WESTERN NATIONAL BANK 508 WEST WALL STREET, SUITE 1100 MIDLAND, TEXAS 79701 June 2, 2009
Exhibit 10.1
WESTERN NATIONAL BANK
000 XXXX XXXX XXXXXX, XXXXX 0000
XXXXXXX, XXXXX
00000
000 XXXX XXXX XXXXXX, XXXXX 0000
XXXXXXX, XXXXX
00000
June 2, 2009
Xxxxxx Geophysical Company
000 Xxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
000 Xxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
| RE: Revolving Line of Credit Loan in the amount of $20,000,000.00 from Western National Bank to Xxxxxx Geophysical Company |
Gentlemen:
Pursuant to the terms of a letter loan agreement, dated as of June 2, 2008 (the “Existing Loan
Agreement”), Western National Bank, a national banking association (alternatively, “Western” or the
“Bank”), has previously committed to provide to Xxxxxx Geophysical Company, a Texas corporation
(alternatively, “Xxxxxx Geophysical” or the “Borrower”), a revolving line of credit loan in the
original principal amount of Forty Million and No/Dollars ($40,000,000.00) (the Existing Loan”).
The Existing Loan is evidenced by a Revolving Line of Credit Note, also dated as of June 2, 2008,
executed by the Borrower on behalf of Western, in the original principal amount of Forty Million
and No/100 Dollars ($40,000,000.00) (the “Existing Note”). The Existing Note is secured by that
certain Security Agreement, also dated as of June 2, 2008, covering those accounts receivable
described therein (the “Existing Security Agreement”). From time to time, the Existing Security
Agreement, and any financing statements filed to perfect the security interest created thereunder,
may be collectively referred to herein as the “Existing
Security Instruments”.
Xxxxxxxx has now
requested that Western renew and extend the Existing Loan into a new revolving line of credit loan
in the original principal amount of Twenty Million and No/100 Dollars ($20,000,000.00) (the
“Loan”). The Loan will be evidenced by a Revolving Line of Credit Note, of even date herewith,
executed by the Borrower in favor of Western, in the original principal amount of Twenty Million
and No/100 Dollars ($20,000,000.00), which as stated, will renew and extend the Existing Note (the
“Note”). The Borrower’s performance under the Note will be secured by its execution of a new
Security Agreement, of even date herewith, the security interest of which will be perfected by the
filing of amendments to the existing financing statement, covering all accounts receivable and
equipment described therein (collectively, the “Security Instruments”). This Agreement, as
defined below, the Note, the Security Instruments, and any
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other documents executed simultaneously herewith are collectively referred to as the “Loan
Documents”.
Xxxxxxx has agreed to renew the Existing Loan into the Loan. In consideration of
Western’s agreement to renew the Existing Loan into the Loan, Xxxxxxxx has agreed to execute this
Loan Agreement, the Note, and the Security Instruments required by the Bank, subject to the
fulfillment of the following terms and conditions of this letter loan agreement (the “Agreement”):
I. TERMS
Agreement
This Agreement, dated as of June 2, 2009, and any extensions, renewals, or modifications hereof.
Borrower
Xxxxxx Geophysical Company
Bank
Western National Bank
Commitment
The lesser of the following amounts: (a) the face amount of the Note; or (b) the Borrowing Base
then in effect.
Rate
From June 1, 2009 through June 30, 2009, interest under the Note shall accrue at an annual rate
equal to the Prime Rate, minus three-quarters of one percent (.75%) (the “Prime Rate Index”).
Beginning as of July 1, 2009, interest under the Note shall accrue at an annual rate equal to
either: (a) the 30-day London Interbank Offered Rate (“LIBOR”), plus two and one-quarter percent
(2.25%), or (b) the Prime Rate Index, as the Borrower shall choose monthly by notifying the Bank
in writing, via facsimile or e-mail, by the last day of each month, with each change to be
effective as of the first day of the following month, provided that such interest rate shall not
exceed the Highest Lawful Rate, as defined in the Note, or be less than four percent (4.0%).
Should Borrower fail to notify Bank of its election of interest rate for any given month, the
interest rate shall remain at the interest rate index chosen by Borrower for the immediately
preceding month.
For purposes of this Agreement, LIBOR shall mean, with respect to each Interest Period, as defined
below, the rate as established as the 30-day LIBOR in the money rate table of The Wall Street
Journal, a Dow Xxxxx publication, as of each Business Day, as defined below (and for holidays or
weekends, LIBOR shall be the 30-day LIBOR published in that money rate table of
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The Wall Street Journal, as of the close of business on the most recent Business Day immediately
preceding such weekend or holiday). Without notice to the Borrowers or any other person, LIBOR may
change from time to time pursuant to the preceding sentence, with the effective date of each change
to be the effective date reflected in the money rate table of The Wall Street Journal. Without
notice to the Borrowers or any other person, LIBOR may change from time to time pursuant to the
preceding sentence, with the effective date of each change to be the effective date reflected in
the money rate table of The Wall Street Journal. Each change in LIBOR to be charged on the Revolver
Note will become effective without notice on the commencement of each Interest Period based upon
the Index then in effect. “Interest Period” means each consecutive one month period (the first of
which shall commence on June 1, 2009), effective as of the first day of each Interest Period and
ending on the last day of each Interest Period, provided that if any Interest Period is scheduled
to end on a date for which there is no numerical equivalent to the date on which the Interest
Period commenced, then it shall end instead on the last day of such calender month. For purposes of
this Agreement, the “Prime Rate” shall be defined as that rate established as the prime rate in the
money rate table of The Wall Street Journal, a Dow Xxxxx publication, as of each Business Day, as
hereinafter defined, (and for holidays or weekends, the Prime Rate shall be the prime rate
published in that money rate table of The Wall Street Journal, as of the close of business on the
most recent Business Day immediately preceding such weekend or holiday). Without notice to the
Borrower or any other person, the Prime Rate may change from time to time pursuant to the preceding
sentence, with the effective date of each change to be the effective date reflected in the money
rate table of The Wall Street Journal. The Prime Rate is a reference rate and does not necessarily
represent the lowest or best rate actually charged to any customer. The Bank may make commercial
loans or other loans at rates of interest at, above, or below the Prime Rate. “Business Day” shall
mean any day other than a Saturday, Sunday or legal holiday for commercial banks under the laws of
the State of Texas.
Security
The Loan shall be secured by the Security Instruments.
Structure
Under the Note, funds will be available on a revolving basis through June 2, 2011, the maturity
date of the Loan (the “Revolving Period”). During the Revolving Period, the Borrower may borrow,
repay, and re-borrow funds as long as the aggregate amount (including outstanding letters of
credit) does not exceed the Commitment.
Borrowing Base
At any time, and from time to time, the amounts outstanding under the Revolver Note shall not
exceed the lesser of: (a) the face amount of the Revolver Note; or (b) the Borrowing Base, as
determined from time to time by the Bank, acting in its sole and unlimited discretion (said lesser
amount being referred to herein as the “Revolver Commitment”). As used in this Agreement, the term
“Borrowing Base” shall mean an amount equal to eighty percent (80%) of Borrower’s Eligible
Accounts.
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For the purposes of this Agreement, the term “Eligible Account” shall mean an account receivable
of the Borrower (net of any credit balance, trade discount, or unbilled amount or retention) that
is contractually due, for which each of the following statements is accurate and complete (and the
Borrower, by including such account receivable in any computation of the Borrowing Base, shall be
deemed to represent and warrant to the Bank the accuracy and completeness of such statements):
| a. | Said account receivable is a binding and valid obligation of the obligor thereon, in full force and effect, and enforceable in accordance with its terms; | ||
| b. | Said account receivable is genuine, in all respects, as appearing on its face as represented in the books and records of Xxxxxxxx, and all information set forth therein is true and correct; | ||
| c. | Said account receivable is free of all default of any party thereto, counterclaims, offsets, and defenses, and from any rescission, cancellation, or avoidance, and all right thereof, whether by operation of law or otherwise; | ||
| d. | The payment of said account receivable is not more than ninety (90) days past due the invoice date thereof; | ||
| e. | Said account receivable is free of concessions or understandings with the obligor thereon of any kind not disclosed to and approved by the Bank in writing; | ||
| x. | Xxxx account receivable is, and at all times will be, free and clear of all liens except those in favor of the Bank; | ||
| x. | Xxxx account receivable is not a receivable arising from intercompany indebtedness existing between or among any of the Borrower; | ||
| x. | Xxxx account receivable is derived from sales made or services rendered to the obligor in the ordinary course of the business of the Borrower; | ||
| i. | The obligor on said account receivable (i) is located within the United States or the District of Columbia; (ii) is not the subject of any bankruptcy or insolvency proceeding, nor has a trustee or receiver been appointed for all or a substantial part of its property, nor has said obligor made an assignment for the benefit of creditors, admitted its inability to pay its debts as they mature or suspended its business, (iii) is not affiliated, directly or indirectly, with Borrower, as a subsidiary or affiliate, employee or otherwise; and (iv) is not a state or federal government department, commission, board, bureau, or agency; | ||
| x. | Xxxx account receivable is not owed by a customer whose principal place of business is located in a foreign country; and |
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| x. | Xxxx account receivable did not arise from sales to an obligor as to whom fifteen percent (15%) or more of the total accounts receivable owing by such obligor to the Borrower are delinquent accounts receivable (that is, an account that is more than ninety (90) days delinquent). |
In addition to the criteria stated above for determining whether an account receivable is an
“Eligible Account”, the Bank and the Borrower agree that no such account receivable shall
constitute an Eligible Account if that account receivable arises from any single customer, other
than Client A and its affiliates and subsidiaries (collectively,
“Client A”), whose accounts receivable constitute more than twenty-five percent (25%) of
Borrower’s total accounts receivable. The Bank agrees that an account receivable owed by Client A
to the Borrower (collectively, the “Client A Accounts”) may still qualify as an Eligible Account
even if the Client A Accounts constitute more than twenty-five percent (25%) of Borrower’s total
accounts receivable.
Based upon the terms of this Agreement, and the information provided and the representations made
by the Borrower to the Bank, the Bank hereby redetermines the Borrowing Base, and establishes it
in the amount of Twenty Million and No/100 Dollars ($20,000,000.00). The Borrower may request in
writing an additional increase in the Borrowing Base, such request to be accompanied by a
description and evaluation of any additional collateral to be provided by the Bank. The Bank may
evaluate such for an increase in its sole and absolute discretion, and in conjunction with such
evaluation, may conduct a full credit analysis of the Borrower and the existing or additional
collateral.
If the aggregate amounts outstanding under the Note exceeds the Revolver Commitment at any time,
the Bank will provide written notice of that event to Borrower. On or before the tenth
(10th) day following receipt of such notification by Xxxxxxxx, Borrower will either, at
the direction of the Bank, acting in its sole and absolute discretion: (a) make a mandatory
payment to the Bank of the principal of the Note in an amount at least equal to the amount
necessary to cause the outstanding principal balance of the Note to be less than or equal to the
Revolver Commitment; or (b) create liens on other assets of Borrower, satisfactory in nature,
quantity, and value to the Bank, acting in its sole discretion, said assets to have a fair market
value sufficient to at least equal to the amount necessary to cause the outstanding principal
balance of the Note to be less than or equal to the Revolver Commitment.
Non-Recourse
Although the Borrower is responsible on a corporate basis for the full repayment of principal and
interest due on the Obligations and for any other Event of Default for which the Borrower is
responsible, the Bank specifically acknowledges and agrees that neither any of the directors,
officers, or employees of the Borrower nor any of the Borrower’s shareholders shall have any
personal liability whatsoever for the repayment of the Loan. The sole party responsible for
repayment of the Loan shall be the Borrower, and the sole security for the Loan shall be the
Collateral covered by the Security Instruments.
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Purpose
Funds from the Loan shall be to renew and extend the Existing Loan and to provide additional funds
for working capital. No proceeds from the Loan shall be used for the purpose of purchasing or
carrying margin stock in violation of Regulations G, U, or X of the Board of Governors of the
Federal Reserve System.
Maturity Date
As stated, the maturity date of the Note is June 2, 2011.
II. REPRESENTATIONS AND WARRANTIES
A. Good Standing and Identity. The Borrower is a corporation, duly organized and in
good standing under the laws of Texas. The Borrower’s legal name is that reflected in the address
of this Agreement. Borrower has the power to own its property and to carry on its business in each
jurisdiction in which the Borrower operates.
B. Authority and Compliance. The Borrower has full power and authority to enter into
this Agreement, to make the borrowing hereunder, to execute and deliver the Note, to mortgage those
interests covered by the Security Instruments, and to incur the obligations provided for herein,
all of which will be duly authorized by all proper and necessary corporate action. No consent or
approval of any public authority is required as a condition to the validity of this Agreement, the
Note, and the Security Instrument, and Borrower is in compliance with all laws and regulatory
requirements to which he is subject.
C. Litigation. There are no proceedings pending or, to the knowledge of Borrower,
threatened before any court or administrative agency that will or may have a material adverse
effect on the financial condition or operations of Borrower, except as disclosed to the Bank in
writing prior to the date of this Agreement.
D. Ownership of Assets. As of the date of this Agreement, Xxxxxxxx has good title to
the interests covered by the Security Instruments and any other collateral pledged and the other
collateral is owned free and clear of liens. Borrower will at all times maintain its tangible
property, real and personal, in good order and repair, taking into consideration reasonable wear
and tear.
E. Taxes. All income taxes and other taxes due and payable through the date of this
Agreement have been paid prior to becoming delinquent.
F. Financial Statements. The books and records of the Borrower properly reflect the
financial condition of the Borrower in all material respects, and there has been no material
change in Borrower’s financial condition as represented in its most recent financial statements.
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X. Xxxxxxxxx
Wastes and Substances. To the best knowledge of the Borrower, the Borrower
and its properties are in compliance with applicable state and federal environmental laws and
regulations and the Borrower is not aware of and has not received any notice of any violation of
any applicable state or federal environmental law or regulation and there has not heretofore been
filed any complaint, nor commenced any administrative procedure, against the Borrower or any of its
predecessors, alleging a violation of any environmental law or regulation. Currently and from time
to time, the Borrower, in the course of its regular business, may use or generate on a portion of
its properties materials which are Hazardous Materials, as hereinafter defined. The Borrower has
and will make a good faith attempt to comply with all applicable statutes and regulations in the
use, generation and disposal of such materials. To the best of its knowledge, the Borrower has not
otherwise installed, used, generated, stored or disposed of any hazardous waste, toxic substance,
asbestos or related material (“Hazardous Materials”) on its properties. For the purposes of this
Agreement, Hazardous Materials shall include, but shall not be limited to, substances defined as
“hazardous substances” or “toxic substances” in the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended, 42 U.S.C. §9061, et seq., Hazardous
Materials Transportation Act, 49 U.S.C. §1802, et seq., and the Resource Conservation and
Recovery Act, 42 U.S.C. §6901, et seq., or as “hazardous substances,” “hazardous waste” or
“pollutant or contaminant” in any other applicable federal, state or local environmental law or
regulation. There do not exist upon any property owned by Borrower any underground storage tanks or
facilities, and to the knowledge of Borrower, none of such property has ever been used for the
treatment, storage, recycling, or disposal of any Hazardous Materials.
III. CONDITIONS PRECEDENT
The provisions of this Agreement will serve as the proposed terms of the borrowing arrangements.
Prior to any funds being made available, Borrower will execute and deliver to the Bank, in form
and substance satisfactory to the Bank, this Agreement, the Note, and the Security Instruments.
IV. COVENANTS
Unless the Bank will otherwise consent in writing, and so long as any debt remains outstanding or
the commitment still available, the Borrower agrees to comply with the following covenants:
A. Affirmative Covenants.
1. As soon as available, but in any event not later than ninety (90) days after
the end of each fiscal year, Borrower will provide financial statements, in form and
substance satisfactory to the Bank, reflecting Xxxxxxxx’s financial performance as of the
end of such year and the related statements of income and changes in cash flows for such
year, with the first fiscal year ending on September 30, 2009, such statements to be
audited by an independent certified accountant and to be prepared according to generally
accepted accounting principals, consistently applied (“GAAP”).
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2. Within ninety (90) days of the end of each fiscal quarter, with the next quarter ending on
June 30, 2009, the Borrower will submit to the Bank a financial statement reflecting Xxxxxxxx’s
financial performance during the previous calendar quarter, such statements to be reviewed by an
independent certified accountant and to be prepared according to GAAP.
3. Within thirty (30) days of the end of each calendar month, Borrower shall provide monthly
accounts receivable aging reports.
4. Within thirty (30) days of transmitting any tax return to any governmental authority, the
Borrower will submit to the Bank a copy of that tax return.
5. Within thirty (30) days following the end of each calendar month, Borrower shall provide a
monthly borrowing base report and compliance certificate in the form attached hereto as Exhibit
“A”.
6. Borrower
shall maintain an average Cash Flow Coverage Ratio of not less than 1.50 to 1.0,
calculated quarterly, beginning with the quarter ending on June 30, 2009, from the date of the
Loan to maturity. For purposes of this Agreement, “Cash Flow Coverage Ratio” means, with respect
to any period of calculation thereof, the ratio of the sum of: (a) the net income (or loss) from
continuing operations of Borrower during such period calculated after any and all distributions to
shareholders, plus (b) interest, depreciation, depletion, and amortization expenses of Borrower
during such period, less (c) gains from the sale of any assets; plus (d) losses from the sale of
any assets; less (e) extraordinary adjustments to net income divided by (f) scheduled capital
lease obligations and principal and interest payments, all determined in accordance with GAAP.
7. For any time period for which reporting is required, Borrower will maintain a Debt to
Tangible Net Worth ratio of less than 1.50 to 1.00 to be measured quarterly, beginning with the
quarter ending as of June 30, 2009. For purposes of this paragraph, “Debt” shall mean, all
liabilities, obligations, and indebtedness of the Borrower, of any kind or nature, now or
hereafter owing, arising, due or payable, howsoever evidenced, created, incurred, acquired or
owing, whether primary, secondary, direct, contingent, fixed, or otherwise, and “Tangible Net
Worth” means the excess, if any, of the total assets of Borrower over all items of indebtedness,
obligations, or liability which would be classified as liabilities of Borrower, for the time
period to be measured, each to be determined in accordance with GAAP; provided, however, that for
the purposes of any such computation of Tangible Net Worth, “assets” will not include (a) goodwill
(whether representing the excess of cost over book value of assets acquired or otherwise), and (b)
patents, trademarks, trade names, copyrights, franchises, and deferred charges.
8. Borrow shall maintain a Current Ratio of not less than 1.50 to 1.0, measured quarterly,
beginning with the quarter ending on June 30, 2009, from the date of the Loan to maturity. For
purposes of this Agreement, “Current Ratio” means, with
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respect to any period of calculation thereof, the ratio of the sum of: (a) current assets, plus
(b) availability under the Revolver Loan, divided by (c) current liabilities. Current assets shall
include a minimum balance of cash, plus marketable securities, of not less than $3,500,000.00,
provided that this requirement is only applicable if funds are outstanding under the Note.
9. Borrower shall submit copies of all financial statements, reports, notices, and proxy
statements sent or made available generally by the Borrower to its shareholders, of all regular
and periodic reports and all private placement memorandums and all registration statements and
prospectuses, if any, filed by the Borrower with any securities exchange or with the Security
Exchange Commission; and all press releases and other statements made available generally by the
Borrower to the public concerning material changes in the business of the Borrower upon their
becoming available, but in no event later than 10 days after the same was sent.
10. Borrower will maintain all primary operating accounts with the Bank.
11. The Borrower will maintain its existence in good standing and comply with all laws,
regulations and governmental requirements applicable to it or to any of its property, business
operations and transactions.
12. The Borrower will promptly pay any reasonable costs incurred by the Bank in connection
with the preparation or enforcement of this Agreement, the Notes, the Security Instruments, and
any other documentation executed concurrently herewith.
13. The Borrower will remain in substantial compliance with same and will not place or permit
to be placed any Hazardous Materials on any of its properties in violation of applicable state and
federal environmental laws. In the event that the Borrower should discover any Hazardous Materials
on any of its properties that could result in a breach of the foregoing covenant, the Borrower
shall notify the Bank within three (3) days after such discovery. The Borrower shall dispose of all
material amounts of Hazardous Materials that it generates only at facilities or with carriers that
maintain valid governmental permits under the Resource Conservation and Recovery Act, 42 U.S.C.
§6901. In the event of any notice or filing of any procedure against the Borrower alleging a
violation of any environmental law or regulation, the Borrower shall give notice to the Bank within
five (5) days after receiving notice of such notice or filing.
14. The Borrower will provide such other information as the Bank may reasonably request from
time to time in its sole discretion.
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B. Negative Covenants.
1. The Borrower will not make any change in its present accounting method or change
its present fiscal year.
2. The Borrower will not make any substantial change in the nature of its business as
now conducted.
3. The Borrower will not reorganize or merge with any other entity, without the prior
written consent of the Bank.
4. With respect to the Borrower’s interest in any of the properties covered by the
Security Instrument, the Borrower will not sell, contract to sell, convey, assign,
transfer, mortgage, pledge, hypothecate, encumber, or in any way alienate that interest in
such properties, without the consent of the Bank.
V. EVENTS OF DEFAULT
The occurrence and continuing existence of any one of the following will constitute an Event of
Default under this Agreement and the Note:
X. Xxxxxxxx fails to pay when due any principal, interest, or other amount payable under this
Agreement, the Note, or any other promissory notes executed or guaranteed by the Borrower in favor
of the Bank;
B. Any representation or warranty made by the Borrower hereunder or in any related collateral
security or other documents entered into with the Bank proves to be at any time incorrect in any
significant respect;
C. The Borrower fails to observe or perform any covenant, obligation, agreement, or other
provision contained herein or in any other contract or instrument executed in connection herewith;
D. Any default or defined Event of Default under any security agreement, deed of trust,
promissory note, loan agreement or other contract or instrument executed by the Borrower pursuant
to, or as required by, this Agreement;
E. Any final judgment or judgments for the payment of money is rendered against Xxxxxxxx and
is not be satisfied or discharged at least thirty (30) days prior to the date on which any of
their assets could be lawfully sold to satisfy such judgment or judgments, unless Xxxxxxxx brings
litigation to stay same; or
X. Xxxxxxxx: (i) becomes insolvent, or suffers or consents to, or applies for the appointment
of a receiver, trustee, custodian or liquidator for himself or any of his property, or generally
fails to pay his debts as they become due, or makes a general assignment for the benefit of
creditors; or (ii) files a voluntary petition in bankruptcy, or seeking reorganization, in order
to effect a plan or other arrangement with creditors or any other relief under the Bankruptcy
Reform
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Act, Title 11 of the United States Code, as recodified from time to time (“Bankruptcy Code”), or
as now or hereafter in effect, or any involuntary petition or proceeding pursuant to said
Bankruptcy Code or any other applicable state or federal law relating to bankruptcy or
reorganization or other relief for debtors is filed or commenced against Borrower; or (iii) files
any answer admitting the jurisdiction of the court and the material allegations of any such
involuntary petition; or (iv) is adjudicated a bankrupt, under said Bankruptcy Code or any other
state or federal law relating to bankruptcy, reorganization, or other relief for debtors.
VI. REMEDIES
If any Event of Default occurs, any term hereof or of the Note to the contrary notwithstanding, the
Note shall at the Bank’s option become immediately due and payable. In addition, the obligation, if
any, of the Bank to permit further borrowings hereunder will immediately cease and terminate and
the Bank will have all rights, powers, and remedies available under this Agreement, the Note, or
other contracts or instruments executed in connection herewith, or accorded by law, including,
without limitation, the right to resort to any or all of the collateral and to exercise any or all
of its rights, powers, or remedies at any time and from time to time after the occurrence of an
Event of Default.
ONCE AN EVENT OF DEFAULT HAS OCCURRED, WESTERN MAY PURSUE THE REMEDIES PROVIDED FOR IN THIS
AGREEMENT, THE NOTE, AND THE SECURITY INSTRUMENTS WITHOUT PRESENTMENT, DEMAND, PROTEST, NOTICE OF
ACCELERATION, NOTICE OF INTENT TO ACCELERATE, NOTICE OF PROTEST OR NOTICE OF DISHONOR, OR ANY
OTHER NOTICE OF ANY KIND, ALL OF WHICH ARE EXPRESSLY WAIVED BY BORROWER.
All rights, powers, and remedies of the Bank in connection with this Agreement, the promissory
notes or any other contract or instrument on which the Borrower may at any time be obligated to
the Bank (or any holder thereof) are cumulative and not exclusive and will be in addition to any
other rights, powers, or remedies provided by law or equity, including without limitation the
right to set off any liability owing by the Bank to the Borrower (including sums deposited in any
deposit account of Borrower with the Bank) against any liability of the Borrower to the Bank.
VII. WAIVER
No delay, failure, or discontinuation by the Bank, or any holder of the Note, in exercising any
right, power, or remedy under this Agreement, the Note or any other contract or instrument on which
the Borrower may at any time be obligated to the Bank (or any holder thereof) will affect or
operate as waiver of such right, power or remedy. Any waiver, permit, consent, or approval of any
kind by the Bank (or any holder of the Note), or of any provisions or conditions of, or any breach
or default under this Agreement, the Note or any other contract or instrument on which the Borrower
may at any time be obligated, must be in writing and will be effective only to the extent set forth
in such writing.
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VIII. NOTICES
All notices, requests, and demands given to or made upon the respective parties must be in writing
and shall be deemed to have been given or made: (1) at the time of personal delivery thereof, (2)
or two days after any of the same are deposited in the U.S. Mail, first class and postage prepaid,
addressed as follows:
| Borrower: | Xxxxxx Geophysical Company | |||
| 000 Xxxx Xxxx Xxxxxx, Xxxxx 000 | ||||
| Midland, Texas 79701 | ||||
| Western: | Western National Bank | |||
| Attention: Xxxxx X. Xxxxx | ||||
| 000 Xxxx Xxxx Xxxxxx, Xxxxx 0000 | ||||
| Midland, Texas 79701 |
or other such address as any party may designate by written notice to all other parties.
IX. SUCCESSORS, ASSIGNMENTS
This Agreement will be binding on and inure to the benefit of the heirs, executors, administrators,
legal representatives, successors, and assigns of the parties, provided, however, that this
Agreement may not be assigned by the Borrower without the prior written consent of the Bank. The
Bank reserves the right to sell, assign, transfer, negotiate, or grant participations in all or any
part of, or any interest in, the Bank’s rights and benefits under this Agreement, the Note or any
contracts or instruments relating thereto. In connection therewith, the Bank may disclose all
documents and information which the Bank now has or may hereafter acquire relating to the loan or
the Note, the Borrower or his business, or any collateral required hereunder.
X. SEVERABILITY OF PROVISIONS
If any of the provisions of this Agreement shall be prohibited by or invalid under applicable law,
such provision shall be ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or any remaining provisions of this Agreement.
XI. VENUE AND JURISDICTION
Any suit, action or proceeding against the Borrower arising out of or relating to this Agreement
or any judgment entered by any court in respect thereof, may be brought or enforced in the courts
of the State of Texas, County of Midland, or in the United States District Court for the Western
District of Texas, as Western in its sole discretion may elect, and Borrower hereby submits to the
nonexclusive jurisdiction of such courts for the purpose of any such suit, action or proceeding.
The Borrower hereby irrevocably consents to service of process in any suit, action or proceeding
in any of said courts by the mailing thereof by the Bank by registered or certified mail, postage
prepaid, to the Borrower, at the address set forth herein.
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THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTIONS THAT THEY MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
BROUGHT IN ANY OF SAID COURTS AND HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND ANY
RIGHT GRANTED BY STATUTE, RULE OR COURT OR OTHERWISE TO HAVE SUCH SUIT, ACTION, OR PROCEEDING
TRIED BY A JURY.
XII. MISCELLANEOUS
A. Texas Law Applicable. This Agreement, the Note, the Security Instruments, and any
contracts or instruments relating thereto, shall be governed by and construed in accordance with
the laws of the State of Texas, except to the extent that the Bank has greater rights or remedies
under federal law or the law of any jurisdiction in which the collateral properties are located, in
which case such choice of Texas law shall not be deemed to deprive the Bank of such rights and
remedies under federal law or the law of any jurisdiction in which the collateral properties are
located, in which case such choice of Texas law shall not be deemed to deprive the Bank of such
rights and remedies as may be available under such law.
B. Notice of Final Agreement. THIS AGREEMENT, THE NOTE, ANY CONTRACTS OR INSTRUMENTS
RELATING THERETO, REPRESENT THE ENTIRE AGREEMENT BETWEEN THE PARTIES, AND IT IS EXPRESSLY
UNDERSTOOD THAT ALL PRIOR CONVERSATIONS OR MEMORANDA BETWEEN THE PARTIES REGARDING THE TERMS OF
THIS AGREEMENT SHALL BE SUPERSEDED BY THIS AGREEMENT. ANY AMENDMENT, APPROVAL, OR WAIVER BY WESTERN
OF THE TERMS OF THIS AGREEMENT, THE NOTE AND ANY CONTRACTS OR INSTRUMENTS RELATING THERETO, MUST BE
IN WRITING OR CONFIRMED WRITING, AND SHALL BE EFFECTIVE ONLY TO THE EXTENT SPECIFICALLY SET FORTH
IN SUCH WRITING. THIS AGREEMENT, IN CONJUNCTION WITH THE NOTE AND ANY CONTRACTS OR INSTRUMENTS
RELATING THERETO, SHALL SERVE TO EVIDENCE THE TERMS OF THE ENTIRE AGREEMENT BETWEEN THE PARTIES.
{The remainder of this page is intentionally left blank. Signature page follows.}
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Please acknowledge your acceptance of and agreement to the terms of this Agreement by dating
and executing where indicated.
| Very truly yours, WESTERN NATIONAL BANK |
||||
| By: | /s/ Xxxxx X. Xxxxx | |||
| Xxxxx X. Xxxxx | ||||
| President | ||||
| AGREED TO AND ACCEPTED AS OF THE 2nd DAY OF JUNE 2009. | ||||
| BORROWER: | ||||
| XXXXXX GEOPHYSICAL COMPANY | ||||
By: |
/s/ Xxxxxxx X. Xxxxxx | |||
| President | ||||
By: |
/s/ Xxxxxxxxx X. Xxxxx | |||
| Secretary | ||||
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