lenders).
	 
	 	(c)	 	Each Interest Period for a Loan shall start on the Utilisation Date for
that Loan.
	 
	 	(d)	 	An Interest Period for a Loan shall not extend beyond the Termination
Date.
	 
	 	(e)	 	A Loan has one Interest Period only.

	10.2	 	Changes to Interest Periods

	 	(a)	 	Prior to determining the interest rate for a Loan, the Agent may, subject
to prior notice to the Lenders, shorten the Interest Period for any Loan
to ensure that, when aggregated with the Available Facility, there are
sufficient Loans (with an aggregate Dollar Amount equal to or greater than
the Reduction Instalment) which have an Interest Period ending on a
Reduction Date for the scheduled reduction to occur.
	 
	 	(b)	 	If the Agent makes any of the changes to an Interest Period referred to
in this Clause 10.2, it shall promptly notify the Principal Company and
the Lenders.

	10.3	 	Non-Business Days
	 
	 	 	If an Interest Period would otherwise end on a day which is not a Business
Day, that Interest Period will instead end on the next Business Day in
that calendar month (if there is one) or the preceding Business Day (if
there is not).
	 
	11.	 	CHANGES TO THE CALCULATION OF INTEREST
	 
	11.1	 	Absence of quotations
	 
	 	 	Subject to Clause 11.2 (Market disruption), if LIBOR or, if applicable,
EURIBOR is to be determined by reference to the Reference Banks but a
Reference Bank does not supply a quotation

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	 	 	by the Specified Time on the Quotation Day, the applicable LIBOR or
EURIBOR shall be determined on the basis of the quotations of the
remaining Reference Banks.
	 
	11.2	 	Market disruption

	 	(a)	 	If a Market Disruption Event occurs in relation to a Loan for any
Interest Period, then the rate of interest on each Lender’s share of that
Loan for the Interest Period shall be the rate per annum which is the sum
of:

	 	(i)	 	the Margin;
	 
	 	(ii)	 	the rate notified to the Agent by that Lender as soon as
practicable and in any event before interest is due to be paid in
respect of that Interest Period, to be that which expresses as a
percentage rate per annum the cost to that Lender of funding its
participation in that Loan from whatever source it may reasonably
select; and
	 
	 	(iii)	 	the Mandatory Cost, if any, applicable to that Lender’s
participation in the Loan.

	 	(b)	 	In this Agreement “Market Disruption Event” means:

	 	(i)	 	at or about noon on the Quotation Day for the relevant Interest
Period the Screen Rate is not available and none or only one of the
Reference Banks supplies a rate to the Agent to determine LIBOR or,
if applicable, EURIBOR for the relevant currency and Interest Period;
or
	 
	 	(ii)	 	before close of business in Paris on the Quotation Day for the
relevant Interest Period, the Agent receives notifications from a
Lender or Lenders (whose participations in a Loan exceed thirty five
per cent. (35%) of that Loan) that the cost to it of obtaining
matching deposits in the Relevant Interbank Market would be in excess
of LIBOR or, if applicable, EURIBOR.

	11.3	 	Alternative basis of interest or funding

	 	(a)	 	If a Market Disruption Event occurs and the Agent or the Principal
Company so requires, the Agent and the Principal Company shall enter into
negotiations (for a period of not more than thirty days) with a view to
agreeing a substitute basis for determining the rate of interest.
	 
	 	(b)	 	Any alternative basis agreed pursuant to paragraph (a) above shall, with
the prior consent of all the Lenders and the Principal Company, be binding
on all Parties.

	11.4	 	Break Costs

	 	(a)	 	Each Borrower shall, within three (3) Business Days of demand by a
Finance Party, pay to that Finance Party its Break Costs attributable to
all or any part of a Loan or Unpaid Sum being paid by that Borrower on a
day other than the last day of an Interest Period for that Loan or Unpaid
Sum.
	 
	 	(b)	 	Each Lender shall, as soon as reasonably practicable after a demand by
the Agent, provide a certificate confirming the amount of its Break Costs
for any Interest Period in which they accrue.

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	12.	 	FEES
	 
	12.1	 	Commitment fee

	 	(a)	 	The Principal Company shall pay, on behalf of itself and the other
Borrowers, to the Agent (for the account of each Lender) a fee in dollars
computed, at any time, at the rate per annum equal to forty per cent.
(40%) of the applicable Margin at such time on that Lender’s Available
Commitment.
	 
	 	(b)	 	The accrued commitment fee is payable on the last day of each successive
period of three Months, with the first such period commencing on the
Signing Date, which ends during the Availability Period, on the
Termination Date and, if cancelled in full, on the cancelled amount of the
relevant Lender’s Commitment at the time the cancellation is effective.

	12.2	 	Arrangement fee and participation fee
	 
	 	 	The Principal Company shall pay, on behalf of itself and the other
Borrowers, to the Arranger an arrangement fee and the participation fee in
the amount and at the times agreed in a Fee Letter.
	 
	12.3	 	Agency fee
	 
	 	 	The Principal Company shall pay, on behalf of itself and the other
Borrowers, to the Agent (for its own account) an agency fee in the amount
and at the times agreed in a Fee Letter.
	 
	12.4	 	Allocation of Fees among the Borrowers
	 
	 	 	Without in any manner limiting or otherwise affecting the obligations of
the Principal Company pursuant to this Clause 12, the fees referred to in
Clause 12.1 (Commitment fee), 12.2 (Arrangement fee and participation fee)
and 12.3 (Agency fee) shall be allocated, as between the Principal Company
and each of the other Borrowers, in accordance with the rules set out in
Schedule 11 (Allocation of fees among the Borrowers).

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SECTION 6

ADDITIONAL PAYMENT OBLIGATIONS

	13.	 	TAX GROSS-UP AND INDEMNITIES
	 
	13.1	 	Tax Definitions

	 	(a)	 	In this Agreement:
	 
	 	 	 	“Protected Party” means a Finance Party which is or will be subject to any
liability, or required to make any payment, for or on account of Tax in
relation to a sum received or receivable (or any sum deemed for the
purposes of Tax to be received or receivable) under a Finance Document.
	 
	 	 	 	“Qualifying Lender” means a Lender which:

	 	(i)	 	has its Facility Office in France; or
	 
	 	(ii)	 	fulfils the conditions imposed by French law taking into
account, as the case may be, any double taxation agreement in force
on the date (subject to the completion of any necessary procedural
formalities), in order for that payment not to be subject to (or as
the case may be, to be exempt from) any Tax Deduction.

	 	 	 	“Tax Credit” means a credit against, relief or remission for, or repayment
of any Tax.
	 
	 	 	 	“Tax Deduction” means a deduction or withholding for or on account of Tax
from a payment under a Finance Document.
	 
	 	 	 	“Tax Payment” means an increased payment made by a Borrower to a Finance
Party under Clause 13.2 (Tax gross-up) or a payment under Clause 13.3 (Tax
indemnity).
	 
	 	 	 	“Treaty Lender” means a Lender which is entitled to that payment under a
double taxation agreement (subject to the completion of any necessary
procedural formalities) without a Tax Deduction.
	 
	 	(b)	 	Unless a contrary indication appears, in this Clause 13 a reference to
“determines” or “determined” means a determination made in the absolute
discretion of the person making the determination.

	13.2	 	Tax gross-up

	 	(a)	 	Each Borrower shall make all payments to be made by it without any Tax
Deduction, unless a Tax Deduction is required by law.
	 
	 	(b)	 	The Principal Company shall promptly upon becoming aware that a Borrower
must make a Tax Deduction (or that there is any change in the rate or the
basis of a Tax Deduction) notify the Agent accordingly. Similarly, a
Lender shall notify the Agent on becoming so aware in respect of a payment
payable to that Lender. If the Agent receives such notification from a
Lender it shall notify the Principal Company and that Borrower.
	 
	 	(c)	 	If a Tax Deduction is required by law to be made by a Borrower, the
amount of the payment due from that Borrower to a Finance Party shall be
increased to an amount which (after making any

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	 	 	 	Tax Deduction) leaves an amount equal to the payment which would have been
due if no Tax Deduction had been required.
	 
	 	(d)	 	A Borrower is not required to make an increased payment to a Lender under
paragraph (c) above for a Tax Deduction in respect of tax imposed by
France from a payment of interest on a Loan, if on the date on which the
payment falls due:

	 	(i)	 	the payment could have been made to the relevant Lender without
a Tax Deduction if it was a Qualifying Lender, but on that date that
Lender is not or has ceased to be a Qualifying Lender other than as a
result of any change after the date it became a Lender under this
Agreement in (or in the interpretation, administration, or
application of) any law, regulation or double taxation agreement, or
any published practice or concession of any relevant taxing
authority; or
	 
	 	(ii)	 	the relevant Lender is a Treaty Lender and the Borrower making
the payment is able to demonstrate that the payment could have been
made to the Lender without the Tax Deduction had that Lender complied
with its obligations under paragraph (g) below.

	 	(e)	 	If a Borrower is required to make a Tax Deduction, that Borrower shall
make that Tax Deduction and any payment required in connection with that
Tax Deduction within the time allowed and in the minimum amount required
by law.
	 
	 	(f)	 	Within thirty (30) days of making either a Tax Deduction or any payment
required in connection with that Tax Deduction, the Borrower making that
Tax Deduction shall deliver to the Agent for the Finance Party entitled to
the payment evidence reasonably satisfactory to that Finance Party that
the Tax Deduction has been made or (as applicable) any appropriate payment
paid to the relevant taxing authority.
	 
	 	(g)	 	A Treaty Lender and each Borrower which makes a payment to which that
Treaty Lender is entitled shall co-operate in completing any procedural
formalities necessary for that Borrower to obtain authorisation to make
that payment without a Tax Deduction.
	 
	 	(h)	 	Each Lender represents that, as at the Signing Date or, if it becomes a
party to this Agreement after the Signing Date, on the date it becomes
party to this Agreement, it is a Qualifying Lender.

	13.3	 	Tax indemnity

	 	(a)	 	The Principal Company shall (within three (3) Business Days of demand by
the Agent) pay to a Protected Party an amount equal to the loss, liability
or cost which that Protected Party determines will be or has been
(directly or indirectly) suffered for or on account of Tax by that
Protected Party in respect of a Finance Document.
	 
	 	(b)	 	Paragraph (a) above shall not apply:

	 	(i)	 	with respect to any Tax assessed on a Finance Party:

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	 	(A)	 	under the law of the jurisdiction in which that
Finance Party is incorporated or, if different, the
jurisdiction (or jurisdictions) in which that Finance Party is
treated as resident for tax purposes; or
	 
	 	(B)	 	under the law of the jurisdiction in which that
Finance Party’s Facility Office is located in respect of
amounts received or receivable in that jurisdiction,

	 	 	 	if that Tax is imposed on or calculated by reference to the net
income of that Finance Party which is received or receivable (but
not any sum deemed to be received or receivable) by that Finance
Party; or
	 
	 	(ii)	 	to the extent a loss, liability or cost:

	 	(A)	 	is compensated for by an increased payment under
Clause 13.2 (Tax gross-up); or
	 
	 	(B)	 	would have been compensated for by an increased
payment under Clause 13.2 (Tax gross-up) but was not so
compensated solely because one of the exclusions in paragraph
(d) of Clause 13.2 (Tax gross-up) applied.

	 	(c)	 	A Protected Party making, or intending to make a claim under paragraph
(a) above shall promptly notify the Agent of the event which will give, or
has given, rise to the claim, following which the Agent shall notify the
Principal Company.
	 
	 	(d)	 	A Protected Party shall, on receiving a payment from a Borrower under
this Clause 13.3, notify the Agent.

	13.4	 	Tax Credit
	 
	 	 	If a Borrower makes a Tax Payment and the relevant Finance Party
determines that:

	 	(a)	 	a Tax Credit is attributable to that Tax Payment; and
	 
	 	(b)	 	that Finance Party has obtained, utilised and retained that Tax
Credit,

	 	 	the Finance Party shall pay an amount to that Borrower which that Finance
Party determines will leave it (after that payment) in the same after-Tax
position as it would have been in had the Tax Payment not been made by
that Borrower.
	 
	13.5	 	Stamp taxes
	 
	 	 	The Principal Company shall pay and, within three Business Days of demand,
indemnify each Finance Party against any cost, loss or liability that
Finance Party incurs in relation to all stamp duty, registration and other
similar Taxes payable in respect of any Finance Document.
	 
	13.6	 	Value added tax

	 	(a)	 	All consideration expressed to be payable under a Finance Document by any
Party to a Finance Party shall be deemed to be exclusive of any VAT. If
VAT is chargeable, on any supply made by any Finance Party to any Party in
connection with a Finance Document, that Party shall pay to the Finance
Party (in addition to and at the same time as paying the consideration) an
amount equal to the amount of the VAT.

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	 	(b)	 	Where a Finance Document requires any Party to reimburse a Finance Party
for any costs or expenses, that Party shall also at the same time pay and
indemnify the Finance Party against all VAT incurred by the Finance Party
in respect of the costs or expenses to the extent that the Finance Party
reasonably determines that it is not entitled to credit or repayment of
the VAT.

	14.	 	INCREASED COSTS
	 
	14.1	 	Increased costs

	 	(a)	 	Subject to Clause 14.3 (Exceptions) the Principal Company shall, within
three Business Days of a demand by the Agent, pay for the account of a
Finance Party the amount of any Increased Costs incurred by that Finance
Party or any of its Affiliates as a result of (i) the introduction of or
any change in (or in the interpretation, administration or application of)
any law or regulation or (ii) compliance with any law or regulation made
after the date of this Agreement.
	 
	 	(b)	 	In this Agreement “Increased Costs” means:

	 	(i)	 	a reduction in the rate of return from the Facility or on a
Finance Party’s (or its Affiliate’s) overall capital;
	 
	 	(ii)	 	an additional or increased cost; or
	 
	 	(iii)	 	a reduction of any amount due and payable under any Finance
Document,

	 	 	 	which is incurred or suffered by a Finance Party or any of its Affiliates
to the extent that it is attributable to that Finance Party having entered
into its Commitment or funding or performing its obligations under any
Finance Document.

	14.2	 	Increased cost claims

	 	(a)	 	A Finance Party intending to make a claim pursuant to Clause 14.1
(Increased costs) shall notify the Agent of the event giving rise to the
claim, following which the Agent shall promptly notify the Principal
Company.
	 
	 	(b)	 	Each Finance Party shall, as soon as practicable after a demand by the
Agent, provide a certificate confirming the amount of its Increased Costs.

	14.3	 	Exceptions
	 
	 	 	Clause 14.1 (Increased costs) does not apply to the extent any Increased
Cost is:

	 	(a)	 	attributable to a Tax Deduction required by law to be made by a Borrower;
	 
	 	(b)	 	compensated for by Clause 13.3 (Tax indemnity) (or would have been
compensated for under Clause 13.3 (Tax indemnity) but was not so
compensated solely because one of the exclusions in paragraph (b) of
Clause 13.3 (Tax indemnity) applied);
	 
	 	(c)	 	compensated for by the payment of the Mandatory Cost; or
	 
	 	(d)	 	attributable to the wilful breach by the relevant Finance Party or its
Affiliates of any law or regulation.

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	15.	 	OTHER INDEMNITIES
	 
	15.1	 	Currency indemnity

	 	(a)	 	If any sum due from a Borrower under the Finance Documents (a “Sum”), or
any order, judgment or award given or made in relation to a Sum, has to be
converted from the currency (the “First Currency”) in which that Sum is
payable into another currency (the “Second Currency”) for the purpose of:

	 	(i)	 	making or filing a claim or proof against the Borrower;
	 
	 	(ii)	 	obtaining or enforcing an order, judgment or award in relation
to any litigation or arbitration proceedings,

	 	 	 	that Borrower shall as an independent obligation within three Business
Days of demand, indemnify to the extent permitted by law each Finance
Party to whom that Sum is due against any cost, loss or liability arising
out of or as a result of the conversion including any discrepancy between
(A) the rate of exchange used to convert that Sum from the First Currency
into the Second Currency and (B) the rate or rates of exchange available
to that person at the time of its receipt of that Sum.
	 
	 	(b)	 	Each Borrower waives any right it may have in any jurisdiction to pay any
amount under the Finance Documents in a currency or currency unit other
than that in which it is expressed to be payable.

	15.2	 	Other indemnities
	 
	 	 	The Principal Company shall (or shall procure that another Borrower will),
within three Business Days of demand, indemnify each Finance Party against
any cost, loss or liability incurred by that Finance Party as a result of:

	 	(a)	 	the occurrence of any Event of Default;
	 
	 	(b)	 	a failure by a Borrower to pay any amount due under a Finance
Document on its due date, including without limitation, any cost,
loss or liability arising as a result of Clause 27 (Sharing among the
Finance Parties);
	 
	 	(c)	 	funding, or making arrangements to fund, its participation in a
Loan requested by a Borrower in a Utilisation Request but not made by
reason of the operation of any one or more of the provisions of this
Agreement (other than by reason of default or negligence by that
Finance Party alone); or
	 
	 	(d)	 	a Loan (or part of a Loan) not being prepaid in accordance with
a notice of prepayment given by a Borrower.

	15.3	 	Indemnity to the Agent
	 
	 	 	The Principal Company shall promptly indemnify the Agent (acting
reasonably) against any cost, loss or liability incurred by the Agent as a
result of:

	 	(a)	 	investigating any event which it reasonably believes is a
Default; or

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	 	(b)	 	acting or relying on any notice, request or instruction which
it reasonably believes to be genuine, correct and appropriately
authorised.

	16.	 	MITIGATION BY THE LENDERS
	 
	16.1	 	Mitigation

	 	(a)	 	Each Finance Party shall, in consultation with the Principal Company,
take all reasonable steps to mitigate any circumstances which arise and
which would result in any amount becoming payable under or pursuant to, or
cancelled pursuant to, any of Clause 8.1 (Illegality), Clause 13 (Tax
gross-up and indemnities), Clause 14 (Increased costs) or paragraph 3 of
Schedule 4 (Mandatory Cost formulae) including (but not limited to)
transferring its rights and obligations under the Finance Documents to
another Affiliate or Facility Office.
	 
	 	(b)	 	Paragraph (a) above does not in any way limit the obligations of any
Borrower under the Finance Documents.

	16.2	 	Limitation of liability

	 	(a)	 	The Principal Company shall indemnify each Finance Party for all
liabilities, costs and expenses reasonably incurred by that Finance Party
as a result of steps taken by it under Clause 16.1 (Mitigation).
	 
	 	(b)	 	A Finance Party is not obliged to take any steps under Clause 16.1
(Mitigation) if, in the opinion of that Finance Party (acting reasonably),
to do so might be prejudicial to it or to do so might have any adverse
effect upon its business, operations or financial condition (other than
any minor costs and expenses of an administrative nature).

	17.	 	COSTS AND EXPENSES
	 
	17.1	 	Transaction expenses
	 
	 	 	Subject to the provisions of paragraph 6 of the Mandate Letter, the
Principal Company shall promptly on demand pay the Agent and the Arranger
the amount of all costs and expenses (including legal fees, travel and
other out pocket expenses) reasonably incurred by any of them in
connection with the negotiation, preparation, printing, execution and
syndication of:

	 	(a)	 	this Agreement and any other documents referred to in this
Agreement; and
	 
	 	(b)	 	any other Finance Documents (including, but not limited to, any
such Finance Document executed after the date of this Agreement).

	17.2	 	Amendment costs
	 
	 	 	If (a) a Borrower requests an amendment, waiver or consent or (b) an
amendment is required pursuant to Clause 28.9 (Change of currency), the
Principal Company shall, within three (3) Business Days of demand,
reimburse the Agent for the amount of all costs and expenses (including
legal fees) reasonably incurred by the Agent in responding to, evaluating,
negotiating or complying with that request or requirement.

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	17.3	 	Enforcement costs
	 
	 	 	The Principal Company shall, within three Business Days of demand, pay to
each Finance Party the amount of all reasonable costs and expenses
(including legal fees and necessary translation costs) incurred by that
Finance Party in connection with the enforcement of, or the preservation
of any rights under, any Finance Document.

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SECTION 7

REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

	18.	 	REPRESENTATIONS
	 
	 	 	Each Borrower makes the representations and warranties set out in this
Clause 18 to each Finance Party on the date of this Agreement.
	 
	18.1	 	Status and due incorporation
	 
	(a)	 	It is a corporation, duly incorporated and validly existing under the law
of France.
	 
	(b)	 	It and each of its Subsidiaries has the power to own its assets and carry
on its business as it is being conducted.
	 
	18.2	 	Legal validity
	 
	 	 	The obligations expressed to be assumed by it in each Finance Document
are, subject to any general principles of law limiting its obligations
which are specifically referred to in any legal opinion delivered pursuant
to Clause 4 (Conditions of Utilisation), legal, valid, binding and
enforceable obligations.
	 
	18.3	 	Non-conflict with other obligations
	 
	 	 	The entry into and performance by it of, and the transactions contemplated
by, and its creation of the Security constituted by, the Finance Documents
do not and will not conflict with:

	 	(a)	 	any law or regulation applicable to it;
	 
	 	(b)	 	its and each of its Subsidiaries’ constitutional documents; or
	 
	 	(c)	 	any agreement or instrument binding upon it or any of its
Subsidiaries or any of its or any of its Subsidiaries’ assets to the
extent that such conflict (i) could reasonably be expected to have a
Material Adverse Effect or (ii) arises from a material provision of
any Financial Indebtedness incurred by it.

	18.4	 	Powers and authority
	 
	 	 	It has the power to enter into, perform and deliver, and has taken all
necessary action to authorise its entry into, performance and delivery of,
and its creation of the Security constituted by, the Finance Documents to
which it is a party and the transactions contemplated by those Finance
Documents.
	 
	18.5	 	Authorisations
	 
	 	 	All Authorisations required or desirable:

	 	(a)	 	to enable it lawfully to enter into, exercise its rights and
comply with its obligations in, and to create the Security
constituted by, the Finance Documents to which it is a party; and
	 
	 	(b)	 	to make the Finance Documents to which it is a party admissible
in evidence in France, subject to any general principles of law
limiting its obligations which are specifically referred to in any
legal opinion delivered pursuant to Clause 4 (Conditions of
Utilisation),

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	 	 	 	have been obtained or effected and are in full force and effect.

	18.6	 	Governing law, Jurisdiction and enforcement
	 
	(c)	 	The choice of French law as the governing law of the Finance Documents
will be recognised and enforced in France.
	 
	(d)	 	The tribunaux within the jurisdiction of the Cour d’appel of Paris
(tribunaux du ressort de la Cour d’appel de Paris) will accept
jurisdiction over proceedings against a Borrower in accordance with this
Agreement.
	 
	(e)	 	Any judgment obtained in France in relation to a Finance Document will be
recognised and enforced in France.
	 
	18.7	 	Taxes on payments
	 
	 	 	It is not required under the law of France to make any deduction for or on
account of Tax from any payment it may make under any Finance Document to
a Qualifying Lender.
	 
	18.8	 	No filing or stamp taxes
	 
	 	 	Under the law of France it is not necessary that the Finance Documents be
filed, recorded or enrolled with any court or other authority in that
jurisdiction or that any stamp, registration or similar tax be paid on or
in relation to the Finance Documents or the transactions contemplated by
the Finance Documents.
	 
	18.9	 	No default
	 
	(a)	 	No Event of Default is continuing or might reasonably be expected to
result from the making of any Utilisation.
	 
	(b)	 	No other event or circumstance is outstanding which constitutes a default
under any other agreement or instrument which is binding on it or any of
its Principal Subsidiaries or to which its (or its Principal
Subsidiaries’) assets are subject which would be likely to have a Material
Adverse Effect.
	 
	18.10	 	Full Disclosure
	 
	(a)	 	Any written factual information provided by any member of the Group for
the purposes of the Information Memorandum was true and accurate in all
material respects as at the date it was provided or as at the date (if
any) at which it is stated.
	 
	(b)	 	The financial projections contained in the Information Memorandum have
been prepared on the basis of recent historical information and on the
basis of reasonable assumptions.
	 
	(c)	 	No information has been given or withheld by any member of the Group that
results in the information contained in the Information Memorandum being
untrue or misleading in any material respect.
	 
	(d)	 	All written information (other than in the Information Memorandum)
supplied by any member of the Group is true, complete and accurate in all
material respects as at the date it was given and is not misleading in any
respect.

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	18.11	 	Financial statements
	 
	(a)	 	Its Original Financial Statements were prepared in accordance with GAAP
consistently applied.
	 
	(b)	 	Its Original Financial Statements give a true and fair view of its
financial condition and operations (consolidated in the case of the
Principal Company) during the relevant financial year.
	 
	(c)	 	Its most recent audited financial statements (and, in the case of the
Principal Company, the most recent audited consolidated financial
statements) delivered in accordance with Clause 19.1 (Financial
statements) were prepared in accordance with GAAP consistently applied.
	 
	(d)	 	Its most recent audited financial statements (and, in the case of the
Principal Company, the most recent audited consolidated financial
statements) delivered in accordance with Clause 19.1 (Financial
statements) give a true and fair view of its financial condition and
operations (consolidated in the case of the Principal Company) during the
relevant financial year.
	 
	18.12	 	No material adverse change
	 
	 	 	Since the date at which its Original Financial Statements were stated to
be prepared, there has been no change in its business or financial
condition (or the business or consolidated financial condition of the
Group, in the case of the Principal Company), save as disclosed in writing
to the Lenders prior to the Signing Date, which would be reasonably likely
to have a Material Adverse Effect.
	 
	18.13	 	Pari passu ranking
	 
	 	 	The claims of the Finance Parties in respect of its payment obligations
under the Finance Documents rank at least pari passu with the claims of
all its other unsecured and unsubordinated creditors, except for claims
mandatorily preferred by law applying to companies generally.
	 
	18.14	 	Litigation
	 
	 	 	No litigation, arbitration or administrative proceedings of or before any
court, arbitral body or agency which, if adversely determined, might
reasonably be expected to have a Material Adverse Effect have (to the best
of its knowledge and belief) been started or threatened against it or any
of its Subsidiaries.
	 
	18.15	 	Immunity
	 
	 	 	In any proceedings taken in France in relation to any of the Finance
Documents, it will not be entitled to claim or itself or any of its assets
immunity from suit, execution, attachment or other legal process and its
execution of each of the Finance Documents, and the performance its
obligations thereunder, will constitute private and commercial acts done
and performed for private and commercial purposes.
	 
	18.16	 	Existing Security
	 
	 	 	Save for Security referred to in paragraph (c) of Clause 21.3 (Negative
Pledge), no Security exists over all or any of the present or future
revenues or assets of any Borrower or any Principal Subsidiary.

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	18.17	 	No obligation to create security
	 
	 	 	Save as provided by the Finance Documents, its execution of the Finance
Documents, the creation of the Security provided thereunder, its exercise
of its rights and performance of its obligations thereunder, will not
result in the existence of, or oblige any Borrower or any of the Principal
Subsidiaries to create, any Security over all or any of the present or
future revenues or assets of any Borrower or any Principal Subsidiary.
	 
	18.18	 	Insolvency Proceedings and winding-up
	 
	 	 	No member of the Core Group has taken any corporate action nor have any
other steps been taken or legal proceedings been started or (to the best
of its knowledge and belief) threatened against any such member of the
Core Group under any applicable bankruptcy laws for its redressement
judiciaire, liquidation judiciaire, cession totale de l’entreprise,
règlement amiable, winding-up, dissolution, administration or
re-organisation (whether by voluntary arrangement, scheme of arrangement
or otherwise) or for the appointment of a mandataire ad hoc,
administrateur provisoire, mandataire liquidateur, conciliateur, receiver
administrator, administrative receiver, conservator, custodian, trustee or
similar officer of it or of any or all of its assets or revenues.
	 
	18.19	 	Centre of main interests
	 
	 	 	It has its’ “centre of main interests” (as that term is used in Article
3(1) of The Council of the European Union Regulation No. 1346/2000 on
Insolvency Proceedings in France).
	 
	18.20	 	Environmental compliance
	 
	 	 	Each member of the Core Group has performed and observed in all material
respects all Environmental Law, Environmental Permits and all other
material covenants, conditions, restrictions or agreements directly or
indirectly concerned with any contamination, pollution or waste or the
release or discharge of any toxic or hazardous substance in connection
with any real property which is or was at any time owned, leased or
occupied by any member of the Core Group or on which any member of the
Core Group has conducted any activity where failure to do so would be
likely to have a Material Adverse Effect.
	 
	18.21	 	Control of CGG Marine and Sercel
	 
	 	 	CGG Marine and Sercel are both wholly owned Subsidiaries of the Principal Company.
	 
	18.22	 	Repetition
	 
	 	 	The Repeating Representations are deemed to be made by each Borrower by
reference to the facts and circumstances then existing on the date of each
Utilisation Request and the first day of each Interest Period.
	 
	19.	 	INFORMATION UNDERTAKINGS
	 
	 	 	The undertakings in this Clause 19 remain in force from the date of this
Agreement for so long as any amount is outstanding under the Finance
Documents or any Commitment is in force.

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	19.1	 	Financial statements
	 
	 	 	The Principal Company shall supply to the Agent in sufficient copies for
all the Lenders:

	 	(a)	 	as soon as the same become available, but in any event within
six (6) Months after the end of each of its financial years:

	 	(i)	 	its audited consolidated financial statements for
that financial year; and
	 
	 	(ii)	 	the audited financial statements of each other
Borrower for that financial year; and

	 	(b)	 	as soon as the same become available, but in any event within
four (4) Months after the end of each half of each of its financial
years:

	 	(i)	 	its consolidated financial statements for that
financial half year; and
	 
	 	(ii)	 	the financial statements of each other Borrower
for that financial half year.

	19.2	 	Compliance Certificate
	 
	(a)	 	The Principal Company shall supply to the Agent, with each set of
financial statements delivered pursuant to paragraph (a)(i) or (b)(i) of
Clause 19.1 (Financial statements), a Compliance Certificate setting out
(in reasonable detail) computations as to compliance with Clause 20
(Financial covenants) as at the date as at which those financial
statements were drawn up.
	 
	(b)	 	Each Compliance Certificate shall be signed by two people, the chief
financial officer and an Authorised Signatory of the Principal Company.
	 
	(c)	 	Each Compliance Certificate shall (i) certify the amount of any Permitted
Shareholder Advances as at the date on such the financial statements
delivered therewith are drawn up and (ii), if applicable, set out
computations in relation to giving acquisitions or disposals (other than
of multi-data client libraries) by a member of the Group pro forma effect
and being considered as if they had been acquired or disposed of at the
beginning of the Relevant Period to which the financial statements
delivered therewith relate.
	 
	19.3	 	Requirements as to financial statements
	 
	(a)	 	Each set of financial statements delivered by the Principal Company
pursuant to Clause 19.1 (Financial statements) shall be certified by an
Authorised Signatory of the relevant company as fairly representing its
financial condition as at the end of the period to which those financial
statements relate.
	 
	(b)	 	The Principal Company shall procure that each set of financial statements
delivered pursuant to Clause 19.1 (Financial statements) is prepared using
GAAP.
	 
	(c)	 	The Principal Company shall procure that each set of financial statements
of a Borrower delivered pursuant to Clause 19.1 (Financial statements) is
prepared using GAAP, accounting practices and financial reference periods
consistent with those applied in the preparation of the Original Financial
Statements for that Borrower unless, in relation to any set of financial
statements, it notifies the Agent that there has been a change in GAAP,
the accounting practices or reference periods and its auditors (or, if
appropriate, the auditors of that Borrower) deliver to the Agent:

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	 	(i)	 	a description, in form and substance satisfactory to the Agent,
of any change necessary for those financial statements to reflect the
GAAP, accounting practices and reference periods upon which that
Borrower’s Original Financial Statements were prepared; and
	 
	 	(ii)	 	sufficient information, in form and substance satisfactory the
Agent, to enable the Lenders to determine whether Clause 20
(Financial covenants) has been complied with and make an accurate
comparison between the financial position indicated in those
financial statements and that Borrower’s Original Financial
Statements.

	 	 	Any reference in this Agreement to those financial statements shall be
construed as a reference to those financial statements as adjusted to
reflect the basis upon which the Original Financial Statements were
prepared.
	 
	19.4	 	Information: miscellaneous
	 
	 	 	The Principal Company shall supply to the Agent (in sufficient copies for
all the Lenders, if the Agent so requests):

	 	(a)	 	all documents dispatched by the Principal Company to its
shareholders (or any class of them) or its creditors generally at the
same time as they are dispatched;
	 
	 	(b)	 	promptly upon becoming aware of them, the details of any
litigation, arbitration or administrative proceedings which are
current, threatened or pending against any member of the Group, and
which are likely to be adversely determined and, if adversely
determined, would be likely to have a Material Adverse Effect; and
	 
	 	(c)	 	promptly, such further information regarding the financial
condition, business and operations of any member of the Group as any
Finance Party (through the Agent) may reasonably request except to
the extent that disclosure of such information would be in breach of
any law, regulation or duty of confidentiality.

	19.5	 	Notification of default
	 
	(a)	 	Each Borrower shall notify the Agent of any Default (and the steps, if
any, being taken to remedy it) promptly upon becoming aware of its
occurrence (unless that Borrower is aware that a notification has already
been provided by another Borrower).
	 
	(b)	 	Promptly upon a request by the Agent, the Principal Company shall supply
to the Agent a certificate signed by an Authorised Signatory on its behalf
certifying that, to the best of its knowledge and belief, no Default is
continuing (or if a Default is continuing, specifying the Default and the
steps, if any, being taken to remedy it).
	 
	19.6	 	“Know your customer” checks
	 
	(a)	 	Each Borrower shall promptly upon the request of the Agent or any Lender
supply, or procure the supply of, such documentation and other evidence as
is reasonably requested by the Agent (for itself or on behalf of any
Lender and in relation to itself, any Lender or any prospective New
Lender) in order for the Agent, such Lender or any prospective New Lender
to carry out and be satisfied (acting reasonably) with the results of all
necessary “know your customer” or other

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	 	 	checks in relation to any person that it is required to carry out pursuant
to the transactions contemplated in the Finance Documents.
	 
	(b)	 	Each Lender shall promptly upon the request of the Agent supply, or
procure the supply of, such documentation and other evidence as is
reasonably requested by the Agent (for itself) in order for the Agent to
carry out and be satisfied with the results of all necessary “know your
customer” or other checks in relation to any person that it is required to
carry out pursuant to the transactions contemplated in the Finance
Documents.
	 
	19.7	 	List of Principal Subsidiaries
	 
	 	 	At the time the Principal Company deliveries its annual consolidated
financial statements in accordance with paragraph (a) of Clause 19.1
(Financial statements) and, if, at any time, a company becomes a member of
the Group and becomes a Principal Subsidiary, the Principal Company shall
provide the Agent with a list of its Principal Subsidiaries.
	 
	19.8	 	Environmental Claims
	 
	 	 	Each Borrower shall inform the Agent in writing as soon as reasonably
practicable upon becoming aware of the same:

	 	(a)	 	if any Environmental Claim has been commenced or (to the best
of such Borrower’s knowledge and belief) is threatened against any
member of the Core Group, or
	 
	 	(b)	 	of any facts or circumstances which (to the best of such
Borrower’s knowledge and belief) will or are reasonably likely to
result in any Environmental Claim being commenced or threatened
against any member of the Core Group,

	 	 	where the claim would be reasonably likely, if determined against that
member of the Core Group, to have a Material Adverse Effect.
	 
	20.	 	FINANCIAL COVENANTS
	 
	20.1	 	Financial Definitions
	 
	 	 	In this Agreement:
	 
	 	 	“EBITDA” means, in respect of any Relevant Period and using GAAP:

	 	(i)	 	if Relevant Period ends on 31 December, Reference EBITDA for
the annual consolidated financial statements of the Principal Company
for the period ending on such 31 December; and
	 
	 	(ii)	 	if the Relevant Period ends on 30 June, (a) the sum of
Reference EBITDA for the semi-annual consolidated financial
statements of the Principal Company for the period ending on such 30
June and Reference EBITDA for the most recent annual consolidated
financial statements of the Principal Company less (b) Reference
EBITDA for the consolidated semi-annual financial statements of the
Principal Company for the period ending on 30 June in the previous
year,

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	 	 	provided that, in each case in the calculation of EBITDA, acquisitions or
disposals (other than of multi-data client libraries) by a member of the
Group in any such Relevant Period shall, in all cases, be given pro forma
effect and be considered as if they had been acquired or disposed of at
the beginning of that Relevant Period.
	 
	 	 	“Equity” means, in relation to any Relevant Period and using GAAP, the
aggregate of “Total Shareholders Equity”, “Minority Interests” and
“Permitted Shareholder Advances” less “Goodwill” as such items appear in
the Principal Company’s consolidated financial statements for the period
ending on the last day of such Relevant Period and, in the case of
Permitted Shareholder Advances as set out in the Compliance Certificate
provided for such Relevant Period (or, other than for Permitted
Shareholder Advances, if different, the figures that would appear in the
item so entitled in the consolidated financial statements of the Principal
Company presented in the same manner as and prepared in accordance with
the principles and accounting practices followed for preparation of the
financial statements in the Original Financial Statements of the Principal
Company).
	 
	 	 	“Gearing” means the ratio of Net Debt to Equity.
	 
	 	 	“Gross Operating Cashflow” means, in respect of any Relevant Period and
using GAAP:

	 	(i)	 	if Relevant Period ends on 31 December, Reference Gross
Operating Cashflow for the annual consolidated financial statements
of the Principal Company for the period ending on such 31 December;
and
	 
	 	(ii)	 	if the Relevant Period ends on 30 June, (a) the sum of
Reference Gross Operating Cashflow in the semi-annual consolidated
financial statements of the Principal Company for the period ending
on such 30 June and Reference Gross Operating Cashflow in the most
recent annual consolidated financial statements of the Principal
Company less (b) Reference Gross Operating Cashflow in the
consolidated semi-annual financial statements of the Principal
Company for the period ending on 30 June in the previous year.

	 	 	“Leverage” means the ratio of Net Debt to EBITDA.
	 
	 	 	“Net Debt” means, in relation to any Relevant Period, the aggregate of
“Bank overdrafts”, “Short term debt”, “Current portion of long-term debt”
and “Long-term debt” less “Cash and cash equivalents” in the Principal
Company’s consolidated financial statements for the period ending on the
last day of such Relevant Period (or, if different, the figures that would
appear in the item so entitled in the consolidated financial statements of
the Principal Company presented in the same manner as and prepared in
accordance with the principles and accounting practices followed for
preparation of the financial statements in the Original Financial
Statements of the Principal Company).
	 
	 	 	“Operational Leverage” means the ratio of Net Debt denominated in euro and
divided by the euro/dollar closing exchange rate for the Relevant Period
(as indicated in the Principal Company’s consolidated financial statements
relating to the period ending on the last day of such Relevant Period) to
Gross Operating Cashflow denominated in euro and divided by the
euro/dollar average

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	 	 	exchange rate for the Relevant Period (as indicated in the Principal
Company’s consolidated financial statements relating to the period ending
on the last day of such Relevant Period).
	 
	 	 	“Permitted Shareholder Advances” means, as at the last day of any
applicable Relevant Period, the aggregate, at such time, of the amount of
any loans made to the Principal Company by its shareholders and nominal
amount of any securities issued by the Principal Company to its
shareholders (and if any such loan is denominated in a currency other than
euros, converted at the spot rate of exchange quoted by the European
Central Bank (Banque Centrale Européenne) as the rate offered for the
purchase of the relevant currency with euros at or about 14:15 for
delivery three (3) Business Days later on the last day of the applicable
Relevant Period) provided that the Agent shall have received such evidence
as he may reasonably require that (i) such advances are fully subordinated
to the sums outstanding under this Agreement as to priority and payment,
(ii) that no principal amount under such advances shall be repayable prior
to the Termination Date (iii) that interest arising thereunder (which
shall accrue at a rate consistent with fair market practice) shall be
capitalised throughout the term of such advances and, in any event, shall
only become payable after the Termination Date.
	 
	 	 	“Reference EBITDA” means, in respect of any set of consolidated financial
statements of the Principal Company, “Operating income (loss)” excluding
“Non-recurring revenues (expenses) — net” plus “Depreciation and
amortization” in the such consolidated financial statements, (or, in each
case, if different, the figures that would appear in the items so entitled
in the consolidated financial statements of the Principal Company
presented in the same manner as and prepared in accordance with the
principles and accounting practices followed for preparation of the
financial statements in the Original Financial Statements of the Principal
Company).
	 
	 	 	“Reference Gross Operating Cashflow” means, in respect of any set of
consolidated financial statements of the Principal Company, Reference
EBITDA for such consolidated financial statements less “Investments made
in multi-client surveys” as such item appears in such consolidated
accounts “Document de Référence” (or, if different, the figure that would
appear in the item so entitled in the consolidated financial statements of
the Principal Company presented in the same manner as and prepared in
accordance with the principles and accounting practices followed for
preparation of the financial statements in the Original Financial
Statements of the Principal Company).
	 
	 	 	“Relevant Period” means each period of twelve (12) Months ending on 30
June or 31 December.
	 
	20.2	 	Financial condition
	 
	 	 	The Principal Company shall ensure that:

	 	(a)	 	Gearing shall not exceed 0.9:1.
	 
	 	(b)	 	Leverage shall not exceed:

	 	(i)	 	for each of the Relevant Periods ending on 31
December 2003, 30 June 2004 and 31 December 2004, 2.00:1;

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	 	(ii)	 	for each of the Relevant Periods ending on 30
June 2005 and 31 December 2005, 1.75:1; and
	 
	 	(iii)	 	for each Relevant Period thereafter, 1:50:1.

	 	(c)	 	Operational Leverage shall not exceed:

	 	(i)	 	for each of the Relevant Periods ending on 31
December 2003 and 30 June 2004, 4.00:1;
	 
	 	(ii)	 	for the Relevant Period ending on 31 December 2004, 3.75:1;
	 
	 	(iii)	 	for the Relevant Period ending on 30 June 2005, 3:50:1;
	 
	 	(iv)	 	for the Relevant Period ending on 31 December 2005, 3:00:1; and
	 
	 	(v)	 	for each Relevant Period thereafter, 2:50:1.

	20.3	 	Testing of Financial Covenants
	 
	(a)	 	The financial covenants set out in Clause 20.2 (Financial condition)
shall be tested by reference to each of the latest sets of financial
statements delivered pursuant to Clause 19.1 (Financial statements) which
is accompanied by a Compliance Certificate delivered pursuant to Clause
19.2 (Compliance Certificate).
	 
	(b)	 	The financial covenants set out in Clause 20.2 (Financial condition)
shall be calculated by the Principal Company and set out in a Compliance
Certificate.
	 
	21.	 	GENERAL UNDERTAKINGS
	 
	 	 	The undertakings in this Clause 21 remain in force from the date of this
Agreement for so long as any amount is outstanding under the Finance
Documents or any Commitment is in force.
	 
	21.1	 	Maintenance of legal validity
	 
	 	 	Each Borrower shall promptly:

	 	(a)	 	obtain, comply with and do all that is necessary to maintain in
full force and effect; and
	 
	 	(b)	 	supply certified copies to the Agent of,

	 	 	any Authorisation required under any law or regulation of France to enable
it to perform its obligations under the Finance Documents, and create the
Security constituted thereby, and to ensure the legality, validity,
enforceability or admissibility in evidence in France of any Finance
Document.
	 
	21.2	 	Compliance with laws
	 
	 	 	Each Borrower shall comply in all respects with all laws to which it may
be subject, if failure so to comply would materially impair its ability to
perform its obligations under the Finance Documents.

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	21.3	 	Negative pledge
	 
	(a)	 	No Borrower shall (and the Principal Company shall ensure that no other
member of the Core Group will) create or permit to subsist any Security
over any of its assets.
	 
	(b)	 	No Borrower shall (and the Principal Company shall ensure that no other
member of the Core Group will):

	 	(i)	 	sell, transfer or otherwise dispose of any of its assets on
terms whereby they are or may be leased to or re-acquired by a
Borrower or any other member of the Group;
	 
	 	(ii)	 	sell, transfer or otherwise dispose of any of its receivables
on recourse terms;
	 
	 	(iii)	 	enter into any arrangement under which money or the benefit of
a bank or other account may be applied, set-off or made subject to a
combination of financial statements; or
	 
	 	(iv)	 	enter into any other preferential arrangement having a similar
effect,

	 	 	in circumstances where the arrangement or transaction is entered into
primarily as a method of raising Financial Indebtedness or of financing
the acquisition of an asset.
	 
	(c)	 	Paragraphs (a) and (b) above do not apply to:

	 	(i)	 	any Security granted pursuant to the terms of the Existing
Facility prior to the date that the first Loan is made under the
Facility;
	 
	 	(ii)	 	any Security listed in Schedule 7 (Existing Security) except to
the extent the principal amount secured by that Security exceeds the
amount as stated in that Schedule (or, if higher, the maximum amount
of the relevant facility as stated in that Schedule);
	 
	 	(iii)	 	any netting or set-off arrangement entered into by any member
of the Group in the ordinary course of its cash management
arrangements for the purpose of netting debit and credit balances;
	 
	 	(iv)	 	any lien arising by operation of law and in the ordinary course
of its business;
	 
	 	(v)	 	any sale of receivables on recourse terms or any Security
constituted by any title transfer or retention of title or
conditional sale arrangements, in each case which are entered into by
any member of the Group in the normal course of its business;
	 
	 	(vi)	 	any Security over or affecting any asset acquired by a member
of the Group after the date of this Agreement if:

	 	(A)	 	the Security was not created in contemplation of
the acquisition of that asset by a member of the Group;
	 
	 	(B)	 	the principal amount (or, if higher, the maximum
principal amount of the relevant facility) secured has not
been increased in contemplation of, or since the acquisition
of that asset by a member of the Group; and

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	 	(C)	 	the Security is removed or discharged within six
(6) Months of the date of acquisition of such asset if not
otherwise permitted pursuant to this Clause 21.3;

	 	(vii)	 	any Security over or affecting any asset of any company which
becomes a member of the Group after the date of this Agreement, where
the Security is created prior to the date on which that company
becomes a member of the Group, if:

	 	(A)	 	the Security was not created in contemplation of
the acquisition of that company; and
	 
	 	(B)	 	the principal amount (or, if higher, the maximum
principal amount of the relevant facility) secured has not
increased in contemplation of or since the acquisition of that
company.

	 	(viii)	 	any Security entered into pursuant to any Finance Document;
	 
	 	(ix)	 	any Security created in connection with the acquisition and
holding of shares by a person on behalf of a member of the Group
which was created in order to secure Financial Indebtedness incurred
by a member of Group to such person solely for the purpose of the
acquisition of such shares by that member of the Group (opération de
portage) provided that such Financial Indebtedness was entered into
on an arm’s length basis and the amount of such Financial
Indebtedness does not exceed the balance sheet value of such shares;
	 
	 	(x)	 	any Security created in respect of any tax assessment or
governmental charge or claim provided that (i) the aggregate amount
secured by such Security is less than two million euros (EUR
2,000,000) (or its equivalent in another currency or currencies),
(ii) that such assessment, charge or claim is being contested in good
faith, (iii) adequate reserves are being maintained for such
assessment, charge or claim, (iv) payment in respect of such
assessment, charge or claim can be lawfully withheld and (v) any such
assessment, charge or claim which relates to an amount in excess of
one million euros (EUR 1,000,000) (or its equivalent in another
currency or currencies) has been notified to the Agent;
	 
	 	(xi)	 	any Security consented to in writing by the Majority Lenders;
or
	 
	 	(xii)	 	any Security securing indebtedness the principal amount of
which (when aggregated with the principal amount of any other
indebtedness which has the benefit of Security given by any member of
the Group other than any permitted under paragraphs (i) to (xi)
above) does not exceed fifteen million dollars ($15,000,000) (or its
equivalent in another currency or currencies).

	21.4	 	Disposals
	 
	(a)	 	No Borrower shall (and the Principal Company shall ensure that no other
member of the Group will), enter into a single transaction or a series of
transactions (whether related or not) and whether voluntary or involuntary
to (or enter into any binding agreement to) sell, lease, transfer or
otherwise dispose of any asset or revenue.

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	(b)	 	Paragraph (a) above does not apply to any sale, lease, transfer or other
disposal:

	 	(i)	 	made in the ordinary course of trading of the disposing entity;
	 
	 	(ii)	 	of multi-client data libraries;
	 
	 	(iii)	 	of assets in exchange for other assets comparable or superior
as to type, value and quality;
	 
	 	(iv)	 	made to another member of the Group;
	 
	 	(v)	 	any Security, lien or sale which is permitted in accordance
with paragraph (c) of Clause 21.3 (Negative pledge);
	 
	 	(vi)	 	consented to in writing by the Majority Lenders; or
	 
	 	(vii)	 	where the higher of the market value or consideration
receivable (when aggregated with the higher of the market value or
consideration receivable for any other sale, lease, transfer or other
disposal by the Group in any related transaction) does not exceed
fifteen million dollars ($15,000,0000) (or its equivalent in another
currency or currencies).

	21.5	 	Loans and Guarantees
	 
	(a)	 	No Borrower shall (and the Principal Company shall ensure that no member
of the Group will) make any loans or grant any credit (save in the
ordinary course of business or to another member of the Group) to any
person or give any guarantee or indemnity (except as required under any of
the Finance Documents) in respect of the obligations of any person (other
than a member of Group) or otherwise voluntarily assume any liability,
whether actual or contingent, in respect of any obligation of any person
(other than a member of the Group).
	 
	(b)	 	Paragraph (a) of this Clause 21.5 does not apply if:

	 	(i)	 	such loan is made to, credit granted to, guarantee or indemnity
given to, or liability assumed in respect of liability of, Argas Ltd;
	 
	 	(ii)	 	such loan, credit, guarantee, indemnity or liability is
consented to in writing by the Majority Lenders; or
	 
	 	(iii)	 	the aggregate amount of all such loans, credits, guarantees,
indemnity and liabilities (other than those permitted pursuant to
paragraphs (i) and (ii) above) is less than five million dollars
($5,000,000) (or its equivalent in another currency or currencies).

	21.6	 	Claims pari passu

	 	 	Each Borrower shall ensure that, at all times, the claims of the Finance
Parties in respect of its payment obligations under the Finance Documents
rank at least pari passu with the claims of all its other unsecured and
unsubordinated creditors, except for claims mandatorily preferred by law
applying to companies generally.

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	21.7	 	Merger
	 
	(a)	 	No Borrower shall (and the Principal Company shall ensure that no other
member of the Group will) enter into any amalgamation, demerger, merger or
corporate reconstruction.
	 
	(b)	 	Paragraph (a) of this Clause 21.7 shall not apply to:

	 	(i)	 	any such amalgamation, demerger, merger or corporate
reconstruction which involves members of the Group only (provided
that if such amalgamation, demerger, merger or corporate
reconstruction involves a Borrower, that Borrower is a surviving
entity);
	 
	 	(ii)	 	any merger or amalgamation which involves a company which is
not a member of the Group provided that if such merger or
amalgamation involves a Borrower, that Borrower is a surviving entity
and such merger or amalgamation is not likely to have a Material
Adverse Effect;
	 
	 	(iii)	 	any demerger (scission) or any contribution of part of its
business in consideration of shares (apport partiel d’actifs)
involving a Borrower where the Borrower is a beneficiary of a
transfer of assets to it and which is not likely to have a Material
Adverse Effect.

	21.8	 	Bordereaux Dailly
	 
	(a)	 	Each Borrower shall ensure that (and the Principal Company shall ensure
that for each Borrower), at all times, the aggregate nominal value of
Eligible Receivables (if denominated in a currency other than dollars,
converted at the Spot Rate of Exchange at such time) assigned by it
pursuant to the Bordereaux Dailly executed by it (and which are in effect
at such time) exceeds one hundred and twenty per cent. (120%) of the
aggregate amount of the Dollar Amounts of the Loans made to that Borrower
(being for each Borrower, the “Required Threshold”).
	 
	(b)	 	If on any date falling at an integral multiple of a Month after the
Signing Date, there is a Loan outstanding to a Borrower, such Borrower
shall, within three (3) Business Days of such date, assign to the Lenders,
as security for its obligations to the Lenders as borrower under this
Agreement, by executing a Bordereau Dailly in accordance with the
Convention Cadre de Cession executed by that Borrower, its Eligible
Receivables with (i) an aggregate nominal value exceeding the Required
Threshold for that Borrower at such time and (ii) more than one (1) Month
until their due date as at the date of the relevant Bordereau Dailly.
	 
	(c)	 	Each Borrower shall ensure that (i) each Bordereau Dailly that is
executed by it is executed by an Authorised Signatory of that Borrower and
(ii), as at the date of each Bordereau Dailly executed by it, each
Eligible Receivable assigned pursuant to that Bordereau Dailly constitutes
a legal, valid, binding and enforceable claim.
	 
	(d)	 	Each Borrower shall ensure that, at all times, the aggregate nominal
value of Eligible Receivables assigned by it pursuant to the Bordereaux
Dailly executed by it (and which are in effect at such time) (and if
denominated in a currency other than dollars, converted at the Spot Rate
of Exchange at the relevant time) which are owed by companies that are not
members of the Group is no less than two thirds of the Required Threshold
applicable to that Borrower at such time.

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	(e)	 	The nominal value of Eligible Receivables that have not been paid on
their due date and (i) are more than three (3) Months overdue or (ii) are,
in the reasonable opinion of the Agent, likely to become overdue for more
than three (3) Months (having regard, among other factors, to the identity
and nationality of the debtor) shall not be included in the calculation of
the aggregate nominal value of the Eligible Receivables assigned by the
Borrowers pursuant to the Bordereaux Dailly for the purpose of determining
whether the Required Threshold is satisfied for each Borrower pursuant to
paragraph (a) of this Clause 21.8 or for the purposes of paragraph (d) of
this Clause 21.8.
	 
	21.9	 	Insurance
	 
	 	 	Each Borrower shall (and the Principal Company shall ensure that each
Principal Subsidiary will) maintain insurances on and in relation to its
business and assets with reputable underwriters or insurance companies
against those risks and to the extent as is usual for companies carrying
on the same or substantially similar business as such Borrower or
Principal Subsidiary.
	 
	21.10	 	Environmental Compliance
	 
	 	 	Each Borrower shall (and the Principal Company shall ensure that each
Principal Subsidiary will) comply in all material respects with all
Environmental Law and obtain and maintain any Environmental Permits and
take all reasonable steps in anticipation of known or expected future
changes to or obligations under the same where failure to do so would be
likely to have a Material Adverse Effect.
	 
	21.11	 	Taxation
	 
	 	 	Each Borrower shall (and the Principal Company ensure that each member of
the Core Group shall) pay and discharge all Taxes imposed upon it or its
assets within the time period allowed without incurring penalties (expect
to the extent (i) that such payment is being contested in good faith and
adequate reserves are being maintained for those Taxes or (ii) where
failure to do so is not likely to have a Material Adverse Effect).
	 
	21.12	 	Acquisition Finance
	 
	(a)	 	No Borrower shall (and the Principal Company shall ensure that no other
member of the Group will), without the prior written consent of the
Majority Lenders:

	 	(i)	 	acquire, make any investment in or make any capital
contribution in any company, business, undertaking or other person
that is not a member of the Group; or
	 
	 	(ii)	 	enter into any partnership or similar arrangement with any
person that is not a member of the Group.

	(b)	 	Paragraph (a) of this Clause 21.12 shall only apply to any such
acquisition, investment, capital contribution, partnership or similar
arrangement, whether by means of a single transaction or a series of
transactions, (a “Relevant Operation”) where:

	 	(i)	 	the aggregate net expenditures in such Relevant Operation for
members of the Group exceeds twenty five million euros (EUR
25,000,000) (or its equivalent in another currency or currencies);

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	 	(ii)	 	the aggregate net expenditures for members of the Group
involved in such Relevant Operation increased by the amount of the
aggregate net acquired indebtedness, if any, which would be included
in the consolidated balance sheet position of the Group as a result
of such Relevant Operation exceeds twenty five million euros (EUR
25,000,000) (or its equivalent in another currency or currencies);
	 
	 	(iii)	 	if the relevant company, business, undertaking, person,
partnership or similar arrangement had been consolidated, on a pro
forma basis, in the most recent set of consolidated financial
statements delivered by the Principal Company in accordance with
Clause 19.1 (Financial statements), any requirement of Clause 20
(Financial covenants) would not have been satisfied on the date that
such requirements were tested by reference to such consolidated
financial statements in accordance with Clause 20.3 (Testing of
Financial Covenants);
	 
	 	(iv)	 	any person created for the purpose of such acquisition,
investment, capital contribution, partnership or similar arrangement
is not a limited liability company.

	22.	 	EVENTS OF DEFAULT
	 
	 	 	Each of the events or circumstances set out in Clause 22 is an Event of Default.
	 
	22.1	 	Non-payment
	 
	 	 	Any Borrower does not pay on the due date any amount payable pursuant to a
Finance Document (including, without limitation, any amount in principal,
interest, default interest, fees, costs, expenses and any other sum
whatsoever due and payable under a Finance Document) (except an amount the
non-payment of which requires the Borrower to make a prepayment under
Clause 8.6 (Mandatory prepayment and cancellation in relation to a single
Lender)) at the place at and in the currency in which it is expressed to
be payable unless:

	 	(a)	 	its failure to pay is caused by administrative or technical
error; and
	 
	 	(b)	 	payment is made within three (3) Business Days of its due date.

	22.2	 	Financial covenants
	 
	 	 	Any requirement of Clause 20 (Financial covenants) is not satisfied.
	 
	22.3	 	Breach of covenants
	 
	(a)	 	A Borrower does not comply with any provision of the Finance Documents
(other than those referred to in Clause 22.1 (Non-payment) and Clause 22.2
(Financial covenants)).
	 
	(b)	 	No Event of Default under paragraph (a) above will occur if the failure
to comply is capable of remedy and is remedied within:

	 	(i)	 	in relation to Clause 21 (General Undertakings) (other than
Clause 21.5 (Loans and Guarantees)), five (5) Business Days; or
	 
	 	(ii)	 	in relation to any other provision of the Finance Documents,
ten (10) Business Days,

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	 	 	of the Agent giving notice to the Principal Company or the Principal
Company becoming aware of the failure to comply.
	 
	22.4	 	Misrepresentation
	 
	 	 	Any representation or statement made or deemed to be made by a Borrower in
any Finance Document or any other document delivered by or on behalf of
any Borrower under or in connection with any Finance Document is or proves
to have been incorrect or misleading in any material respect when made or
deemed to be made.
	 
	22.5	 	Cross default
	 
	(a)	 	Any Financial Indebtedness of any member of the Core Group is not paid
when due nor within any originally applicable grace period.
	 
	(b)	 	Any Financial Indebtedness of any member of the Core Group is declared to
be or otherwise becomes due and payable prior to its specified maturity as
a result of an event of default (however described).
	 
	(c)	 	Any commitment for any Financial Indebtedness of any member of the Core
Group is cancelled or suspended by a creditor of any member of the Core
Group as a result of an event of default (however described).
	 
	(d)	 	Any creditor of any member of the Core Group becomes entitled to declare
any Financial Indebtedness of any member of the Core Group due and payable
prior to its specified maturity as a result of an event of default
(however described).
	 
	(e)	 	No Event of Default will occur under this Clause 22.5 if the aggregate
amount of Financial Indebtedness or commitment for Financial Indebtedness
falling within paragraphs (a) to (d) above is less than five million euros
(EUR 5,000,000) (or its equivalent in any other currency or currencies).
	 
	22.6	 	Insolvency
	 
	(a)	 	A member of the Core Group is unable or admits inability to pay its debts
as they fall due, suspends making payments on any of its debts or, by
reason of actual or anticipated financial difficulties, commences
negotiations with one or more of its creditors with a view to rescheduling
any of its indebtedness.
	 
	(b)	 	The Principal Company or any member of the Core Group which conducts
business in France is in a state of cessation des paiements, or any member
of the Group becomes insolvent for the purpose of any insolvency law.
	 
	(c)	 	A moratorium is declared in respect of any indebtedness of any member of
the Core Group.
	 
	22.7	 	Insolvency proceedings
	 
	(a)	 	Any corporate action, legal proceedings or other procedure or step is
taken in relation to:

	 	(i)	 	the suspension of payments, a moratorium of any indebtedness,
winding-up, dissolution, administration or reorganisation (by way of
voluntary arrangement, scheme of

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	 	 	 	arrangement or otherwise) of any member of the Core Group other
than a solvent liquidation or reorganisation of any member of the
Core Group which is not a Borrower;
	 
	 	(ii)	 	a composition, assignment or arrangement with any creditor of
any member of the Core Group;
	 
	 	(iii)	 	the appointment of a liquidator (other than in respect of a
solvent liquidation of a member of the Core Group which is not a
Borrower), receiver, administrator, administrative receiver,
compulsory manager or other similar officer in respect of any member
of the Group or any of its assets;
	 
	 	(iv)	 	enforcement of any Security over any assets of any member of
the Core Group; or

	(b)	 	Any analogous procedure or step is taken in any jurisdiction.
	 
	(c)	 	Any member of the Core Group commences proceedings for règlement amiable
in accordance with articles L.611-3 to L.611-6 of the French Code de
commerce.
	 
	(d)	 	A judgement for the opening of redressement judiciaire, cession totale de
l’entreprise or liquidation judiciaire proceedings is entered in relation
to any member of the Core Group under articles L.620-1 to L.628-3 of the
French Code de commerce.
	 
	(e)	 	A mandataire ad hoc, conciliateur or similar officer is appointed in
respect of all or material part of the business or assets of any member of
the Core Group.
	 
	22.8	 	Creditors’ process and execution or distress
	 
	 	 	Any of the enforcement proceedings provided for in French law no.91-650 of
9 July 1991, or any expropriation, attachment, sequestration, distress or
execution affects any asset or assets of a member of the Core Group having
an aggregate value greater than or equal to five million euros (EUR
5,000,000) (or its equivalent in any other currency or currencies) and
which is not discharged within thirty (30) days.
	 
	22.9	 	Failure of comply with final judgment
	 
	 	 	Any member of the Core Group fails to comply with, or pay any sum due from
it under, any final judgement or any final order made or given by any
court of competent jurisdiction.
	 
	22.10	 	Ownership of the Subsidiary Borrowers
	 
	 	 	The Principal Company does not or ceases to hold, directly or indirectly,
sixty six and two thirds per cent. (66 2/3%) of the (i) share capital and
(ii) voting rights in each of CGG Marine and Sercel.
	 
	22.11	 	The Group’s Business
	 
	 	 	The Principal Activity ceases to be the principal business of the Group or
any member of the Core Group enters into any unrelated business which
would be likely to have a Material Adverse Effect.
	 
	22.12	 	Illegality

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	(a)	 	Except as provided in Clause 8.6 (Mandatory prepayment and cancellation
in relation to a single Lender), it is or becomes unlawful for a Borrower
to perform any of its obligations under the Finance Documents.
	 
	(b)	 	At any time any of the Security expressed to be created under any
Bordereau Dailly is or becomes unlawful.
	 
	22.13	 	Security under a Bordereau Dailly
	 
	 	 	At any time, any Bordereau Dailly does not validly create the Security
which is expressed to be created thereby over the assets expressed to be
subject to such Security.
	 
	22.14	 	Material adverse change
	 
	 	 	Any event or circumstance occurs which the Majority Lenders reasonably
believe would be likely to have a Material Adverse Effect.
	 
	22.15	 	Acceleration
	 
	 	 	On and at any time after the occurrence of an Event of Default which is
continuing, the Agent may without mise en demeure or any other judicial or
extra judicial step, and shall if so directed by the Majority Lenders, by
notice to the Principal Company but subject to the mandatory provisions of
articles L.620-1 to L.628-3 of the French Code de commerce:

	 	(a)	 	cancel the Total Commitments whereupon they (and all of the
Commitments) shall immediately be cancelled; and/or
	 
	 	(b)	 	declare that all or part of the Loans, together with accrued
interest, and all other amounts accrued or outstanding under the
Finance Documents be immediately due and payable, whereupon they
shall become immediately due and payable.

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SECTION 8

CHANGES TO PARTIES

	23.	 	CHANGES TO THE LENDERS
	 
	23.1	 	Assignments and transfers by the Lenders
	 
	(a)	 	Subject to this Clause 23, a Lender (the “Existing Lender”) may:

	 	(i)	 	assign any of its rights; or
	 
	 	(ii)	 	transfer any of its rights (including such as relate to that
Lender’s participation in each Loan) and obligations,

	 	 	to any credit institution (établissement de crédit) in France (or which is
recognised as such in accordance with EU regulations) (the “New Lender”)
provided that if such assignment or transfer relates to a part (but not
all) of such Existing Lender’s rights or obligations, the aggregate of the
part of the Existing Lender’s Commitment and/or the Dollar Amount of the
part of the Loan to which such assignment or transfer relates is not less
than one million ($1,000,000) dollars.
	 
	(b)	 	The consent of the Finance Parties is hereby given to a transfer by an
Existing Lender to a New Lender.
	 
	23.2	 	Conditions of assignment or transfer
	 
	(a)	 	The consent of the Principal Company is required for an assignment or
transfer by a Lender, provided that:

	 	(i)	 	in the case of an assignment, no consent is required if the
assignment is to another Lender or an Affiliate of a Lender;
	 
	 	(ii)	 	the Principal Company and each other Borrower hereby consents
to a transfer to another Lender or an Affiliate of a Lender;
	 
	 	(iii)	 	no consent is required if the assignment or transfer is made
after the occurrence of an Event of Default and such Event of Default
is continuing on the date of such assignment or transfer; and
	 
	 	(iv)	 	the Principal Company and each other Borrower hereby consents
to a transfer to any person in the circumstances referred to in
paragraph (iii) above.

	(b)	 	The consent of the Principal Company to an assignment or transfer must
not be unreasonably withheld or delayed. The Principal Company will be
deemed to have given its consent five (5) Business Days after the Lender
has requested it unless consent is expressly refused by the Principal
Company within that time.
	 
	(c)	 	The consent of the Principal Company to an assignment or transfer must
not be withheld solely because the assignment or transfer may result in an
increase to the Mandatory Cost.

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	(d)	 	An assignment will only be effective as among the Finance Parties on
receipt by the Agent of written confirmation from the New Lender (in form
and substance satisfactory to the Agent) that the New Lender has become
entitled to the same rights and will assume the same obligations to the
other Finance Parties as it would have been under if it was an Original
Lender.
	 
	(e)	 	A transfer will only be effective if the procedure set out in Clause 23.5
(Procedure for transfer) is complied with.
	 
	(f)	 	If:

	 	(i)	 	a Lender assigns or transfers any of its rights or obligations
under the Finance Documents or changes its Facility Office; and
	 
	 	(ii)	 	as a result of circumstances existing at the date the
assignment, transfer or change occurs, a Borrower would be obliged to
make a payment to the New Lender or Lender acting through its new
Facility Office under Clause 13 (Tax gross-up and indemnities) or
Clause 14 (Increased Costs),

	 	 	then the New Lender or Lender acting through its new Facility Office is
only entitled to receive payment under those Clauses to the same extent as
the Existing Lender or Lender acting through its previous Facility Office
would have been if the assignment, transfer or change had not occurred.
	 
	23.3	 	Assignment or transfer fee
	 
	 	 	The New Lender shall, on the date upon which an assignment or transfer
takes effect, pay to the Agent (for its own account) a fee of two thousand
dollars ($2,000).
	 
	23.4	 	Limitation of responsibility of Existing Lenders
	 
	(a)	 	Unless expressly agreed to the contrary, an Existing Lender makes no
representation or warranty and assumes no responsibility to a New Lender
for:

	 	(i)	 	the legality, validity, effectiveness, adequacy or
enforceability of the Finance Documents or any other documents;
	 
	 	(ii)	 	the financial condition of any Borrower;
	 
	 	(iii)	 	the performance and observance by any Borrower of its
obligations under the Finance Documents or any other documents; or
	 
	 	(iv)	 	the accuracy of any statements (whether written or oral) made
in or in connection with any Finance Document or any other document,

	 	 	and any representations or warranties implied by law are excluded.
	 
	(b)	 	Each New Lender confirms to the Existing Lender and the other Finance
Parties that it:

	 	(i)	 	has made (and shall continue to make) its own independent
investigation and assessment of the financial condition and affairs
of each Borrower and its related entities in connection with its
participation in this Agreement and has not relied exclusively on any

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	 	 	 	information provided to it by the Existing Lender in connection
with any Finance Document; and
	 
	 	(ii)	 	will continue to make its own independent appraisal of the
creditworthiness of each Borrower and its related entities whilst any
amount is or may be outstanding under the Finance Documents or any
Commitment is in force.

	(c)	 	Nothing in any Finance Document obliges an Existing Lender to:

	 	(i)	 	accept a re-transfer from a New Lender of any of the rights and
obligations assigned or transferred under this Clause 23; or
	 
	 	(ii)	 	support any losses directly or indirectly incurred by the New
Lender by reason of the non-performance by any Borrower of its
obligations under the Finance Documents or otherwise.

	23.5	 	Procedure for transfer
	 
	(a)	 	Subject to the conditions set out in Clause 23.2 (Conditions of
assignment or transfer) a transfer is effected in accordance with
paragraph (b) below when the Agent executes an otherwise duly completed
Transfer Agreement delivered to it by the Existing Lender and the New
Lender. The Agent shall, as soon as reasonably practicable after receipt
by it of a duly completed Transfer Agreement appearing on its face to
comply with the terms of this Agreement and delivered in accordance with
the terms of this Agreement, execute that Transfer Agreement.
	 
	(b)	 	By virtue of the execution of a Transfer Agreement, as from the Transfer
Date:

	 	(i)	 	to the extent that in the Transfer Agreement the Existing
Lender seeks to transfer its rights and obligations under the Finance
Documents, the Existing Lender shall be discharged to the extent
provided for in the Transfer Agreement from further obligations
towards each of the Borrowers and the other Finance Parties under the
Finance Documents;
	 
	 	(ii)	 	the rights and obligations of the Existing Lender with respect
to the Borrowers shall be transferred to the New Lender, to the
extent provided for in the Transfer Agreement;
	 
	 	(iii)	 	the Agent, the Arranger, the New Lender and other Lenders
shall have the same rights and obligations between themselves as they
would have had had the New Lender been an Original Lender with the
rights and/or obligations to which it is entitled and subject as a
result of the transfer and to that extent the Agent, the Arranger and
the Existing Lender shall each be released from further obligations
to each other under the Finance Documents; and
	 
	 	(iv)	 	the New Lender shall become a Party as a “Lender”.

	23.6	 	Disclosure of information
	 
	 	 	Any Lender may disclose to any of its Affiliates and any other person:

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	 	(a)	 	to (or through) whom that Lender assigns or transfers (or may
potentially assign or transfer) all or any of its rights and
obligations under this Agreement;
	 
	 	(b)	 	with (or through) whom that Lender enters into (or may
potentially enter into) any sub-participation in relation to, or any
other transaction under which payments are to be made by reference
to, this Agreement or any Borrower; or
	 
	 	(c)	 	to whom, and to the extent that, information is required to be
disclosed by any applicable law or regulation,

	 	 	any information about any Borrower, the Group (and any member thereof) and
the Finance Documents as that Lender shall consider appropriate if, in
relation to paragraphs (a) and (b) above, the person to whom the
information is to be given has entered into a Confidentiality Undertaking.
	 
	24.	 	CHANGES TO THE BORROWERS
	 
	 	 	No Borrower may assign any of its rights or transfer any of its rights or
obligations under the Finance Documents.

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SECTION 9

THE FINANCE PARTIES

	25.	 	ROLE OF THE AGENT AND THE ARRANGER
	 
	25.1	 	Appointment of the Agent
	 
	(a)	 	Each other Finance Party appoints the Agent to act as its agent under and
in connection with the Finance Documents.
	 
	(b)	 	Each other Finance Party authorises the Agent to exercise the rights,
powers, authorities and discretions specifically given to the Agent under
or in connection with the Finance Documents together with any other
incidental rights, powers, authorities and discretions.
	 
	25.2	 	Duties of the Agent
	 
	(a)	 	The Agent shall promptly forward to a Party the original or a copy of any
document which is delivered to the Agent for that Party by any other
Party.
	 
	(b)	 	Except where a Finance Document specifically provides otherwise, the
Agent is not obliged to review or check the adequacy, accuracy or
completeness of any document it forwards to another Party.
	 
	(c)	 	If the Agent receives notice from a Party referring to this Agreement,
describing a Default and stating that the circumstance described is a
Default, it shall promptly notify the Finance Parties.
	 
	(d)	 	If the Agent is aware of the non-payment of any principal, interest,
commitment fee or other fee payable to a Finance Party (other than the
Agent or the Arranger) under this Agreement it shall promptly notify the
other Finance Parties.
	 
	(e)	 	The Agent’s duties under the Finance Documents are solely mechanical and
administrative in nature.
	 
	25.3	 	Role of the Arranger
	 
	 	 	Except as specifically provided in the Finance Documents, the Arranger has
no obligations of any kind to any other Party under or in connection with
any Finance Document.
	 
	25.4	 	No fiduciary duties
	 
	(a)	 	Nothing in this Agreement constitutes the Agent or the Arranger as a
trustee or fiduciary of any other person.
	 
	(b)	 	Neither the Agent nor the Arranger shall be bound to account to any
Lender for any sum or the profit element of any sum received by it for its
own account.
	 
	25.5	 	Business with the Group
	 
	 	 	The Agent and the Arranger may accept deposits from, lend money to and
generally engage in any kind of banking or other business with any member
of the Group.
	 
	25.6	 	Rights and discretions of the Agent
	 
	(a)	 	The Agent may rely on:

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	 	(i)	 	any representation, notice or document believed by it to be
genuine, correct and appropriately authorised; and
	 
	 	(ii)	 	any statement made by a director, authorised signatory or
employee of any person regarding any matters which may reasonably be
assumed to be within his knowledge or within his power to verify.

	(b)	 	The Agent may assume (unless it has received notice to the contrary in
its capacity as agent for the Lenders) that:

	 	(i)	 	no Default has occurred (unless it has actual knowledge of a
Default arising under Clause 22.1 (Non-payment));
	 
	 	(ii)	 	any right, power, authority or discretion vested in any Party
or the Majority Lenders has not been exercised; and
	 
	 	(iii)	 	any notice or request made by the Principal Company (other
than a Utilisation Request) is made on behalf of and with the consent
and knowledge of all the Borrowers.

	(c)	 	The Agent may engage, pay for and rely on the advice or services of any
lawyers, accountants, surveyors or other experts.
	 
	(d)	 	The Agent may act in relation to the Finance Documents through its
personnel and agents.
	 
	(e)	 	The Agent may disclose to any other Party any information it reasonably
believes it has received as agent under this Agreement.
	 
	(f)	 	Notwithstanding any other provision of any Finance Document to the
contrary, neither the Agent nor the Arranger is obliged to do or omit to
do anything if it would or might in its reasonable opinion constitute a
breach of any law or regulation or a breach of a fiduciary duty or duty of
confidentiality.
	 
	25.7	 	Majority Lenders’ instructions
	 
	(a)	 	Unless a contrary indication appears in a Finance Document, the Agent
shall (a) exercise any right, power, authority or discretion vested in it
as Agent in accordance with any instructions given to it by the Majority
Lenders (or, if so instructed by the Majority Lenders, refrain from
exercising any right, power, authority or discretion vested in it as
Agent) and (b) not be liable for any act (or omission) if it acts (or
refrains from taking any action) in accordance with an instruction of the
Majority Lenders.
	 
	(b)	 	Unless a contrary indication appears in a Finance Document, any
instructions given by the Majority Lenders will be binding on all the
Finance Parties.
	 
	(c)	 	The Agent may refrain from acting in accordance with the instructions of
the Majority Lenders (or, if appropriate, the Lenders) until it has
received such security as it may require for any cost, loss or liability
(together with any associated VAT) which it may incur in complying with
the instructions.

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	(d)	 	The Agent is entitled to request instructions, or clarification of any
instructions, from the Lenders (or any of them) as to whether, and in what
manner, to exercise any right, power, authority or discretion vested in it
as Agent and the Agent may refrain from acting unless and until those
instructions or clarifications are received by it.
	 
	(e)	 	In the absence of instructions from the Majority Lenders, (or, if
appropriate, the Lenders) the Agent may act (or refrain from taking
action) as it considers to be in the best interest of the Lenders.
	 
	(f)	 	The Agent is not authorised to act on behalf of a Lender in any legal or
arbitration proceedings relating to any Finance Document, without having
first obtained that Lender’s authority to act on its behalf in those
proceedings.
	 
	25.8	 	Responsibility for documentation
	 
	 	 	Neither the Agent nor the Arranger:

	 	(a)	 	is responsible for the adequacy, accuracy and/or completeness
of any information (whether oral or written) supplied by the Agent,
the Arranger, a Borrower or any other person given in or in
connection with any Finance Document or the Information Memorandum;
or
	 
	 	(b)	 	is responsible for the legality, validity, effectiveness,
adequacy or enforceability of any Finance Document or any other
agreement, arrangement or document entered into, made or executed in
anticipation of or in connection with any Finance Document.

	25.9	 	Exclusion of liability
	 
	(a)	 	Without limiting paragraph (b) below, the Agent will not be liable for
any action taken by it under or in connection with any Finance Document,
unless directly caused by its gross negligence or wilful misconduct.
	 
	(b)	 	No Party (other than the Agent) may take any proceedings against any
officer, employee or agent of the Agent in respect of any claim it might
have against the Agent or in respect of any act or omission of any kind by
that officer, employee or agent in relation to any Finance Document and
any officer, employee or agent of the Agent may rely on this Clause.
	 
	(c)	 	The Agent will not be liable for any delay (or any related consequences)
in crediting an account with an amount required under the Finance
Documents to be paid by the Agent if the Agent has taken all necessary
steps as soon as reasonably practicable to comply with the regulations or
operating procedures of any recognised clearing or settlement system used
by the Agent for that purpose.
	 
	(d)	 	Nothing in this Agreement shall oblige the Agent or the Arranger to carry
out any “know your customer” or other checks in relation to any person on
behalf of any Lender and each Lender confirms to the Agent and the
Arranger that it is solely responsible for any such checks it is required
to carry out and that it may not rely on any statement in relation to such
checks made by the Agent or the Arranger.

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	(e)	 	The Agent shall not be liable (i) for any failure to take, or require any
of the Borrowers to take, any steps to ensure that any assignment by way
of security pursuant to any Bordereau Dailly is binding on third parties
(opposable aux tiers), (ii) if any receivable assigned pursuant to any
Bordereau Dailly does not constitute a legal, valid, binding and
enforceable claim, (iii) if any receivable assigned pursuant to a
Bordereau Dailly is not an Eligible Receivable and (iv) in relation to
financial condition, status and nature of any debtor under any Eligible
Receivable assigned pursuant to any Bordereau Dailly.
	 
	25.10	 	Lenders’ indemnity to the Agent
	 
	 	 	Each Lender shall (in proportion to its share of the Total Commitments or,
if the Total Commitments are then zero, to its share of the Total
Commitments immediately prior to their reduction to zero) indemnify the
Agent, within three (3) Business Days of demand, against any cost, loss or
liability incurred by the Agent (otherwise than by reason of the Agent’s
gross negligence or wilful misconduct) in acting as Agent under the
Finance Documents (unless the Agent has been reimbursed by a Borrower
pursuant to a Finance Document).
	 
	25.11	 	Resignation of the Agent
	 
	(a)	 	The Agent may resign and appoint one of its Affiliates acting through an
office in France as successor by giving notice to the other Finance
Parties and the Principal Company.
	 
	(b)	 	Alternatively, the Agent may resign by giving notice to the other Finance
Parties and the Principal Company, in which case the Majority Lenders
(after consultation with the Principal Company) may appoint a successor
Agent.
	 
	(c)	 	If the Majority Lenders have not appointed a successor Agent in
accordance with paragraph (b) above within thirty (30) days after notice
of resignation was given, the Agent (after consultation with the Principal
Company) may appoint a successor Agent (acting through an office in
France).
	 
	(d)	 	The retiring Agent shall, at its own cost, make available to the
successor Agent such documents and records and provide such assistance as
the successor Agent may reasonably request for the purposes of performing
its functions as Agent under the Finance Documents.
	 
	(e)	 	The Agent’s resignation notice shall only take effect upon the
appointment of a successor.
	 
	(f)	 	Upon the appointment of a successor, the retiring Agent shall be
discharged from any further obligation in respect of the Finance Documents
but shall remain entitled to the benefit of this Clause 25. Its successor
and each of the other Parties shall have the same rights and obligations
amongst themselves as they would have had if such successor had been an
original Party.
	 
	(g)	 	After consultation with the Principal Company, the Majority Lenders may,
by notice to the Agent, require it to resign in accordance with paragraph
(b) above. In this event, the Agent shall resign in accordance with
paragraph (b) above.
	 
	25.12	 	Confidentiality
	 
	(a)	 	In acting as agent for the Finance Parties, the Agent shall be regarded
as acting through its agency division which shall be treated as a separate
entity from any other of its divisions or departments.

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	(b)	 	If information is received by another division or department of the
Agent, it may be treated as confidential to that division or department
and the Agent shall not be deemed to have notice of it.
	 
	25.13	 	Relationship with the Lenders
	 
	(a)	 	The Agent may treat each Lender as a Lender, entitled to payments under
this Agreement and acting through its Facility Office unless it has
received not less than five (5) Business Days prior notice from that
Lender to the contrary in accordance with the terms of this Agreement.
	 
	(b)	 	Each Lender shall supply the Agent with any information required by the
Agent in order to calculate the Mandatory Cost in accordance with Schedule
4 (Mandatory Cost formulae).
	 
	25.14	 	Credit appraisal by the Lenders
	 
	 	 	Without affecting the responsibility of any Borrower for information
supplied by it or on its behalf in connection with any Finance Document,
each Lender confirms to the Agent and the Arranger that it has been, and
will continue to be, solely responsible for making its own independent
appraisal and investigation of all risks arising under or in connection
with any Finance Document including but not limited to:

	 	(a)	 	the financial condition, status and nature of each member of
the Group;
	 
	 	(b)	 	the legality, validity, effectiveness, adequacy or
enforceability of any Finance Document and any other agreement,
arrangement or document entered into, made or executed in
anticipation of, under or in connection with any Finance Document;
	 
	 	(c)	 	whether that Lender has recourse, and the nature and extent of
that recourse, against any Party or any of its respective assets
under or in connection with any Finance Document, the transactions
contemplated by the Finance Documents or any other agreement,
arrangement or document entered into, made or executed in
anticipation of, under or in connection with any Finance Document;
and
	 
	 	(d)	 	the adequacy, accuracy and/or completeness of the Information
Memorandum and any other information provided by the Agent, any Party
or by any other person under or in connection with any Finance
Document, the transactions contemplated by the Finance Documents or
any other agreement, arrangement or document entered into, made or
executed in anticipation of, under or in connection with any Finance
Document.

	25.15	 	Reference Banks

If a Reference Bank (or, if a Reference Bank is not a Lender, the Lender
of which it is an Affiliate) ceases to be a Lender, the Agent shall (in
consultation with the Principal Company) appoint another Lender or an
Affiliate of a Lender to replace that Reference Bank.
	 
	25.16	 	Deduction from amounts payable by the Agent

If any Party owes an amount to the Agent under the Finance Documents the
Agent may, after giving notice to that Party, deduct an amount not
exceeding that amount from any payment to that Party which the Agent would
otherwise be obliged to make under the Finance Documents and apply the
amount deducted in or towards satisfaction of the amount owed. For the
purposes of the Finance Documents that Party shall be regarded as having
received any amount so deducted.

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	26.	 	CONDUCT OF BUSINESS BY THE FINANCE PARTIES
	 
	 	 	No provision of this Agreement will:

	 	(a)	 	interfere with the right of any Finance Party to arrange its
affairs (tax or otherwise) in whatever manner it thinks fit;
	 
	 	(b)	 	oblige any Finance Party to investigate or claim any credit,
relief, remission or repayment available to it or the extent, order
and manner of any claim; or
	 
	 	(c)	 	oblige any Finance Party to disclose any information relating
to its affairs (tax or otherwise) or any computations in respect of
Tax.

	27.	 	SHARING AMONG THE FINANCE PARTIES
	 
	27.1	 	Payments to Finance Parties
	 
	 	 	If a Finance Party (a “Recovering Finance Party”) receives or recovers any
amount from a Borrower other than in accordance with Clause 28 (Payment
mechanics) and applies that amount to a payment due under the Finance
Documents then:

	 	(a)	 	the Recovering Finance Party shall, within three (3) Business
Days, notify details of the receipt or recovery, to the Agent;
	 
	 	(b)	 	the Agent shall determine whether the receipt or recovery is in
excess of the amount the Recovering Finance Party would have been
paid had the receipt or recovery been received or made by the Agent
and distributed in accordance with Clause 28 (Payment mechanics),
without taking account of any Tax which would be imposed on the Agent
in relation to the receipt, recovery or distribution; and
	 
	 	(c)	 	the Recovering Finance Party shall, within three (3) Business
Days of demand by the Agent, pay to the Agent an amount (the “Sharing
Payment”) equal to such receipt or recovery less any amount which the
Agent determines may be retained by the Recovering Finance Party as
its share of any payment to be made, in accordance with Clause 28.5
(Partial payments).

	27.2	 	Redistribution of payments
	 
	 	 	The Agent shall treat the Sharing Payment as if it had been paid by the
relevant Borrower and distribute it between the Finance Parties (other
than the Recovering Finance Party) in accordance with Clause 28.5 (Partial
payments).
	 
	27.3	 	Recovering Finance Party’s rights

	(a)	 	On a distribution by the Agent under Clause 27.2 (Redistribution of
payments), the Recovering Finance Party will be subrogated to the rights
of the Finance Parties which have shared in the redistribution which
Finance Parties agree that they will in that connection waive the benefit
of Article 1252 of the French Code civil.
	 
	(b)	 	If and to the extent that the Recovering Finance Party is not able to
rely on its rights under paragraph (a) above, the relevant Borrower shall
be liable to the Recovering Finance Party for a debt equal to the Sharing
Payment which is immediately due and payable.

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	27.4	 	Reversal of redistribution
	 
	 	 	If any part of the Sharing Payment received or recovered by a Recovering
Finance Party becomes repayable and is repaid by that Recovering Finance
Party, then:

	 	(a)	 	each Finance Party which has received a share of the relevant
Sharing Payment pursuant to Clause 27.2 (Redistribution of payments)
shall, upon request of the Agent, pay to the Agent for account of
that Recovering Finance Party an amount equal to the appropriate part
of its share of the Sharing Payment (together with an amount as is
necessary to reimburse that Recovering Finance Party for its
proportion of any interest on the Sharing Payment which that
Recovering Finance Party is required to pay); and
	 
	 	(b)	 	that Recovering Finance Party’s rights of subrogation in
respect of any reimbursement shall be cancelled and the relevant
Borrower will be liable to the reimbursing Finance Party for the
amount so reimbursed.

	27.5	 	Exceptions
	 
	(a)	 	This Clause 27 shall not apply to the extent that the Recovering Finance
Party would not, after making any payment pursuant to this Clause, have a
valid and enforceable claim against the relevant Borrower.
	 
	(b)	 	A Recovering Finance Party is not obliged to share with any other Finance
Party any amount which the Recovering Finance Party has received or
recovered as a result of taking legal or arbitration proceedings, if:

	 	(i)	 	it notified that other Finance Party of the legal or
arbitration proceedings; and
	 
	 	(ii)	 	that other Finance Party had an opportunity to participate in
those legal or arbitration proceedings but did not do so as soon as
reasonably practicable having received notice and did not take
separate legal or arbitration proceedings.

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SECTION 10

ADMINISTRATION

	28.	 	PAYMENT MECHANICS
	 
	28.1	 	Payments to the Agent
	 
	(a)	 	On each date on which a Borrower or a Lender is required to make a
payment under a Finance Document, that Borrower or Lender shall make the
same available to the Agent (unless a contrary indication appears in a
Finance Document) for value on the due date at the time and in such funds
specified by the Agent as being customary at the time for settlement of
transactions in the relevant currency in the place of payment.
	 
	(b)	 	Payment shall be made to such account in the principal financial centre
of the country of that currency (or, in relation to euro, in a principal
financial centre in a Participating Member State or London) with such bank
as the Agent specifies.
	 
	28.2	 	Distributions by the Agent
	 
	 	 	Each payment received by the Agent under the Finance Documents for another
Party shall, subject to Clause 28.3 (Distributions to a Borrower) and
Clause 28.4 (Clawback) be made available by the Agent as soon as
practicable after receipt to the Party entitled to receive payment in
accordance with this Agreement (in the case of a Lender, for the account
of its Facility Office), to such account as that Party may notify to the
Agent by not less than five Business Days’ notice with a bank in the
principal financial centre of the country of that currency (or, in
relation to euro, in the principal financial centre of a Participating
Member State or London).
	 
	28.3	 	Distributions to a Borrower
	 
	 	 	The Agent may (with the consent of the Borrower or in accordance with
Clause 29 (Set-off)) apply any amount received by it for that Borrower in
or towards payment (on the date and in the currency and funds of receipt)
of any amount due from that Borrower under the Finance Documents or in or
towards purchase of any amount of any currency to be so applied.
	 
	28.4	 	Clawback
	 
	(a)	 	Where a sum is to be paid to the Agent under the Finance Documents for
another Party, the Agent is not obliged to pay that sum to that other
Party (or to enter into or perform any related exchange contract) until it
has been able to establish to its satisfaction that it has actually
received that sum.
	 
	(b)	 	If the Agent pays an amount to another Party and it proves to be the case
that the Agent had not actually received that amount, then the Party to
whom that amount (or the proceeds of any related exchange contract) was
paid by the Agent shall on demand refund the same to the Agent together
with interest on that amount from the date of payment to the date of
receipt by the Agent, calculated by the Agent to reflect its cost of
funds.
	 
	28.5	 	Partial payments
	 
	(a)	 	If the Agent receives a payment that is insufficient to discharge all the
amounts then due and payable by a Borrower under the Finance Documents,
the Agent shall apply that payment towards the obligations of that
Borrower under the Finance Documents in the following order:

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	 	(i)	 	first, in or towards payment pro rata of any unpaid fees, costs
and expenses of the Agent and the Arranger under the Finance
Documents;
	 
	 	(ii)	 	secondly, in or towards payment pro rata of any accrued
interest or commission due but unpaid under this Agreement;
	 
	 	(iii)	 	thirdly, in or towards payment pro rata of any principal due
but unpaid under this Agreement; and
	 
	 	(iv)	 	fourthly, in or towards payment pro rata of any other sum due
but unpaid under the Finance Documents.

	(b)	 	The Agent shall, if so directed by the Majority Lenders, vary the order
set out in paragraphs (a)(ii) to (iv) above.
	 
	(c)	 	Paragraphs (a) and (b) above will override any appropriation made by a
Borrower.
	 
	28.6	 	No set-off by Borrowers
	 
	 	 	All payments to be made by a Borrower under the Finance Documents shall be
calculated and be made without (and free and clear of any deduction for)
set-off or counterclaim.
	 
	28.7	 	Business Days
	 
	(a)	 	Any payment which is due to be made on a day that is not a Business Day
shall be made on the next Business Day in the same calendar month (if
there is one) or the preceding Business Day (if there is not).
	 
	(b)	 	During any extension of the due date for payment of any principal or an
Unpaid Sum under this Agreement interest is payable on the principal or
Unpaid Sum at the rate payable on the original due date.
	 
	28.8	 	Currency of account
	 
	(a)	 	Subject to paragraphs (b) to (e) below, dollars are the currency of
account and payment for any sum due from a Borrower under any Finance
Document.
	 
	(b)	 	A repayment of a Loan or Unpaid Sum or a part of a Loan or Unpaid Sum
shall be made in the currency in which that Loan or Unpaid Sum is
denominated on its due date.
	 
	(c)	 	Each payment of interest shall be made in the currency in which the sum
in respect of which the interest is payable was denominated when that
interest accrued.
	 
	(d)	 	Each payment in respect of costs, expenses or Taxes shall be made in the
currency in which the costs, expenses or Taxes are incurred.
	 
	(e)	 	Any amount expressed to be payable in a currency other than dollars shall
be paid in that other currency.
	 
	28.9	 	Change of currency
	 
	(a)	 	Unless otherwise prohibited by law, if more than one currency or currency
unit are at the same time recognised by the central bank of any country as
the lawful currency of that country, then:

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	 	(i)	 	any reference in the Finance Documents to, and any obligations
arising under the Finance Documents in, the currency of that country
shall be translated into, or paid in, the currency or currency unit
of that country designated by the Agent (after consultation with the
Principal Company); and
	 
	 	(ii)	 	any translation from one currency or currency unit to another
shall be at the official rate of exchange recognised by the central
bank for the conversion of that currency or currency unit into the
other, rounded up or down by the Agent (acting reasonably).

	(b)	 	If a change in any currency of a country occurs, this Agreement will, to
the extent the Agent (acting reasonably and after consultation with the
Principal Company) specifies to be necessary, be amended to comply with
any generally accepted conventions and market practice in the Relevant
Interbank Market and otherwise to reflect the change in currency.
	 
	29.	 	SET-OFF
	 
	 	 	A Finance Party may set off any matured obligation due from a Borrower
under the Finance Documents (to the extent beneficially owned by that
Finance Party) against any matured obligation owed by that Finance Party
to that Borrower, regardless of the place of payment, booking branch or
currency of either obligation. If the obligations are in different
currencies, the Finance Party may convert either obligation at a market
rate of exchange in its usual course of business for the purpose of the
set-off.
	 
	30.	 	NOTICES
	 
	30.1	 	Communications in writing
	 
	 	 	Any communication to be made under or in connection with the Finance
Documents shall be made in writing and, unless otherwise stated, may be
made by fax or letter.
	 
	30.2	 	Addresses
	 
	 	 	The address and fax number (and the department or officer, if any, for
whose attention the communication is to be made) of each Party for any
communication or document to be made or delivered under or in connection
with the Finance Documents is:

	 	(a)	 	in the case of the Principal Company and each other Borrower,
that identified with its name below;
	 
	 	(b)	 	in the case of each Lender, that notified in writing to the
Agent on or prior to the date on which it becomes a Party; and
	 
	 	(c)	 	in the case of the Agent, that identified with its name below,

	 	 	or any substitute address, fax number or department or officer as the
Party may notify to the Agent (or the Agent may notify to the other
Parties, if a change is made by the Agent) by not less than five (5)
Business Days’ notice.

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	30.3	 	Delivery
	 
	(a)	 	Any communication or document made or delivered by one person to another
under or in connection with the Finance Documents will only be effective:

	 	(i)	 	if by way of fax, when received in legible form; or
	 
	 	(ii)	 	if by way of letter, when it has been left at the relevant
address or five Business Days after being deposited in the post
postage prepaid in an envelope addressed to it at that address,

	 	 	and, if a particular department or officer is specified as part of its
address details provided under Clause 30.2 (Addresses), if addressed to
that department or officer.
	 
	(b)	 	Any communication or document to be made or delivered to the Agent will
be effective only when actually received by the Agent and then only if it
is expressly marked for the attention of the department or officer
identified with the Agent’s signature below (or any substitute department
or officer as the Agent shall specify for this purpose).
	 
	(c)	 	All notices from or to a Borrower shall be sent through the Agent.
	 
	(d)	 	Any communication or document made or delivered to the Principal Company
in accordance with this Clause will be deemed to have been made or
delivered to each of the Borrowers.
	 
	30.4	 	Notification of address and fax number
	 
	 	 	Promptly upon receipt of notification of an address and fax number or
change of address or fax number pursuant to Clause 30.2 (Addresses) or
changing its own address or fax number, the Agent shall notify the other
Parties.
	 
	30.5	 	Electronic communication
	 
	(a)	 	Any communication to be made between the Agent and a Lender under or in
connection with the Finance Documents may be made by electronic mail or
other electronic means, if the Agent and the relevant Lender:

	 	(i)	 	agree that, unless and until notified to the contrary, this is
to be an accepted form of communication;
	 
	 	(ii)	 	notify each other in writing of their electronic mail address
and/or any other information required to enable the sending and
receipt of information by that means; and
	 
	 	(iii)	 	notify each other of any change to their address or any other
such information supplied by them.

	(b)	 	Any electronic communication made between the Agent and a Lender will be
effective only when actually received in readable form and in the case of
any electronic communication made by a Lender to the Agent only if it is
addressed in such a manner as the Agent shall specify for this purpose.

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	30.6	 	English and French language
	 
	(a)	 	Any notice, Utilisation Request or Compliance Certificate given under or
in connection with any Finance Document must be in English.
	 
	(b)	 	All other documents provided under or in connection with any Finance
Document must be:

	 	(i)	 	in English or French; or
	 
	 	(ii)	 	if not in English or French, and if so required by the Agent,
accompanied by a certified English translation and, in this case, the
English translation will prevail unless the document is a
constitutional, statutory or other official document.

	31.	 	CALCULATIONS AND CERTIFICATES
	 
	31.1	 	Accounts
	 
	 	 	In any litigation or arbitration proceedings arising out of or in
connection with a Finance Document, the entries made in the accounts
maintained by a Finance Party are prima facie evidence of the matters to
which they relate.
	 
	31.2	 	Certificates and Determinations
	 
	 	 	Any certification or determination by a Finance Party of a rate or amount
under any Finance Document is, in the absence of manifest error,
conclusive evidence of the matters to which it relates.
	 
	31.3	 	Day count convention
	 
	 	 	Any interest, commission or fee accruing under a Finance Document will
accrue from day to day and is calculated on the basis of the actual number
of days elapsed and a year of 360 days or, in any case where the practice
in the Relevant Interbank Market differs, in accordance with that market
practice.
	 
	32.	 	PARTIAL INVALIDITY
	 
	 	 	If, at any time, any provision of the Finance Documents is or becomes
illegal, invalid or unenforceable in any respect under any law of any
jurisdiction, neither the legality, validity or enforceability of the
remaining provisions nor the legality, validity or enforceability of such
provision under the law of any other jurisdiction will in any way be
affected or impaired.
	 
	33.	 	REMEDIES AND WAIVERS
	 
	 	 	No failure to exercise, nor any delay in exercising, on the part of any
Finance Party, any right or remedy under the Finance Documents shall
operate as a waiver, nor shall any single or partial exercise of any right
or remedy prevent any further or other exercise or the exercise of any
other right or remedy. The rights and remedies provided in this Agreement
are cumulative and not exclusive of any rights or remedies provided by
law.

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	34.	 	AMENDMENTS AND WAIVERS
	 
	34.1	 	Required consents
	 
	(a)	 	Subject to Clause 34.2 (Exceptions) any term of the Finance Documents may
be amended or waived only with the consent of the Majority Lenders and the
Borrowers and any such amendment or waiver will be binding on all Parties.
	 
	(b)	 	The Agent may effect, on behalf of any Finance Party, any amendment or
waiver permitted by this Clause.
	 
	34.2	 	Exceptions
	 
	(a)	 	An amendment or waiver that has the effect of changing or which relates
to:

	 	(i)	 	the definition of “Majority Lenders” in Clause 1.1
(Definitions);
	 
	 	(ii)	 	an extension to the date of payment of any amount under the
Finance Documents;
	 
	 	(iii)	 	a reduction in the Margin or a reduction in the amount of any
payment of principal, interest, fees or commission payable;
	 
	 	(iv)	 	an increase in or an extension of any Commitment;
	 
	 	(v)	 	a change to the Borrowers;
	 
	 	(vi)	 	any provision which expressly requires the consent of all the
Lenders; or
	 
	 	(vii)	 	Clause 2.2 (Finance Parties’ rights and obligations), Clause
23 (Changes to the Lenders), Clause 27 (Sharing among the Finance
Parties) or this Clause 34,

	 	 	shall not be made without the prior consent of all the Lenders.
	 
	(b)	 	An amendment or waiver which relates to the rights or obligations of the
Agent or the Arranger may not be effected without the consent of the Agent
or the Arranger.

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SECTION 11

GOVERNING LAW AND ENFORCEMENT

	35.	 	GOVERNING LAW
	 
	 	 	This Agreement is governed by French law.
	 
	36.	 	ENFORCEMENT — JURISDICTION OF FRENCH COURTS
	 
	(a)	 	The tribunaux within the jurisdiction of the Cour d’appel of Paris
(tribunaux du ressort de la Cour d’appel de Paris) has exclusive
jurisdiction to settle any dispute arising out of or in connection with
this Agreement (including a dispute regarding the existence, validity or
termination of this Agreement) (a “Dispute”).
	 
	(b)	 	Paragraph (a) of this Clause 36 is for the benefit of the Finance Parties
only. As a result, no Finance Party shall be prevented from taking
proceedings relating to a Dispute in any other courts with jurisdiction.
To the extent allowed by law, the Finance Parties may take concurrent
proceedings in any number of jurisdictions.

This Agreement has been entered into on the date stated at the beginning of
this Agreement.

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SCHEDULE 1

The Original Lenders

	 	 	 	 	 
	Name of Original Lender
	 	Commitment (dollars)

	Natexis Banques Populaires
	 	 	14,700,000	 
	BNP Paribas
	 	 	13,200,000	 
	Société Générale
	 	 	13,200,000	 
	Crédit Industriel et Commercial
	 	 	11,250,000	 
	KBC Bank
	 	 	7,650,000	 
	Total
	 	 	60,000,000	 

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SCHEDULE 2

Conditions Precedent

	1.	 	The Borrowers
	 
	(a)	 	A K-bis extract for each Borrower, not more than one month old.
	 
	(b)	 	A copy of the constitutive documents (statuts) of each Borrower.
	 
	(c)	 	Evidence that the person(s) who has signed the Finance Documents on
behalf of each Borrower was duly authorised so to sign (including, but not
limited to, a copy, certified as a true copy by an Authorised Signatory,
of any power of attorney or corporate decision necessary to provide such
person with such authority).
	 
	(d)	 	A copy of a resolution of the board of directors (conseil
d’administration) of the Principal Company taken in accordance with
article L.225-35 of the French Code de commerce, approving the terms of
the Guarantee given by it and authorising a specified person or persons,
on its behalf, to execute that Guarantee.
	 
	(e)	 	A copy of a decision of the comité de surveillance of CGG Marine taken
prior to the Signing Date, approving the execution and performance by CGG
Marine of the Finance Documents to which it is a party (including, but not
limited to, each Bordereau Dailly to be executed by CGG Marine after the
Signing Date).
	 
	(f)	 	A copy of a resolution of the board of directors (conseil
d’administration) of Sercel authorising the execution of this Agreement by
Sercel in accordance with article L.225-38 of the French Code de commerce.
	 
	(g)	 	For each Borrower, a certificate signed by a duly authorised
representative of such Borrower:

	 	(i)	 	setting out the name and a specimen of the signature of (1)
each person referred to in paragraph (c) above, (2), in relation to
the Principal Company, of each person authorised by the resolution
referred to in paragraph (d) above and (3) each person authorised to
sign, on behalf of such Borrower, the Finance Documents to which it
is a party and each other document to be delivered by such Borrower
pursuant thereto (including, but not limited, to any Bordereau
Dailly, any Compliance Certificate or any Utilisation Request
provided by such Borrower);
	 
	 	(ii)	 	certifying that each copy document relating to it specified in
this Part 1 of Schedule 2 and in paragraph (h) of Part 3 of this
Schedule 2 is correct, complete and in full force and effect as at a
date no earlier than the date of this Agreement; and
	 
	 	(iii)	 	in relation to the certificate for the Principal Company,
setting out a list of the Principal Subsidiaries as at the date of
such certificate.

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	2.	 	Legal opinions
	 
	(a)	 	A legal opinion of Clifford Chance, legal advisers to the Arranger and
the Agent in France, dated the date hereof, substantially in the form
distributed to the Original Lenders prior to signing this Agreement.
	 
	(b)	 	A legal opinion of Linklaters, the legal advisers to the Principal
Company, dated the date hereof, substantially in the form distributed to
the Original Lenders prior to signing this Agreement.
	 
	3.	 	Other documents and evidence
	 
	(a)	 	A copy of any other Authorisation or other document, opinion or assurance
which the Agent considers to be necessary or desirable (if it has notified
the Principal Company accordingly) in connection with the entry into and
performance of the transactions contemplated by any Finance Document or
for the validity and enforceability of any Finance Document.
	 
	(b)	 	The Original Financial Statements of each Borrower.
	 
	(c)	 	Evidence that the fees, costs and expenses then due from the Principal
Company pursuant to Clause 12 (Fees) and Clause 17 (Costs and expenses)
have been paid or will be paid by the first Utilisation Date.
	 
	(d)	 	The Guarantee, duly executed by the Principal Company.
	 
	(e)	 	Convention Cadre de Cession, duly executed by the Principal Company.
	 
	(f)	 	Convention Cadre de Cession, duly executed by CGG Marine.
	 
	(g)	 	Convention Cadre de Cession, duly executed by Sercel.
	 
	(h)	 	A copy of an irrevocable notice by the Principal Company of cancellation
and prepayment of the Existing Facility, on such terms as are satisfactory
to the Agent.

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SCHEDULE 3

Form of Utilisation Request

	From:	 	[Borrower]
	 
	To:	 	[Agent]

Dated:

Dear Sirs,

$ 60,000,000 Facility Agreement dated 12 March 2004 between Compagnie Générale de

Géophysique, CGG Marine and Sercel as borrowers and, among others, Natexis Banques

Populaires as Agent (the “Agreement”)

	1.	 	We refer to the Agreement. This is a Utilisation Request. Terms defined
in the Agreement have the same meaning in this Utilisation Request unless
given a different meaning in this Utilisation Request.
	 
	2.	 	We wish to borrow a Loan on the following terms:

	 	 	 
	Proposed Utilisation Date:

	 	[•] (or, if that is not a Business
Day, the next Business Day)
	 
	Currency of Loan:

	 	[•]
	 
	Amount:

	 	[•] or, if less, such that its
Dollar Amount is the Available
Facility, or, if less, such that its
Dollar Amount fulfils the
requirements of paragraph (b) of
Clause 5.3 (Currency and amount) of
the Agreement
	 
	Interest Period:

	 	[•]

	3.	 	We confirm that each condition specified in Clause 4.2 (Further
conditions precedent) is satisfied on the date of this Utilisation
Request.
	 
	4.	 	The proceeds of this Loan should be credited to [account].
	 
	5.	 	This Utilisation Request is irrevocable.

Yours faithfully

.......................................

Authorised Signatory for

[name of relevant Borrower]

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[Confirmed

Yours faithfully

.......................................

Authorised Signatory for

Compagnie Générale de Géophysique]

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SCHEDULE 4

Mandatory Cost Formulae

	1.	 	The Mandatory Cost is an addition to the interest rate to compensate
Lenders for the cost of compliance with (a) the requirements of the Bank
of England and/or the Financial Services Authority (or, in either case,
any other authority which replaces all or any of its functions) or (b) the
requirements of the European Central Bank.
	 
	2.	 	On the first day of each Interest Period (or as soon as possible
thereafter) the Agent shall calculate, as a percentage rate, a rate (the
“Additional Cost Rate”) for each Lender, in accordance with the paragraphs
set out below. The Mandatory Cost will be calculated by the Agent as a
weighted average of the Lenders’ Additional Cost Rates (weighted in
proportion to the percentage participation of each Lender in the relevant
Loan) and will be expressed as a percentage rate per annum.
	 
	3.	 	The Additional Cost Rate for any Lender lending from a Facility Office in
a Participating Member State will be the percentage notified by that
Lender to the Agent. This percentage will be certified by that Lender in
its notice to the Agent to be its reasonable determination of the cost
(expressed as a percentage of that Lender’s participation in all Loans
made from that Facility Office) of complying with the minimum reserve
requirements of the European Central Bank in respect of loans made from
that Facility Office.
	 
	4.	 	The Additional Cost Rate for any Lender lending from a Facility Office in
the United Kingdom will be calculated by the Agent as follows:

	 	(a)	 	in relation to a sterling Loan:

	 	 	 
	AB+C(B-D)+Ex0.01
100-(A+C)	 	per cent. per annum

	 	(b)	 	in relation to a Loan in any currency other than sterling:

	 	 	 
	Ex0.01
300	 	per cent. per annum.

	 	 	Where:

	 	A	 	is the percentage of Eligible Liabilities (assuming these to be
in excess of any stated minimum) which that Lender is from time to
time required to maintain as an interest free cash ratio deposit with
the Bank of England to comply with cash ratio requirements.
	 
	 	B	 	is the percentage rate of interest (excluding the Margin and
the Mandatory Cost and, if the Loan is an Unpaid Sum, the additional
rate of interest specified in paragraph (a) of Clause 9.3 (Default
interest)) payable for the relevant Interest Period on the Loan.

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	 	C	 	is the percentage (if any) of Eligible Liabilities which that
Lender is required from time to time to maintain as interest bearing
Special Deposits with the Bank of England.
	 
	 	D	 	is the percentage rate per annum payable by the Bank of England
to the Agent on interest bearing Special Deposits.
	 
	 	E	 	is designed to compensate Lenders for amounts payable under the
Fees Rules and is calculated by the Agent as being the average of the
most recent rates of charge supplied by the Reference Banks to the
Agent pursuant to paragraph 7 below and expressed in pounds per one
million (£1,000,000).

	5.	 	For the purposes of this Schedule:

	 	(a)	 	“Eligible Liabilities” and “Special Deposits” have the meanings
given to them from time to time under or pursuant to the Bank of
England Act 1998 or (as may be appropriate) by the Bank of England;
	 
	 	(b)	 	“Fees Rules” means the rules on periodic fees contained in the
FSA Supervision Manual or such other law or regulation as may be in
force from time to time in respect of the payment of fees for the
acceptance of deposits;
	 
	 	(c)	 	“Fee Tariffs” means the fee tariffs specified in the Fees Rules
under the activity group A.1 Deposit acceptors (ignoring any minimum
fee or zero rated fee required pursuant to the Fees Rules but taking
into account any applicable discount rate); and
	 
	 	(d)	 	“Tariff Base” has the meaning given to it in, and will be
calculated in accordance with, the Fees Rules.

	6.	 	In application of the above formulae, A, B, C and D will be included in
the formulae as percentages (i.e. 5 per cent. will be included in the
formula as 5 and not as 0.05). A negative result obtained by subtracting
D from B shall be taken as zero. The resulting figures shall be rounded
to four decimal places.
	 
	7.	 	If requested by the Agent, each Reference Bank shall, as soon as
practicable after publication by the Financial Services Authority, supply
to the Agent, the rate of charge payable by that Reference Bank to the
Financial Services Authority pursuant to the Fees Rules in respect of the
relevant financial year of the Financial Services Authority (calculated
for this purpose by that Reference Bank as being the average of the Fee
Tariffs applicable to that Reference Bank for that financial year) and
expressed in pounds per one million (£1,000,000) of the Tariff Base of
that Reference Bank.
	 
	8.	 	Each Lender shall supply any information required by the Agent for the
purpose of calculating its Additional Cost Rate. In particular, but
without limitation, each Lender shall supply the following information on
or prior to the date on which it becomes a Lender:

	 	(a)	 	the jurisdiction of its Facility Office; and
	 
	 	(b)	 	any other information that the Agent may reasonably require for
such purpose.

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	 	 	Each Lender shall promptly notify the Agent of any change to the
information provided by it pursuant to this paragraph.
	 
	9.	 	The percentages of each Lender for the purpose of A and C above and the
rates of charge of each Reference Bank for the purpose of E above shall be
determined by the Agent based upon the information supplied to it pursuant
to paragraphs 7 and 8 above and on the assumption that, unless a Lender
notifies the Agent to the contrary, each Lender’s obligations in relation
to cash ratio deposits and Special Deposits are the same as those of a
typical bank from its jurisdiction of incorporation with a Facility Office
in the same jurisdiction as its Facility Office.
	 
	10.	 	The Agent shall have no liability to any person if such determination
results in an Additional Cost Rate which over or under compensates any
Lender and shall be entitled to assume that the information provided by
any Lender or Reference Bank pursuant to paragraphs 3, 7 and 8 above is
true and correct in all respects.
	 
	11.	 	The Agent shall distribute the additional amounts received as a result of
the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate
for each Lender based on the information provided by each Lender and each
Reference Bank pursuant to paragraphs 3, 7 and 8 above.
	 
	12.	 	Any determination by the Agent pursuant to this Schedule in relation to a
formula, the Mandatory Cost, an Additional Cost Rate or any amount payable
to a Lender shall, in the absence of manifest error, be conclusive and
binding on all Parties.
	 
	13.	 	The Agent may from time to time, after consultation with the Principal
Company and the Lenders, determine and notify to all Parties any
amendments which are required to be made to this Schedule in order to
comply with any change in law, regulation or any requirements from time to
time imposed by the Bank of England, the Financial Services Authority or
the European Central Bank (or, in any case, any other authority which
replaces all or any of its functions) and any such determination shall, in
the absence of manifest error, be conclusive and binding on all Parties.

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SCHEDULE 5

Form of Transfer Agreement

This Transfer Agreement is made on [ ]

BETWEEN:

	(1)	 	[•] (the “Existing Lender”)

AND:

	(2)	 	[•] (the “New Lender”)

WHEREAS:

	(A)	 	The Existing Lender has entered into a multicurrency revolving loan
facility in an aggregate amount equal to sixty million dollars ($ 60,000,000) under a facility agreement dated 12 March 2004, between
Compagnie Générale de Géophysique, CGG Marine, Sercel as Borrowers, the
Financial Institutions listed in Schedule 1 to that facility agreement as
Lenders, Natexis Banques Populaires acting as Arranger, and Natexis
Banques Populaires acting as Agent of the Lenders (the “Facility
Agreement”).
	 
	(B)	 	The Existing Lender wishes to transfer and the New Lender wishes to
acquire [all] [the part specified in the Schedule of this Transfer
Agreement] of the Existing Lender’s Commitment, rights and obligations
referred to in the Schedule to this Transfer Agreement.
	 
	(C)	 	Terms defined in the Facility Agreement have the same meaning when used
in this Transfer Agreement.

IT IS AGREED AS FOLLOWS:

	1.	 	The Existing Lender and the New Lender agree to the transfer (cession) of
[all] [the part specified in the Schedule of this Transfer Agreement] of
the Existing Lender’s Commitment, rights and obligations referred to in
the Schedule to this Transfer Agreement in accordance with Clause 23.5 of
the Facility Agreement (Procedure for transfer).a
	 
	2.	 	The proposed Transfer Date is [•].
	 
	3.	 	The Facility Office and address, fax number and attention details for
notices of the New Lender for the purposes of Clause 30.2 (Addresses) are
set out in the Schedule to this Transfer Agreement.

	a	 	The New Lender may, in the case of a transfer of rights by the Existing
Lender under this Transfer Agreement, if it considers it necessary to make the
transfer effective as against third parties, arrange for it to be notified by
way of signification to the Borrowers in accordance with article 1690 of the
French Code Civil.

-81-

 

	4.	 	The New Lender acknowledges the limitations on the Existing Lender’s
liabilities set out in paragraph (c) of Clause 23.4 (Limitation of
responsibility of Existing Lenders) of the Facility Agreement.
	 
	5.	 	The New Lender confirms to the other Finance Parties represented by the
Agent that it will assume the same obligations to those Parties as it
would have been under if it was an Original Lender.
	 
	6.	 	This Transfer Agreement is governed by French law. The Tribunal of
Commerce of Paris shall have jurisdiction in relation to any dispute
concerning it.

SCHEDULE

Commitment/rights and obligations to be transferred

[insert relevant details]

[Facility Office address, fax number and attention details for notices and account details for payments]

	 	 	 
	[Existing Lender]

	 	[New Lender]
	 
	By:

	 	By:

This Transfer Agreement is accepted by the Agent and the Transfer Date is
confirmed as [•].

[Agent]

By:

-82-

 

SCHEDULE 6

Form of Compliance Certificate

To: Natexis Banques Populaires as Agent

From: [Company]

Dated:

Dear Sirs,

$ 60,000,000 Facility Agreement dated 12 March 2004 between Compagnie Générale de

Géophysique, CGG Marine and Sercel as borrowers and, among others, Natexis Banques

Populaires as Agent (the “Agreement”)

	1.	 	We refer to the Agreement. This is a Compliance Certificate. Terms
defined in the Agreement have the same meaning when used in this
Compliance Certificate unless given a different meaning in this Compliance
Certificate.
	 
	2.	 	We confirm that for the purposes of Clause 16.2 (Limitation of liability)
of the Agreement that in respect of the Relevant Period ending on [30
June/31 December] [l]:
	 
	 	 	[Gearing is [l]:1]
	 
	 	 	[Leverage is [l]:1]
	 
	 	 	[Operational Leverage is [l]:1]
	 
	3.	 	Gearing, Leverage and Operational Leverage were calculated as follows:
[Insert details of calculation].
	 
	4.	 	The amount of Permitted Shareholder Advances for the calculations
referred to above is [l] euros (EUR [l]).
	 
	5.	 	We attach a copy of the Principal Company’s consolidated financial
statements for the period ending on [30 June/31 December] [l].

-83-

 

	6.	 	[We confirm that no Default is continuing.]*

	 	 	 	 	 
	Signed:

	 	..................................................................

Chief Financial Officer

Of

Compagnie Générale de Géophysique
	 	..................................................................

Authorised Signatory

Of

Compagnie Générale de Géophysique

	*	 	If this statement cannot be made, the certificate should identify any Default
that is continuing and the steps, if any, being taken to remedy it.

-84-

 

SCHEDULE 7

Existing Security

	 	 	 	 	 
	Name of Security provider

CGG Marine

	 	Security (including details of the asset to which such Security relates)

Streamers equipping vessel Mistral
	 	Total amount (or, if higher, total maximum facility amount) secured

$8.7 million

-85-

 

SCHEDULE 8

Existing Financial Indebtedness

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Maximum Facility	 	Amount outstanding	 	 
	Name of the Borrower
	 	Bank
	 	Facility Type
	 	Amount
	 	(29/02/2004)
	 	Due date

	Compagnie Générale

de Géophysique

	 	CIC Paris
	 	Overdraft
	 	€1,000,000
	 	 	0	 	 	At sight
	

	 	
 
	 	
 
	 	
 
	 	 	
 	 	 	
 
	Compagnie Générale

de Géophysique

	 	Natwest London
	 	Overdraft
	 	£500,000
	 	£	31,232	 	 	At sight
	

	 	
 
	 	
 
	 	
 
	 	 	
 	 	 	
 
	Compagnie Générale

de Géophysique

	 	Dhofar al Omani Al

Fransi Mascate

(Oman)
	 	Overdraft
	 	OMR 200,000
	 	 	0	 	 	01/2005
	

	 	
 
	 	
 
	 	
 
	 	 	
 	 	 	
 
	Sercel

	 	CIO Nantes
	 	Overdraft
	 	€200,000
	 	€	1,194	 	 	At sight
	

	 	
 
	 	
 
	 	
 
	 	 	
 	 	 	
 
	Sercel

	 	CIO Nantes
	 	Discount of
receivables
	 	€3,880,238
	 	€	3,880,238	 	 	04/2006
	

	 	
 
	 	
 
	 	
 
	 	 	
 	 	 	
 
	Sercel

	 	CRCA
	 	Medium Term Loan
	 	€571,684
	 	€	571,684	 	 	10/2004
	

	 	
 
	 	
 
	 	
 
	 	 	
 	 	 	
 
	Sercel

	 	CRCA
	 	Medium Term Loan
	 	€1,400,000
	 	€	1,400,000	 	 	06/2004
	

	 	
 
	 	
 
	 	
 
	 	 	
 	 	 	
 
	Sercel

	 	CRCA
	 	Medium Term Loan
	 	US$3,712,800
	 	US$	3,712,800	 	 	01/2008
	

	 	
 
	 	
 
	 	
 
	 	 	
 	 	 	
 
	Sercel

	 	BCME
	 	Medium Term Loan
	 	US$1,200,000
	 	US$	1,200,000	 	 	10/2005
	

	 	
 
	 	
 
	 	
 
	 	 	
 	 	 	
 
	Sercel

	 	BCME
	 	Medium Term Loan
	 	US$2,000,000
	 	US$	2,000,000	 	 	12/2007
	

	 	
 
	 	
 
	 	
 
	 	 	
 	 	 	
 
	Sercel

	 	BCME
	 	Medium Term Loan
	 	US$2,500,000
	 	US$	2,500,000	 	 	12/2008
	

	 	
 
	 	
 
	 	
 
	 	 	
 	 	 	
 
	Sercel

	 	CIO Nantes
	 	Medium Term Loan
	 	US$1,300,000
	 	US$	1,300,000	 	 	04/2007
	

	 	
 
	 	
 
	 	
 
	 	 	
 	 	 	
 
	CGG Marine

	 	CIC Paris
	 	Medium Term Loan
	 	US$9,500,000
	 	US$	9,500,000	 	 	11/2007
	

	 	
 
	 	
 
	 	
 
	 	 	
 	 	 	
 
	Compagnie Générale

de Géophysique

	 	Natexis (Agent)
	 	Revolving Credit

Facility
	 	US$36,000,000
	 	 	0	 	 	09/2004
	

	 	
 
	 	
 
	 	
 
	 	 	
 	 	 	
 

-86-

 

SCHEDULE 9

Timetables

	 	 	 	 	 
	 	 	Loans in euro	 	Loans in dollars
	 	 	(Paris time)
	 	(Paris time, unless
	 	 	 	 	specified)
	Delivery of a duly
completed Utilisation
Request (Clause 5.1
(Delivery of a
Utilisation Request)

	 	Prior to 10:00 am, 5
Business Days prior
to the Utilisation
Date
	 	Prior to 10:00 am, 5
Business Days prior
to the Utilisation
Date
	 
	Agent determines (in
relation to a
Utilisation) the Dollar
Amount of the Loan

	 	Prior to 15:00, 3
Business Days prior
to the Utilisation
Date
	 	Prior to 15:00, 3
Business Days prior
to the Utilisation
Date
	 
	Agent notifies the
Lenders of the Loan, the
Dollar Amount of the Loan
in accordance with Clause
5.4 (Lenders’
participation)

	 	Prior to 17:00, 3
Business Days prior
to the Utilisation
Date
	 	Prior to 17:00, 3
Business Days prior
to the Utilisation
Date
	 
	Agent receives a
notification from a
Lender under Clause 6.2
(Unavailability of a
currency)

	 	Prior to 9:30 am,
two Business Days
prior to the
Utilisation Date	 	 
	 
	Agent gives notice in
accordance with Clause
6.2 (Unavailability of a
currency)

	 	Prior to 11:00 am,
two Business Days
prior to the
Utilisation Date	 	 
	 
	LIBOR or EURIBOR is fixed

	 	Quotation Day as of
11:00 am
	 	Quotation Day as of
11:00 a.m. (London time)

-87-

 

SCHEDULE 10

Form of Confidentiality Undertaking

[Letterhead of Seller]

From: [l] (the “Seller”)

To:

	 	 	 
	[l] [as agent/broker of] [l] (the “Purchaser”)

	 	[insert name of Potential

Purchaser/Purchaser’s agent/broker]

Re: The Agreement

Borrowers: Compagnie Générale de Géophysique, CGG Marine, Sercel

Date: 12 March 2004

Amount: US$ 60,000,000

Agent: Natexis Banques Populaires

Dear Sirs,

We understand that you are considering acquiring an interest in the Agreement
(the “Acquisition”). In consideration of us agreeing to make available to you
certain information, by your signature of a copy of this letter you agree as
follows:

	1.	 	CONFIDENTIALITY UNDERTAKING
	 
	 	 	You undertake (a) to keep the Confidential Information confidential and
not to disclose it to anyone except as provided for by paragraph 2 below,
(b) to use the Confidential Information only for the Permitted Purpose and
(c) to use all reasonable endeavours to ensure that any person to whom you
pass any Confidential Information (unless disclosed under paragraph 2(d)
below) acknowledges and complies with the provisions of this letter as if
that person were also a party to it.
	 
	2.	 	PERMITTED DISCLOSURE
	 
	 	 	We agree that you may disclose Confidential Information:
	 
	(a)	 	to members of the Purchaser Group and their officers, directors,
employees and professional advisers to the extent necessary for the
Permitted Purpose and to any auditors (commissaires aux comptes) of
members of the Purchaser Group;

-88-

 

	(b)	 	subject to the requirements of the Agreement, in accordance with the
Permitted Purpose so long as any prospective purchaser has delivered a
letter to you in equivalent form to this letter;
	 
	(c)	 	subject to the requirements of the Agreement, to any person to (or
through) whom you assign or transfer (or may potentially assign or
transfer) all or any of the rights, benefits and obligations which you may
acquire under the Agreement or with (or through) whom you enter into (or
may potentially enter into) any sub-participation in relation to, or any
other transaction under which payments are to be made by reference to, the
Agreement or the Borrower or any member of the Group in each case so long
as that person has delivered a letter to you in equivalent form to this
letter; and
	 
	(d)	 	(i) where requested or required by any court of competent jurisdiction or
any competent judicial, governmental, supervisory or regulatory body, (ii)
where required by the rules of any stock exchange on which the shares or
other securities of any member of the Purchaser Group are listed or (iii)
where required by the laws or regulations of any country with jurisdiction
over the affairs of any member of the Purchaser Group.
	 
	3.	 	NOTIFICATION OF REQUIRED OR UNAUTHORISED DISCLOSURE
	 
	 	 	You agree (to the extent permitted by law) to inform us of the full
circumstances of any disclosure under paragraph 2(d) or upon becoming
aware that Confidential Information has been disclosed in breach of this
letter.
	 
	4.	 	RETURN OF COPIES
	 
	 	 	If we so request in writing, you shall return all Confidential Information
supplied to you by us and destroy or permanently erase all copies of
Confidential Information made by you and use all reasonable endeavours to
ensure that anyone to whom the Purchaser has supplied any such
Confidential Information destroys or permanently erases such Confidential
Information and any copies made by them, in each case save to the extent
that you are required to retain any such Confidential Information by any
applicable law, rule or regulation or by any competent judicial,
governmental, supervisory or regulatory body or in accordance with
internal policy, or where the Confidential Information has been disclosed
under paragraph 2(d) above.
	 
	5.	 	CONTINUING OBLIGATIONS
	 
	 	 	The obligations in this letter are continuing and, in particular, shall
survive the termination of any discussions or negotiations between you and
us. Notwithstanding the previous sentence, the obligations in this letter
shall cease (a) if you become a party to or otherwise acquire (by
assignment or sub-participation) an interest, direct or indirect, in the
Agreement or (b) twelve months after you have returned all Confidential
Information supplied to you by us and destroyed or permanently erased all
copies of Confidential Information made by you (other than any such
Confidential Information or copies which have been disclosed under
paragraph 2 above (other than sub-paragraph 2(a)) or which, pursuant to
paragraph 4 above, are not required to be returned or destroyed).

-89-

 

	6.	 	NO REPRESENTATION; CONSEQUENCES OF BREACH, ETC
	 
	 	 	You acknowledge and agree that neither we nor any member of the Group nor
any of our or their respective officers, employees or advisers (each a
“Relevant Person”) (i) make any representation or warranty, express or
implied, as to, or assume any responsibility for, the accuracy,
reliability or completeness of any of the Confidential Information or any
other information supplied by us or the assumptions on which it is based
or (ii) shall be under any obligation to update or correct any inaccuracy
in the Confidential Information or any other information supplied by us or
be otherwise liable to you or any other person in respect to the
Confidential Information or any such information.
	 
	7.	 	NO WAIVER; AMENDMENTS, ETC
	 
	 	 	This letter sets out the full extent of your obligations of
confidentiality owed to us in relation to the information the subject of
this letter. No failure or delay in exercising any right, power or
privilege hereunder will operate as a waiver thereof nor will any single
or partial exercise of any right, power or privilege preclude any further
exercise thereof or the exercise of any other right, power or privileges
hereunder. The terms of this letter and your obligations hereunder may
only be amended or modified by written agreement between us.
	 
	8.	 	INSIDE INFORMATION
	 
	 	 	You acknowledge that some or all of the Confidential Information is or may
be price-sensitive information and that the use of such information may be
regulated or prohibited by applicable legislation relating to insider
dealing and you undertake not to use any Confidential Information for any
unlawful purpose.
	 
	9.	 	GOVERNING LAW AND JURISDICTION
	 
	(a)	 	This letter (including the agreement constituted by your acknowledgement
of its terms) is governed by French law.
	 
	(b)	 	The parties submit to the non-exclusive jurisdiction of the [tribunaux du
ressort de la Cour d’appel] de Paris.
	 
	10.	 	DEFINITIONS
	 
	 	 	In this letter (including the acknowledgement set out below) terms defined
in the Agreement shall, unless the context otherwise requires, have the
same meaning and:
	 
	 	 	“Borrowers” means Compagnie Générale de Géophysique, CGG Marine or Sercel
and “Borrower” means each or any of them.
	 
	 	 	“Confidential Information” means any information relating to any and each
of the Borrowers, its financial, commercial or legal situation the Group,
the Agreement and/or the Acquisition provided to you by us or any of our
affiliates or advisers, in whatever form, and includes information given
orally and any document, electronic file or any other way of representing
or recording information which contains or is derived or copied from such
information but excludes information that (a) is or becomes public
knowledge other than as a direct or indirect result of any breach of this
letter or

-90-

 

	(b)	 	is known by you before the date the information is disclosed to you by
us or any of our affiliates or advisers or is lawfully obtained by you
thereafter, other than from a source which is connected with the Group and
which, in either case, as far as you are aware, has not been obtained in
violation of, and is not otherwise subject to, any obligation of
confidentiality;
	 
	 	 	“Group” means Compagnie Générale de Géophysique and its Subsidiaries for
the time being;
	 
	 	 	“Permitted Purpose” means subject to the terms of this letter, [passing on
information to a prospective purchaser for the purpose of] considering and
evaluating whether to enter into the Acquisition; and
	 
	 	 	“Purchaser Group” means you, each of your holding companies and
Subsidiaries and each Subsidiary of each of your holding companies.
	 
	 	 	“Subsidiary” means, in relation to any company, another company which is
controlled by it within the meaning of article L.233-3 of the French Code
de commerce.

Please acknowledge your agreement to the above by signing and returning the
enclosed copy.

Yours faithfully

......................................

For and on behalf of

[Seller]

To: [Seller]

Each of the Borrowers and each other member of the Group

We acknowledge and agree to the above:

......................................

For and on behalf of

[Potential Purchaser]

-91-

 

SCHEDULE 11

Allocation of Fees among the Borrowers

1/ For the purposes of this Schedule and for the time being:

	 	DW.G 	 	is the Facility drawings of Compagnie Générale de Géophysique;
	 
	 	DW.M 	 	is the Facility drawings of CGG Marine;
	 
	 	DW.S 	 	is the Facility drawings of Sercel;
	 
	 	DW 	 	is the Facility drawings, i.e the sum of DW.G, DW.M and DW.S;
	 
	 	AV.G 	 	is the part of the Facility that can be still drawdown by Compagnie
Générale de Géophysique;
	 
	 	AV.M 	 	is the part of the Facility that can be still drawdown by CGG Marine;
	 
	 	AV.S 	 	is the part of the Facility that can be still drawdown by Sercel;
	 
	 	AV 	 	is the sum of AV.G, AV.M and AV.S;
	 
	 	G0 	 	is the amount of the revolving credit facility made available under this Agreement;
	 
	 	M0 	 	is the Available CGG Marine Facility;
	 
	 	S0 	 	is the Available Sercel Facility.

2/ These definitions correspond to the following formulas :

     AV.G = G0 – DW

     AV.M = MIN ( G0 – DW ; M0 – DW.M )

     AV.S = MIN ( G0 – DW ; S0 – DW.S )

3/ For the time being, each fee (i.e arrangement fee, agency fee, commitment
fee) will be partly charged by the Principal Company to the other Borrowers by
applying the following weights :

     CGG Marine         ratio AV.M / AV

     Sercel                    ratio AV.S / AV

-92-

 

SCHEDULE 12

Form of TEG letter

From: [the Agent]

To: [each Borrower]

[date]

Dear Sirs,

We refer to the $ 60,000,000 agreement (the “Facility Agreement”) dated 12
March 2004 and made between, inter alia, Compagnie Générale de Géophysique, CGG
Marine and Sercel as Borrowers and Natexis Banques Populaires as Agent. Terms
defined in the Facility Agreement shall have the same meaning in this notice.

This is the letter referred to in Clause 9.5 (Effective Global Rate (Taux
Effectif Global)) of the Facility Agreement.

The floating nature of the interest rate applicable to the Loans makes it
impossible to specify a taux effectif global applicable for the duration of the
Facility Agreement.

However, in order to meet the requirements of article L. 313-1 et seq. R. 313-1
and R. 313-2 of the French Code de la consommation and in accordance with the
provisions of Clause 9.5 (Effective Global Rate (Taux Effectif Global)) of the
Facility Agreement, we set out below an indicative calculation of the taux
effectif global, based on the assumptions set out in this letter.

Assumed [LIBOR/EURIBOR] and Margin:

	 	 	 
	[LIBOR/EURIBOR]:

	 	[to be completed by the Agent]
	 
	Margin:

	 	[to be completed by the Agent]

Based on the assumptions set out above (and including the Margin, all fees and
expenses relating to the Loans), the interest rate (taux de période) for an
Interest Period (durée de période) of [to be completed by the Agent] months
would be [to be completed by the Agent] % per annum and the effective global
rate (taux effectif global annuel) would be [to be completed by the Agent]% per
annum.

-93-

 

The calculations set out in this letter are for illustrative purposes only and
shall not bind the parties to the Facility Agreement. Nothing expressed or
implied in this letter constitutes any commitment on the part of any of the
Finance Parties.

Yours sincerely,

[l]

For and on behalf

of [the Agent]

Receipt acknowledged

[l]

For and on behalf of

[each Borrower]

-94-

 

SIGNATURES

Made on 12 March 2004

In Paris

In nine (9) original copies

THE BORROWERS

The Principal Company

COMPAGNIE GENERALE DE GEOPHYSIQUE

Signed by: MICHEL PONTHUS

	 	 	 
	Address:

Fax:

Attention:

	 	Tour Montparnasse - 33 avenue du
Maine - 75755 Paris cedex 15

+33 (0)1 64 47 34 31

Mr Stéphane-Paul Frydman

CGG MARINE

	 	 	 
	Signed by: YVES GOULARD
	 
	Address:

	 	1 rue Léon Migaux - 91300 Massy
	 
	Fax:

	 	+33 (0)1 64 47 30 89
	 
	Attention:

	 	Mr André Froment

-95-

 

SERCEL

	 	 	 
	Signed by: STÉPHANE-PAUL FRYDMAN
	 
	Address:

	 	16 rue de Bel Air - 44470 Carquefou
	 
	Fax:

	 	+33 (0)2 40 30 31 12
	 
	Attention:

	 	Mr Jean-Maurice Dalongeville

THE ARRANGER

NATEXIS BANQUES POPULAIRES

	 	 	 
	Signed by: JEAN-PAUL CHAVANNE

	 	Signed by: GÉRARD FOHLEN-WEIL

	 	 	 
	Address:

	 	45 rue Saint Dominique - 75007 Paris
	 
	Fax:

	 	+33 (0)1 58 19 30 90
	 
	Attention:

	 	Mr Gérald Barbieux

THE AGENT

NATEXIS BANQUES POPULAIRES

	 	 	 
	Signed by: GÉRALD BARBIEUX

	 	Signed by: JEAN-PAUL CHAVANNE

	 	 	 
	Address:

	 	45 rue Saint Dominique - 75007 Paris
	 
	Fax:

	 	+33 (0)1 58 19 30 90
	 
	Attention:

	 	Mr Gérald Barbieux

-96-

 

THE ORIGINAL LENDERS

NATEXIS BANQUES POPULAIRES

	 	 	 
	Signed by: JEAN-PAUL CHAVANNE

	 	Signed by: GÉRARD FOHLEN-WEIL

	 	 	 
	Address:

	 	45 rue Saint Dominique - 75007 Paris
	 
	Fax:

	 	+33 (0)1 58 19 30 90
	 
	Attention:

	 	Mr Gérald Barbieux

BNP PARIBAS

	 	 	 
	Signed by: GÉRALD BARBIEUX

	 	Signed by: JEAN-PAUL CHAVANNE

	 	 	 
	Address:

	 	2/12 Chemin des Femmes - 91300 Massy
	 
	Fax:

	 	+33 (0)1 69 19 83 09
	 
	Attention:

	 	Mr Jean-Claude Verdonck

SOCIETE GENERALE

	 	 	 
	Signed by: GÉRALD BARBIEUX

	 	Signed by: JEAN-PAUL CHAVANNE

	 	 	 
	Address:

	 	Tours SG - 17 Cours Valmy - 92972 Paris La Défense Cedex
	 
	Fax:

	 	+33 (0)1 42 13 34 90
	 
	Attention:

	 	Mr Pierre Beuzen / Mrs Svetlana Kouznetsova / Mrs Marie-France Vecten

-97-

 

CREDIT INDUSTRIEL ET COMMERCIAL

	 	 	 
	Signed by: GÉRALD BARBIEUX

	 	Signed by: JEAN-PAUL CHAVANNE

	 	 	 
	Address:

	 	9 rue de Provence - 75009 Paris
	 
	Fax:

	 	+33 (0)1 45 96 90 11 / +33 (0)1 42 66 78 21
	 
	Attention:

	 	Mr Arnaud Roland-Gosselin / Mrs Anne-Hélène Hovasse

KBC BANK

	 	 	 
	Signed by: GÉRALD BARBIEUX

	 	Signed by: JEAN-PAUL CHAVANNE

	 	 	 
	Address:

Fax:

Attention:

	 	18 rue du Quatre Septembre - 75002 Paris

+33 (0)1 53 75 28 18

Mr David Frenkel / Mr Géraud Petit

-98-

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