Exhibit 10.41
LOAN AND SECURITY AGREEMENT
between
EAGLE GEOPHYSICAL, INC.,
as Debtor,
and
NATIONSBANC LEASING CORPORATION OF NORTH CAROLINA,
as Secured Party
dated as of February 6, 1997
TABLE OF CONTENTS
Page
ARTICLE I DEFINED TERMS; CREDIT FACILITIES; CONDITIONS PRECEDENT...........1
SECTION 1.1 Definitions...........................................1
SECTION 1.2 Other Terms...........................................7
SECTION 1.3 Term Loans............................................7
SECTION 1.4 Conditions Precedent.................................11
ARTICLE II SECURITY INTEREST 13
SECTION 2.1 Grant of Security Interest...........................13
SECTION 2.2 Security for Secured Obligations.....................15
SECTION 2.3 Security Interest Absolute...........................15
SECTION 2.4 Debtor as Agent for Secured Party....................16
ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS.....................16
SECTION 3.1 Debtor's Representations and Warranties..............16
SECTION 3.2 Affirmative Covenants................................20
SECTION 3.3 Negative Covenants...................................23
ARTICLE IV INSURANCE, TRANSFER, CONDEMNATION AND EVENT OF LOSS............25
SECTION 4.1 Insurance............................................25
SECTION 4.2 Transfer of Collateral...............................27
SECTION 4.3 Condemnation.........................................27
SECTION 4.4 Certain Events of Loss...............................27
ARTICLE V EVENTS OF DEFAULT AND REMEDIES..................................28
SECTION 5.1 Events of Default....................................28
SECTION 5.2 Remedies.............................................31
SECTION 5.3 Proceeds of Collateral...............................34
SECTION 5.4 Waiver of Rights; Receiver...........................34
ARTICLE VI INDEMNITY AND EXPENSES.........................................35
SECTION 6.1 General Indemnity....................................35
SECTION 6.2 General Tax Indemnity................................37
ARTICLE VII FURTHER ASSURANCES; ATTORNEY-IN-FACT; DISCHARGE...............38
SECTION 7.1 Further Assurances...................................38
SECTION 7.2 Secured Party Appointed Attorney-in-Fact.............39
SECTION 7.3 Secured Party May Perform............................39
SECTION 7.4 Secured Party's Duties...............................39
SECTION 7.5 Continuing Security Interest; Transfer of Note;
Termination..........................................40
ARTICLE VIII MISCELLANEOUS 40
SECTION 8.1 Notices.40
SECTION 8.2 Risk of Loss.........................................41
SECTION 8.3 Powers and Agencies..................................41
SECTION 8.4 Entire Agreement.....................................41
SECTION 8.5 Lawful Interest......................................41
SECTION 8.6 Survival; Severability...............................42
SECTION 8.7 Binding Effect.......................................42
SECTION 8.8 Amendment and Waiver.................................43
SECTION 8.9 Headings; Execution in Counterpart...................43
SECTION 8.10 Transaction Costs...................................43
SECTION 8.11 APPLICABLE LAW; CONSENT TO JURISDICTION AND
VENUE; WAIVER OF JURY TRIAL.........................43
SECTION 8.12 Break-Funding Costs.................................44
SECTION 8.13 Intention of the Parties............................44
EXHIBIT A -- Equipment Description
Schedule 1.3 -- Notice of Borrowing
Schedule 1.3(a) -- Form of Secured Term Note A
Schedule 1.3(b) -- Form of Secured Term Note B
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT dated as of February 6, 1997 (as amended,
modified, supplemented, restated and/or replaced from time to time, the
"Agreement") is between EAGLE GEOPHYSICAL, INC., a Delaware corporation
("Debtor"), and NATIONSBANC LEASING CORPORATION OF NORTH CAROLINA, a North
Carolina corporation ("Secured Party").
PRELIMINARY STATEMENTS:
(1) Debtor has requested that Secured Party make loans in the aggregate
principal amount of $7,563,920.18 to Debtor pursuant to the terms of the
Agreement as evidenced by promissory notes in such amount to finance Debtor's
acquisition of the Equipment (hereinafter defined).
(2) Secured Party has agreed to make the Loans to Debtor on the condition,
among other things, that Debtor shall have executed and delivered the Notes
(hereinafter defined) payable to Secured Party, this Agreement, any required
amendment or supplement hereto Granting (hereinafter defined) Secured Party a
first priority security interest in the Collateral (hereinafter defined),
related UCC-1 financing statements and other filings reasonably deemed necessary
or prudent by Secured Party to perfect such security interest.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Debtor and Secured Party hereby agree as follows:
ARTICLE I
DEFINED TERMS; CREDIT FACILITIES; CONDITIONS PRECEDENT
SECTION 1.1 Definitions.
When used in this Agreement, the following capitalized terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):
"Affiliate" means a Person (i) which directly or indirectly through one or
more intermediaries controls, or is controlled by, or is under common control
with, Debtor; (ii) which beneficially owns or holds 10% or more of any class of
the voting stock of Debtor, or (iii) of which 10% or more of the voting stock is
beneficially owned or held by Debtor or a Subsidiary.
"Amortization Rate" means (i) for Term Loan A, the interpolated generic two
year U.S. Treasury yield as quoted by the Dow Xxxxx/Telerate Inc. system at
approximately 11:00 a.m. (Charlotte, North Carolina time) five (5) Business Days
prior to the Term Loan A Draw Termination Date plus 1.48% and (ii) for Term Loan
B, the interpolated generic three year U.S. Treasury yield as quoted by the Dow
Xxxxx/Telerate Inc. system at approximately 11:00 a.m. (Charlotte, North
Carolina time) plus 1.56%, in each case expressed on a per annum basis; or, if
such data for any reason ceases to be available on the Dow Xxxxx/Telerate Inc.
system, the applicable U.S. Treasury yield shall be determined from any publicly
available source of similar market data selected by Secured Party; provided,
however, to the extent any such date on which the U.S. Treasury yield is to be
determined is not a Business Day, then the applicable U.S. Treasury yield in
effect on the immediately preceding Business Day shall be the effective yield.
"Assigned Agreements" has the meaning set forth in Section 2.1(b) hereof.
"Beneficiary" has the meaning set forth in Section 6.1 hereof.
"Bills of Sale" means each warranty xxxx of sale in favor of the Debtor duly
executed by the Seller of the Equipment or other evidence of title transfer
satisfactory to Secured Party.
"Break-Funding Costs" means, in the case of any voluntary prepayment of all
or any portion of the unamortized balance of the Loans, an amount reasonably
determined by Secured Party as shall compensate Secured Party as a result of the
inability of Secured Party in its reasonable discretion to redeploy the amount
so prepaid at an interest rate equal to or greater than the interest rate on the
applicable Loan and for a term equal to the remaining average life of the
applicable Loan.
"Business Day" means any day other than a day on which banking institutions
in the states of North Carolina or Georgia are authorized or required by law to
close.
"Closing Date" means February 6, 1997.
"Collateral" shall have the meaning set forth in Section 2.1 hereof.
"Default" shall mean an event or occurrence which upon the giving of notice
and/or the lapse of time shall constitute an Event of Default.
"Equipment" means all items of equipment described in Exhibit A attached
hereto, together with any replacement parts which may from time to time be
incorporated in such equipment and title to which shall have vested in Debtor.
"Equipment Cost" means, with respect to any item of Equipment, an amount
equal to the sum of (a) the total cost paid by Debtor for such item of Equipment
plus (b) all excise, sales and use taxes and registration fees paid by Debtor on
or with respect to the acquisition of such item of Equipment, both as evidenced
by invoices, appraisals and/or bills of sale in form and substance reasonably
satisfactory to Secured Party.
"ERISA" has the meaning set forth in Section 3.1(t) hereof.
"Eurodollar Rate" for a particular day means the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page
3750 (or any successor page) as the London interbank offered rate for deposits
in U.S. dollars at approximately 11:00 a.m. (London time) for a period of one
month and in an amount substantially equal to the requested Term Loan A advance
or the requested Term Loan B advance, as appropriate. If for any reason such
rate is not available, the term "Eurodollar Rate" shall mean the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits in U.S.
dollars at approximately 11:00 a.m. (London time) for a period of one month and
in an amount substantially equal to the requested Term Loan A advance or the
requested Term Loan B advance, as appropriate; provided, however, if more than
one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates.
"Event of Default" has the meaning set forth in Section 5.1 hereof.
"Event of Loss" with respect to an item of Equipment means any of the
following events: (i) loss of any item of Equipment or of the use thereof due to
theft or disappearance prior to the expiration or termination of this Agreement,
or the non-existence of any item of Equipment at the expiration or termination
of this Agreement, (ii) destruction, damage beyond repair, or rendition of any
item of Equipment permanently unfit for normal use for any reason whatsoever,
(iii) any damage to any item of Equipment which results in an insurance
settlement with respect to such item of Equipment on the basis of a total loss,
or (iv) the condemnation, confiscation, seizure, or requisition of use or title
to any item of Equipment by any governmental authority under the power of
eminent domain or otherwise.
"Event of Loss Payment Date" has the meaning set forth in Section 4.3 hereof.
"Grant" means to grant, bargain, sell, warrant, remise, release, convey,
assign, transfer, mortgage, pledge, deposit, set over, confirm or create a
security interest under the North Carolina UCC. A grant with respect to any
instrument, document or agreement shall include all rights, powers and options
(but none of the obligations) of the granting party thereunder, including
without limitation the right to generally do anything which the granting party
then is or thereafter may be entitled to do thereunder or with respect thereto.
"Guarantor" means Seitel, Inc., a Delaware corporation.
"Guaranty" means the Guaranty Agreement dated as of the date hereof, as such
may be amended, modified, supplemented, restated and/or replaced from time to
time, executed by Guarantor for the benefit of Secured Party.
"Installment Payment Date" means the last day of each calendar month with
respect to Term Loan A and/or Term Loan B.
"Lien" means any lien, claim, charge, security interest, mortgage and/or
other encumbrance.
"Loans" means each of Term Loan A and Term Loan B.
"North Carolina UCC" or "UCC" means the North Carolina Uniform Commercial
Code, N.C. Gen. Stat. Chapter 25, Articles 1-11, as now in effect and as
hereafter amended from time to time.
"Notes" means each of Secured Term Note A and Secured Term Note B.
"Notice of Borrowing" means a notice of borrowing delivered pursuant to
Section 1.3(a) or 1.3(b) substantially in the form of Schedule 1.3 hereto.
"PBGC" has the meaning set forth in Section 3.1(t) hereof.
"Permitted Contest" means any contest by Debtor with respect to any Lien, tax
or imposition referred to in Section 6.2 hereof, so long as Debtor shall
contest, in good faith and at its expense, the existence, the amount or the
validity thereof, the amount of the damages caused thereby, or the extent of its
liability therefor, by appropriate Proceedings which do not result in (i) the
collection of, or other realization upon, the tax, assessment, levy, fee, rent
or Lien so contested, (ii) the sale, forfeiture or loss of any item of Equipment
or any material part thereof, or (iii) any interference with the use of any item
of Equipment or any material part thereof.
"Permitted Encumbrances", with respect to the Collateral, means (i) this
Agreement and any assignment permitted hereby, (ii) any Lien affecting the
Collateral for work or service performed or materials furnished securing amounts
which are not yet due and payable or which are not otherwise delinquent and
(iii) any Lien which is the subject of a Permitted Contest and (iv) any other
Lien incurred in the ordinary course of business which such Lien does not exceed
$50,000.
"Permitted Lease" shall mean a lease of all the Equipment or any portion
thereof entered into between Debtor and a Permitted Lessee; provided, that the
following conditions shall be met with respect to each such lease: (i) Secured
Party shall have given its prior written consent to such lease; (ii) upon the
effective date of such lease, there shall exist no Default or Event of Default
and no Liens on any of the Collateral other than the Permitted Encumbrances;
(iii) each such lease shall specify explicitly as a condition to the
effectiveness of such lease that (A) Debtor shall remain fully obligated and in
compliance with the terms and conditions of this Agreement and (B) upon Secured
Party's delivery to the lessee of notice specifying that an Event of Default has
occurred and is continuing and that the Secured Party has commenced the exercise
of remedies with respect to the Equipment, such lease will automatically
terminate and be of no further force or effect and the lessee will cause each
item of Equipment then subject to such lease to be delivered to Secured Party at
a place to be designated by Secured Party.
"Permitted Lessee" shall mean any Person which (i) is domiciled in the United
States, (ii) in Debtor's reasonable opinion, is financially responsible and
(iii) at the time Debtor enters into such lease, is not the subject of any
filing by or against such Person of a petition under any federal bankruptcy law
or any federal law replacing or superseding such law or any state bankruptcy law
in which such Person is named as debtor.
"Person" means an individual or a corporation, partnership, trust,
association, joint venture, joint stock company, firm or other enterprise or
government (or a political subdivision or any agency, department or
instrumentality thereof) or other entity of any kind.
"Plan" means any "employee benefit pension plan" or other "plan" (including a
"multiemployer plan" as defined in Section 3(37) of ERISA) established or
maintained, as to which contributions have been made, by Debtor or any Affiliate
for either of their respective employees and which is covered by Title IV of
ERISA or to which Section 412 of the Internal Revenue Code of 1986, as amended
applies.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"Replacement Equipment" means an item (i) of comparable make, model and
manufacture as the item of Equipment with respect to which an Event of Loss has
occurred, (ii) selected by Debtor and consented to by Secured Party, such
consent not to be unreasonably withheld or delayed, (iii) owned by Debtor free
and clear of all Liens and other encumbrances other than Permitted Encumbrances
and (iv) having a value, utility and useful life at least equal to, and being in
as good operating condition as, the item of Equipment with respect to which the
Event of Loss occurred, assuming such item of Equipment was in the condition and
repair required by the terms hereof immediately prior to the occurrence of the
Event of Loss.
"Secured Obligations" has the meaning set forth in Section 2.2 hereof.
"Secured Party" means NationsBanc Leasing Corporation of North Carolina, a
North Carolina corporation, and its successors and assigns.
"Security Instrument" means each of this Agreement, and any other instrument,
document, financing statement or agreement with respect to which any right or
interest in or with respect to the Collateral has been Granted to Secured Party
or has been recorded with the appropriate filing office.
"Secured Term Note A" means the promissory note of the Debtor in favor of the
Secured Party dated the Closing Date evidencing Term Loan A as provided pursuant
to Section 1.3(a)(iii), as amended, modified, supplemented, extended, renewed or
replaced from time to time.
"Secured Term Note B" means the promissory note of the Debtor in favor of the
Secured Party dated the Closing Date evidencing Term Loan B as provided pursuant
to Section 1.3(b)(iii), as amended, modified, supplemented, extended, renewed or
replaced from time to time.
"Seller" means each Person executing a Xxxx of Sale in favor of Debtor with
respect to any Equipment.
"Subsidiary" means any corporation, limited liability company, partnership,
joint venture, trust or estate of which (i) more than 50% of the outstanding
capital stock having ordinary voting power to elect a majority of the board of
directors of such corporation; or (ii) the interest in the capital or profits of
such corporation, limited liability company, partnership or joint venture; or
(iii) the beneficial interest of such trust or estate is owned directly or
indirectly by Guarantor and/or one of its Subsidiaries.
"Taxes or Other Impositions" has the meaning set forth in Section 6.2 hereof.
"Term Loan A" means the term loan made pursuant to the provisions of Section
1.3(a).
"Term Loan A Commitment" has the meaning set forth in Section 1.3(a) hereof.
"Term Loan B" means the term loan made pursuant to the provisions of Section
1.3(b).
"Term Loan B Commitment" has the meaning set forth in Section 1.3(b) hereof.
"Term Loan A Draw Termination Date" has the meaning set forth in Section
1.3(a) hereof.
"Term Loan B Draw Termination Date" has the meaning set forth in Section
1.3(b) hereof.
"Termination Value" means, with respect to any or all item(s) of Equipment,
an amount equal to the Equipment Cost of such item(s) of Equipment multiplied by
the Termination Value Percentage as of such Installment Payment Date.
"Termination Value Percentage" means the termination value percentage for
Term Loan A and/or Term Loan B, as appropriate, as of each Installment Payment
Date calculated as of the date on which the Amortization Rate is determined for
each of Term Loan A and Term Loan B.
SECTION 1.2 Other Terms.
Unless otherwise defined in this Agreement, all terms defined in the North
Carolina UCC and used in this Agreement have the meanings set forth in the North
Carolina UCC.
SECTION 1.3 Term Loans.
(a) Term Loan A. Subject to and upon the terms and conditions and relying
upon the representations and warranties herein set forth, the Secured Party
agrees to make advances ("Term Loan A") to the Debtor from time to time from
the Closing Date to and including February 28, 1997 (as such date may be
extended from time to time in the sole discretion of the Secured Party, the
"Term Loan A Draw Termination Date") in an aggregate principal amount of up
to FIVE HUNDRED FIFTY-SEVEN THOUSAND SEVEN HUNDRED SIXTY-EIGHT AND 14/100
DOLLARS ($557,768.14) (the "Term Loan A Commitment") for the purposes
hereinafter set forth. Amounts repaid on Term Loan A may not be reborrowed.
(i) Term Loan A Advances. So long as the conditions to advances have
been satisfied, the Secured Party will make Term Loan A advances to the
Debtor from time to time from the Closing Date to the Term Loan A Draw
Termination Date upon submission of a Notice of Borrowing substantially in
the form of Schedule 1.3 to the Secured Party five (5) Business Days prior
to the date of the requested advance. Each such notice shall specify (A)
the date of the requested advance (which shall be a Business Day), (B)
shall not exceed, taking into account all prior Term Loan A advances, the
Term Loan A Commitment, (C) shall be in a minimum amount of $100,000 and
(D) shall be accompanied by any supporting invoices and requisitions
relating to the requested advance. The Secured Party shall make such Term
Loan A advances available by deposit to the Debtor's account at the office
of Bank One, Texas, N.A. in Houston, Texas.
(ii) Payment of Principal and Interest.
(A) Interest During Draw Period. Term Loan A shall be subject to a
draw period during which accrued interest shall be payable monthly in
arrears on the last day of each calendar month beginning with the first
of such dates to occur after the Closing Date. Interest during such
draw period shall accrue at the applicable Eurodollar Rate plus 1.30%
(computed on the basis of the actual number of days elapsed over a year
of 360 days) with respect to the Term Loan A advance made on the
Closing Date and with respect to each Term Loan A advance made
thereafter throughout the draw period. The Eurodollar Rate applicable
to the Term Loan A advance made on the Closing Date shall be determined
five (5) Business Days prior to the Closing Date. The Eurodollar Rate
applicable to each Term Loan A advance made after the Closing Date
shall be determined five (5) Business Days prior to the date of the
requested advance.
(B) Principal and Interest after Draw Period. The Term Loan A
Commitment shall bear interest at a fixed rate equal to the
Amortization Rate. The Amortization Rate for Term Loan A shall be
determined five (5) Business Days prior to the Term Loan A Draw
Termination Date. Principal and interest on Term Loan A shall be
amortized and payable in thirty-six (36) consecutive level monthly
installments beginning with the payment due on March 31, 1997. Payments
received on Term Loan A shall be applied first to accrued interest and
then to principal in inverse order of maturity.
Upon the occurrence and during the continuation of an Event of Default
hereunder, the principal of and, to the extent permitted by law, interest on
Term Loan A hereunder shall bear interest, payable on demand, at a rate equal to
2.0% per annum in excess of the rate otherwise applicable hereunder.
(iii) Secured Term Note A. Term Loan A shall be evidenced by a duly
executed promissory note of the Debtor to the Secured Party dated the Closing
Date in an original principal amount equal to the Term Loan A Commitment and
substantially in the form of Schedule 1.3(a) hereto.
(b) Term Loan B. Subject to and upon the terms and conditions and relying
upon the representations and warranties herein set forth, the Secured Party
agrees to make advances ("Term Loan B") to the Debtor from time to time from the
Closing Date to and including April 30, 1997 (as such date may be extended from
time to time in the sole discretion of the Secured Party, the "Term Loan B Draw
Termination Date") in an aggregate principal amount of up to SEVEN MILLION SIX
THOUSAND ONE HUNDRED FIFTY-TWO AND 04/100 DOLLARS ($7,006,152.04) (the "Term
Loan B Commitment") for the purposes hereinafter set forth. Amounts repaid on
Term Loan B may not be reborrowed.
(i) Term Loan B Advances. So long as the conditions to advances have been
satisfied, the Secured Party will make Term Loan B advances to the Debtor
from time to time from the Closing Date to the Term Loan B Draw Termination
Date upon submission of a Notice of Borrowing substantially in the form of
Schedule 1.3 to the Secured Party five (5) Business Days prior to the date of
the requested advance. Each such notice shall specify (A) the date of the
requested advance (which shall be a Business Day), (B) shall not exceed,
taking into account all prior Term Loan B advances, the Term Loan B
Commitment, (C) shall be in a minimum amount of $100,000 and (D) shall be
accompanied by any supporting invoices and requisitions relating to the
requested advance. The Secured Party shall make such Term Loan B advances
available by deposit to the Debtor's account at the office of Bank One,
Texas, N.A. in Houston, Texas.
(ii) Payment of Principal and Interest.
(A) Interest during Draw Period. Term Loan B shall be subject to a draw
period during which accrued interest shall be payable monthly in arrears
on the last day of each calendar month beginning with the first of such
dates to occur after the Closing Date. Interest during such draw period
shall accrue at the applicable Eurodollar Rate plus 1.30% (computed on the
basis of the actual number of days elapsed over a year of 360 days) with
respect to the Term Loan B advance made on the Closing Date and with
respect to each Term Loan B advance made thereafter throughout the draw
period. The Eurodollar Rate applicable to the Term Loan B advance made on
the Closing Date shall be determined five (5) Business Days prior to the
Closing Date. The Eurodollar Rate applicable to each Term Loan B advance
made after the Closing Date shall be determined five (5) Business Days
prior to the date of the requested advance.
(B) Principal and Interest after Draw Period. The Term Loan B
Commitment shall bear interest at a fixed rate equal to the Amortization
Rate. The Amortization Rate for Term Loan B shall be determined five (5)
Business Days prior to the Term Loan B Draw Termination Date. Principal
and interest on Term Loan B shall be amortized and payable in sixty (60)
consecutive level monthly installments beginning with the payment due on
May 31, 1997. Payments received on Term Loan B shall be applied first to
accrued interest and then to principal in inverse order of maturity.
Upon the occurrence and during the continuation of an Event of Default
hereunder, the principal of and, to the extent permitted by law, interest on
Term Loan B shall bear interest, payable on demand, at a rate equal to 2.0% per
annum in excess of the rate otherwise applicable hereunder.
(iii) Secured Term Note B. Term Loan B shall be evidenced by a duly
executed promissory note of the Debtor to the Secured Party dated the Closing
Date in an original principal amount equal to the Term Loan B Commitment and
substantially in the form of Schedule 1.3(b) hereto.
(c) Early Termination. (i) On any Installment Payment Date on or after the
second anniversary of the Closing Date, Debtor may, upon sixty (60) days' prior
written notice to Secured Party, terminate the Loans and this Agreement. Debtor
shall pay to Secured Party on the applicable Installment Payment Date the sum
of: (A) the Termination Value as of such Installment Payment Date, plus (B) any
Break-Funding Costs, plus (C) any accrued but unpaid interest with respect to
either Loan, plus (D) all other obligations owing under the Agreement on the
termination date. Upon receipt of the amounts set forth in (A)-(D) above,
Secured Party shall release its Lien on the Collateral.
(ii) On any Installment Payment Date on or after the second anniversary of
the Closing Date, Debtor may, upon sixty (60) days' prior written notice to
Secured Party, prepay a portion of the Loans in accordance with the terms
hereof. Debtor shall have the option to make up to three (3) prepayments in
the aggregate on the Loans, each prepayment in an amount not less than
$200,000. Debtor shall pay to Secured Party on the applicable Installment
Payment Date the sum of: (A) the prepayment amount, plus (B) any
Break-Funding Costs, plus (C) any accrued but unpaid interest with respect to
the prepayment. Amounts so prepaid under this subsection (c)(ii) shall be
applied to outstanding obligations owing under this Agreement in the
reasonable discretion of the Secured Party.
SECTION 1.4 Conditions Precedent.
The obligation of Secured Party to make any Loan advance shall be subject to
the following conditions, as appropriate:
(a) Conditions to All Advances on Closing Date. Each Loan advance on the
Closing Date shall be subject to the delivery to Secured Party of the
following originally executed documents (unless otherwise noted) each in form
and substance satisfactory to Secured Party and the satisfaction of the other
conditions set forth herein:
(i) the Agreement;
(ii) the Notes;
(iii) the Guaranty;
(iv) evidence of payment (or evidence of exemption) of any and all
sales, transfer, use, documentation or similar taxes due in connection
with the acquisition of the Equipment by Debtor;
(v) a secretarial certificate from Debtor: (A) certifying Debtor's
articles of incorporation, by-laws and resolutions, with such resolutions
authorizing the overall transaction and Debtor's execution, delivery and
performance of this Agreement and (B) containing an incumbency
certification of Debtor with the name(s), title(s) and specimen
signature(s) of the person or persons authorized on behalf of Debtor to
execute this Agreement.
(vi) an officer's certificate from Debtor: (A) stating that no material
adverse change has occurred in the condition of Debtor (financial or
otherwise) since the date of the last financial statement of Guarantor
which has been delivered to Secured Party which would impair the ability
of Debtor to pay and perform its obligations under this Agreement and (B)
stating that no Default or Event of Default shall have occurred and be
continuing as of such date;
(vii) a secretarial certificate from Guarantor: (A) certifying
Guarantor's articles of incorporation, by-laws and resolutions, with such
resolutions authorizing the overall transaction and Guarantor's execution,
delivery and performance of the Guaranty and (B) containing an incumbency
certification of Guarantor with the name(s), title(s) and specimen
signature(s) of the person or persons authorized on behalf of Guarantor to
execute the Guaranty;
(viii) an officer's certificate from Guarantor: (A) stating that no
material adverse change has occurred in the condition of Guarantor
(financial or otherwise) since the date of the last financial statement of
Guarantor which has been delivered to Secured Party which would impair the
ability of Guarantor to pay and perform its obligations under the Guaranty
and (B) stating that no Default or Event of Default shall have occurred
and be continuing as of such date;
(ix) a written opinion of counsel for Debtor and Guarantor;
(x) copies of the Bills of Sale;
(xi) certificates of insurance evidencing the coverages required
hereunder;
(xii) Uniform Commercial Code filings as deemed appropriate by Secured
Party's counsel duly executed by Debtor and necessary third parties;
(xiii) good standing certificates from the Secretary of State of
Debtor's state of incorporation and the state of Debtor's chief executive
office; and
(xiv) good standing certificates from the Secretary of State of
Guarantor's state of incorporation and Guarantor's chief executive office.
(xv) UCC, tax and judgment lien searches as deemed necessary or
advisable by Secured Party;
(xvi) the absence on the date hereof of any Liens on the Collateral,
other than any Permitted Encumbrance in favor of Secured Party; and
(xvii) Secured Party shall have received such other documents,
certificates, financing statements and other items, in form and substance
satisfactory to Secured Party, as Secured Party may request.
(b) Term Loan Advances after the Closing Date. The obligation of the Secured
Party to make Term Loan A advances and/or Term Loan B advances after the Closing
Date is subject to satisfaction of the following conditions:
(i) delivery to the Secured Party of a Notice of Borrowing;
(ii) no material adverse change in the condition of the Debtor (financial
or otherwise) shall have occurred since the Closing Date;
(iii) the absence on the date of such advance of any Default or Event of
Default; and
(iv) no Lien or other interest shall have been permitted to attach to the
Collateral superior or subordinate to the interest of the Secured Party under
this Agreement, except for Permitted Encumbrances.
ARTICLE II
SECURITY INTEREST
SECTION 2.1 Grant of Security Interest.
Debtor hereby Grants to Secured Party a first priority security interest in
the following (collectively, the items described in subsections (a)-(d) may be
referred to herein as the "Collateral"):
(a) All right, title and interest of the Debtor in and to the Equipment as
the same is now and will hereafter be constituted, whether now owned by the
Debtor or hereafter acquired, together with all accessories, equipment, parts
and appurtenances appertaining or attached to the Equipment whether now owned
or hereafter acquired, and all substitutions, renewals and replacements of
and additions, improvements, accessions and accumulations to the Equipment
together with all the rents, issues, income, profits and avails thereof.
(b) All right, title, interest, claims and demands of Debtor in, to and
under the following (collectively the "Assigned Agreements"):
(i) the Bills of Sale;
(ii) the Permitted Leases; and
(iii) any and all other contracts and agreements (excluding this
Agreement and any supplement or modification thereto and the Notes)
relating to the Equipment or any rights or interests therein to which
Debtor is now or may hereafter be a party (excluding contracts or
agreements by the Debtor with vendors providing for the use of certain
Equipment by Debtor to record, produce and distribute seismic data),
together with all rights, powers, privileges, licenses, easements, options
and other benefits of Debtor under each thereof, including without
limitation the right to make all waivers and agreements, to give and
receive all notices and other instruments or communications, to take such
action upon the occurrence of a default thereunder, including the
commencement, conduct and consummation of legal, administrative or other
Proceedings, as shall be permitted thereby or by law, and to do any and
all other things which Debtor is or may be entitled to do thereunder.
(c) The proceeds from a sale or transfer of any right, title or interest of
Debtor in the Equipment or any portion thereof.
(d) All proceeds of any and all of the foregoing Collateral, whether now
owned or hereafter acquired by Debtor and wherever located, including without
limitation:
(i) cash, accounts receivable, instruments, contract rights, chattel
paper, documents of title and any other obligation due to Debtor with respect
to or in connection with the foregoing Collateral; and
(ii) to the extent not otherwise included, all payments under any casualty
insurance (whether or not Secured Party is the loss payee thereof),
condemnation award, indemnity, warranty or guaranty, payable by reason of
loss or damage to or otherwise with respect to any of the foregoing
Collateral.
The Collateral shall mean and include all personal property and the
proceeds of such personal property described in any and all amendments to
this Agreement hereafter executed by Debtor and Secured Party in connection
with the Loan.
SECTION 2.2 Security for Secured Obligations.
This Agreement secures the payment of all indebtedness and other obligations
of Debtor to Secured Party with respect to: the Loans, whether now or hereafter
existing, including without limitation Debtor's obligations to Secured Party
under the Notes or any other instrument and all amendments thereto and renewals
and extensions thereof, whether for principal, interest, fees, expenses or
otherwise; all of Debtor's obligations of payment and performance now or
hereafter existing under this Agreement, including, without limitation, all
amendments hereto and renewals and extensions hereof (all such obligations of
Debtor described in this Section 2.2 being, collectively, the "Secured
Obligations").
SECTION 2.3 Security Interest Absolute.
All rights of Secured Party and security interests hereunder and all Secured
Obligations shall be absolute and unconditional, irrespective of:
(i) any lack of validity or enforceability of the Notes, this Agreement or
any other Security Instrument or any other agreement or instrument relating
thereto;
(ii) any change in the time, manner, or place or payment of, or in any
other term of, all or any of the Secured Obligations or any other amendment
or waiver of or any consent to any departure from the Notes, this Agreement
or any other Security Instrument; or
(iii) any exchange, release or non-perfection of any other collateral, or
any release, amendment or waiver of or consent to departure from any
guaranty, for all or any of the Secured Obligations.
SECTION 2.4 Debtor as Agent for Secured Party.
Title to each item of Equipment shall at all times remain in Debtor so long
as any Loans or other obligations under this Agreement remain outstanding;
provided, however, that with respect to each item of Equipment subject to motor
vehicle titling and registration laws, Secured Party appoints Debtor as the
agent of Secured Party and grants Debtor a limited power of attorney for the
sole and limited purpose of causing each item of such Equipment to be titled in
the name of Debtor with Secured Party noted as the first, and sole, lienholder.
Debtor shall keep possession of such original certificates of title and upon
reasonable notice Secured Party shall have the right to review such original
certificates of title during Debtor's normal business hours. In the case of a
Default or an Event of Default, Debtor shall promptly deliver within five (5)
Business Days the original certificates of title to Secured Party. The agency
and power of attorney created hereby shall immediately terminate upon the
occurrence of any Default or Event of Default under this Agreement. ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 3.1 Debtor's Representations and Warranties.
Debtor hereby represents and warrants to Secured Party that:
(a) Debtor is a corporation duly organized and validly existing under the
laws of the State of Delaware and has all requisite corporate power,
authority and legal right to own its properties, including without limitation
the Collateral, to conduct its business as is now being conducted and to
execute, deliver and perform its obligations under the Notes, this Agreement,
each other Security Instrument to which it is a party and each other document
or agreement related to the Collateral to which it is a party. Debtor is
fully qualified to do business and is in good standing in each jurisdiction
in which the failure to be in good standing would have a material adverse
effect on the business or operations of Debtor.
(b) The execution, delivery and performance by Debtor of the Notes, this
Agreement and each other Security Instrument to which it is a party are
within Debtor's corporate powers, have been duly authorized by all requisite
corporate action, do not contravene Debtor's charter or by-laws or any law,
governmental rule or regulation, or any order, writ, injunction, decree,
determination or award currently in effect applicable to, or any contractual
restriction binding on or affecting, Debtor or any of its properties,
including without limitation the Collateral, and do not result in or require
the creation of any Lien, security interest, right of acceleration, charge or
encumbrance (other than pursuant to this Agreement) upon or with respect to
any of its properties.
(c) No authorization or approval or other action by, and no notice to or
filing (other than the filings referred to in subparagraph (f) below) with,
any governmental authority or regulatory body, shareholders or any other
Person is required for the due execution, delivery and performance by Debtor
of this Agreement or any other Security Instrument to which it is a party.
(d) The Notes, this Agreement and each other Security Instrument to which
Debtor is a party are the legal, valid and binding obligations of Debtor,
enforceable against Debtor in accordance with their respective terms,
subject, in the case of enforceability, to applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting creditors' rights
generally and to the application of general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).
(e) The proceeds of the Loans will be used only to finance the purchase by
Debtor of the Equipment; Debtor owns good and marketable title to the
Equipment; the Collateral is free and clear of all Liens (except for
Permitted Encumbrances in favor of Secured Party); and the Equipment is in
good condition and ready for operation. The Equipment is and will retain its
character as personal property, and neither Debtor, Guarantor, or any
Affiliate or Subsidiary of either Debtor or Guarantor shall affix or attach
any item of Equipment in any manner so as to alter the character of the
Equipment as personal property subject to the UCC.
(f) Except for the notation on the certificates of title naming Secured
Party as first lienholder with respect to all items of Equipment subject to
motor vehicle titling and registration laws, the filing of Uniform Commercial
Code financing statements in the office of the Secretary of State of the
State of Texas will create a valid perfected first priority security interest
in the Collateral, securing the payment of the Secured Obligations, and all
filings and other actions necessary or desirable to perfect and protect such
security interests will have been taken. No Person other than Secured Party
holds any security interest affecting the Collateral. No effective Security
Instrument or other instrument similar in effect covering all or any part of
the Collateral is on file in any recording office, except such as may have
been filed in favor of Secured Party relating to this Agreement.
(g) Debtor's chief executive office is located in Xxxxxx County, Houston,
Texas. The Debtor has not used any trade names or other names.
(h) Contemporaneously with the execution and delivery of this Agreement,
Debtor is delivering to Secured Party evidence of insurance satisfying the
requirements of Section 4.1 hereof.
(i) Debtor is not currently insolvent, as defined in 11 U.S.C. 101(32) nor
will it be rendered insolvent by virtue of entering into the Notes, this
Agreement or any other Security Instrument to which it is a party or carrying
out any of the transactions contemplated hereby or thereby.
(j) Each financial statement of Guarantor which has been furnished to
Secured Party fairly presents the financial condition of Guarantor as of the
date of such financial statement. There has been no material adverse change
in Guarantor's financial condition since the date of the most current
financial statement delivered to Secured Party.
(k) There is no pending, or to the Debtor's knowledge, threatened, action
or Proceeding affecting Debtor, Guarantor or any of their properties before
any court, governmental agency or arbitrator which may materially and
adversely affect the condition (financial or otherwise) or operations of
Debtor, Guarantor or any of their properties or which purports to affect the
validity or enforceability of the Notes, this Agreement or any other Security
Instrument to which Debtor is a party.
(l) No Default or Event of Default has occurred and is continuing.
(m) All sales, transfer, use, documentation or similar taxes, fees or
other charges due and payable prior to or as of the date hereof have been
paid to the extent such are in connection with the sale to and purchase by
Debtor of the Equipment.
(n) Debtor is not a party to, nor bound by, any contract, agreement or
instrument that would conflict with this Agreement, the Notes or any other
contracts, agreements or instruments executed in connection with the
transactions contemplated by this Agreement.
(o) Debtor has agreed, and hereby acknowledges, to accept service of
process at its address set forth in Section 8.1 hereof in person or by
registered or certified mail return receipt requested, postage prepaid, in
connection with any Proceeding initiated by Secured Party in any of the
courts referenced in Section 8.11 hereof.
(p) The Debtor has no Subsidiaries.
(q) Debtor has not incurred any accumulated unfunded deficiency within the
meaning of the Employee Retirement Income Security Act of 1974, as amended
from time to time ("ERISA") nor has Debtor incurred any material liability to
the Pension Benefit Guaranty Corporation ("PBGC") established under such Act
(or any successor thereto under such Act) in connection with any Plan. Debtor
and its Affiliates are in compliance in all material respects with those
provisions of ERISA and the regulations and public interpretations thereunder
which are applicable to Debtor and its Affiliates, except for such
noncompliance as would not have a material adverse effect on the financial
condition of Debtor and its Affiliates, taken as a whole.
(r) Debtor has filed all income tax returns required to be filed prior to
the date hereof with the various governmental entities having taxing
authority with respect to Debtor.
(s) Debtor (i) is not an "investment company" as such term is defined in,
or otherwise subject to regulations under, the Investment Company Act of 1940
and (ii) is not a "holding company" as that term is defined in, and is not
otherwise subject to regulations under, the Public Utility Holding Company
Act of 1935.
(t) Debtor has not sold, extended any offer to sell nor accepted any offer
to purchase regarding any of Debtor's interest in the Collateral or with
respect to the transactions described in the Security Instruments or the
Notes.
(u) Debtor has delivered true and accurate copies of the Bills of Sale
executed by each Seller with respect to the transfer of the Equipment to
Debtor.
SECTION 3.2 Affirmative Covenants.
Until all the Secured Obligations shall have been fully paid and satisfied,
Debtor covenants and agrees that it shall, unless Secured Party shall have
otherwise consented in writing:
(a) promptly pay the principal of, interest on, and any other amounts due
under the Notes as and when the same become due, whether at maturity, by
acceleration or otherwise;
(b) (i) duly, punctually and faithfully perform its obligations under the
Notes, this Agreement and each other Security Instrument to which it is a
party; (ii) maintain the Liens and security interests created by this
Agreement and each other Security Instrument to which it is a party as valid
and perfected Liens on and security interests in all of the Collateral, prior
in right to any other Lien, security interest, claim or other encumbrance;
(iii) warrant and defend its interest in and to the Collateral against the
claims and demands of all Persons; and (iv) defend, at Debtor's cost, any
action, claim or Proceeding affecting the Collateral;
(c) use the proceeds of the Loans only to finance the purchase by Debtor
of the Equipment and maintain good and marketable title to the Equipment,
free and clear of any Liens, security interests, charges or encumbrances
except for the security interest created by this Agreement and Permitted
Encumbrances;
(d) notify Secured Party at least thirty (30) days prior to the changing
of the chief executive office of the Debtor from the location specified in
Section 3.1(g);
(e) at no expense to Secured Party, cause each item of Equipment to be
serviced, maintained and preserved in the same condition, repair and working
order as when new, ordinary wear and tear excepted, and in accordance with
any manufacturer's suggested or approved maintenance program and warranty
requirements, and shall, in the case of any loss or damage to any item of
Equipment, promptly furnish to Secured Party a statement respecting any such
loss or damage and (unless an Event of Loss shall have occurred with respect
to an item of Equipment) as quickly as practicable after the occurrence
thereof make or cause to be made all repairs, replacements and other
improvements in connection therewith which are necessary or desirable to keep
each item of Equipment in proper working order;
(f) permit Secured Party to inspect the Equipment during normal business
hours upon reasonable prior notice to Debtor;
(g) from time to time execute and deliver all such supplements and
amendments hereto and to any other Security Instrument, and all such
financing statements, continuation statements, instruments of further
assurance and other instruments, and take such other action, as the Secured
Party requests and reasonably deems necessary or advisable to: (i) further
Grant, maintain or preserve the Lien and security interest contemplated by
this Agreement or carry out more effectively the purposes hereof; (ii)
perfect or protect the validity of any Security Instrument or of any Grant
made or to be made by this Agreement; or (iii) enforce any Security
Instrument or preserve and defend title to the Collateral and the rights of
the Secured Party therein against the claims of all Persons and parties;
(h) comply with all of its representations, warranties and covenants set
forth in this Agreement, in the Notes and each Security Instrument to which
it is a party; and punctually perform and observe all of its obligations and
agreements contained in this Agreement, in the Notes and each Security
Instrument to which it is a party;
(i) promptly notify the Secured Party of any default by any Person under
any Security Instrument;
(j) remain a duly organized and validly existing corporation under the
laws of the state of its incorporation and remain duly qualified to do
business and in good standing in each jurisdiction in which the failure to be
in good standing would have a material adverse effect on the business or
operations of Debtor;
(k) comply in all material respects with all applicable laws, rules,
regulations and orders; and preserve and maintain all federal, state and
local licenses, privileges, franchises, certificates and other permits
necessary for the operation of its business and the operation of each item of
Equipment;
(l) pay or cause to be paid promptly when due (i) (subject to the right of
Debtor, in accordance with the provisions of this Agreement to obtain
extensions of the date on which such taxes are due) all property and other
taxes (including without limitation income, sales, use, franchise and gross
receipts taxes) and governmental charges or levies which are at any time or
from time to time levied upon or assessed against it or any item of Equipment
or are otherwise associated with the ownership, use or operation of any item
of Equipment (except such taxes levied on the net income of Secured Party)
and (ii) all claims (including without limitation claims for labor, materials
and supplies) against any item of Equipment; provided, that Debtor may
contest any such tax or claim by appropriate Proceedings so long as such
Proceedings shall suspend the collection thereof, no part of the Collateral
would be subject to sale, forfeiture or diminution during the pendency of
such Proceedings, Debtor shall have furnished such security as may be
required in the Proceedings or reasonably requested by Secured Party, Debtor
conducts such contests in good faith and with due diligence, and promptly
after the final determination of each such contest, Debtor pays all amounts
which shall be determined to be payable in respect thereof;
(m) within 120 days after the end of each fiscal year furnish to the
Secured Party unaudited year end financial reports of the Debtor including
without limitation (i) a balance sheet and (ii) statements of income and
retained earnings, all prepared in accordance with generally accepted
accounting principles consistently applied and certified by the president,
chief financial officer or any vice president of Debtor who prepared such
financial statements as being true and accurate and fairly representing the
financial condition of Debtor;
(n) promptly report to Secured Party the commencement of any Proceeding
against Debtor if such litigation reasonably would be expected to, in the
event of an unfavorable outcome, cause an Event of Default, have a material
adverse effect on Debtor's financial condition or operations, affect the
validity or enforceability of the Notes, this Agreement or any of the
Security Instruments or affect priority or enforceability of Secured Party's
security interest in any of the Collateral;
(o) promptly notify Secured Party in writing if a Default or an Event of
Default has occurred;
(p) upon the replacement of an item of Equipment with Replacement
Equipment, Debtor, at its own expense, will promptly (i) cause a supplement
hereto, in form and substance satisfactory to Secured Party, subjecting such
Replacement Equipment to this Agreement, to be duly executed by Debtor, (ii)
furnish Secured Party with such evidence of Debtor's title to such
Replacement Equipment, of the condition of such Replacement Equipment, and of
compliance with the insurance provisions hereof with respect to such
Replacement Equipment and (iii) take such other action as Secured Party may
request in order that such Replacement Equipment be duly and properly titled
in Debtor and subject to this Agreement to the same extent as the item of
Equipment replaced thereby;
(q) (i) at all times, make prompt payment of all contributions required
under its Plans and required to meet the minimum funding standard set forth
in ERISA with respect to its Plans; (ii) notify Secured Party immediately of
any fact, including, but not limited to, any Reportable Event (as defined in
ERISA) arising in connection with any of its Plans, which might constitute
grounds for termination thereof by the PBGC or for the appointment by the
appropriate United States District Court of a trustee to administer such
Plan, together with a statement, if requested by the Secured Party, as to the
reason therefor and the action, if any, proposed to be taken with respect
therefor; and (iii) furnish to Secured Party upon its request, such
additional information concerning any of its Plans as may be reasonably
requested;
(r) Debtor shall pay, and save Secured Party harmless against, any and all
losses, judgments, decrees and costs (including, without limitation, all
reasonable attorneys' fees and expenses) in connection with any Permitted
Contest and shall promptly after the final settlement, compromise or
determination (including any appeals) of such contest, fully pay and
discharge the amounts which shall be levied, assessed, charged or imposed or
be determined to be payable therein or in connection therewith, together with
all penalties, fines, interest, costs and expenses thereof or in connection
therewith, and perform all acts, the performance of which shall be ordered or
decreed as a result thereof.
SECTION 3.3 Negative Covenants.
Until the Secured Obligations shall have been fully paid and satisfied,
Debtor shall not, without the prior written consent of Secured Party:
(a)(i) sell, lease, assign, transfer, convey, Grant an interest in,
exchange or otherwise dispose of any of the Collateral or any part thereof or
(ii) cause or permit any subleasing of any of the Equipment (except that
Debtor may lease any or all items of Equipment to a Permitted Lessee pursuant
to a Permitted Lease);
(b) create or suffer to exist any Lien affecting the Collateral or any
part thereof, other than in favor of Secured Party or other Permitted
Encumbrances;
(c) use the Equipment for any unlawful purpose;
(d) dissolve, wind up or liquidate or seek or permit the dissolution or
liquidation of Debtor in whole or in part;
(e) [intentionally omitted];
(f) as against Secured Party, claim any credit on, or make any deduction
from, the principal or interest payable on the Notes, whether by reason of
the payment of any taxes levied or assessed upon any of the Collateral, or
otherwise;
(g) take or permit any action which would result in an Event of Default;
(h) [intentionally omitted];
(i) [intentionally omitted];
(j) enter into any new line of business or operation not currently in
existence with respect to the Debtor or materially alter its existing
operations;
(k) consolidate with or merge into any other corporation or sell, assign,
convey, transfer or lease substantially all of its assets as an entirety to
any Person unless:
(i) Debtor is the surviving entity of any such consolidation or merger;
or
(ii) (A) the corporation formed by such consolidation or into which
Debtor is merged, or the Person which acquires by conveyance, transfer or
lease of substantially all of the assets of Debtor as an entirety, shall
be a solvent corporation organized and existing under the laws of the
United States or any state thereof or the District of Columbia and shall
execute and deliver to Secured Party an agreement containing an effective
assumption by such successor, transferee or lessee corporation of the due
and punctual performance and observance of each covenant and condition of
this Agreement;
(B) immediately prior to and after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing;
(C) Debtor shall have delivered to Secured Party a certificate
signed by an officer of Debtor and an opinion of Debtor's counsel
satisfactory in form and substance to Secured Party stating that such
consolidation, merger, conveyance, transfer or lease and the assumption
agreement mentioned in clause 3.3(k)(ii)(A) above comply with the
requirements of this Section 3.3(k) and that all conditions precedent
herein provided for relating to such transaction have been complied
with.
Upon any consolidation or merger in which Debtor is not the surviving
corporation, or any conveyance, transfer or lease of substantially all the
assets of Debtor as an entirety in accordance with this Section 3.3(k), the
successor corporation formed by such consolidation or into which Debtor is
merged or to which such conveyance, transfer or lease is made (x) shall succeed
to, and be substituted for (but without release of Debtor from any of its
obligations hereunder) and (y) may exercise every right and power of, Debtor
under this Agreement with the same effect as if such successor corporation had
been named as a Debtor herein.
(l) attach or affix any item of Equipment in any manner so as to alter the
character of the Equipment as personal property subject to the UCC.
ARTICLE IV
INSURANCE, TRANSFER, CONDEMNATION AND EVENT OF LOSS
SECTION 4.1 Insurance.
(a) Property and Liability Insurance. So long as this Agreement is in effect,
Debtor shall maintain and keep in force, or cause to be maintained and kept in
force, without cost or expense to Secured Party, with respect to all items of
Equipment prior to the expiration or earlier termination of this Agreement (i)
all-risk property damage insurance in an amount not less than the aggregate
Termination Value for all items of Equipment of such type as shall be
satisfactory to Secured Party and (ii) commercial general liability insurance,
including blanket contractual and personal injury insurance, covering any risks
which Secured Party or Debtor might incur by reason of the use or operation of
the Equipment in or over any area, in an amount not less than $6,000,000 per
occurrence. Such insurance policy or policies referenced to in clause (i) of the
preceding sentence will name Secured Party as a loss payee to the extent of its
interest; provided, that upon verification by Secured Party that all amounts
owing to Secured Party under the Agreement, the Notes or any other Security
Instrument have been paid in full, then Secured Party shall remit all remaining
property damage insurance proceeds, respecting any item of Equipment, to the
extent such proceeds are controlled by Secured Party, to Debtor. Such insurance
policy or policies referenced to in clause (ii) of the preceding sentence will
name Secured Party as an additional insured. Each of the policies required by
this Section 4.1 will provide that (A) the same may not be invalidated against
Secured Party by reason of (1) any violation of a condition or breach of
warranty of the policies or the application therefor by any Person excepting
Secured Party, (2) the use of any item of Equipment for purposes not permitted
by such policies by any Person excepting Secured Party, (3) any foreclosure
proceeding or notice of sale regarding any item of Equipment or (4) the title or
beneficial ownership of any item of Equipment being held by a party other than
Debtor; (B) the policies may be canceled or materially amended by the insurer
only after thirty (30) days' prior written notice to Secured Party; (C) the
interests of Secured Party in such insurance policies (except with respect to
commercial general liability) are assignable and (D) such insurance policies
shall be primary insurance. Each of the policies required by this Section 4.1
shall otherwise be reasonably satisfactory to Secured Party. The policies of
insurance required under this Section shall be valid and enforceable policies
issued by insurers of recognized responsibility acceptable to Secured Party. On
or before the date hereof, and thereafter at intervals of not more than twelve
months, Debtor will furnish or cause to be furnished to Secured Party a
certificate or other evidence satisfactory to Secured Party signed by an
independent insurance broker certifying to Secured Party's satisfaction that
Debtor has insurance in place with respect to all items of Equipment which
complies with the insurance requirements of this Agreement. If Debtor shall fail
to cause the insurance required under this Section 4.1 to be carried and
maintained, Secured Party may, but shall have no obligation to, provide such
insurance and Debtor shall reimburse Secured Party upon demand for the cost
thereof as a supplemental payment hereunder in addition to other amounts owing
with respect to the Notes or this Agreement.
SECTION 4.2 Transfer of Collateral.
Except as otherwise expressly provided by the provisions of this Agreement,
Debtor will not (prior to the satisfaction of all Obligations) lease, Grant or
otherwise transfer the Collateral or any part thereof or any interest therein to
any party other than Secured Party without Secured Party's prior written consent
and any and all such transfers shall be made under and subject to Secured
Party's security interest in such Collateral hereunder. Prior to or
simultaneously with any such transfer, the transferee shall accept, agree to and
execute an agreement assuming Debtor's Obligations to Secured Party, in form and
substance satisfactory to Secured Party.
SECTION 4.3 Condemnation.
Immediately upon obtaining knowledge thereof, Debtor shall notify Secured
Party of any condemnation or other eminent domain Proceedings with respect to
any item of Equipment. Secured Party may participate in any such Proceedings,
and Debtor shall provide Secured Party with all instruments required by it to
permit such participation upon obtaining actual knowledge thereof. Debtor shall
pay all reasonable fees and expenses incurred by Secured Party in connection
with Secured Party's participation in any such Proceedings. All proceeds arising
from any such eminent domain Proceedings shall be paid to and applied by the
Secured Party as specified in Section 5.3 hereof.
SECTION 4.4 Certain Events of Loss.
Upon the occurrence of an Event of Loss with respect to any item of
Equipment, Debtor shall pay Secured Party within thirty (30) days after receipt
of insurance proceeds after the occurrence of such Event of Loss (but in no
event shall such period extend 120 days beyond the date of the occurrence of
such Event of Loss) or, if such day is not a Business Day, on the next occurring
Business Day (the "Event of Loss Payment Date") an amount equal to the sum of
(a) the Termination Value (computed as of the Installment Payment Date
immediately preceding the Event of Loss Payment Date) for the items of Equipment
then subject to the Event of Loss, plus (b) all accrued but unpaid interest,
plus (c) any Break-Funding Costs with respect to the items of Equipment then
subject to the Event of Loss, plus (d) all other obligations owing hereunder on
the Event of Loss Payment Date. Upon payment of the amounts set forth in (a)-(d)
above, Secured Party shall release its Lien on the items of Equipment then
subject to the Event of Loss.
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
SECTION 5.1 Events of Default.
Any of the following occurrences or acts shall constitute an event of default
under this Agreement (individually, an "Event of Default"):
(a) Debtor shall fail to pay any principal of, or interest on, the Notes
or any other indebtedness of Debtor to Secured Party, now or hereafter
existing, within five (5) Business Days from the date the same shall be due
and payable, whether at maturity, by acceleration or otherwise; or
(b) Except as specified in Section 5.1(a), Debtor shall default in the
payment of any costs or expenses incurred by Secured Party in connection
herewith or any other amounts hereunder or under the Notes within ten (10)
Business Days from the date on which Secured Party notifies Debtor of such
default; or
(c) Debtor shall fail to observe the terms and covenants of Sections
3.2(b)(ii), 3.2(c), 3.2(l), 3.3(a)-(l) or 4.1; or
(d) Except as otherwise specified in Sections 5.1(a)-(c), Debtor shall
fail to perform or observe any other term, covenant or agreement contained in
the Notes, this Agreement or any other Security Instrument and such failure
shall remain unremedied for a period of thirty (30) days from either the date
Debtor first knows of such failure or the date on which Secured Party
notifies Debtor of such failure; or
(e) Any representation or warranty made by Debtor in the Notes, this
Agreement, any other Security Instrument or in any certificate or other
document delivered pursuant hereto or thereto shall prove to have been
incorrect or misleading in any material respect when made; or
(f) Debtor shall admit in writing its inability to pay its debts, or shall
make a general assignment for the benefit of creditors; or any Proceeding
shall be instituted by or against Debtor seeking to adjudicate it bankrupt or
insolvent, or seeking reorganization, liquidation, arrangement, adjustment or
composition of it or its debt under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking appointment of
a receiver, custodian, trustee, or other similar official for it or for any
substantial part of its property, and, in the case of any such Proceeding
instituted against Debtor, it shall remain undismissed for a period of sixty
(60) days; or Debtor shall take any action to authorize any of the actions
set forth in this subsection (f); or
(g) This Agreement shall, for any reason, except to the extent permitted
by the terms hereof, cease to create a valid first priority Lien on and
perfected first priority security interest in any of the Collateral purported
to be covered hereby; or
(h) Any provision of the Notes, this Agreement or the other Security
Instruments shall cease to be valid and binding on Debtor, as a signatory
thereto, or Debtor shall so state in writing; or Secured Party shall be
deprived of any of the benefits of the Note, this Agreement or any other
Security Instrument for any reason whatsoever; or
(i) For any reason whatsoever, Debtor is not entitled to or does not
possess the property rights or other rights regarding the Collateral which
have been assigned or transferred to Secured Party; or
(j) Debtor shall dissolve or any action shall be taken by Debtor to wind
up or liquidate Debtor's business, affairs or property or assets or Debtor
shall announce its intention to do so without Secured Party's prior written
consent; or
(k) Any sale, transfer, conveyance, abandonment, condemnation, partition
or change in ownership of any item or items of Equipment in excess of
$50,000, or any portion thereof shall occur, whether in one transaction or a
series of transactions without Secured Party's prior written consent; or
(l) An attachment or other Lien shall be filed or levied against a
substantial part of the property of Debtor (or any Affiliate of Debtor) and
such judgment shall continue unstayed and in effect, or such attachment or
Lien shall continue undischarged or unbonded, for a period of sixty (60)
days; or
(m) Guarantor shall fail to make a payment under the Guaranty within five
(5) Business Days from the date such payment is due; or
(n) Except as specified in Section 5.1(m), Guarantor shall fail to perform
or observe any other term, covenant or agreement contained in the Guaranty
and such failure shall remain unremedied for a period of thirty (30) days
from either the date Guarantor first knows of such failure or the date on
which Secured Party notifies Guarantor of such failure; or
(o) Any representation or warranty made by Guarantor in the Guaranty or in
any certificate or other document delivered pursuant thereto shall prove to
have been incorrect or misleading in any material respect when made; or
(p) Guarantor shall admit in writing its inability to pay its debts, or
shall make a general assignment for the benefit of creditors; or any
Proceeding shall be instituted by or against Guarantor seeking to adjudicate
it bankrupt or insolvent, or seeking reorganization, liquidation,
arrangement, adjustment or composition of its finances or debt under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking appointment of a receiver, custodian, trustee, or other similar
official for its finances or for any substantial part of its property, and,
in the case of any such Proceeding instituted against Guarantor, it shall
remain undismissed for a period of sixty (60) days; or Guarantor shall take
any action to authorize any of the actions set forth in this subsection (p);
or
(q) Guarantor (or any Affiliate of Guarantor) shall be in default (i)
under any lease, loan agreement or other agreement, instrument or document
respecting any such obligation of Guarantor (or any Affiliate of Guarantor)
in excess of $10,000,000, now or hereafter entered into between Guarantor (or
any Affiliate of Guarantor) and Secured Party, or between Guarantor (or any
Affiliate of Guarantor) and any parent, subsidiary or affiliate of Secured
Party, and such default shall have been declared by the party entitled to
declare the same, (ii) under any promissory note, now or hereafter executed
by Guarantor (or any Affiliate of Guarantor) and delivered to any party
referred to in clause (i) above evidencing a loan made by any such party to
Guarantor (or any Affiliate of Guarantor) or (iii) in the payment of any
single amount due by Guarantor (or any Affiliate of Guarantor) to any Person
(other than Secured Party, or any parent, subsidiary or affiliate of Secured
Party) in excess of $10,000,000 (excluding any such obligation which is being
contested in good faith by Guarantor (or any Affiliate of Guarantor) by
appropriate proceedings, and the liability for which has not been reduced to
judgment) relating to the payment of borrowed money or the payment of rent or
hire under any lease agreement and such default shall have continued for more
than thirty (30) days after the date Guarantor (or any Affiliate of
Guarantor) obtained knowledge or received notice thereof; or an attachment or
other Lien shall be filed or levied against a substantial part of the
property of Guarantor or Debtor and such judgment shall continue unstayed and
in effect, or such attachment or Lien shall continue undischarged or
unbonded, for a period of sixty (60) days; or
(r) Any provision of the Guaranty shall cease to be valid and binding on
Guarantor, as a signatory thereto, or Guarantor shall so state in writing; or
Secured Party shall be deprived of any of the benefits of the Guaranty for
any reason whatsoever; or
(s) Any action shall be taken by Guarantor to wind up or liquidate
Guarantor's business, affairs or property or assets or Guarantor shall
announce his intention to do so without Secured Party's prior written
consent.
SECTION 5.2 Remedies.
If any Event of Default shall have occurred and be continuing:
(a) the Secured Party may do one or more of the following:
(i) declare the Notes and all interest thereon and all other Secured
Obligations to be forthwith due and payable, whereupon the Notes, all such
interest and all Secured Obligations shall become and be forthwith due and
payable, without presentation, demand, protest or further notice of any
kind, all of which are hereby expressly waived by Debtor;
(ii) exercise, in respect of the Collateral, in addition to other
rights and remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party on default under the UCC and/or
other applicable law and also (A) require Debtor to, and Debtor hereby
agrees that it will at its expense and upon the request of Secured Party
forthwith, assemble all or part of the Collateral as directed by Secured
Party and make it available to Secured Party at a place to be designated
by Secured Party and (B) without notice except as specified below, sell
the Collateral or any part thereof in one or more parcels at public or
private sale, at any of Secured Party's offices or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as Secured Party
may deem commercially reasonable. Debtor agrees that, to the extent notice
of sale shall be required by law, at least fifteen (15) days' notice to
Debtor of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification.
Secured Party shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. Secured Party may adjourn
any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned;
(iii) to the extent permitted by applicable law, bring suit at law, in
equity or through other appropriate Proceedings, whether for the specific
performance of any covenant or agreement contained in this Agreement or
any of the other Security Instruments, for an injunction against a
violation of any of the terms hereof or thereof, in aid of the exercise of
any power Granted hereby or thereby, or by law, to recover judgment for
any and all amounts due on the Notes, this Agreement, any of the other
Security Instruments or otherwise, including, without limitation, any
deficiency remaining after foreclosure hereunder;
(iv) exclude Debtor from the Collateral and take immediate possession
of interest therein, and, at the expense of Debtor, maintain, repair,
alter, use, add to, improve, insure, lease, operate and manage the
Collateral in such manner as Secured Party shall see fit; and
(v) take any other appropriate action to protect and enforce the rights
and remedies of Secured Party hereunder, or under or in respect of any
other Security Instrument, or otherwise.
(b) Notwithstanding any provision to the contrary contained in this
Agreement, the Notes or any other Security Instrument, the unpaid principal
amount of the Notes and all accrued interest and other sums payable under the
Notes or under this Agreement shall be forthwith payable upon a sale of any
portion of the Collateral pursuant to subsection (a)(ii) of this Section 5.2.
All earnings, revenues, proceeds, rents, issues, profits and income derived
pursuant to subsection (a)(iv) of this Section 5.2 (after deducting costs and
expenses of operation and other proper charges), all proceeds of any such
sale and all other money and property received or recovered by the Secured
Party pursuant to this Section 5.2 shall be held and applied as set forth in
Section 5.3 hereof.
(c) The power to effect any sale under this Section 5.2 shall not be
exhausted by any one or more sales as to any portion of the Collateral
remaining unsold, but shall continue unimpaired until all of the Collateral
shall have been sold or all of the Secured Obligations shall have been paid
in full.
(d) Secured Party may bid for and acquire any portion of the Collateral in
connection with a sale thereof under this Section 5.2, and may pay all or
part of the purchase price by crediting against amounts owing on the Secured
Obligations, all or part of the net proceeds of such sale after deducting the
costs, charges and expenses incurred by Secured Party in connection with such
sale. The Notes need not be produced in order to complete any such sale or
effect such credit. Secured Party may hold, lease, operate, manage or
otherwise deal with any property so acquired in any manner permitted by law.
(e) Secured Party shall execute and deliver an appropriate instrument of
conveyance transferring its interest in any portion of the Collateral in
connection with a sale thereof under this Section 5.2. In addition, Debtor
hereby irrevocably appoints Secured Party as its agent and attorney-in-fact
to transfer and convey its interest in any portion of the Collateral in
connection with such a sale thereof and to take all action necessary to
effect such sale. No purchaser or transferee at such a sale shall be bound to
ascertain Secured Party's authority, inquire into the satisfaction of any
condition precedent or see to the application of any monies.
(f) Secured Party's right to seek and recover judgment on the Secured
Obligations shall not be affected by the seeking, obtaining or application of
any other relief under or with respect to this Agreement. Neither the Lien of
this Agreement nor any rights or remedies of Secured Party shall be impaired
by the recovery of any judgment by Secured Party against Debtor or by the
levy of an execution under such judgment upon any portion of the Collateral.
(g) All rights and remedies from time to time conferred upon or reserved
to the Secured Party are cumulative, and none is intended to be exclusive of
another and shall be in addition to every other right or remedy permitted by
law. No delay or omission in insisting upon the strict observance or
performance of any provision of this Agreement, or in exercising any right or
remedy, shall be construed as a waiver or relinquishment of such provision,
nor shall it impair such right or remedy. Every right and remedy may be
exercised from time to time and as often as deemed expedient in any
combination and order desired by Secured Party; provided, however, that
Secured Party shall exercise none of the remedies referenced in this Section
5.2 with respect to the Collateral unless and until an Event of Default shall
have occurred and be continuing.
(h) Anything contained in this Agreement to the contrary notwithstanding,
until an Event of Default shall occur and be continuing: (i) all rights,
powers, privileges and other benefits of or accruing to Debtor under the
Assigned Agreements shall be exercisable only by Debtor, without the consent
or approval of the Secured Party, (ii) Debtor shall retain full right to make
all waivers and agreements, to give and receive all notices and other
instruments or communications, and to take all action upon the occurrence of
a default under any Assigned Agreement, including the commencement, conduct
and consummation of legal, administrative or other proceedings, as shall be
permitted thereby or by law, and to do any and all other things which Debtor
is or may be entitled to do under any Assigned Agreement.
SECTION 5.3 Proceeds of Collateral.
All cash proceeds received by Secured Party in respect of any sale of,
collection from, or other realization upon all or any part of the Collateral
shall be held by Secured Party as collateral for, and then promptly thereafter
applied by Secured Party against, all or any part of the amounts due under the
Notes and the other Secured Obligations in such order as Secured Party shall
elect. Any surplus of such cash or cash proceeds held by Secured Party and
remaining after payment in full of all the Secured Obligations shall be paid
over to Debtor or to whomsoever may be lawfully entitled to receive such
surplus.
SECTION 5.4 Waiver of Rights; Receiver.
(a) Debtor consents to the appointment of one or more receivers of all or
part of the Collateral, upon the request of Secured Party, if an Event of
Default shall have occurred and be continuing.
(b) To the extent permitted by law, Debtor hereby waives its right to
seek, and hereby agrees that it will not seek or derive any benefit or
advantage from, any of the following whether now existing or hereafter in
effect:
(i) any stay, extension, moratorium or similar law with respect to the
Collateral or the Secured Obligations;
(ii) any law allowing for the redemption of any portion of the
Collateral after a sale thereof under Section 5.2 hereof; and
(iii) any right to have any portion of the Collateral after an Event of
Default shall have occurred.
Debtor covenants not to hinder, delay or impede the exercise of any right
or remedy of Secured Party under or in respect of this Agreement and agrees
to suffer and permit the exercise of each such remedy.
ARTICLE VI
INDEMNITY AND EXPENSES
SECTION 6.1 General Indemnity.
Debtor hereby assumes liability for, and does hereby agree, whether or not
any of the transactions contemplated hereby, by the Security Instruments or the
Notes are consummated, to indemnify, protect, save, defend and hold harmless
Secured Party and each of its officers, directors, stockholders, successors,
assigns, agents and servants (for purposes of this Article VI, each of the
foregoing may be referred to individually as a "Beneficiary") from and against
any and all obligations, fees, liabilities, losses, damages, penalties, claims,
demands, actions, suits, judgments, costs and expenses, including, without
limitation, reasonable legal fees and expenses, of every kind and nature
whatsoever imposed on, incurred by, or asserted against any Beneficiary, in any
way relating to or arising out of (a) the manufacture, construction, ordering,
purchase, acceptance or rejection, financing, ownership, titling or retitling,
registration or re-registration, acceptance, leasing, subleasing, possession,
use, operation, maintenance, storage, removal, sale, delivery or other
disposition of any item of Equipment, including, without limitation, any of such
as may arise from (i) loss or damage to any property or death or injury to any
person, (ii) patent or latent defects in any item of Equipment (whether or not
discoverable by Debtor or any Beneficiary), (iii) any claims based on strict
liability in tort or otherwise, (iv) any claims based on patent, trademark or
copyright infringement and (v) any claims based on liability arising under the
applicable environmental or noise or pollution control law or regulation or (b)
any failure on the part of Debtor to perform or comply with any of the terms of
the Security Instruments or the Notes or (c) any Security Instrument or the
Notes. Debtor shall not be required to indemnify any Beneficiary for any claims
resulting from acts which would constitute the willful misconduct or gross
negligence of such Beneficiary. Debtor shall give Secured Party prompt notice of
any occurrence, event or condition known to Debtor as a consequence of which any
Beneficiary is or is reasonably likely to be entitled to indemnification
hereunder. Debtor shall promptly upon demand of any such Beneficiary reimburse
such Beneficiary for amounts expended by it in connection with any of the
foregoing or pay such amounts directly. Debtor shall be subrogated to a
Beneficiary's rights in any matter with respect to which Debtor has actually
reimbursed such Beneficiary for amounts expended by it or has actually paid such
amounts directly pursuant to this Section 6.1. In case any action, suit or
Proceeding is brought against any Beneficiary in connection with any claim
indemnified against hereunder, such Beneficiary will, after receipt of notice of
the commencement of such action, suit or Proceeding, notify Debtor thereof,
enclosing a copy of all papers served upon such Beneficiary. Debtor may, and
upon any Beneficiary's request will, at Debtor's expense, resist and defend such
action, suit or Proceeding, or cause the same to be resisted or defended by
counsel selected by Debtor and reasonably satisfactory to such Beneficiary and
in the event of any failure by Debtor to do so, Debtor shall pay all costs, fees
and expenses (including, without limitation, reasonable attorney's fees and
expenses) incurred by such Beneficiary in connection with such action, suit or
Proceeding.
SECTION 6.2 General Tax Indemnity.
Debtor agrees to pay, and indemnify and hold each Beneficiary harmless on an
after-tax basis from, any and all federal, state, local and foreign taxes, fees,
withholdings, levies, imposts, duties, assessments and charges of any kind and
nature whatsoever, together with any penalties, fines or interest therein
(herein called "Taxes or Other Impositions") howsoever imposed, whether levied
or imposed upon or asserted against such Beneficiary, Debtor, any item of
Equipment or any part thereof, by any federal, state or local government or
taxing authority in the United States, or by any taxing authority or
governmental subdivision of a foreign country, upon or with respect to (a) any
item of Equipment (b) the manufacture, construction, ordering, purchase,
ownership, financing, delivery, leasing, re-leasing, possession, use,
maintenance, registration, titling, licensing, documentation, return, sale
(including, without limitation, sale to a third party) or other application or
disposition thereof, (c) the payments, receipts or earnings arising from any
item of Equipment or (d) the Bills of Sale, the Security Instruments or the
Notes, or upon the payments by Debtor under the Bills of Sale, the Notes or the
Security Instruments; provided, however, that the foregoing indemnity shall not
apply to any taxes or other impositions to the extent based upon or measured by
any Beneficiary's net income (unless such tax or other imposition is a Covered
Income Tax as hereinafter defined), and which are imposed or levied by any
federal, state or local taxing authority in the United States. For purposes
hereof, a "Covered Income Tax" shall mean an income tax (including, without
limitation, a tax imposed upon gross income or receipts) imposed on any
Beneficiary by any taxing authority (excluding the United States federal
government) in whose jurisdiction such Beneficiary (including for this purpose
all entities with which it is combined, integrated or consolidated in such
taxing authority's jurisdiction) would not engage in business, would not
maintain an office or other place of business and would not otherwise be located
therein, but for such Beneficiary's role in the transaction associated with the
financing of the Equipment, the operation of the Equipment in such jurisdiction,
the presence of Debtor or any use of the Equipment or the transactions
contemplated by the Bills of Sale, the Security Instruments or the Notes.
Each Beneficiary shall furnish Debtor with copies of any requests for
information received by such Beneficiary from any taxing authority relating to
any taxes or other impositions with respect to which Debtor is required to
indemnify hereunder, and if a claim is made against such Beneficiary for any
such taxes or other impositions, with respect to which Debtor is liable for a
payment or indemnity hereunder, such Beneficiary shall give Debtor notice in
writing within (10) Business Days of such Beneficiary's receipt of such claim.
Debtor may, at its sole cost and expense, either in its own name or in the name
of any Beneficiary, contest the validity, applicability or amount of any such
tax or other imposition by means of a Permitted Contest. If any Beneficiary
shall obtain a refund of any amount paid by Debtor pursuant to this Section 6.2,
such Beneficiary shall pay to Debtor the amount of such refund, together with
the amount of any interest actually received by such Beneficiary on account of
such refund. Debtor will promptly notify Secured Party of all reports or returns
required to be made with respect to any tax or other imposition with respect to
which Debtor is required to indemnify hereunder and will promptly provide each
Beneficiary with all information necessary for the making and timely filing of
such reports or returns by such Beneficiary. If any Beneficiary requests that
any such reports or returns be prepared and filed by Debtor, Debtor will prepare
and file the same if permitted by applicable law to do so, and if not so
permitted, Debtor shall prepare such reports or returns for signature by such
Beneficiary, and shall forward the same, together with immediately available
funds for payment of any tax or other imposition due, to such Beneficiary, at
least ten (10) Business Days in advance of the date such payment is to be made.
Upon written request, Debtor shall furnish each Beneficiary with copies of all
paid receipts or other appropriate evidence of payment for all taxes or other
impositions paid by Debtor pursuant to this Section 6.2.
ARTICLE VII
FURTHER ASSURANCES; ATTORNEY-IN-FACT; DISCHARGE
SECTION 7.1 Further Assurances.
(a) Debtor agrees that from time to time, at the expense of Debtor, Debtor
will promptly execute and deliver all further instruments and documents, and
take all further action that Secured Party may reasonably deem necessary or
desirable, or that Secured Party may otherwise reasonably request, in order
to perfect and protect any security interest Granted or purported to be
Granted hereby or to enable Secured Party to exercise and enforce its rights
and remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, Debtor will cooperate to execute and file
financing or continuation statements, or amendments hereto or thereto, and
such other instruments or notices, as may be necessary or reasonably
desirable, or as Secured Party may reasonably request, in order to perfect
and preserve the security interests Granted or purported to be Granted
hereby.
(b) A carbon, photographic or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
(c) Debtor will furnish to Secured Party from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as Secured Party may reasonably
request, all in reasonable detail.
SECTION 7.2 Secured Party Appointed Attorney-in-Fact.
Debtor hereby irrevocably appoints Secured Party to serve as Debtor's
attorney-in-fact (provided, the parties hereto agree that Secured Party may not
act as Debtor's attorney-in-fact until the occurrence and during the
continuation of an Event of Default), with full authority in the place and stead
of Debtor and in the name of Debtor, Secured Party or otherwise, from time to
time in Secured Party's discretion, to take any action and to execute any
instrument, including without limitation financing statements or amendments
thereto, which Secured Party may deem necessary or advisable to accomplish the
purposes of this Agreement, including without limitation:
(a) to obtain and adjust insurance required to be paid to Secured Party
hereunder;
(b) to ask, demand, collect, xxx for, recover, compound, receive and give
acquittance and receipts for monies due and to become due under or in respect
of any of the Collateral;
(c) to receive, endorse, and collect any drafts or other instruments,
documents and chattel paper, in connection with subsections (a) or (b) above;
and
(d) to file any claims or take any action or institute any Proceedings
which Secured Party may deem necessary or desirable for the collection of any
of the Collateral or otherwise to enforce the rights of Secured Party with
respect to any of the Collateral.
SECTION 7.3 Secured Party May Perform.
If Debtor fails to perform any agreement contained herein, Secured Party may
itself perform, or cause performance of, such agreement, and the expenses of
Secured Party incurred in connection therewith shall be payable by Debtor under
Section 6.1.
SECTION 7.4 Secured Party's Duties.
The powers conferred on Secured Party hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Secured Party shall have no duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against other parties or any
other rights pertaining to any Collateral.
SECTION 7.5 Continuing Security Interest; Transfer of Note; Termination.
This Agreement shall: (a) create a continuing security interest in the
Collateral and shall remain in full force and effect until payment in full of
the Secured Obligations, be binding upon Debtor, its successors and assigns and
(b) inure to the benefit of Secured Party and its permitted successors,
transferees and assigns. Without limiting the generality of the foregoing
clause, Secured Party may assign or otherwise transfer all or any part of
Secured Party's interest in the Notes and/or the Security Instruments to one or
more persons or entities, and such other persons or entities shall thereupon
become vested with all the benefits in respect thereof Granted to Secured Party
herein. Upon the payment in full of the Secured Obligations, the security
interest Granted hereby shall terminate and all rights to the Collateral shall
revert to Debtor. Upon any such termination, Secured Party will execute and
deliver to Debtor such documents as Debtor shall reasonably request to evidence
such termination.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Notices.
Except as expressly permitted herein to the contrary, all notices and other
communications provided for hereunder shall be in writing (including
communication by telecopier) and mailed (postage prepaid, by registered or
certified mail, return receipt requested), telecopied or hand delivered:
if to Secured Party, at:
NationsBanc Leasing Corporation of
North Carolina
000 Xxxxx Xxxxx Xxxxxx, XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Manager of Corporate Lease
Administration
Telecopy: (000) 000-0000
or if to Debtor, at:
Eagle Geophysical, Inc.
00 Xxxxx Xxxxxx Xxxx, 0xx Xxxxx-Xxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy: (000) 000-0000
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party. All such notices and communications
shall be effective (a) five (5) days after such have been deposited in the mail
or (b) immediately (i) after such have been telecopied to the appropriate
telecopy number and (ii) after such have been hand delivered to the appropriate
address.
SECTION 8.2 Risk of Loss.
Debtor shall bear all risk of any loss of or damage to the Collateral and in
no event shall Secured Party be liable for such loss or damage.
SECTION 8.3 Powers and Agencies.
Whenever in this Agreement Secured Party or Debtor is Granted the power of
attorney or is appointed the agent and attorney-in-fact with respect to any
Person, such Grant or appointment is irrevocable and coupled with an interest.
Secured Party shall have full power of substitution and delegation in respect of
all such Grants and appointment.
SECTION 8.4 Entire Agreement.
The Notes, this Agreement and the other Security Instruments embody the
entire agreement between the parties and supersede all prior agreements and
understandings, if any, relating to the subject matter hereof.
SECTION 8.5 Lawful Interest.
No provision in the Notes, this Agreement or any Security Instrument or other
document in favor of Secured Party shall require or permit the collection of
interest in excess of the maximum lawful rate which Debtor may contract for,
stipulate or agree to pay as determined by a court of competent jurisdiction
over the holder of the Notes or any such document. In determining whether or not
the interest paid or payable under any specific contingency exceeds such maximum
lawful rate, Debtor and Secured Party shall, to the full extent permitted by
applicable law, prorate, allocate and spread, in equal parts, the total amount
of interest throughout the entire contemplated term of the Notes or other
document, as the case may be, so that the interest rate is uniform throughout
the entire term of the Notes or such document. If it is so determined that any
interest in excess of such maximum lawful rate is provided for, such excess
shall be applied first to any other amounts not constituting interest due or
which may become due and payable to Debtor under the Notes or any of such other
documents, and the balance, if any, shall be refunded to Debtor; provided,
however, that in no event shall Debtor be obligated to pay, and Secured Party
hereby waives payment of, the amount of interest to the extent it is in excess
of the amount permitted by applicable law.
SECTION 8.6 Survival; Severability.
If any word, phrase, sentence, paragraph, provision or section of this
Agreement, the Notes or any other Security Instrument shall be held, declared or
pronounced void, voidable, invalid, unenforceable or inoperative for any reason
by any court of competent jurisdiction, governmental authority or otherwise,
such holding, declaration or pronouncement shall not adversely affect any other
word, phrase, sentence, paragraph, provision or section of this Agreement, the
Notes or any other Security Instrument, which shall otherwise remain in full
force and effect and be enforced in accordance with their respective terms, and
the effect of such holding, declaration or pronouncement shall be limited to the
territory or the jurisdiction in which made. All agreements, covenants,
representations, warranties and conditions contained in this Agreement or made
pursuant to the provisions hereof shall survive the execution and delivery of
this Agreement until the Secured Obligations shall have been paid and performed
in full. All statements by Debtor contained in any certificate or other
instrument delivered pursuant to the provisions of this Agreement or any other
Security Instrument shall constitute the representations and warranties of
Debtor.
SECTION 8.7 Binding Effect.
This Agreement shall be binding upon and inure to the benefit of Debtor and
Secured Party and their respective successors and assigns, except that Debtor
shall not have the right to assign its rights hereunder of any interest herein
without the prior written consent of Secured Party. Secured Party may assign all
or any part of, or any interest in, its rights and benefits hereunder, under the
Notes and any Security Instrument as permitted under Section 7.5 hereof, and to
the extent of such permitted assignment each such assignee shall have the same
rights and benefits against Debtor as it would have had if it were Secured Party
hereunder.
SECTION 8.8 Amendment and Waiver.
No amendment or waiver of any provision of the Notes, this Agreement or any
of the other Security Instruments, or consent to any departure by Debtor
therefrom, shall in any event be effective unless the same shall be in writing
and signed by Secured Party and Debtor, and such waiver and consent shall be
effective only in the specific instance and for the specific purpose for which
given. No failure on the part of Secured Party to exercise, and no delay in
exercising, any right under the Notes, this Agreement or any of the other
Security Instruments shall operate as a waiver thereof; nor shall any single or
partial exercise of any right under any such instrument or agreement preclude
any other or further exercise thereof or the exercise of any other right.
SECTION 8.9 Headings; Execution in Counterpart.
The section and article headings herein are for convenience of reference
only, and shall not limit or otherwise affect the meaning of any provision
herein. This Agreement may be executed in counterparts, each of which shall
constitute an original, but all of which together shall constitute one and the
same Agreement.
SECTION 8.10 Transaction Costs.
Debtor shall pay all reasonable costs and out-of-pocket expenses of Secured
Party incurred in connection with preparation, negotiation, execution,
modification and/or enforcement of the Notes, this Agreement, the other Security
Instruments including without limitation (a) the reasonable legal fees and
expenses of Xxxxx & Xxx Xxxxx, PLLC, (b) all filing and registration costs, (c)
all fees and disbursements incurred by Secured Party in connection with the
custody, preservation, use or operation of, or the sale of, collection from, or
other realization upon, any of the Collateral, and (d) all fees and
disbursements incurred by Secured Party in connection with the failure by Debtor
to perform or observe any of the provisions hereof.
SECTION 8.11 APPLICABLE LAW; CONSENT TO JURISDICTION AND VENUE; WAIVER OF
JURY TRIAL.
THIS AGREEMENT, THE NOTES AND THE OTHER SECURITY INSTRUMENTS AND ALL MATTERS
RELATING THERETO SHALL, EXCEPT TO THE EXTENT OTHERWISE REQUIRED BY APPLICABLE
LAW, BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NORTH CAROLINA WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
DEBTOR HEREBY SUBMITS TO THE JURISDICTION AND VENUE OF THE STATE AND FEDERAL
COURTS OF MECKLENBURG COUNTY, NORTH CAROLINA AND AGREES THAT SECURED PARTY MAY,
AT ITS OPTION, ENFORCE ITS RIGHTS HEREUNDER AND UNDER THE NOTES AND OTHER
SECURITY INSTRUMENTS IN SUCH COURTS. DEBTOR HEREBY IRREVOCABLY WAIVES THE
DEFENSE OF AN INCONVENIENT FORUM TO MAINTENANCE OF ANY ACTION OR PROCEEDING BY
SECURED PARTY IN SUCH COURTS. DEBTOR HEREBY IRREVOCABLY WAIVES, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
NOTES OR ANY OTHER SECURITY INSTRUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
SECTION 8.12 Break-Funding Costs.
Upon any early termination of this Agreement and/or any early prepayment of
the Notes for any reason which is not expressly permitted under the Notes,
Debtor shall promptly pay Secured Party (in addition to all other amounts due
and owing hereunder) an amount equal to the Break-Funding Costs incurred by
Secured Party, as such are (a) determined by Secured Party at such time in its
reasonable discretion and (b) specified in writing to Debtor.
SECTION 8.13 Intention of the Parties.
It is the intention of the parties to this Agreement that the Equipment be
and remain personal property, and at no time (so long as any of the Secured
Obligations remain outstanding) shall such Equipment be attached, affixed or
otherwise become a part of any vehicle or vessel. Further, each of the parties
hereto agree that it is their intent that the provisions of the UCC govern the
creation and perfection of a security interest in the Collateral.
[The remainder of this page has been intentionally left blank.]
IN WITNESS WHEREOF, Debtor and Secured Party have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
EAGLE GEOPHYSICAL, INC., as Debtor
By:/s/ Xxxxx X. Xxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxx
--------------------------------
Title: Vice President
-------------------------------
NATIONSBANC LEASING CORPORATION OF
NORTH CAROLINA, as Secured Party
By:/s/ Xxxxxx X. Xxxxxxxx, Xx.
----------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
--------------------------------
Title: Senior Vice President
-------------------------------
SCHEDULE 1.3(a)
SECURED TERM NOTE A
Due February 29, 2000
$557,768.14 February 6, 1997
FOR VALUE RECEIVED, the undersigned EAGLE GEOPHYSICAL, INC., a Delaware
corporation ("Debtor") HEREBY PROMISES TO PAY to the order of NATIONSBANC
LEASING CORPORATION OF NORTH CAROLINA, a North Carolina corporation ("Secured
Party"), the principal sum of FIVE HUNDRED FIFTY-SEVEN THOUSAND SEVEN HUNDRED
SIXTY-EIGHT AND 14/100 DOLLARS ($557,768.14) (the "Original Amount") pursuant to
the terms and conditions of that certain Loan and Security Agreement dated as of
the date hereof between the Debtor and the Secured Party, as amended, modified
or replaced from time to time (as so amended, modified or replaced, the
"Agreement" - all the terms, conditions, definitions and covenants of such
Agreement are expressly made a part hereof in the same manner and with the same
effect as if set forth herein at length, any holder of this Secured Term Note A
(the "Note") being entitled to the benefits and remedies provided for in the
Agreement).
The Bank has made a term loan to the Borrower as provided in Section
1.3(a) of the Loan Agreement. The outstanding principal balance hereof shall be
due and payable as provided in Section 1.3(a)(ii) of the Agreement.
Notwithstanding the foregoing, the final payment made on this Note shall be an
amount sufficient to discharge in full the unpaid Original Amount and all
accrued and unpaid interest on, and any other amounts due under this Note and
under the Agreement.
This Note shall bear interest on the outstanding balance hereof, and
such interest shall be payable hereunder, as provided in Section 1.3(a)(ii) of
the Agreement.
In the event the amounts owing under this Note shall be accelerated in
accordance with the terms of the Agreement, the amounts owing hereunder shall
become immediately due and payable without presentation, demand, protest or
notice of any kind, all of which are hereby expressly waived. Further, in the
event amounts owing hereunder are not paid when due (including any stated or
accelerated maturity), the Debtor agrees to pay promptly upon demand, in
addition to principal, interest and other amounts owing hereunder, all costs of
collection, including reasonable attorneys' fees.
All payments shall be payable, in lawful money of the United States and
in immediately available funds without setoff or counterclaim, to Secured Party
at its office at NationsBank Plaza, 101 South Xxxxx Street, NC1-002-38-20,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 or such other address as the holder thereof
shall notify Debtor in writing.
In determining whether or not the interest paid or payable, under any
specific contingency, exceeds the maximum lawful rate permitted by law, Debtor
and Secured Party shall, to the full extent permitted by applicable law, exclude
voluntary prepayment and the effects thereof and amortize, prorate, allocate and
spread, in equal parts, the total amount of interest throughout the entire
contemplated term of this Note so that the interest rate is uniform throughout
the entire term of this Note. If it is so determined that any interest in excess
of such maximum lawful rate is provided for, then such excess shall be applied
first to any other amounts not constituting interest due or which may become due
under this Note or the Agreement and the balance, if any, shall be refunded to
Debtor; provided, however, that in no event shall Debtor be obligated to pay,
and Secured Party hereby waives payment of, the amount of interest to the extent
it is in excess of the amount permitted by applicable law. No provision in this
Note or the Agreement shall require or permit the collection of interest in
excess of the maximum lawful rate.
This Note may be prepaid by the Debtor in accordance with Section
1.3(c) of the Agreement only if all amounts owing with respect to this Note,
Agreement and the other Security Instruments are paid in full. Except as
otherwise provided for herein and in the Agreement, this Note shall not be
subject to prepayment.
THIS NOTE, THE AGREEMENT AND THE SECURITY INSTRUMENTS AND ALL MATTERS
RELATING THERETO SHALL, EXCEPT TO THE EXTENT OTHERWISE REQUIRED BY APPLICABLE
LAW, BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NORTH CAROLINA WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
DEBTOR HEREBY SUBMITS TO THE JURISDICTION AND VENUE OF THE STATE AND FEDERAL
COURTS OF NORTH CAROLINA AND AGREES THAT THE SECURED PARTY MAY, AT ITS OPTION,
ENFORCE ITS RIGHTS HEREUNDER AND UNDER THE AGREEMENT AND THE OTHER SECURITY
INSTRUMENTS IN SUCH COURTS. DEBTOR HEREBY IRREVOCABLY WAIVES THE DEFENSE OF AN
INCONVENIENT FORUM TO MAINTENANCE OF ANY ACTION OR PROCEEDING BY SECURED PARTY
IN SUCH COURTS. DEBTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS NOTE,
THE AGREEMENT OR ANY OTHER SECURITY INSTRUMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
IN WITNESS WHEREOF, the Debtor has caused this Note to be executed as
of the date appearing above.
EAGLE GEOPHYSICAL, INC.
By:
--------------------------------
Name (Printed):
--------------------
Title:
-----------------------------
SCHEDULE 1.3(b)
SECURED TERM NOTE B
Due April 30, 2002
$7,006,152.04 February 6, 1997
FOR VALUE RECEIVED, the undersigned EAGLE GEOPHYSICAL, INC., a Delaware
corporation ("Debtor") HEREBY PROMISES TO PAY to the order of NATIONSBANC
LEASING CORPORATION OF NORTH CAROLINA, a North Carolina corporation ("Secured
Party"), the principal sum of SEVEN MILLION SIX THOUSAND ONE HUNDRED FIFTY-TWO
AND 04/100 DOLLARS ($7,006,152.04) (the "Original Amount") pursuant to the terms
and conditions of that certain Loan and Security Agreement dated as of the date
hereof between the Debtor and the Secured Party, as amended, modified or
replaced from time to time (as so amended, modified or replaced, the "Agreement"
- all the terms, conditions, definitions and covenants of such Agreement are
expressly made a part hereof in the same manner and with the same effect as if
set forth herein at length, any holder of this Secured Term Note B (the "Note")
being entitled to the benefits and remedies provided for in the Agreement).
The Bank has made a term loan to the Borrower as provided in Section
1.3(b) of the Loan Agreement. The outstanding principal balance hereof shall be
due and payable as provided in Section 1.3(b)(ii) of the Agreement.
Notwithstanding the foregoing, the final payment made on this Note shall be an
amount sufficient to discharge in full the unpaid Original Amount and all
accrued and unpaid interest on, and any other amounts due under this Note and
under the Agreement.
This Note shall bear interest on the outstanding balance hereof, and
such interest shall be payable hereunder, as provided in Section 1.3(b)(ii) of
the Agreement.
In the event the amounts owing under this Note shall be accelerated in
accordance with the terms of the Agreement, the amounts owing hereunder shall
become immediately due and payable without presentation, demand, protest or
notice of any kind, all of which are hereby expressly waived. Further, in the
event amounts owing hereunder are not paid when due (including any stated or
accelerated maturity), the Debtor agrees to pay promptly upon demand, in
addition to principal, interest and other amounts owing hereunder, all costs of
collection, including reasonable attorneys' fees.
All payments shall be payable, in lawful money of the United States and
in immediately available funds without setoff or counterclaim, to Secured Party
at its office at NationsBank Plaza, 101 South Xxxxx Street, NC1-002-38-20,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 or such other address as the holder thereof
shall notify Debtor in writing.
In determining whether or not the interest paid or payable, under any
specific contingency, exceeds the maximum lawful rate permitted by law, Debtor
and Secured Party shall, to the full extent permitted by applicable law, exclude
voluntary prepayment and the effects thereof and amortize, prorate, allocate and
spread, in equal parts, the total amount of interest throughout the entire
contemplated term of this Note so that the interest rate is uniform throughout
the entire term of this Note. If it is so determined that any interest in excess
of such maximum lawful rate is provided for, then such excess shall be applied
first to any other amounts not constituting interest due or which may become due
under this Note or the Agreement and the balance, if any, shall be refunded to
Debtor; provided, however, that in no event shall Debtor be obligated to pay,
and Secured Party hereby waives payment of, the amount of interest to the extent
it is in excess of the amount permitted by applicable law. No provision in this
Note or the Agreement shall require or permit the collection of interest in
excess of the maximum lawful rate.
This Note may be prepaid by the Debtor in accordance with Section
1.3(c) of the Agreement only if all amounts owing with respect to this Note, the
Agreement and the other Security Instruments are paid in full. Except as
otherwise provided for herein and in the Agreement, this Note shall not be
subject to prepayment.
THIS NOTE, THE AGREEMENT AND THE SECURITY INSTRUMENTS AND ALL MATTERS
RELATING THERETO SHALL, EXCEPT TO THE EXTENT OTHERWISE REQUIRED BY APPLICABLE
LAW, BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NORTH CAROLINA WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
DEBTOR HEREBY SUBMITS TO THE JURISDICTION AND VENUE OF THE STATE AND FEDERAL
COURTS OF NORTH CAROLINA AND AGREES THAT THE SECURED PARTY MAY, AT ITS OPTION,
ENFORCE ITS RIGHTS HEREUNDER AND UNDER THE AGREEMENT AND THE OTHER SECURITY
INSTRUMENTS IN SUCH COURTS. DEBTOR HEREBY IRREVOCABLY WAIVES THE DEFENSE OF AN
INCONVENIENT FORUM TO MAINTENANCE OF ANY ACTION OR PROCEEDING BY SECURED PARTY
IN SUCH COURTS. DEBTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS NOTE,
THE AGREEMENT OR ANY OTHER SECURITY INSTRUMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
IN WITNESS WHEREOF, the Debtor has caused this Note to be executed as
of the date appearing above.
EAGLE GEOPHYSICAL, INC.
By:
--------------------------------
Name (Printed):
--------------------
Title:
-----------------------------
GUARANTY
THIS GUARANTY AGREEMENT dated as of February 6, 1997 (the "GUARANTY")
is given by SEITEL, INC., a Delaware corporation (the "GUARANTOR") and extended
to NATIONSBANC LEASING CORPORATION OF NORTH CAROLINA, a North Carolina
corporation (the "SECURED PARTY"), for the benefit of EAGLE GEOPHYSICAL, INC., a
DELAWARE corporation (the "DEBTOR").
Capitalized terms used herein but not otherwise defined shall have the
meaning set forth in the Loan and Security Agreement (as defined below). In
consideration of the execution by the Secured Party of the Loan and Security
Agreement dated as of the date hereof (as renewed, extended, supplemented or
amended, and together with all exhibits and schedules thereto, the "LOAN AND
SECURITY AGREEMENT") with Debtor, and to induce Secured Party to enter into the
Loan and Security Agreement, Guarantor hereby agrees as follows:
SECTION 1. UNCONDITIONAL GUARANTEE. Guarantor does hereby
unconditionally guarantee to Secured Party, without offset or deduction, (a) the
prompt payment when due, whether by acceleration or otherwise, of all amounts
payable by Debtor pursuant to (i) the Loan and Security Agreement (including all
supplements and amendments thereto and all exhibits and schedules now or
hereafter attached thereto and made a part thereof), (ii) the Secured Term Note
A dated February 6, 1997 ("TERM NOTE A") in the original principal amount of
$557,768.14 extended by Debtor for the benefit of Secured Party, (iii) Secured
Term Note B dated February 6 , 1997 ("TERM NOTE B") in the original principal
amount of $7,006,152.04 extended by Debtor for the benefit of Secured Party
(collectively, Term Note A and Term Note B may be referred to as the "NOTES"),
and (iv) all agreements, instruments and documents delivered or to be delivered
by Debtor pursuant to the Loan and Security Agreement and/or the Notes
(collectively, the Loan and Security Agreement, the Notes and such other
agreements, instruments and documents may be referred to herein as the
"TRANSACTION DOCUMENTS"), the guarantee under this clause (a) of Section 1
constituting a guarantee of payment and not of collection, and (b) the punctual
and faithful performance by Debtor of each and every duty, agreement, covenant
and obligation of Debtor under and in accordance with the terms of the
Transaction Documents and all other obligations of Debtor to Secured Party.
Guarantor does hereby agree that in the event Debtor does not or is unable to
pay or perform in accordance with the terms of the Transaction Documents for any
reason (including, without limitation, the liquidation, dissolution,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of, or other similar
proceedings affecting the status, existence, assets or obligations of Debtor or
the limitation of damages for the breach, or the disaffirmance of, any
Transaction Documents in such proceeding) it will pay the sums, or amounts equal
thereto, which Debtor is (or, but for any such reason, would be) obligated to
pay at the times specified in the Transaction Documents, whether by acceleration
or otherwise (it being the intention hereof that Guarantor shall pay to Secured
Party, as a payment obligation directly due from Guarantor to Secured Party,
amounts equal to all amounts which Debtor shall fail faithfully and properly to
pay when due under the Transaction Documents, whether by acceleration or
otherwise), or otherwise provide for and bring about promptly when due such
payment and the performance of such duties, agreements, covenants and
obligations of Debtor under the Transaction Documents. Guarantor acknowledges
that it is fully aware of, and consents to the terms and conditions of, the Loan
and Security Agreement, the Notes and each of the other Transaction Documents
and guarantees the accuracy of all representations and warranties of Debtor or
any officer thereof made, or to be made after the date hereof, in any of such
Transaction Documents. The obligations of Debtor hereby guaranteed are
hereinafter called the "SECURED OBLIGATIONS".
SECTION 2. DIRECTNESS OF OBLIGATION. Without limiting the generality of
clause (a) of Section 1, Guarantor specifically agrees that it shall not be
necessary or required, and that Guarantor shall not be entitled to require, that
Secured Party file suit or proceed to obtain or assert a claim for personal
judgment against Debtor for the Secured Obligations or make any effort at
collection of the Secured Obligations from Debtor or foreclose against or seek
to realize upon any security now or hereafter existing for the Secured
Obligations or file suit or proceed to obtain or assert a claim for personal
judgment against any other party liable for the Secured Obligations or make any
effort at collection of the Secured Obligations from any such other party or
exercise or assert any other right or remedy to which it is or may be entitled
in connection with the Secured Obligations or any security or other guarantee
therefor or assert or file any claim against the assets of Debtor or any other
person liable for the Secured Obligations, or any part thereof, before or as a
condition of enforcing the liability of Guarantor under this Guaranty or
requiring payment of said Secured Obligations by Guarantor hereunder, or at any
time thereafter. Fulfillment by Debtor or Guarantor of any of the Secured
Obligations shall dispose of any claim hereunder with respect to, and to the
extent of, such of the Secured Obligations fulfilled. Without limiting the
generality of the waiver provisions hereof, Guarantor hereby waives any rights
to require Secured Party to proceed against Debtor or any co-guarantor or to
require Secured Party to pursue any other remedy or enforce any other right,
including any and all rights under ss.26-7 through ss.26-9 of the North Carolina
General Statutes. The Guarantor shall have no rights of subrogation,
reimbursement or indemnity whatsoever, nor any right or recourse to security for
the debts and obligations of Debtor to Secured Party so long as any of the
Secured Obligations shall remain outstanding. Guarantor does hereby waive and
relinquish, so far as Guarantor may lawfully and effectively do so, the benefit
and advantage of any and all valuation, stay, appraisement, extension or
redemption laws which, but for this provision, agreement and waiver, might be
applicable to any sale made under any judgment, order or decree of any court or
otherwise based on this Guaranty, the Loan and Security Agreement or any other
Agreement.
SECTION 3. WAIVER OF NOTICE AND DEFENSE. This Guaranty shall not be
deemed to create any right in any person except as provided herein or be
construed in any respect to be a contract in whole or in part for the benefit of
any other person except Secured Party and its successors or assigns. Guarantor
specifically agrees that it shall not be necessary or required in order to
enforce the obligations of Guarantor hereunder that there be, and specifically
waives (a) notice of the acceptance of this Guaranty and of the performance or
nonperformance of the Loan and Security Agreement, the Notes or any other
Transaction Documents, (b) demand of payment from Debtor, (c) presentment for
payment upon Debtor or the making of any protest, (d) notice of the amount of
the Secured Obligations outstanding at any time, (e) notice of nonpayment or
failure to perform on the part of Debtor, and (f) any other circumstance which
might otherwise constitute a legal or equitable defense or discharge of a
guarantor.
SECTION 4. OBLIGATIONS - ABSOLUTE AND UNCONDITIONAL. The obligations of
Guarantor under this Guaranty shall be absolute and unconditional and shall
remain in full force and effect until Debtor shall have fully discharged the
Secured Obligations and shall not be released or discharged for any reason
whatsoever, including, without limitation, the following: (a) the waiver by
Secured Party, or its successors or assigns, of the performance or observance by
Debtor of any of the agreements, covenants, terms or conditions contained in the
Transaction Documents, or any default thereunder, (b) the extension of time for
payment by Debtor of any sums or any part thereof owing or payable under any
Transaction Document, or of the time for performance by Debtor of any other
obligations under or arising out of or on account of any Transaction Document,
or the extension or renewal of any Transaction Document, (c) any failure,
omission or delay of Secured Party to enforce, assert or exercise any right,
power or remedy conferred on Secured Party in any action on the part of Secured
Party granting extension or indulgence in any form, (d) any transfer or
assignment by Debtor or Secured Party of its interest, or any part thereof, in
and to any Collateral (as such term is defined in the Loan and Security
Agreement) as permitted by the Loan and Security Agreement, (e) any compromise,
settlement, release, renewal, extension, indulgence, change in or waiver or
modification of any of the Secured Obligations or the release or discharge of
Debtor from the performance or observance of any of the Secured Obligations by
operation of law, (f) any assignment or mortgaging or the purported assignment
or mortgaging of all or any part of the interest of Debtor in the Loan and
Security Agreement or in any Collateral, (g) the voluntary or involuntary
liquidation, dissolution, sale or other disposition of all or substantially all
the assets and liabilities of, or the voluntary or involuntary receivership,
insolvency, bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of, or other similar proceeding
affecting, Debtor or the disaffirmance of the Loan and Security Agreement in any
such proceeding, (h) any merger, consolidation or other reorganization to which
Debtor, Guarantor or any related entity is a party, or any sale or disposition,
whether directly or indirectly, of any of Guarantor's direct or indirect
ownership interest in Debtor, or (i) any other circumstance, whether similar or
dissimilar to any of the above, which might otherwise constitute a legal or
equitable defense or discharge of a guarantor.
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS. Guarantor
represents, warrants and covenants to and with Secured Party all of the
following: (a) Guarantor is duly organized, validly existing and in good
standing under the laws of the state in which it is incorporated, and is duly
qualified and authorized to do business wherever the nature of its activities or
the ownership of its properties requires such qualification and authorization;
(b) Guarantor has the full power, authority and legal right to execute, deliver
and perform the terms of this Guaranty; and this Guaranty has been duly
authorized by all necessary corporate action of Guarantor and constitutes a
valid and binding obligation of Guarantor, enforceable in accordance with its
terms; (c) Guarantor has delivered to Secured Party various financial statements
in regard to this transaction and such financial statements have been prepared
in accordance with generally accepted accounting principles consistently
applied; and to the best knowledge of Guarantor, such financial statements
present fairly the financial condition of Guarantor as of the date indicated,
and as of the date hereof no material adverse change has occurred with respect
to Guarantor's financial condition from the date of each such financial
statement previously provided to Secured Party; (d) neither the execution and
delivery of, nor the performance by Guarantor under, this Guaranty will
contravene any law or government regulation or the charter or by-laws of
Guarantor, or any provision in any existing mortgage, indenture, contract or
agreement binding upon Guarantor; (e) no consent of the shareholders, or of any
trustee or holder of any indebtedness of Guarantor, is or will be required as a
condition to the execution, delivery or performance of this Guaranty or to the
validity and enforceability of this Guaranty or with respect to the obligations
of Guarantor hereunder, or if required, all such consents have been obtained and
duly certified copies thereof have been delivered to Secured Party; (f) no
registration with, or approval of, any governmental agency or commission is
necessary for the execution, delivery or performance by Guarantor of the terms
of this Guaranty or for the validity and enforceability of this Guaranty or with
respect to the obligations of Guarantor hereunder; or if required, all such
registrations and approvals have been duly made or obtained and certified copies
thereof delivered to Secured Party; and (g) there are no outstanding or unpaid
judgments against Guarantor, and there is no action or proceeding pending or,
insofar as Guarantor knows, threatened against Guarantor before any court or
administrative agency which in Guarantor's reasonable opinion might have any
material adverse effect on the business, condition (financial or otherwise) or
operations of Guarantor.
SECTION 6. BUSINESS COVENANTS. So long as there shall remain
outstanding any obligation or covenant under the Transaction Documents,
Guarantor agrees that:
(a) FINANCIAL STATEMENTS. (i) within sixty (60) days after the
end of each fiscal quarter (except the fourth quarter), Debtor will
cause Guarantor to furnish to Secured Party unaudited quarterly
financial statements (including consolidated balance sheets of
Guarantor) as of the end of such quarterly period, and consolidated
statements of income, retained earnings and changes in financial
position or cash flows for the year to date of Guarantor setting forth
in each case comparative consolidated financial statements for the
corresponding period in the preceding year all prepared by Guarantor in
accordance with generally accepted accounting principles applied on a
consistent basis and certified by the president, chief financial
officer or any vice president of Guarantor who prepared such financial
statements as being true and accurate and fairly representing the
financial condition of Guarantor and (ii) within 120 days after the end
of each fiscal year, furnish to Secured Party audited year end
financial statements (including consolidated balance sheets of
Guarantor) as of the end of such fiscal year, and the notes thereto,
and consolidated statements of income, retained earnings and cash flows
for the year then ended of Guarantor and the notes thereto, and setting
forth in each case comparative consolidated financial statements for
the corresponding period in the preceding year, all prepared in
accordance with generally accepted accounting principles consistently
applied and containing, with respect to such financial statements,
opinions of a firm of independent certified public accountants of
national prominence selected by Guarantor that such reports are without
a "going concern" or like qualification or exception, or qualification
indicating that the scope of the audit was inadequate or limited;
(b) MERGER; CONSOLIDATION. Guarantor may not consolidate with,
merge with or into, or sell, lease or otherwise transfer all or
substantially all of its assets (as an entirety or substantially as an
entirety in one transaction or a series of related transactions), to
any Person unless: (i) Guarantor shall be the continuing Person, or the
Person (if other than Guarantor) formed by such consolidation or into
which Guarantor is merged or to which the properties and assets of
Guarantor are sold, leased or otherwise transferred shall be a
corporation organized and existing under the laws of the United States
or any State thereof or the District of Columbia and shall expressly
assume, by a written agreement, executed and delivered to Secured
Party, in form and substance satisfactory to Secured Party all of the
obligations of Guarantor under this Guaranty, and the obligations under
this Guaranty shall remain in full force and effect; and (ii)
immediately before and immediately after giving effect to such
transaction, no Default or Event of Default hereunder or under the
Security Agreement shall have occurred and be continuing;
In connection with any consolidation, merger, sale, lease or
other transfer contemplated by this provision, Guarantor shall deliver,
or cause to be delivered, to Secured Party, in form and substance
reasonably satisfactory to Secured Party, an officers' certificate and
an opinion of counsel, each stating that such consolidation, merger,
sale, lease or other transfer and the written agreement in respect
thereto comply with this provision and the representations, warranties
and covenants of this Guaranty and that all conditions precedent herein
provided for relating to such transaction or transactions have been
complied with;
(c) NET WORTH. The Guarantor will not, at any time, permit
Consolidated Net Worth to be less than the sum of (a) Ninety Million
Dollars ($90,000,000.00), plus (b) an aggregate amount equal to fifty
percent (50%) of Consolidated Net Income (but, in each case, only if a
positive number) for each completed fiscal year of the Guarantor
beginning with the fiscal year ending December 31, 1995.
(d) INTEREST COVERAGE. The Guarantor will not, at any time,
permit EBITDA for the period of four consecutive fiscal quarters of the
Guarantor then most recently ended to be less than five hundred percent
(500%) of Consolidated Interest Expense for such period.
(e) DEBT INCURRENCE. The Guarantor will not, directly or
indirectly, create, incur, assume, guarantee, or otherwise become
directly or indirectly liable with respect to, any Debt (including,
without limitation, any extension, renewal or refunding of Debt),
unless on the date the Guarantor becomes liable with respect to any
such Debt and immediately after giving effect thereto and the
concurrent retirement of any other Debt,
(i) no Default or Event of Default exists, and
(ii) Consolidated Debt does not exceed fifty percent (50%)
of Total Capitalization.
For purposes of this Guaranty, the following capitalized terms shall have the
following meanings:
"CAPITAL LEASE" means a lease with respect to which the lessee
is required concurrently to recognize the acquisition of an asset and
the incurrence of a liability in accordance with GAAP.
"CAPITAL LEASE OBLIGATIONS" means, with the respect to any
Person and a Capital Lease, the amount of the obligation of such Person
as the lessee under such Capital Lease which would in accordance with
GAAP, appear as a liability on a balance sheet of such Person.
"CONSOLIDATED DEBT" means, as of any date of determination,
the total of all Debt of the Guarantor and the Restricted Subsidiaries
outstanding on such date, after eliminating all offsetting debits and
credits between the Guarantor and the Restricted Subsidiaries and all
other items required to be eliminated in the course of the preparation
of consolidated financial statements of the Guarantor and the
Restricted Subsidiaries in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to any
period, the sum (without duplication) of the following (in each case,
eliminating all offsetting debits and credits between the Guarantor and
the Restricted Subsidiaries and all other items required to be
eliminated in the course of the preparation of consolidated financial
statements of the Guarantor and the Restricted Subsidiaries in
accordance with GAAP):
(a) all interest in respect of Debt of the Guarantor
and the Restricted Subsidiaries (including imputed interest on
Capital Lease Obligations) deducted in determining
Consolidated Net Income for such period, and
(b) all debt discount and expense amortized or
required to be amortized in the determination of Consolidated
Net Income for such period.
"CONSOLIDATED NET INCOME" means, with reference to any period,
the net income (or loss) of the Guarantor and the Restricted
Subsidiaries for such period (taken as a cumulative whole), as
determined in accordance with GAAP, after eliminating all offsetting
debits and credits between the Guarantor and the Restricted
Subsidiaries and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of the
Guarantor and the Restricted Subsidiaries in accordance with GAAP,
provided that there shall be excluded:
(a) any gains resulting from any write-up of any
assets (but not any loss resulting from any write-down of any
assets),
(b) the income (or loss) of any Person accrued prior
to the date it becomes a Restricted Subsidiary or is merged
into or consolidated with the Guarantor or a Restricted
Subsidiary, and the income (or loss) of any Person,
substantially all of the assets of which have been acquired in
any manner by the Guarantor or any Restricted Subsidiary,
realized by such other Person prior to the date of
acquisition,
(c) in the case of a successor to the Guarantor by
consolidation or merger or as a transferee of its assets, any
earnings of the successor corporation prior to such
consolidation, merger or transfer of assets,
(d) any aggregate net gain (but not any aggregate net
loss) during such period arising from the sale, conversion,
exchange or other disposition of capital assets (such term to
include, without limitation, (i) all non-current assets and,
without duplication, (ii) the following, whether or not
current: all fixed assets, whether tangible or intangible, all
inventory sold in conjunction with the disposition of fixed
assets, and all securities),
(e) any portion of such net income that cannot be
freely converted into United States Dollars,
(f) the income (or loss) of any Person (other than a
Restricted Subsidiary) in which the Guarantor or any
Restricted Subsidiary has an ownership interest, except to the
extent that any such income has been actually received by the
Guarantor or such Restricted Subsidiary in the form of cash
dividends or similar cash distributions,
(g) any gain arising from the acquisition of any
security, or the extinguishment, under GAAP, of any Debt, of
the Guarantor or any Restricted Security,
(h) any net income or gain or any net loss during
such period from (i) any change in accounting principles in
accordance with GAAP or (ii) any prior period adjustments
resulting from any change in accounting principles in
accordance with GAAP, and
(i) any net income or gain (but not any net loss)
during such period from (i) any extraordinary items or (ii)
any discontinued operations or the disposition thereof.
"CONSOLIDATED NET WORTH" means, at any time, the total
stockholders' equity which would be shown in consolidated financial
statements of the Guarantor and the Restricted Subsidiaries prepared at
such time in accordance with GAAP.
"DEBT" means, with respect to any Person, without duplication,
(a) its obligations for borrowed money;
(b) its obligations in respect of banker's
acceptances, other acceptances, letters of credit and other
instruments serving a similar function issued or accepted by
banks and other financial institutions for the account of such
Person (whether or not incurred in connection with the
borrowing of money);
(c) its obligations that are evidenced by bonds,
notes, debentures or similar instruments;
(d) its obligations for the deferred purchase price
of property acquired by such Person (excluding accounts
payable arising in the ordinary course of business but
including, without limitation, all obligations created or
arising under any conditional sale or other title retention
agreement with respect to any such property);
(e) its Capital Lease Obligations;
(f) its obligations in respect of all mandatorily
redeemable preferred stock of such Person;
(g) its obligations for borrowed money secured by any
Lien with respect to any property owned by such Person
(whether or not it has assumed or otherwise become liable for
such obligations); and
(h) any guaranty of such Person with respect to
liabilities of a type described in any clauses (a) through (g)
hereof.
Debt of any person shall include all obligations of such
Person of the character described in clauses (a) through (h) to the
extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be extinguished
under GAAP.
"EBITDA" means, in respect of any period, Consolidated Net
Income for such period minus:
(a) to the extent added in the computation of such
Consolidated Net Income, each of the following:
(i) extraordinary gains, net of extraordinary
losses, and
(ii) gains, net of losses, arising from the
disposition of property other than in the ordinary
course of business, plus
(b) to the extent deducted in the computation of such
Consolidated Net Income, each of the following:
(i) Consolidated Interest Expense, net of
interest and other investment income,
(ii) taxes imposed on or measured by income or
excess profits of the Guarantor and the Restricted
Subsidiaries,
(iii) the amount of all depreciation, depletion
and amortization allowances and other non-cash
expenses of the Guarantor and the Restricted
Subsidiaries,
(iv) extraordinary losses, net of extraordinary
gains, and
(v) losses, net of gains, arising from the
disposition of property other than in the ordinary
course of business.
"EQUITY INTEREST" means (a) the outstanding Voting Stock of a
corporation or other business entity, (b) the interest in the capital
or profits of a corporation, limited liability company, partnership or
joint venture, or (c) the beneficial interest in a trust or estate.
"GAAP" means generally accepted accounting principles as in
effect in the United States as of the date hereof.
"LIEN" means with respect to any Person, any mortgage, lien,
pledge, charge, security interest or other encumbrance, or any interest
or title of any vendor, lessor, lender, or other secured party to or of
such Person under any conditional sale or other title retention
agreement or Capital Lease, upon or with respect to any property or
asset of such Person (including in the case of stock, stockholder
agreements, voting trust agreements and all similar arrangements).
"PERSON" means an individual, partnership, corporation,
limited liability company, association, trust, unincorporated
organization, or a government or agency or political subdivision
thereof.
"RESTRICTED SUBSIDIARY" means and includes each and every
Subsidiary other than any Subsidiary which, at the time of any
determination hereunder, has been designated by the Board of Directors
and by written notice of the Guarantor to all of the holders to be an
Unrestricted Subsidiary; provided, in any event, that each of the
following shall at all times constitute a Restricted Subsidiary:
(a) each Subsidiary identified on SCHEDULE 5.4
attached hereto; and
(b) each Subsidiary which owns, directly or
indirectly, more than fifty percent (50%) of the Equity
Interest of a Restricted Subsidiary.
"TOTAL CAPITALIZATION" means, at any time, the sum of
Consolidated Debt plus Consolidated Net Worth, in each case at such
time.
"VOTING STOCK" means the capital stock or similar interest of
any class or classes (however designated) of a corporation or other
business entity, the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of the members of the
board of directors (or Persons performing similar functions) of a
corporation or other business entity.
SECTION 7. SUCCESSORS AND ASSIGNS. This Guaranty shall inure to the
benefit of and be binding upon the successors and assigns of Secured Party and
of Guarantor. The dissolution or release from liability of any other guarantor
shall not relieve Guarantor from liability hereunder.
SECTION 8. FEES AND EXPENSES. Guarantor shall be liable for all
reasonable out-of-pocket legal fees and other reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) incurred by
reason of the enforcement by Secured Party of its rights hereunder.
SECTION 9. NOTICES. Except as expressly permitted herein to the
contrary, all notices and other communications provided for hereunder shall be
in writing (including communication by telecopier) and mailed (postage prepaid,
by registered or certified mail, return receipt requested), telegraphed,
telecopied or hand delivered:
if to Secured Party, at:
NationsBanc Leasing Corporation of
North Carolina
000 Xxxxx Xxxxx Xxxxxx, XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Manager of Corporate Lease
Administration
Telecopy: (000) 000-0000
or if to Guarantor, at:
Seitel, Inc.
00 Xxxxx Xxxxxx Xxxx, 0xx Xxxxx - Xxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy: (000) 000-0000
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party. All such notices and communications
shall be effective (a) five (5) days after such have been deposited in the mail
or (b) immediately (i) after such have been telecopied to the appropriate
telecopy number and (ii) after such have been hand delivered to the appropriate
address.
SECTION 10. APPLICABLE LAW; CONSENT TO JURISDICTION AND VENUE; WAIVER
OF JURY TRIAL. THIS GUARANTY AND THE TRANSACTION DOCUMENTS AND ALL MATTERS
RELATING THERETO SHALL, EXCEPT TO THE EXTENT OTHERWISE REQUIRED BY APPLICABLE
LAW, BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NORTH CAROLINA WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
GUARANTOR HEREBY SUBMITS TO THE JURISDICTION AND VENUE OF THE STATE AND FEDERAL
COURTS OF NORTH CAROLINA AND AGREES THAT SECURED PARTY MAY, AT ITS OPTION,
ENFORCE ITS RIGHTS HEREUNDER AND UNDER THE TRANSACTION DOCUMENTS IN SUCH COURTS.
GUARANTOR HEREBY IRREVOCABLY WAIVES THE DEFENSE OF AN INCONVENIENT FORUM TO
MAINTENANCE OF ANY ACTION OR PROCEEDING BY SECURED PARTY IN SUCH COURTS. TO THE
EXTENT PERMITTED BY APPLICABLE LAW, GUARANTOR HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS GUARANTY OR THE TRANSACTION DOCUMENTS OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
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IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed as of
the date hereof by its duly authorized officer.
SEITEL, INC.
By
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