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10.32.3
SECURITY AGREEMENT - PLEDGE
BY AND BETWEEN
XXX X. XXXXXXXXX
("Debtor")
AND
EAGLE GEOPHYSICAL, INC.
("Secured Party")
DATED EFFECTIVE THE 23RD DAY OF JULY, 1997
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SECURITY AGREEMENT - PLEDGE
Xxx X. Xxxxxxxxx (the "Debtor"), and Eagle Geophysical, Inc., a Delaware
corporation (the "Secured Party"), agree as follows:
Section 1. General Terms
1.1 Secured Obligations. Debtor hereby grants to Secured Party a
security interest in the property described in Section 1.2 of this Agreement
(the "Collateral") to secure the performance and payment of all obligations and
indebtedness of Debtor to Secured Party arising under or in connection with (i)
that certain Promissory Note in the original principal amount of $400,000
executed by Debtor in favor of Secured Party of even date herewith (the "Note")
and, (ii) this Agreement (all of the foregoing described in this Section 1
being the "Secured Indebtedness").
1.2 The Collateral. The Collateral of this Agreement is 25,000
shares of Common Stock of Secured Party issued in the name of Debtor currently
in the possession of, and to be delivered in the future to, Secured Party
("Pledged Stock"). "Collateral" as used in this Agreement includes the
Pledged Stock and, without limitation, any stock rights, rights to subscribe,
liquidating dividends, stock dividends, property, cash distributions, dividends
paid in stock, new securities, cash dividends or other property which Debtor
may hereafter become entitled to receive on account of the Collateral. In the
event Debtor receives any such property, Debtor will immediately deliver same
to Secured Party to be held by Secured Party in the same manner as the property
originally deposited as Collateral. The Collateral of this Agreement also
includes the proceeds of any and all property described above including goods
and intangible personal property.
Section 2. Representations and Warranties
Debtor represents, warrants and agrees that:
2.1 Validity, Enforceability. This Agreement has been duly executed
and delivered by Debtor and constitutes a legal, valid and binding obligation
of Debtor, enforceable against Debtor in accordance with its terms, except as
the same may be limited by bankruptcy, insolvency or other similar laws
affecting creditors' rights generally and by general equity principles.
2.2 Ownership of Collateral. Debtor is the legal and equitable owner
of the Collateral free and clear of all other liens, security interests,
charges and encumbrances of every kind and nature. The Collateral is duly
authorized, validly issued, fully paid and non-assessable; Debtor has legal
title to the Collateral and good right and lawful authority to pledge, assign
and deliver the Collateral in the manner hereby done or contemplated; and no
consent or approval of any governmental body or regulatory authority, or any
securities exchange, is or will be necessary for the rights created under this
Agreement to be valid as to the Collateral.
2.3 Defending the Collateral. Debtor will defend the Collateral and
its proceeds against the claims and demands of all third persons.
2.4 Secured Party's Duty. Secured Party's duty with reference to the
Collateral shall be solely to use reasonable care in the custody and
preservation of Collateral in Secured Party's possession.
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2.5 Waiver. Demand, notice, protest and all demands and notices of
any action taken by Secured Party under this Agreement or in connection with
any indebtedness of Debtor to Secured Party, are hereby waived, and any
indulgence of Secured Party, substitution for, exchange of or release of
Collateral, in whole or in part, or addition or release of any person liable on
the Collateral is hereby assented and consented to by Debtor.
2.6 Non-liability of Secured Party. Secured Party shall not be
responsible in any way for any depreciation in the value of the Collateral, nor
shall any duty or responsibility whatsoever rest upon Secured Party to take
necessary steps to preserve rights against prior parties or to enforce
collection of the Collateral by legal proceedings or otherwise, the sole duty
of Secured Party being to receive collections, remittances and payments on such
Collateral as and when made and received by Secured Party, and at Secured
Party's option, applying the amount or amounts so received, after deduction of
any collection costs incurred, as payment upon the Secured Indebtedness, or
holding same for the account and order of Debtor.
2.7 Payment of Charges by Debtor. Debtor shall pay prior to
delinquency all taxes, charges, liens and assessments against the Collateral.
Upon Debtor's failure to pay, Secured Party at its option may pay any tax,
charge, lien or assessment and shall be the sole judge of the legality or
validity thereof and the amount necessary to discharge the same. Such payment
shall become part of the Secured Indebtedness and shall be paid to Secured
Party by Debtor immediately and without demand, with interest thereon from the
date of payment by Secured Party at the maximum non-usurious rate of interest
permitted by applicable law with respect to Debtor.
Section 3. Events of Default
Debtor shall be in default under this Agreement upon the happening of
any of the following events or conditions (herein called an "Event of
Default"):
(1) Debtor's failure to pay when due any of the Secured Indebtedness.
(2) Default by Debtor in the punctual performance of any of the
obligations, covenants, terms or provisions contained or referred to in this
Agreement or in any instrument evidencing the Secured Indebtedness, including
without limitation, the Note.
(3) Sale or encumbrance of any of the Collateral, or the making of
any levy, seizure or attachment thereof or thereon.
(4) Debtor's insolvency; the appointment of a receiver for all or any
part of the property of Debtor; an assignment for the benefit of creditors of
Debtor; the calling of a meeting of creditors of Debtor; or the commencement of
any proceeding under any bankruptcy or insolvency laws by or against Debtor or
any guarantor or surety for Debtor.
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Section 4. Rights Exclusive of Default
4.1 Assignment by Secured Party Permitted. This Agreement, Secured
Party's rights hereunder or the indebtedness hereby secured may be assigned
from time to time, and in any such case the Assignee shall be entitled to all
of the rights, privileges and remedies granted in this Agreement to Secured
Party. Debtor may not assign any of its rights or obligations hereunder
without the prior written consent of Secured Party.
4.2 Agents; Delivering to Secured Party. Secured Party shall have
the right to appoint one or more agents for the purpose of retaining physical
possession of the certificates or instruments representing or evidencing the
Collateral. For the better perfection of the Secured Party's rights in and to
the Collateral and to facilitate implementation of such rights, Debtor shall,
insofar as possible, cause all the certificates, documents and other
instruments evidencing, representing or otherwise comprising the Collateral, to
be delivered directly to the Secured Party, as the Secured Party shall from
time to time direct, immediately upon any of the same becoming part of the
Collateral. Secured Party is hereby authorized to execute, on behalf of the
Debtor, all documents reasonably necessary to effect the delivery of the
Collateral directly to Secured Party. Secured Party shall have the right at
any time and from time to time (whether before or after an Event of Default) to
retain as Collateral all payments, dividends and distributions regarding the
Collateral otherwise payable or distributable to Debtor.
4.3 Exercise of Voting and/or Consensual Rights; Cash Dividends. (a)
(i) The Debtor shall be entitled to exercise any and all voting and/or
consensual rights and powers relating or pertaining to the Collateral or any
part thereof for any purpose not inconsistent with the terms of this Agreement,
until (x) occurrence of an Event of Default or an event which, with the giving
of notice or lapse of time, or both, would become an Event of Default shall
have occurred and be continuing, and (y) written notification to Debtor by the
Secured Party that Secured Party intends to exercise the rights granted to
Debtor under this Section 4.3(a)(i).
(ii) Until an Event of Default or an event which,
with the giving of notice or lapse of time, or both, would become an Event of
Default shall have occurred and be continuing and written notification to
Debtor by the Secured Party that Secured Party intends to exercise the rights
granted to Debtor under this Section 4.3(a)(ii), the Debtor shall be entitled
to receive and retain any and all cash dividends or other cash payments paid on
the Collateral. However, any and all stock and/or liquidating dividends,
distributions in property, or cash returns of capital or other distributions
made on or in respect of the Collateral, whether resulting from a subdivision,
combination or reclassification of the capital stock or received in exchange
for Collateral or any part thereof or as a result of any merger,
reorganization, consolidation, acquisition or other exchange of assets, and any
and all cash and other property received in
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redemption of or in exchange for any Collateral (either at maturity, upon call
for redemption or otherwise), shall be and become a part of the Collateral and,
if received by the Debtor, shall be held in trust for the benefit of the
Secured Party and shall forthwith be delivered to the Secured Party or its
designated agent to be held subject to the terms of this Agreement. Debtor
agrees to execute any additional documents, including the proper instruments of
assignment or stock power, with respect to Collateral delivered to Secured
Party.
(b) (i) Upon the occurrence and during the continuance
of an Event of Default or an event which, with the giving of notice or the
lapse of time, or both, would become an Event of Default, and upon the giving
of the notice referred to in Section 4.3(a)(i), all rights of the Debtor to
exercise the voting and/or consensual rights and powers which it is entitled to
exercise pursuant to Section 4.3(a)(i) prior to such notice shall cease.
(ii) Upon the giving of the notice referred to in
Section 4.3(a)(ii), all rights of the Debtor to receive cash dividends or other
payments which it is authorized to receive and retain pursuant to Section
4.3(a)(ii) prior to such notice shall cease.
(iii) Upon the occurrence of an Event of Default
and the giving of notice referred to in Section 4.3(a)(i) or upon the giving of
notice referred to in Section 4.3(a)(ii), all such rights referred to in
Sections 4.3(a)(i) and 4.3(a)(ii), as the case may be, shall thereupon become
vested in the Secured Party, who shall have the sole and exclusive right and
authority to exercise such voting and/or consensual rights and powers and/or to
receive and retain the dividends. Any and all money and other property paid
over to or received by the Secured Party pursuant to the provisions of this
subsection (b) shall be retained by the Secured Party as part of the Collateral
and be applied in accordance with the provisions hereof.
(c) For the foregoing purposes in this Section 4.3 Debtor
hereby names, constitutes and appoints Secured Party as Debtor's proxy in the
Debtor's name, place and stead to vote any and all of the securities, as such
proxy may elect, for and in the name, place and stead of Debtor, as to all
matters coming before shareholders, such proxy to be irrevocable and being
coupled with an interest. The rights, powers and authority of said proxy shall
remain in full force and effect, and shall not be rescinded, revoked,
terminated, amended or otherwise modified until all the Secured Indebtedness
has been fully satisfied.
Section 5. Rights in the Event of Default
Upon the occurrence of an Event of Default and at any time thereafter,
and in addition to the rights granted pursuant to Section 4:
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(a) Secured Party may declare all obligations secured hereby
immediately due and payable.
(b) Secured Party shall have the rights and remedies provided in the
Texas Business and Commerce Code in force at the date of execution of this
Agreement and under other applicable laws of each state having jurisdiction
over the Collateral or any part thereof.
(c) In addition to the rights and remedies referred to above, Secured
Party may, in its discretion, sell, assign and deliver all or any part of the
Collateral at any broker's board or at public or private sale without notice or
advertisement, and bid and become purchaser at any public sale or at any
Broker's Board.
(d) Secured Party shall have the right to transfer legal and
beneficial title to such number of shares of the Pledged Stock to Secured Party
as may be necessary to satisfy the damages arising from such default. The
value of a share of Pledged Stock for the purposes of this paragraph (d) only
shall be equal to the average closing price for the Secured Party's Common
Stock on the preceding five business days as reported on the Nasdaq National
Market System.
(e) If notice to Debtor is required by the Texas Business and
Commerce Code or other applicable law of public or private sale of Collateral,
Secured Party may fulfill said notice requirement by giving written notice to
Debtor ten (10) days prior to the date of public sale of the Collateral or
prior to the date after which private sale of the Collateral will be made, by
mailing such notice to Debtor at the address designated in this Agreement.
Secured Party shall apply the proceeds of any disposition of Collateral
available for satisfaction of Secured Indebtedness first to costs of sale or
collection, then to the amount owed to Secured Party, with any balance to be
held as Collateral until termination of this Agreement.
(f) Secured Party may at any time demand, xxx for, collect or make
any compromise or settlement with reference to the Collateral as Secured Party,
in its sole discretion, chooses. Secured Party may delay exercising or omit to
exercise any right or remedy under this Agreement without waiving that or any
other past, present or future right or remedy, except in writing signed by
Secured Party.
(g) Secured Party may remedy any default and may waive any default
without waiving the default remedied or without waiving any other prior or
subsequent default.
(h) The remedies of Secured Party hereunder are cumulative, and the
exercise of any one or more of the remedies provided for herein shall not be
construed as a waiver of any of the other remedies of Secured Party.
(i) SECURED PARTY MAY ENFORCE ITS RIGHTS UNDER THIS AGREEMENT WITHOUT
RESORT TO PRIOR JUDICIAL PROCESS OR JUDICIAL HEARING, AND DEBTOR EXPRESSLY
WAIVES, RENOUNCES AND KNOWINGLY RELINQUISHES ANY LEGAL RIGHT WHICH MIGHT
OTHERWISE REQUIRE SECURED PARTY TO ENFORCE
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ITS RIGHTS BY JUDICIAL PROCESS. IN SO PROVIDING FOR A NON-JUDICIAL REMEDY,
DEBTOR RECOGNIZES AND CONCEDES THAT SUCH A REMEDY IS CONSISTENT WITH THE USAGE
OF THE TRADE, IS RESPONSIVE TO COMMERCIAL NECESSITY AND IS THE RESULT OF
BARGAINING AT ARMS LENGTH. NOTHING IN THIS AGREEMENT IS INTENDED TO PREVENT
DEBTOR OR SECURED PARTY FROM RESORTING TO JUDICIAL PROCESS AT EITHER PARTY'S
OPTION.
(j) Debtor agrees that in performing any act under this Agreement
that time shall be of the essence and that Secured Party's acceptance of a
partial or delinquent payment or payments, or the failure of Secured Party to
exercise any right or remedy shall not be a waiver of any obligation of Debtor
or any right of Secured Party or constitute a waiver of any other similar
default subsequently occurring.
(k) Debtor hereby agrees to cooperate fully with Secured Party in
order to permit Secured Party to sell, whether at foreclosure or at other
private sale, the Collateral as permitted hereunder. Specifically, Debtor
agrees to comply fully with the securities laws of the United States of America
and applicable state securities laws and to take such action as may be
necessary to permit Secured Party to sell or otherwise transfer the securities
pledged hereunder in compliance with such laws. Without limiting the
foregoing, Debtor, at its own expense, upon request of Secured Party, agrees to
cause and/or obtain such registration, filings, statements, rulings, consents
and other matters as Secured Party may request.
(l) Debtor hereby appoints Secured Party as its attorney-in-fact to
complete, execute and file with the United States Securities and Exchange
Commission one or more notices of proposed sale of securities pursuant to Rule
144 under the Securities Act of 1933 and/or any similar filings or notices with
any applicable state agencies, and said attorney-in-fact shall have the full
power and authority to do, take and perform every act necessary to be done in
the exercise of that right as fully as Debtor might or could do if personally
present. This power shall be irrevocable during the term of this Agreement and
deemed coupled with an interest. The rights pursuant to said attorney-in-fact
herein granted shall commence and be in full force and effect from the date of
this agreement and shall remain in full force and effect and shall not be
rescinded, revoked, terminated, amended or otherwise modified until the
termination of this Agreement.
(m) Because of applicable securities laws, including without
limitation, the Securities Act of 1933, the Texas Securities Act and other
applicable state securities laws, there may be legal restrictions or
limitations affecting attempts of Secured Party to dispose of the Collateral in
enforcement of its rights and remedies hereunder. Secured Party is hereby
authorized by Debtor, but not obligated, upon an Event of Default, to sell all
or any part of the Collateral as permitted hereunder at private sale, subject
to investment letters or in any other manner which will not require the
Collateral or any part thereof, to be registered in accordance with the
Securities Act of 1933, as amended, or the rules and regulations promulgated
thereunder, or any other applicable
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securities law or regulation. Debtor specifically agrees that under these
circumstances such a sale is a commercially reasonable method of disposition of
the Collateral. Secured Party is also hereby authorized by Debtor, but not
obligated, to take such actions, give such notices, obtain such rulings and
consents, and do such other things as Secured Party may deem appropriate in the
event of a sale or disposition of any of the Collateral. Debtor acknowledges
that Secured Party may, in its reasonable discretion, approach a restricted
number of potential purchasers and that a sale under such circumstances may
yield a lower price for the Collateral or any part or parts thereof than would
otherwise be obtainable if the same were registered and sold in the open
market. Debtor agrees that such private sale shall constitute a commercially
reasonable method of disposing of the Collateral in view of the time, expense,
and potential liability to the parties of such transactions of registration of
the Collateral in accordance with applicable securities laws.
Section 6. Miscellaneous
6.1 Pronouns. The pronouns used in this instrument are in the
masculine gender but shall be construed as feminine or neuter as occasions may
require.
6.2 Parties. "Secured Party" and "Debtor" as used in this instrument
include the successors, representatives, receivers, and assigns of those
parties.
6.3 Section Headings. The section headings appearing in this
instrument have been inserted for convenience only and shall be given no
substantive meaning or significance whatever in construing the terms and
provisions of this instrument.
6.4 Defined Terms. Terms used in this instrument which are defined
in the Texas Business and Commerce Code are used with the meanings as therein
defined.
6.5 Applicable Law, Place of Payment. The law governing this secured
transaction shall be that of the State of Texas in force at the date of this
instrument, and all payments and obligations hereunder shall be made and
performed in Xxxxxx County, Texas.
6.6 Notices. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given if delivered personally or by courier,
or mailed by first class mail, postage prepaid, return receipt requested, or
sent by facsimile, as follows:
(1) If to the Debtor:
Mr. Xxx Xxxxxxxxx
00 Xxxxx Xxxxxx Xxxx, 0xx Xxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
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(2) If to Secured Party:
Eagle Geophysical, Inc.
00 Xxxxx Xxxxxx Xxxx, 0xx Xxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attn: Xx. Xxxxxxx X. XxXxxxx
or to such other address as either party shall have specified by notice in
writing to the other party. All such notices, requests, demands and
communications shall be deemed to have been received on the earlier of the date
of delivery or on the fifth business day after the mailing thereof.
6.7 Severability. In the event any of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such provision shall not affect the validity,
legality or enforceability of any other terms or provisions of this Agreement
and, to the extent permitted by applicable law, a valid, legal and enforceable
provision substantially similar to the invalid, illegal or unenforceable
provision shall be substituted in lieu thereof.
6.8 Waiver of Rights. In the event that Debtor is not the Borrower
or Maker as defined in the Note, Debtor waives any right to require Secured
Party to file suit against the Borrower or Maker or take any other action
against Borrower or Maker or Borrower's or Maker's property as a prerequisite
to Secured Party's taking any action or bringing any suit against Debtor under
this Security Agreement.
EXECUTED effective the 23rd day of July, 1997.
DEBTOR:
/s/ XXX X. XXXXXXXXX
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XXX X. XXXXXXXXX
SECURED PARTY:
EAGLE GEOPHYSICAL, INC.
BY: /s/ XXXXXXX X. XXXXXXX
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XXXXXXX X. XXXXXXX, Vice
President-Chief Financial Officer
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