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10.8.1
TERM CREDIT AND SECURITY AGREEMENT
This Term Credit and Security Agreement (the "Agreement") is executed
and delivered this 15th day of July, 1993 by and between SEITEL GEOPHYSICAL,
INC., a Delaware corporation ("Borrower"), with its chief executive office and
its principal place of business at 00 Xxxxx Xxxxxx Xxxx, 0xx Xxxxx-Xxxx,
Xxxxxxx, Xxxxx 00000 and CENTRAL BANK OF THE SOUTH, an Alabama banking
corporation ("Bank"), with its principal offices at 00 Xxxxx 00xx Xxxxxx,
Xxxxxxxxxx, Xxxxxxx 00000. Borrower has applied to Bank for a term loan in
the principal amount of FOUR MILLION THREE HUNDRED THOUSAND AND NO/100 Dollars
($4,300,000) to be evidenced by a Term Note (the "Note") in such amount, and to
be secured by a security interest in all of the Collateral (as defined herein)
on the terms hereinafter set forth.
Bank is willing to extend such $4,300,000 term loan (the "Term Loan") to
Borrower to provide Borrower with financing for the purchase of an Opseis Eagle
seismic data gathering and recording system upon the security of the Collateral
on the terms and subject to the conditions hereinafter set forth.
Accordingly, Borrower and Bank in consideration of the premises, the
credit to be extended hereunder, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, agree as follows:
SECTION 1. DEFINITIONS - AS HEREIN USED.
1.1 "Account" and "Account Receivable" shall include all
accounts, accounts receivable, notes, notes receivable, contracts,
contract rights, leases, lease payments, rental agreements, rentals,
drafts, documents, title retention and lien instruments, security
agreements, acceptances, instruments, conditional sales contracts,
chattel mortgages, chattel paper, general intangibles, and other forms
of obligation and rights to payment and receivables whether or not yet
earned by performance (including, without limitation, state and
federal tax refunds).
1.2 "Account Debtor" shall mean the party other than
Borrower who is obligated on or under any Account Receivable or
contract right.
1.3 "Borrower's Loan Account" shall mean the account on the
books of Bank in which Bank will record the Term Loan advance made by
Bank to or on behalf of Borrower pursuant to this Agreement, payments
received on such Term Loan and other appropriate debits and credits as
provided by this Agreement or the Note.
1.4 "Collateral" shall mean any and all property in which
Bank acquired, now has, by this Agreement or any of the other Loan
Documents (as defined herein) acquires, or hereafter acquires a
security interest or other rights or interests as security for the
Liabilities (as defined herein).
1.5 "Insolvency" of Borrower or any other person or
entity shall mean that there shall have occurred with respect to
Borrower or such other person or entity one or more of the following
events: death, incapacity, dissolution, termination of existence,
liquidation, insolvency, business failure, appointment of a receiver
of any part of title property of, assignment for the benefit of
creditors by Borrower or such other person or entity, or institution
of any action or proceeding by Borrower or such
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other person or entity under or pursuant to any insolvency laws
relating to the relief of debtors by Borrower or such other person or
entity, institution of proceedings in bankruptcy or with respect to
the readjustment of indebtedness, reorganization, composition or
extension by Borrower or such other person or entity (including,
without limitation, under or pursuant to the United States Bankruptcy
Code, as amended, or under any similar law at any time enacted (the
"Bankruptcy Code")), or if any corporate action shall be taken for the
purpose of effecting any of the foregoing.
1.6 "Inventory" shall mean all of Borrower's (or other
entities', as applicable) inventory (as defined in the Uniform
Commercial Code as enacted in the State of Alabama, or in any other
jurisdiction), including, without limitation, all goods, merchandise
and other personal property now owned or hereafter acquired by
Borrower (or other entities, as applicable) which are held for sale,
lease, rental or licensing or are furnished or to be furnished under a
contract of service and all raw materials, work in process, and
materials or supplies used or to be used, or consumed or to be
consumed, in Borrower's (or other entities', as applicable) business,
and related products, wherever located, and all goods represented
thereby, and all such goods that may be reclaimed or repossessed from
or returned by Borrower's (or other entities', as applicable)
customers wheresoever the same may be located, and all shipping and
packaging materials relating to any of the foregoing.
1.7 "Liabilities" shall mean any and all obligations,
indebtedness and liabilities of (i) Borrower and (ii) Seitel, Inc.
("Related Borrower") to Bank of every kind and description, whether
direct or indirect, absolute or contingent, joint or several, due or
to become due, liquidated or unliquidated, now existing or hereafter
arising, and all extensions, modifications, renewals, and refinancings
thereof, regardless of how such Liabilities arise or by what agreement
or instrument (if any) they may be evidenced and include obligations
to perform acts and refrain from taking actions as well as obligations
to pay money. Without limiting the foregoing, Liabilities shall
specifically include all liabilities and obligations of (i) Borrower
arising under or in connection with (a) this Agreement and (b) the
Note and (ii) Related Borrower arising under or in connection with (a)
that certain Revolving Credit and Security Agreement executed by
Related Borrower in favor of Bank on or about the date hereof (the
"Related Loan Agreement") in connection with Related Borrower's
$10,000,000 revolving line of credit from Bank (the "Revolving Line"),
(b) that certain $10,000,000 Master Revolving Promissory Note executed
by Related Borrower in connection with the Revolving Line (the
"Revolving Note"), and the other documents and instruments executed in
connection with the Revolving Line (jointly and severally with the
Related Loan Agreement and the Revolving, Note as the same may be
amended, referred to as the "Related Loan Documents") and (c) the
Continuing Unlimited Guaranty (the "Guaranty") executed by Related
Borrower in connection with the Term Loan.
1.8 "Loan Documents" shall mean and include the Note,
this Agreement, the Guaranty, the Related Loan Documents, the Side
Letter Agreement executed by Bank, Borrower and Related Borrower dated
July 15, 1993, and any other agreement, document or instrument now or
hereafter evidencing, securing, guaranteeing or relating to the Term
Loan or any other Liability, obligation or indebtedness of Borrower or
Related Borrower to Bank, as the same may be amended.
1.9 "Net Worth" and "Current Maturities of Long Term
Debt" shall be defined and calculated in accordance with generally
accepted accounting principles consistently applied.
1.10 "Proceeds" shall mean all cash proceeds, non-cash
proceeds and all forms of payment and other property received by or
due to Borrower, et al. from the collection, sale, lease, rental,
transfer, exchange, disposition, licensing or use of Accounts and
other property constituting Collateral hereunder and any and all
claims against any third party for loss of or damage to any
Collateral, including insurance, contract and tort claims, and
further, without limiting the generality of the foregoing, Proceeds
shall include all Accounts, checks, cash, money orders, drafts,
chattel paper, general intangibles, instruments,
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notes and other documents evidencing payment and payment obligations
for the sale, lease, rental, transfer, exchange, use, disposition,
licensing, or collection of Collateral.
1.11 "Tangible Net Worth" shall mean Related Borrower's
Net Worth less (i) any and all loans and other advances to Related
Borrower's affiliates, subsidiaries, owners, parent, employees,
officers, shareholders, directors or other related entities; (ii)
notes, notes receivable, accounts, accounts receivable, intercompany
receivables, and other amounts owing from Related Borrower's
affiliates, subsidiaries, owners, parent, employees, officers,
shareholders, directors or other related entities; (iii) any and all
intangibles; plus Related Borrower's existing 12-1/2% subordinated
debentures due in 1999 and Related Borrower's existing 9% convertible
subordinated debentures due in 2002 ("Related Borrower's Subordinated
Debentures").
1.12 "Total Debt" shall mean all of Related Borrowers'
indebtedness and liabilities owing to Bank or any other person or
entity, whether now or hereafter existing, created or arising,
absolute or contingent, direct or indirect, joint or several,
including without limitation, the Liabilities.
1.13 "Permitted Encumbrances" shall mean any of the
following (but only to the extent the same do not or could not, in
Bank's reasonable opinion, jeopardize Bank's rights or priority in or
to any Collateral):
(a) liens of vendors, carriers, warehousemen, landlords,
mechanics, laborers and materialmen arising by law
for sums which are not yet due or which are being
diligently contested in good faith;
(b) liens for taxes not yet due or which are being
diligently contested in good faith by appropriate
proceedings;
(c) security interests in the Related Borrower's
equipment (other than equipment constituting Seismic
Data, if any) provided that they are limited to those
securing a portion of the purchase price of said
equipment;
(d) pledges or deposits in connection with or to secure
worker's compensation or unemployment insurance;
(e) Geo Seismic Services, Inc.'s security interest in the
Assets (as that term is defined in the letter from
Related Borrower to Bank dated October 14, 1992 (the
"Letter")) purchased from Geo Seismic Services, Inc.
but only to the extent described in and permitted by
the Letter; and
(f) security interests in Borrower's equipment (other
than the equipment described or referenced in Exhibit
B hereto).
1.14 Any terms used to describe Bank's security interest
hereunder not specifically defined herein shall have the meanings and
definitions given those terms under the Uniform Commercial Code of
Alabama as in effect on the date hereof. Any capitalized terms used
but not defined in this Agreement shall have the meaning given the
same in the Related Loan Agreement.
SECTION 2. BORROWER'S REPRESENTATIONS AND WARRANTIES; CERTAIN
COVENANTS.
To induce Bank to enter into this Agreement, Borrower represents,
warrants and covenants as follows:
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2.1 Borrower (a) is a duly organized Delaware
corporation, validly existing, and in good standing under the laws of
the States of Delaware, Texas and Louisiana; (b) has all necessary
licenses and corporate power and authority to own its assets and
conduct its business as now conducted or presently proposed to be
conducted; (c) has no subsidiaries (except as set forth on Schedule
2.1 hereto; and (d) is duly qualified and in good standing (and will
remain so qualified and in good standing) in every jurisdiction in
which it is or shall be doing business or in which the failure so to
qualify and remain in good standing would or could have a material
adverse effect on its business or properties or the Collateral.
2.2 The execution, delivery, and performance hereof are
within Borrower's corporate powers, have been duly and validly
authorized and are not in contravention of the law or the terms of
Borrower's charter, by-laws, or other incorporation papers, or of any
indenture, agreement, or undertaking or any law, regulation or order
to which Borrower is a party or by which it or any of its properties
is or may be bound. Upon execution and delivery hereof, this
Agreement will be a valid and binding obligation of Borrower
enforceable in accordance with its terms.
2.3 Except for the security interests granted to Bank
hereby or by any of the other Loan Documents in favor of Bank, either
Related Borrower or Borrower is and, as to the Accounts Receivable and
other Collateral arising or to be acquired after the date hereof,
shall be the sole and exclusive owner of the Accounts and all other
Collateral free from any lien, claim, charge, security interest,
mortgage, secondary financing or encumbrance or other interests except
for (i) Permitted Encumbrances; (ii) Approved Seismic Data Licenses
(defined below); and (iii) those approved in advance in writing by
Bank, and Borrower shall defend the Accounts and all other Collateral
and all Proceeds and products thereof against all claims and demands
of all persons at any time claiming the same or any interest therein
adverse to the interests of Bank.
2.4 Borrower will promptly pay, all taxes or charges
levied on or with respect to, and will at all times keep the Accounts
and all other Collateral, free and clear of all liens, claims,
charges, security interests, mortgages, secondary financing and
encumbrances and other interests whatsoever, other than (i) Approved
Seismic Data Licenses; (ii) the security interests granted to Bank
hereby or by any of the other Loan Documents, (iii) Permitted
Encumbrances; and (iv) those approved in advance in writing by Bank.
Borrower agrees to take all actions that Bank may request to establish
and maintain a valid title and security interest in the Accounts and
all other Collateral, free and clear of all other liens, claims,
charges, security interests, mortgages, secondary financing and
encumbrances whatsoever, including, without limitation, the payment
of any amounts, taxes, assessments, fees and/or charges necessary to
perfect Bank's security interest in the same. If such amounts, taxes
or assessments, fees and/or charges remain unpaid after the date fixed
for the payment of same, or if any lien, claim, charge, security
interest, mortgage, secondary financing or encumbrance shall arise,
or be claimed or asserted with respect to the Accounts or any other
Collateral, Bank may, without notice to Borrower, pay such taxes,
assessments, charges or claims, or take any and all other actions
(including the payment of money) deemed desirable by Bank to remove
any such lien, claim, charge, security interest, mortgage, secondary
financing or encumbrance, and Borrower agrees that the amounts
thereof, along with any amounts necessary to perfect and note Bank's
interest in any Collateral, may be charged to Borrower's Loan Account
described herein and shall bear interest at the rate of interest borne
by Borrower's obligations under the Note.
2.5 Neither Borrower nor Related Borrower will (nor will
allow or suffer any other person or entity to) (except-for the
non-exclusive licensing of Related Borrower's Seismic Data pursuant to
Participation Agreements and Licensing Agreements entered into in the
normal and ordinary course of business ("Approved Seismic Data
Licenses')), sell, transfer, lease, convey or otherwise dispose of the
Collateral, any portion thereof, or any interest therein (or any of
the Proceeds thereof, including, without limitation, money, checks,
money orders, drafts, notes, instruments, documents, chattel paper,
Accounts, returns or repossessions), without Bank's prior written
consent.
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2.6 Borrower will deliver to Bank, so long as any of the
Liabilities shall remain outstanding, such documents, instruments,
data or information of any type requested by Bank with respect to the
Accounts Receivable and any other Collateral.
2.7 At the time Borrower pledges, sells, assigns or
transfers to Bank any instruments, document of title, security,
chattel paper or other property, or any interest therein, Borrower
shall be the lawful owner thereof and shall have good right to pledge,
sell, assign or transfer the same; none of such property shall have
been pledged, sold, assigned or transferred to any person other
than Bank or in any way encumbered (except as otherwise allowed under
the terms of this Agreement), and Borrower shall defend the same
against the lawful claims and demands of all persons other than Bank.
2.8 Borrower shall give Bank written notice of each
location at which tangible Collateral is or will be kept, whether for
temporary processing, storage, like purposes or otherwise. Except as
such notice is given, all tangible Collateral is and shall be kept at
(a) Borrower's places of business listed on Schedule 2.9 hereto or (b)
Related Borrower's places of business noted in Section 2.9 of the
Related Loan Agreement.
2.9 Borrower shall give Bank written notice of each
office of Borrower at which records of Borrower pertaining to
Borrower's Accounts Receivable, general intangibles and contract
rights are kept. Except as such notice is given, all records of
Borrower pertaining to Borrower's Accounts Receivable, general
intangibles and contract rights are and shall be kept at Borrower's
chief executive office as noted on the first page of this Agreement
(which Borrower represents and warrants is Borrower's chief executive
office).
2.10 Subject to any limitations stated therein or in
connection therewith, all balance sheets, earnings statements and
other financial data which have been or may hereafter be furnished to
Bank to induce it to enter into this Agreement, or otherwise furnished
in connection herewith, do or shall fairly represent the financial
condition of Borrower or Related Borrower (or other person or entity,
as applicable) as of the dates and results of operations for the
periods for which the same are furnished in accordance with generally
accepted accounting principles consistently applied, and all other
information, reports and other papers and data furnished to Bank shall
be accurate, as of the relevant date, and correct in all material
respects and complete insofar as completeness may be necessary to give
Bank a true and accurate knowledge of the subject matter.
2.11 With respect to any and all equipment which may now
or hereafter constitute Collateral hereunder, Borrower or Related
Borrower shall maintain possession of same, keep the same in good
repair, and maintain casualty insurance on the same naming Bank as
loss payee under a New York (long form) standard mortgagee
endorsement.
2.12 Borrower's name, chief executive office and principal
place of business are and always have been as set forth on the first
page of this Agreement, except as otherwise disclosed in writing to
Bank. Borrower will promptly advise Bank in writing of any charge in
Borrower's name, chief executive office or principal place of
business.
2.13 Borrower is not now in default under any agreement
evidencing an obligation for the payment of money, performance,
delivery, or licensing, demand under which, or acceleration of the
maturity of which would render Borrower insolvent or unable to meet
its other debts as they become due or conduct its business as usual.
2.14 In the event (a) any of Borrower's warranties or
representations shall prove to have been false or misleading when
made; or (b) an Account Debtor in judicial proceeding, shall assert
against the
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Bank a claim or defense arising out of any transaction between such
Account Debtor and Borrower, Borrower agrees to indemnify and hold
Bank harmless from and against any liability, judgment, cost,
attorneys' fees or other expense whatsoever arising therefrom.
2.15 Borrower will pay any and all taxes, with the
exception of taxes measured by income, charges and expenses of every
kind or description paid or incurred by Bank under or with respect to
the Term Loan or any Collateral therefor or the collection of or
realization upon the same. Borrower hereby authorizes Bank to debit
such and other charges, taxes and expenses provided for in this
Agreement (including, without limitation, those taxes, charges and
expenses for which Borrower is liable under Section 13) to Borrower's
Loan Account.
2.16 None of the Collateral is patented, copyrighted or
trademarked or subject to any existing copyright, patent or trademark.
Prior to the time any Collateral is copyrighted, licensed, patented or
trademarked by Borrower or subjected to any copyright, license, patent
or trademark by Borrower, Borrower shall notify Bank and shall take
(or cause to be taken) all actions necessary to preserve the
perfection and priority of Bank's security interest in such
Collateral.
2.17 Borrower shall notify Bank of any filing under the
Bankruptcy Code by, for or against Borrower within two (2) business
days of its having knowledge of such filing.
2.18 There are no judgments, actions, suits, claims,
proceedings or investigations existing, outstanding, pending, or to
the best of Borrower's knowledge after due inquiry, threatened or in
prospect, before any court, agency or tribunal, or governmental
authority against or involving Borrower which do or could reasonably
be expected to materially affect the business, properties, prospects,
financial condition, earnings, results of operations or earnings
capacity of Borrower or which question the validity of the Term Loan
or any of the Loan Documents or any action or instrument contemplated
by any of them.
Nothing in this Section 2 shall be deemed to extend the maturity date
of the Term Loan beyond the time noted in Section 14 hereof.
SECTION 3. BANK'S AGREEMENT TO MAKE ADVANCE.
3.1 The $4,300,000 Term Loan advance shall be made
contemporaneously herewith in a manner acceptable to Bank subject to
the terms and conditions of this Agreement and Borrower's and Related
Borrower's (as applicable) performance of and compliance with each of
the Loan Documents, and so long as no event of default (including,
without limitation, the breach of any warranty or representation)
hereunder or under any of the other Loan Documents shall have occurred
or be continuing (unless waived in writing by Bank).
3.2 The Term Loan advance shall be entered as a debit to
Borrower's Loan Account. Bank shall also record in Borrower's Loan
Account all other charges, expenses and items properly chargeable to
Borrower hereunder, all payments made by Borrower on account of
indebtedness under the Term Loan and other appropriate debits and
credits. The debit balance of Borrower's Loan Account shall reflect
the amount of Borrower's indebtedness from time to time hereunder.
Nothing in this Section 3 shall be deemed to extend the maturity date
of the Term Loan beyond the time noted in Section 14 hereof.
SECTION 4. INSPECTION OF RECORDS; FURTHER ASSURANCE.
4.1 Borrower shall at reasonable times and from time to
time, and in any event, not less than quarterly, allow Bank, by or
through any of its officers, agents, employees, attorneys or
accountants to (i) examine, inspect and make extracts from Borrower's
books and records; (ii) analyze Borrower's
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financial statements; (iii) arrange for verification of Borrower's
Accounts Receivable under reasonable procedures, directly with Account
Debtors or by other methods; and (iv) inspect, review and audit any
Collateral at any time during normal business hours, without prior
notice to Borrower. Borrower shall allow, do, make, execute and
deliver all such additional and further acts, things, deeds,
assurances and instruments which Bank may require more completely to
vest in and assure to Bank its rights hereunder or in any Collateral.
SECTION 5. SECURITY INTEREST OF BANK IN COLLATERAL.
5.1 As security for the payment and performance of all
Liabilities, Bank shall have and is hereby granted a continuing lien
on and security interest in the following Collateral:
(a) Borrower's Opseis Eagle seismic data gathering and
recording system, whether now or hereafter owned,
existing, created, arising or acquired;
(b) all Borrower's Accounts, Accounts Receivable, notes,
notes receivable, contracts, contract rights, leases,
lease payments, rental agreements, rentals, drafts,
documents, title retention and lien instruments,
security agreements, acceptances, instruments,
conditional sales contracts, chattel mortgages,
chattel paper, general intangibles and other forms of
obligation and rights to payment and receivables
whether or not yet earned by performance, whether
now or hereafter owned, existing, created, arising or
acquired;
(c) all Borrower's Inventory, goods, merchandise and
other personal property held for sale, lease, rental
or licensing by Borrower, or furnished or to be
furnished under a contract of service, raw
materials, work in process, component parts,
materials, and supplies used or to be used, or
consumed or to be consumed in Borrower's business,
and related products, wherever located, all goods
represented thereby, and all such goods that may be
reclaimed or repossessed from or returned by
Borrower's customers and all shipping and packaging
materials related to the foregoing, whether now or
hereafter owned, existing, created, arising or
acquired;
(d) all Borrower's general intangibles, whether now or
hereafter owned, existing, created, arising or
acquired;
(e) all Borrower's equipment described or referenced in
Exhibit B hereto, whether now or hereafter owned,
existing, created, arising or acquired;
(f) all goods, instruments, notes, notes receivable,
documents, documents of title, contracts, policies
and certificates of title and policies and
certificates of insurance, securities, chattel paper,
deposits, papers, agreements, cash and other property
now or hereafter owned by Borrower or in which it now
or hereafter has an interest, which are now or may
hereafter be in the possession of Bank, or which are
otherwise assigned to Bank, or as to which Bank may
now or hereafter control possession by documents of
title or otherwise; and
(g) all substitutions, accessions, additions, parts,
accessories, attachments, replacements, Proceeds and
products of, to and for any and all of the foregoing,
including, without limitation, any and all tort and
insurance proceeds and any and all income and other
proceeds and payments from the sale, lease,
collection, licensing, transfer, exchange,
disposition or use of any and all of the foregoing,
and any and all substitutions, accessions, additions,
parts, accessories, attachments, replacements,
Proceeds and
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products in the form of any of the property described
or referenced in (a) through (f) above.
No submission by Borrower to Bank of any schedule or other
particular identification of Collateral shall be necessary to
vest in Bank title to or a security interest in each and every
item of Collateral now existing or hereafter created or
acquired, but rather, such title and security interest shall
vest in tank immediately upon the creation or acquisition of
any item of Collateral, without the necessity for any other or
further action by Borrower or Bank, provided, however, that
Borrower shall execute such other and additional documents,
instruments and agreements as reasonably may be required by
Bank to evidence the security interests contemplated hereby.
5.2 To the extent allowable under applicable law, the
Uniform Commercial Code of Alabama shall govern the security interests
provided for herein. In connection therewith, Borrower (at
Borrower's expense) shall take such steps and execute, deliver and
file (as applicable) (or cause the execution, delivery and filing (as
applicable) of) such financing statements, continuation statements,
agreements (including, without limitation, security agreements and
landlord, creditor and mortgagee subordination agreements), documents,
and papers (all in form and substance acceptable to Bank) as Bank may
from time to time request to perfect or preserve the perfection and
priority of Bank's security interests granted hereby or by any of the
other Loan Documents.
5.3 If, notwithstanding the foregoing, by reason of
location of Borrower, the Collateral or otherwise, the creation,
validity, or perfection of security interests provided for herein are
governed by the law of a jurisdiction other than Alabama, Borrower
shall take such steps and execute and deliver such documents,
agreements, papers and financing statements as Bank may from time to
time request to comply with the Uniform Commercial Code, the Uniform
Trust Receipts Act, the Factors Lien Act, or other laws of other
states or jurisdictions. Borrower hereby appoints and empowers Bank,
or any employee of Bank which Bank may designate for the purpose, as
its attorney-in-fact, to execute (and file, as appropriate) on its
behalf any documents, agreements, papers and financing statements (at
Borrower's expense) which, in Bank's sole judgment, are necessary to
be executed and/or filed in order to perfect or preserve the
perfection and priority of Bank's security interests granted hereby or
by any of the other Loan Documents.
5.4 Borrower shall not pledge, mortgage, or create or
suffer to exist a security interest in any of the Collateral or any
Proceeds or products thereof,or sell, assign or create a security
interest in any of the Collateral or any Proceeds or products thereof
in favor of any person other than Bank unless (i) otherwise allowed
under the terms of this Agreement or the Related Loan Agreement or
(ii) such security interest is expressly subordinate to Bank's
security interest therein and Bank has approved in writing the
existence and priority of such security interest. Nothing in this
Section 5 shall be deemed to extend the maturity date of the Term Loan
beyond the time noted in Section 14 hereof.
SECTION 6. COLLECTION OF ACCOUNTS RECEIVABLE.
6.1 Until Bank requests that Account Debtors on
Accounts Receivable of Borrower be notified of Bank's security
interest therein, Borrower shall continue to collect such Accounts
Receivable. Proceeds transmitted to Bank may be handled and
administered in and through a remittance or special account; the
maintenance of any such account shall be solely for the convenience of
Bank, and Borrower shall not have any right, title, or interest in or
to any such account or in the amounts at any time appearing to the
credit thereof. Bank may apply and credit Proceeds so transmitted or
otherwise received by Bank against the outstanding balance in
Borrower's Loan Account, however, Bank shall not be required to credit
Borrower's Loan Account with the amount of any check or other
instrument constituting provisional payment until Bank has received
final payment thereof at its office in cash or solvent credits
accepted by Bank. After the occurrence of an event of default
hereunder, Borrower shall, at the request of Bank, notify
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the Account Debtors of the security interest of Bank in any Account
and shall instruct Account Debtors to remit payments directly to Bank;
and Bank may itself so notify Account Debtors.
6.2 Borrower (i) shall (a) deliver any instrument
evidencing an Account to Bank, and (b) use its best efforts to collect
all of its Accounts in a commercially reasonable manner; and (ii)
agrees that no court action or other legal proceeding or garnishment,
attachment, repossession of property, detinue, sequestration or any
other repossession shall be attempted by Borrower except by or under
the direction of competent legal counsel. Borrower hereby agrees to
indemnify and hold Bank harmless for any loss or liability of any kind
or character which may be asserted against Bank by virtue of any suit
filed, process issued, or any repossession or attempted repossession
done or attempted by Borrower or by virtue of any other actions or
endeavors which Borrower may make to collect any Collateral. Nothing
in this Section 6 shall be deemed to extend the availability of the
Revolving Line beyond the time noted in Section 14 hereof.
SECTION 7. ADDITIONAL AFFIRMATIVE COVENANTS.
Until all indebtedness of Borrower to Bank has been paid in full and
all Liabilities have been satisfied:
7.1 Borrower shall submit or cause to be submitted to
Bank such financial and other information which Bank shall request
regarding Borrower, Related Borrower, the Collateral and any endorser,
guarantor or surety of any of the Liabilities when and as requested
by Bank, including without limitation: (i) Related Borrower's 10-Q
reports together with Related Borrower's internally prepared
quarterly financial statements within forty-five (45) days after
the close of each quarter in each fiscal year including a balance
sheet as of the close of such period, an income statement, and a
reconciliation of surplus for such period, prepared and analyzed in
accordance with generally accepted accounting principles and attested
to by an authorized officer of Related Borrower; (ii) Related
Borrower's 10-K reports and audited fiscal year-end financial
statements, within ninety (90) days after the close of each fiscal
year, including a balance sheet as of the close of such period, an
income statement, and a reconciliation of stockholders' equity
certified by an independent certified public accountant acceptable to
Bank and analyzed in accordance with generally accepted accounting
principles; (iii) Related Borrower's 8-K reports and all other
documents filed by or on behalf of Related Borrower with the
Securities and Exchange Commission (the "SEC") within thirty (30)
days, following the filing thereof with the SEC; and (iv) together
with each delivery of the financial statements and the 8-K reports
required by (ii) or (iii) above, the certificate of Borrower stating
that no event has occurred which constitutes an event of default or
would constitute an event of default but for the requirement that
notice be given, or time elapse or both, under any loans, notes,
debentures, bonds, leases, or other obligations of Borrower then
outstanding, including, but not limited to, the Term Loan (such
certificate shall publish the accounting calculations used to
determine compliance or noncompliance with Related Borrower's
financial obligations, including those noted in this Agreement), or,
if any such event of default or defaults exists, specifying the nature
thereof.
7.2 Borrower shall (i) maintain insurance (written by
insurance companies acceptable to Bank) in form, amount and substance
acceptable to Bank; (ii) furnish to Bank, upon request, a statement of
the insurance coverage; and (iii) cause Bank to be named as (a) an
additional insured on all Borrower's liability insurance policies; and
(b) a payee as to all insurance covering Collateral hereunder,
pursuant to a New York (long form) standard mortgagee endorsement. All
insurance policies shall provide for a minimum of ten (10) days'
written cancellation notice to Bank and, at Bank's request, all
policies shall be delivered to and held by Bank. In the event of
default hereunder, Bank is hereby made attorney-in-fact for Borrower
to obtain, adjust, and settle, in its sole discretion, such insurance
and to endorse any drafts or checks issued in connection with such
insurance. In the event of failure to provide and maintain insurance
required by this Agreement, Bank may, at its option, provide such
insurance and charge the costs and expenses incurred to Borrower's
Loan Account.
Term Credit and Security Agreement Page 9
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7.3 Borrower does and shall at all times while any
Liabilities remain unsatisfied comply with all laws, ordinances, rules
and regulations of any governmental authority or entity governing or
affecting Borrower, any of its property, the Collateral or any part
thereof, and shall immediately notify Bank of any and all actual,
alleged or asserted violations of any such laws, ordinances, rules or
regulations if such violation would or could have a material adverse
effect on Borrower. Without limitation to the generality of the
foregoing, Borrower shall comply, and cause to be complied with, all
laws, governmental standards and regulations applicable to Borrower or
any Collateral in respect of occupational health and safety, toxic and
hazardous waste and substances and environmental matters. Borrower
promptly shall notify Bank of receipt of any notice of any actual,
alleged or asserted violation of any such law, standard or regulation.
Borrower hereby agrees to indemnify, defend and hold Bank harmless
from all loss, cost, damage, claim and expense incurred by Bank on
account of Borrower's breach of any representation, warranty or
requirement of this Section, Borrower's failure to perform the
obligations of this Section, and/or Borrower's or any Collateral's
violating any applicable laws, ordinances, rules or regulations,
including, without limitation, any environmental or occupational
health and safety laws or regulations. This indemnification shall
survive the closing of the Term Loan, payment of the Term Loan and the
exercise of any right or remedy under any of the Loan Documents.
Borrower represents that there are no pending claims or threats of
claims by private or governmental or administrative authorities
relating to environmental impairment, conditions, or regulatory
requirements involving Borrower or any Collateral.
7.4 Borrower shall cause Related Borrower to have
maintained, as tested at the end of each fiscal year, a minimum Gross
Cash Flow (defined as net profit plus depreciation, amortization and
any other expenses which would be classified as non-cash expenses in
accordance with generally accepted accounting principles) to Current
Maturities of Long Term Debt plus investments in new Seismic Data
coverage ratio of .75 to 1 for such fiscal year.
7.5 Borrower shall cause Related Borrower to maintain a
minimum Tangible Net Worth of not less than $48,000,000 on and after
the date hereof. In addition, Borrower shall cause Related Borrower's
Tangible Net Worth to increase as of the end of each fiscal year by
not less than the greater of (i) $2,500,000 or (ii) fifty percent
(50%) of Related Borrower's net income after taxes for the fiscal year
then ending.
7.6 Borrower shall cause Related Borrower to have a
minimum net earnings each fiscal year of not less than the greater of
(i) $2,500,000 or (ii) fifty percent (50%) of Related Borrower's net
income after taxes for the fiscal year then ending.
7.7 Promptly after the same shall have become known to
Borrower, Borrower shall notify Bank in writing of any action, suit or
proceeding at law or in equity or by or before any governmental
instrumentality or other agency which, if adversely determined, could
reasonably be expected to materially impair the ability of Borrower to
perform its obligations under the Loan Documents, materially impair
the ability of Borrower to carry on its business substantially as now
conducted, or which might materially affect the business, operations,
properties, assets or conditions, financial or otherwise, of Borrower.
Nothing in this Section 7 shall be deemed to extend the maturity date
of the Term Loan beyond the time noted in Section 14 hereof.
SECTION 8. ADDITIONAL NEGATIVE COVENANTS.
Until all indebtedness of Borrower to Bank has been paid in full and
all Liabilities have been satisfied:
8.1 Borrower shall not create or permit the creation of
any lien upon any of its property, except for Permitted Encumbrances.
Term Credit and Security Agreement Page 10
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8.2 Borrower shall not borrow any money other than for
trade credit in the ordinary course of business unless such loans
shall be fully subordinated hereto. Borrower shall not guarantee,
endorse or assume, either directly or indirectly, any indebtedness of
any other corporation, person, or entity.
8.3 Without Bank's prior written consent, Borrower shall
not (i) liquidate, discontinue or materially reduce its normal
operations with intention to liquidate; (ii) cause, allow or suffer to
occur (a) the merger or consolidation of or involving Borrower with or
into any corporation, partnership, or other entity; or (b) the sale,
leasing, licensing, transfer or other disposal of all or any
substantial part of its assets; (iii) acquire any interest(s) in any
corporation, partnership or other entity, whether by stock or asset
purchase or acquisition or otherwise; (iv) enter into any lease which
could be characterized a-s a capitalized lease; or (v) cause, allow,
or suffer to occur any change in the nature of the business of
Borrower.
8.4 Borrower shall not cause, allow or suffer to occur
Related Borrower to make any payment of principal upon Related
Borrower's Subordinated Debentures without Bank's prior written
consent.
8.5 Borrower shall not cause, allow or suffer to occur
Related Borrower's Total Debt to Tangible Net worth ratio to exceed 1
to 1.
8.6 Borrower shall not make or extend or allow to remain
outstanding any loans or advances to or investments in Borrower's
affiliates, parent, subsidiaries, shareholders, owners, directors,
employees, officers, partners, management or other related persons or
entities without the prior written consent of Bank in excess of
$500,000 in the aggregate. Nothing in this Section 8 shall be deemed
to extend the maturity date of the Term Loan beyond the time noted in
Section 14 hereof.
SECTION 9. EVENTS OF DEFAULT; ACCELERATION.
Any or all of the Liabilities, shall be, at the option of Bank and
notwithstanding any time or credit allowed by any instrument
evidencing any of the Liabilities, immediately due and payable without
notice or demand, and the obligation of Bank to make any advances to
or on behalf of Borrower shall immediately cease and terminate upon
the occurrence of any of the following events of default:
(a) default in the payment or performance, when due or
payable, of any of the Liabilities, or of any
liability or obligation (whether now or hereafter
existing, arising or incurred, direct or indirect,
conditional or unconditional) of any endorser,
guarantor, or surety for any of the Liabilities;
(b) failure by Borrower or any other person or entity, as
applicable, to (i) pay or perform any act or
obligation imposed hereby or by any of the other Loan
Documents, or (ii) comply with any of the terms,
conditions, warranties, covenants or requirements
contained or referenced in one or more of the Loan
Documents;
(c) failure of Borrower or any other person or entity, as
applicable, to pay when due (i) any tax (unless such
tax is being diligently contested in good faith by
appropriate proceedings which contest does not or
could not, in Bank's reasonable opinion, materially
jeopardize Bank's rights or priority in or to any
Collateral) or (ii) any premium on any (a) insurance
policy assigned to Bank, or (b) any insurance
covering any Collateral;
(d) if any warranty or representation contained herein
shall prove false or materially misleading or if
Borrower or any endorser, guarantor or surety for any
of the Liabilities made or makes any other material
misrepresentation to Bank for the purpose of
obtaining credit or any extension of credit;
Term Credit and Security Agreement Page 11
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(e) failure of Borrower or any endorser, guarantor, or
surety for any of the Liabilities to furnish
financial information or to permit the inspection of
the books or records or Collateral of Borrower or of
any endorser, guarantor or surety for any of the
Liabilities;
(f) issuance of an injunction, attachment or judgment
against Borrower or any endorser, guarantor or surety
for any of the Liabilities, or of any property of
such persons or entities, if such injunction,
attachment or judgment does or could, in Bank's
reasonable opinion, materially jeopardize Bank's
rights or priority in or to any Collateral and is not
dissolved, discharged or bonded within thirty (30)
days of the issuance thereof; the general assignment
for the benefit of creditors, or filing a petition in
bankruptcy, by Borrower or any endorser, guarantor or
surety for any of the Liabilities; the filing of a
petition in bankruptcy against Borrower or any
endorser, guarantor or surety for any of the
Liabilities if such petition is not dismissed within
sixty (60) days; if Borrower or any endorser,
guarantor or surety for any of the Liabilities shall
file an application in any court for the appointment
of a receiver for Borrower or any such other person
or entity; the appointment of a receiver for Borrower
or any endorser, guarantor or surety for any of the
Liabilities; or the death, dissolution, incapacity or
liquidation of Borrower or any endorser, guarantor or
surety for any of the Liabilities;
(g) calling of a meeting of creditors, appointment of a
committee of creditors or liquidation agents, or
offering of a composition or extension to creditors
by Borrower or by any endorser, guarantor or surety
for any of the Liabilities;
(h) bankruptcy or Insolvency of Borrower or of any
endorser, guarantor or surety for any of the
Liabilities;
(i) any change in the nature of the business of or
acquisition by a person, entity, corporation or group
of more than fifty percent (50%) of the outstanding
voting stock or securities of Borrower or Related
Borrower (except for such an acquisition of Borrower,
voting stock or securities by a fifty-one percent
(51%) or more owned subsidiary of Related Borrower)
without the prior written consent of Bank;
(j) failure of Borrower or any other person or entity, as
applicable, to maintain any insurance required
hereunder and/or assigned or pledged to Bank in
connection herewith;
(k) occurrence or continuation of any default or event of
default by or attributable to Borrower under or in
connection with any mortgage, lease, Participation
Agreement, Licensing Agreement, security agreement,
note, bond indenture, loan agreement or similar
instrument or agreement to which Borrower is now or
may hereafter be a party or by which Borrower or any
of its property (including, without limitation, the
Collateral) is now or may hereafter be bound or
affected if such default or event of default would or
could have a material adverse effect on Borrower;
(l) fraud or material misrepresentation by Borrower (or
any of its agents or employees) in connection with
any transactions contemplated hereby;
(m) such a change in the condition or affairs (financial
or otherwise) of Borrower or of any endorser,
guarantor or surety for any of the Liabilities or of
the Collateral or any other source of repayment of or
security for any of the Liabilities which, in the
opinion of Bank, impairs Bank's security or increases
its risk;
Term Credit and Security Agreement Page 12
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(n) breach or violation of or failure to abide by any
covenant, term or provision of this Agreement, the
Note or any of the other Loan Documents; or the
termination, cancellation or revocation of any Loan
Document without Bank's consent or the determination
by Bank that a material portion of the Accounts or
any of the Loan Documents is void, voidable or
unenforceable;
(o) Borrower's discontinuing doing business for any
reason; or
(p) any default or event of default under the Note, the
Related Loan Documents or any of the other Loan
Documents.
Provided, however, that Borrower shall not be in default
hereunder upon the failure by Borrower or any other person or entity,
as applicable, to perform any act or obligation, or comply with any of
the terms, conditions, covenants or requirements contained in, any of
Sections 2.6, 7.1 or 7.2 hereof, or upon the occurrence of any event
of default described in Section 9(c), 9(j) or 9(m) hereof unless
Borrower has failed to cure any such default within five (5) business
days after notice from Bank of the existence of such default.
SECTION 10. POWER TO SELL OR COLLECT COLLATERAL UPON THE OCCURRENCE OF
ANY OF THE ABOVE EVENTS OF DEFAULT AND AT ANY TIME THEREAFTER. Upon
the occurrence of an), of the above events of default and at any time
thereafter, Bank shall have, in addition to all other rights and
remedies, the remedies of a secured party under the Uniform Commercial
Code of Alabama (regardless of whether the Uniform Commercial Code has
been enacted in the jurisdiction where rights or remedies are
asserted), including, without limitation, the right to take possession
of the Collateral, and for that purpose Bank may, so far as Borrower
can give authority therefor, enter upon any premises on which the
Collateral may be situated and remove the same therefrom or take
possession of same and/or store the same on such premises pending
disposition under the terms of this Agreement or applicable law; and
insofar as Collateral shall consist of Accounts Receivable, insurance
policies, instruments, chattel paper, general intangibles, choices in
action or the like, Bank may demand, collect, receipt for, settle,
compromise, adjust, xxx for, foreclose or realize upon Collateral as
Bank may determine, whether or not Liabilities or Collateral are then
due, and for the purpose of realizing Bank's rights therein, Bank may
receive, open and dispose of mail addressed to Borrower and endorse
notes, checks, drafts, money orders, documents of title or other
evidences of payment, shipment or storage or any form of Collateral on
behalf of and in the name of Borrower as Borrower's attorney-in-fact
for such purpose. Bank may require Borrower to assemble the Collateral
and make it available to Bank at a place designated by Bank which is
reasonably convenient to both parties. Unless the Collateral is
perishable or threatens to decline speedily in value or is of a type
customarily sold on a recognized market, Bank shall give to Borrower
at least five (5) days' written notice of the time and place of any
public sale of Collateral or of the time after which any private sale
or any other intended disposition is to be made. Bank may, at any
time, in its discretion, transfer any securities or other property
constituting Collateral into its own name or that of its nominee and
receive the income therefrom and hold the same as security for the
Liabilities or apply it on principal, interest, charges or expenses
due on Liabilities in any manner deemed appropriate by Bank. Bank may
apply Collateral and the Proceeds from any Collateral against the
Liabilities secured hereby in any manner deemed appropriate by Bank.
The enumeration of the foregoing rights is not intended to be
exhaustive, and the exercise of any right shall not preclude the
exercise of any other rights, all of which shall be cumulative. As
against the obligations secured hereby, to the extent allowed by law,
Borrower hereby expressly waives all claims and all rights to claim
any exemptions, both as to personal and real property, allowed or
allowable under the Constitution or laws of the United States, the
State of Alabama or any other jurisdiction. Any notice to Borrower of
sale, disposition or other intended action by Bank, required by law to
be given to Borrower, sent to Borrower at the address of Borrower
shown on the first page of this Agreement or at such other address
Term Credit and Security Agreement Page 13
14
of Borrower as may from time to time be shown on Bank's records, at
least five (5) days prior to such action, shall constitute reasonable
notice to Borrower.
SECTION 11. SET OFF. Bank and any participant and any holder of all
or any part of the Liabilities are hereby given as additional security
for all Liabilities a continuing lien and security interest in and
upon any and all moneys, securities and other property of Borrower,
and the Proceeds thereof, now or hereafter held or received by or in
transit to Bank (or such participant or holder) from or for Borrower,
whether for safekeeping, custody, pledge, transmission, collection or
otherwise, and also upon any and all deposit balances (general or
special) and credits of Borrower with, and any and all claims of
Borrower against Bank (or such participant or holder) at any time
existing, and upon the occurrence of an event of default hereunder,
Bank (or such participant or holder) may apply or set off the same
against the Liabilities secured hereby in any manner deemed
appropriate by Bank (or such participant or holder). Borrower agrees
that any other person or entity purchasing a participation from Bank
may exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such person
or entity were the direct creditor of Borrower in the amount of such
participation.
SECTION 12. NO WAIVERS. Borrower waives demand, presentment, protest,
notice of protest, notice of intent to accelerate, notice of
acceleration, notice of acceptance of this Agreement, and notice of
advances and loans made, credit extended, Collateral received or
delivered or other action taken in reliance hereon and all other
demands and notices of any description. With respect both to the
Liabilities and Collateral, Borrower assents to any extension or
postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of any or all of the Collateral, to
the addition or release of any party or person primarily or
secondarily liable, to the acceptance of partial payments thereon and
the settlement, compromising or adjusting of any thereof, all in such
manner and at such time or times as Bank may deem advisable. Bank
shall have no duty as to the collection or protection of any or all of
the Collateral or any income therefrom, nor as to the preservation of
any rights against prior parties, nor as to the preservation of any
rights pertaining thereto beyond the safe custody of Collateral in its
possession. Bank may exercise its rights with respect to Collateral
without resorting or regard to other Collateral or sources of
reimbursement for the Liabilities. Bank shall not be deemed to have
waived any of its rights upon or under any of the Liabilities or
Collateral unless such waiver be in writing and signed by Bank. No
course of dealing and no delay or omission on the part of Bank in
exercising any right shall operate as a waiver of such right or any
other right. A waiver on any one occasion shall not be construed as a
bar to or waiver of any right on any further occasion. All rights and
remedies of Bank with respect to Liabilities or Collateral, whether
evidenced hereby, by any of the other Loan Documents or by any other
instrument or paper, shall be cumulative and may be exercised
singularly or concurrently.
SECTION 13. EXPENSES, PROCEEDS OF COLLATERAL. Irrespective of whether
the proceeds of the Term Loan are disbursed, Borrower shall pay all
fees and expenses, including, without limitation, legal fees and
expenses, filing fees, insurance premiums and expenses, appraisal
fees, liabilities and expenses, recording costs and taxes incurred by
Bank or Borrower from time to time in connection with the preparation
and closing, filing, administration, amendment, and modification of
the Term Loan, this Agreement, the Note, and other Loan Documents and
those documents and instruments associated with the perfection and
creation of the security interests granted pursuant hereto or pursuant
to any of the other Loan Documents. Borrower shall pay to Bank on
demand any and all such fees and expenses together with any and all
fees, expenses and costs (a) of collection or (b) otherwise incurred
or paid by Bank in protecting or enforcing its rights upon or with
respect to any of the Liabilities, the Loan Documents or the
Collateral (including, without limitation, reasonable counsel fees,
including, without limitation, those incurred in connection with any
appeal or any bankruptcy proceedings). After deducting all of said
expenses, the residue of any proceeds of collection or sale of
Liabilities or Collateral shall be applied to the payment of principal
of, interest on, and charges and expenses related to the Liabilities
in such order or preference as Bank may
Term Credit and Security Agreement Page 14
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determine, and, lo the extent allowed by law, any excess shall be
returned to Borrower and Borrower shall remain liable for any
deficiency.
SECTION 14. DURATION; EXTENSION. The final maturity date of the Term
Loan shall be June 1, 1998, at which time all principal, interest,
charges and expenses outstanding hereunder, under the Note or under
any of the other Loan Documents (regarding the Term Loan) shall be due
and payable in full unless due sooner under the terms of the Note,
this Agreement or any of the other Loan Documents. No modification or
amendment of this Agreement or extension of the maturity date of the
Term Loan shall be effective unless placed in writing and.duly
executed by Bank and Borrower. It is expressly agreed that this
Agreement shall survive the maturity of the Term Loan in all respects
necessary for Bank to exercise its rights and remedies hereunder and
with respect to the Collateral. The maturity of the Term Loan shall in
no way affect any transactions entered into or rights created or
obligations incurred prior to such maturity; rather, such rights and
obligations shall be fully operative until the same are fully disposed
of, concluded and/or liquidated. Without limitation to the generality
of the foregoing, such maturity shall not release nor diminish any of
(i) Borrower's obligations and agreements, or (ii) Bank's rights and
remedies arising hereunder or in connection herewith until full
payment and performance of all of the Liabilities. This Agreement
shall be a continuing agreement in every respect.
SECTION 15. GENERAL. Any demand upon or notice to Borrower that Bank
may elect to give shall be effective upon delivery if such notice is
given personally, or upon dispatch if deposited in the mails or
delivered to a telegraph, wireless or radio company addressed to
Borrower at the address noted on the first page of this Agreement or,
if Borrower has notified Bank in writing of a change of address, to
Borrower's last address so notified. Demands or notices addressed to
Borrower's address at which Bank customarily communicates with
Borrower shall also be effective. If at any time or times by
assignment or otherwise Bank transfers any Liabilities (either
separately or together with the Collateral therefor), such transfer
shall carry with it Bank's powers and rights under this Agreement with
respect to the Liabilities and/or Collateral transferred, and the
transferee shall become vested with said powers and rights whether or
not they are specifically referred to in the transfer. If and to the
extent Bank retains any other Liabilities or Collateral, Bank will
continue to have the rights and powers herein set forth with respect
thereto. THIS AGREEMENT AND ALL RIGHTS AND OBLIGATIONS HEREUNDER,
INCLUDING MATTERS OF CONSTRUCTION, VALIDITY, AND PERFORMANCE, SHALL BE
GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
ALABAMA, EXCEPT THAT ANY CONFLICT OF LAWS RULE OF SUCH JURISDICTION
THAT WOULD REQUIRE REFERENCE TO THE LAWS OF SOME OTHER JURISDICTION
SHALL BE DISREGARDED. ANY SUITS, CLAIMS OR CAUSES OF ACTION ARISING
DIRECTLY OR INDIRECTLY FROM THIS AGREEMENT, THE NOTE, OR ANY OTHER
AGREEMENTS OR INSTRUMENTS BETWEEN BANK AND BORROWER RELATING TO SUCH
DOCUMENTS SHALL BE BROUGHT IN A COURT OF APPROPRIATE JURISDICTION ONLY
IN JEFFERSON COUNTY, ALABAMA AND OBJECTIONS TO VENUE AND PERSONAL
JURISDICTION IN SUCH FORUM ARE HEREBY EXPRESSLY WAIVED. BORROWER
AGREES THAT THE TERM LOAN, THIS AGREEMENT AND ALL OF THE OTHER LOAN
DOCUMENTS, INCLUDING MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE
STATE OF ALABAMA, INCLUDING, WITHOUT LIMITATION, APPLICABLE USURY
LAWS. THIS AGREEMENT HAS BEEN NEGOTIATED AND IS BEING EXECUTED AND
DELIVERED IN THE STATE OF ALABAMA, OR IF EXECUTED ELSEWHERE, SHALL
BECOME EFFECTIVE UPON BANK'S RECEIPT AND ACCEPTANCE OF THE EXECUTED
ORIGINAL OF THIS AGREEMENT IN THE STATE OF ALABAMA; PROVIDED, HOWEVER,
THAT BANK SHALL HAVE NO OBLIGATION TO GIVE, NOR SHALL BORROWER BE
ENTITLED TO RECEIVE ANY NOTICE OF SUCH ACCEPTANCE FOR THIS AGREEMENT
TO BECOME A BINDING OBLIGATION OF BORROWER. IT IS INTENDED, AND
BORROWER AND BANK SPECIFICALLY AGREE, THAT THE LAWS OF THE STATE OF
ALABAMA GOVERNING INTEREST SHALL APPLY TO THIS
Term Credit and Security Agreement Page 15
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TRANSACTION. BORROWER HEREBY ACKNOWLEDGES THAT (I) THE NEGOTIATION,
EXECUTION, AND DELIVERY OF THE LOAN DOCUMENTS CONSTITUTE THE
TRANSACTION OF BUSINESS WITHIN THE STATE OF ALABAMA, (II) ANY CAUSE OF
ACTION ARISING UNDER ANY OF SAID LOAN DOCUMENTS WILL BE A CAUSE OF
ACTION ARISING FROM SUCH TRANSACTION OF BUSINESS, AND (III) BORROWER
UNDERSTANDS, ANTICIPATES, AND FORESEES THAT ANY ACTION FOR ENFORCEMENT
OF PAYMENT OF BORROWER'S LIABILITIES OR THE LOAN DOCUMENTS MAY BE
BROUGHT AGAINST IT IN THE STATE OF ALABAMA. TO THE EXTENT ALLOWED BY
LAW, BORROWER HEREBY SUBMITS TO JURISDICTION IN THE STATE OF ALABAMA
FOR ANY ACTION OR CAUSE OF ACTION ARISING OUT OF OR IN CONNECTION WITH
BORROWER'S LIABILITIES OR THE LOAN DOCUMENTS AND WAIVES ANY AND ALL
RIGHTS UNDER THE LAWS OF ANY STATE OR JURISDICTION TO OBJECT TO
JURISDICTION OR VENUE WITHIN JEFFERSON COUNTY, ALABAMA;
NOTWITHSTANDING THE FOREGOING, NOTHING CONTAINED IN THIS PARAGRAPH
SHALL PREVENT BANK FROM BRINGING ANY ACTION OR EXERCISING ANY RIGHTS
AGAINST BORROWER, ANY GUARANTOR, ANY SECURITY FOR THE LIABILITIES, OR
ANY OF BORROWER'S OR ANY GUARANTOR'S PROPERTIES IN ANY OTHER COUNTY,
STATE, OR JURISDICTION. INITIATING SUCH ACTION OR PROCEEDING OR TAKING
ANY SUCH ACTION IN ANY OTHER STATE SHALL IN NO EVENT CONSTITUTE A
WAIVER BY BANK OF ANY OF THE FOREGOING. Nothing contained herein, or
in any of the documents contemplated hereby, shall be deemed to render
Bank on the one hand, and Borrower on the other hand, partners or
venturers for any purpose. This Agreement is intended to take effect
as a sealed instrument.
SECTION 16. COMPLIANCE WITH LAWS. It is the intention of Bank and
Borrower to conform strictly to any applicable usury laws (including,
without limitation, the laws of Texas and the United States if and to
the extent such laws other than Alabama laws are deemed applicable
notwithstanding Section 15 above). Accordingly, if the transactions
contemplated hereby would be usurious under any applicable law
(notwithstanding Section 15 above) then, in that event,
notwithstanding anything to the contrary in this Agreement, the other
Loan Documents, or any other agreement or instrument entered into in
connection with or as security for or guaranteeing the Term Loan, it
is agreed as follows: (i) the aggregate of all consideration which
constitutes interest under applicable law that is contracted for,
taken, reserved, charged, or received by Bank under the Loan Documents
or under any other agreement or instrument entered into in connection
with or as security for or guaranteeing the Term Loan shall under no
circumstances exceed the Highest Lawful Rate (as defined below), and
any excess shall be cancelled automatically and, if theretofore paid,
shall, at the option of Bank, be credited by Bank on the principal
amount of any indebtedness owed to Bank by Borrower or refunded by
Bank to Borrower, and (ii) in the event that the payment of the Term
Loan is accelerated or in the event of any required or permitted
prepayment, then such consideration that constitutes interest under
law applicable to Bank may never include more than the Highest Lawful
Rate and excess interest, if any, to Bank provided for in the Loan
Documents or otherwise shall be cancelled automatically as of the date
of such acceleration or prepayment and, if theretofore paid, shall, at
the option of Bank, be credited by Bank on the principal amount of any
indebtedness owed to Bank by Borrower or refunded by Bank to Borrower.
"Highest Lawful Rate" means the maximum non-usurious interest rate
(computed on the basis of a year of 365 or 366 days, as applicable)
that at any time or from time to time may be contracted for, taken,
reserved, charged, or received on amounts due to Bank, under laws
applicable to Bank with regard to this Agreement that are presently in
effect or, to the extent allowed by law, under such applicable laws
that allow a higher maximum non-usurious rate than applicable laws now
allow.
SECTION 17. MISCELLANEOUS. In the event of actual conflict in the
terms and provisions of this Agreement and any of the other Loan
Documents or any other document, instrument or agreement executed in
connection with this Agreement or described or referred to in this
Agreement, the terms and provisions
Term Credit and Security Agreement Page 16
17
most favorable to Bank shall control. No modification, consent,
amendment or waiver of any provision of this Agreement or any of the
other Loan Documents, nor consent to any departure by Borrower or
Related Borrower (as applicable) therefrom, shall be effective unless
the same shall be in writing and signed by Bank, and then shall be
effective only in the specific instance and for the purpose for which
given. This Agreement and each of the other Loan Documents are binding
upon Borrower and Related Borrower (as applicable), their respective
successors and assigns, and inure to the benefit of Bank, its
respective successors and assigns. All representations and warranties
of Borrower and Related Borrower (as applicable) herein, and all
covenants and agreements herein, in the other Loan Documents, or in
any other document delivered hereunder or in connection herewith that
are not fully performed before the date of this Agreement, shall
survive such date.
This Agreement and each of the other Loan Documents shall be deemed to
be drafted by all parties hereto and shall not be construed against
any party hereto. In the event any one or more of the terms or
provisions contained in this Agreement, in any of the other Loan
Documents or in any other instrument or agreement referred to herein
or executed in connection with or as security for the Liabilities, or
any application thereof to any person or circumstances, shall be
declared prohibited, illegal, invalid or unenforceable to any extent
in any jurisdiction, as determined by a court of competent
jurisdiction, such term or provision, in that jurisdiction, shall be
ineffective only to the extent of such prohibition, illegality,
invalidity or unenforceability, or as applied to such persons or
circumstances, without invalidating or rendering unenforceable the
remaining terms or provisions hereof or thereof or affecting the
validity or enforceability of such term or provision in any other
jurisdiction or as to other persons or circumstances in such
jurisdiction, unless such would effect a substantial deviation from
the general intent and purpose of the parties, make a significant
change in the economic effect of the transactions contemplated herein
on Bank, or impair the validity or perfection of Bank's security
interest in any Collateral or the validity of any guaranty or other
security for the Liabilities, in which event a substitute provision
shall be supplied by the court in order to provide Bank with the
benefits intended by such invalid term or provision.
IN WITNESS WHEREOF, the parties hereto have hereunder set their hands
and seals on this 15th day of July, 1993.
BORROWER:
WITNESS: SEITEL GEOPHYSICAL, INC.
By: /s/ [illegible signature] By: /s/ Xxxxx X. Xxxxxx
Its: Secretary/Treasurer
BANK:
CENTRAL BANK OF THE SOUTH
By: /s/ Xxxxx X. Xxxxxx
Its: Vice President
Term Credit and Security Agreement Page 17
18
STATE OF
-----------
COUNTY OF
----------
I, the undersigned Notary Public, in and for said County in said
State, hereby certify that Xxxxx X. Xxxxxx, whose name as Secretary/Treasurer
of SEITEL GEOPHYSICAL, INC., a Delaware corporation, is signed to the foregoing
instrument and who is known to me, acknowledged before me on this day that,
being informed of the contents of the instrument, she, as such officer and with
full authority, executed the same voluntarily for and as the act of said
corporation.
Given under my hand this the 15th day of July, 1993.
/s/
Notary Public
[NOTARIAL SEAL] My commission expires: 4-18-94
STATE OF
--------------
COUNTY OF
-------------
Before me, the undersigned notary public in and for said County in
said State, on this day personally appeared ________________, known to me to be
the person whose name is subscribed to the foregoing instrument, and known to
me to be ______________ of SEITEL GEOPHYSICAL, INC., a Delaware corporation,
and acknowledged to me that _he executed said instrument for the purposes and
consideration therein expressed, and as the act of said corporation.
Given under my hand this the day of , 1993.
--- ------------------
--------------------------------------
Notary Public
[NOTARIAL SEAL] My commission expires:
Term Credit and Security Agreement Page 18
19
STATE OF ALABAMA
COUNTY OF JEFFERSON
I, the undersigned Notary Public, in and for said County in said
State, hereby certify that Xxxxx X. Xxxxxx, whose name as Vice President of
CENTRAL BANK OF THE SOUTH, an Alabama banking corporation, is signed to the
foregoing instrument and who is known to me, acknowledged before me on this day
that, being informed of the contents of the instrument, he, as such officer and
with full authority, executed the same voluntarily for and as the act of said
corporation.
Given under my hand this the 15th day of July, 1993.
/s/
Notary Public
[NOTARIAL SEAL] My commission expires: 4/18/94
Term Credit and Security Agreement Page 19
20
LOAN MODIFICATION AGREEMENT
AND AMENDMENT TO LOAN DOCUMENTS
THIS LOAN MODIFICATION AGREEMENT AND AMENDMENT TO LOAN DOCUMENTS (this
"Agreement") is being entered into effective as of the 28th day of December,
1995, by and between COMPASS BANK, an Alabama state banking corporation
("Bank") and SEITEL GEOPHYSICAL, INC., a Delaware corporation ("Borrower").
P R E A M B L E
In July, 1993, Bank and Borrower executed that certain Term Credit and
Security Agreement (the "Agreement") governing Borrower's $4,300,000 term loan
(the "Term Loan"). In connection with the Term Loan, Borrower executed in favor
of Bank that certain Term Note in the principal amount of FOUR MILLION THREE
HUNDRED THOUSAND AND NO/100 DOLLARS ($4,300,000.00) (the "Note"), along with
other loan documents and instruments evidencing, securing, relating to,
guaranteeing or otherwise executed or delivered in connection with the Term
Loan (jointly and severally with the Agreement and the Note, the "Loan
Documents").
Effective as of the date set forth above, Borrower requested, and Bank
agreed, to modify certain financial covenants relating to the Term Loan as more
specifically set forth below.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises, the mutual
agreements of the parties as set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and to induce Bank to modify certain financial covenants relating to the Term
Loan, the parties, intending to be legally bound hereby, agree as follows:
1. AMENDMENT OF AGREEMENT. The Agreement shall be and the same
hereby is amended as follows:
LOAN MODIFICATION AGREEMENT AND
AMENDMENT TO LOAN DOCUMENTS -- 12/27/95 Page 1
21
(i) Section 7.4 of the Agreement shall be deleted and replaced as
follows:
"7.4 Reserved for Future Use."
(ii) Section 7.5 of the Agreement shall be deleted and replaced as
follows:
"7.5 Reserved For Future Use."
(iii) Section 7.6 of the Agreement shall be deleted and replaced as
follows:
"7.6 Reserved For Future Use."
(iv) Section 8.5 of the Agreement shall be deleted and replaced as
follows:
"8.5 Reserved For Future Use."
(v) New Section 8.7 of the Agreement shall be inserted after
existing Section 8.6 and read in its entirety as follows:
"8.7 The Borrower shall not cause, allow or suffer the Company
nor any Subsidiary of the Company to incur any Debt if after
giving effect thereto, the ratio of the Company's Consolidated
Debt to Total Capitalization would exceed fifty percent
(50%)."
(vi) New Section 8.8 of the Agreement shall be inserted thereafter
and read in its entirety as follows:
"8.8 The Borrower shall not cause, allow or suffer to occur at
any time the Company's Consolidated Net Worth to be less than
the sum of (a) Ninety Million Dollars ($90,000,000) 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 Company
beginning with the fiscal year ending December 31, 1995."
(vii) New Section 8.9 of the Agreement shall be inserted thereafter
and read in its entirety as follows:
"8.9 The Borrower shall not cause, allow or suffer to occur at
any time (a) EBITDA for the period of four consecutive fiscal
quarters of the Company then most recently ended to be less
than (b) five hundred percent (500%) of Consolidated Interest
Expense for such period."
(viii) New Section 8.10 shall be inserted thereafter and read in its
entirety as follows:
"8.10 As used in Sections 8.7, 8.8 and 8.9, capitalized terms
shall have the meaning attributed to the same in Schedule B
hereto."
LOAN MODIFICATION AGREEMENT AND
AMENDMENT TO LOAN DOCUMENTS -- 12/27/95 Page 2
22
(ix) By adding Schedule B hereto as Schedule B to the Agreement.
2. EFFECT ON LOAN DOCUMENTS. Each of the Loan Documents shall be
deemed amended as set forth hereinabove and to the extent necessary to carry
out the intent of this Agreement. Without limiting the generality of the
foregoing, each reference in the Loan Documents to the Agreement or any other
Loan Documents shall be deemed to be references to said documents, as amended
hereby. Except as is expressly set forth herein, all of the Loan Documents
shall remain in full force and effect in accordance with their respective terms
and shall continue to evidence, secure, guarantee or relate to, as the case may
be, the Term Loan.
3. REPRESENTATIONS AND WARRANTIES. Each representation and
warranty contained in the Loan Documents is hereby reaffirmed as of the date
hereof, and Borrower hereby represents that Borrower has no offsets or claims
against Bank arising under, related to, or connected with the Term Loan or any
of the Loan Documents.
4. ADDITIONAL DOCUMENTATION: EXPENSES. If Bank shall request,
Borrower shall provide to Bank certified copies of resolutions properly
authorizing the transactions contemplated hereby and the execution of this
Agreement, all other documents and instruments being executed in connection
herewith and all other documents and instruments required by Bank, all in form
and substance satisfactory to Bank. Borrower shall pay any recording fees and
all other expenses (including, without limitation, legal fees) incurred by Bank
and Borrower in connection with the modification of the Term Loan and any other
transactions contemplated hereby.
5. EXECUTION AND EFFECTIVENESS. This Agreement has been
negotiated, and is being executed and delivered, in the State of Alabama, or,
if executed elsewhere, shall become effective upon Bank's receipt and
acceptance of the original of this Agreement (or a facsimile thereof) in the
State of Alabama; provided, however, that Bank shall have no obligation to
give, nor shall Borrower be entitled to receive, any notice of such acceptance
for this Agreement to become a binding obligation of Borrower.
LOAN MODIFICATION AGREEMENT AND
AMENDMENT TO LOAN DOCUMENTS -- 12/27/95 Page 3
23
IN WITNESS WHEREOF, the undersigned have caused this instrument to be
duly executed effective as of the date first set forth above.
BORROWER:
WITNESS: SEITEL GEOPHYSICAL, INC.
/s/ XXXXXX X. XXXXXXXX By /s/ XXXXX X. XXXXXX
---------------------------------- ------------------------------------
Its Vice President and Secretary
Treasurer
-----------------------------------
BANK:
WITNESS: COMPASS BANK
/s/ XXXX XXXXXXXX By /s/ XXX X. XXXXXX
---------------------------------- ------------------------------------
Its Assistant Vice President
-----------------------------------
STATE OF TEXAS )
-------------------------
:
COUNTY OF XXXXXX )
------------------------
I, the undersigned, Notary Public in and for said County in said
State, hereby certify that Xxxxx X. Xxxxxx whose name as Secretary/Treasurer of
SEITEL GEOPHYSICAL, INC., a corporation, is signed to the foregoing instrument
and who is known to me, acknowledged before me on this day that, being informed
of the contents of the instrument, _he, as such officer, and with full
authority, executed the same voluntarily for and as the act of said
corporation.
Given under my hand this the 7th day of February 1996.
/s/ XXX X. XXXXXXXX
---------------------------------------
Notary Public
[NOTARY SEAL]
My Commission Expires: April 13, 1999
----------------
LOAN MODIFICATION AGREEMENT AND
AMENDMENT TO LOAN DOCUMENTS -- 12/27/95 Page 4
24
STATE OF Alabama )
:
COUNTY OF Jefferson )
I, the undersigned, Notary Public in and for said County in said
State, hereby certify that Xxx X. Xxxxxx whose name as Assistant Vice President
of COMPASS BANK, an Alabama banking corporation, is signed to the foregoing
instrument and who is known to me, acknowledged before me on this day that,
being informed of the contents of the instrument, _he, as such officer, and
with full authority, executed the same voluntarily for and as the act of said
corporation.
Given under my hand this the 13th day of February 1996.
/s/ XXXX X. XXXXXXXX
---------------------------------------
Notary Public
[NOTARY SEAL]
My Commission Expires: April 13, 1998
-----------------
LOAN MODIFICATION AGREEMENT AND
AMENDMENT TO LOAN DOCUMENTS -- 12/27/95 Page 5
25
SCHEDULE B
DEFINED TERMS
As used in Sections 8.7, 8.8, and 8.9 of the Agreement, the following
terms have the respective set forth below:
Bank -- means Compass Bank, an Alabama state banking corporation.
Board of Directors -- means the Board of Directors of the Company.
Borrower -- means Seitel Geophysical, Inc., a Delaware corporation.
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 Obligation -- means, with 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.
Company -- means Seitel, Inc., a Delaware corporation and the parent
corporation of Borrower.
Consolidated Debt -- means, as of any date of determination, the total
of all Debt of the Company and the Restricted Subsidiaries outstanding on such
date, after eliminating all offsetting debits and credits between the Company
and the Restricted Subsidiaries and all other items required to be eliminated
in the course of the preparation of consolidated financial statements of the
Company 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 Company and the Restricted
Subsidiaries and all other items required to be eliminated in the course of the
preparation of consolidated financial statements of the Company and the
Restricted Subsidiaries in accordance with GAAP):
(a) all interest in respect of Debt of the Company 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 Company 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 Company and the
Restricted Subsidiaries and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of the Company
and the Restricted Subsidiaries in accordance with GAAP, provided, there shall
be excluded:
1
26
(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 Company 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 Company or any
Restricted Subsidiary, realized by such other Person prior to the date
of acquisition,
(c) in the case of a successor to the Company 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 Company or any Restricted
Subsidiary has an ownership interest, except to the extent that any
such income has been actually received by the Company 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
Company or any Restricted Subsidiary,
(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 Company
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
2
27
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 of 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 Company and the Restricted Subsidiaries,
(iii) the amount of all depreciation, depletion and
amortization allowances and other non-cash expenses of the
Company and the Restricted Subsidiaries,
3
28
(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 accounting principles as promulgated from time to time
in statements, opinions and pronouncements by the American Institute of
Certified Public Accountants and the Financial Accounting Standards Board and
in such statements, options and pronouncements of such other entities with
respect to financial accounting of for-profit entities as shall be accepted by
a substantial segment of the accounting profession in the United States.
Guaranty -- means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments
for deposit or collection) of such Person guaranteeing or in effect
guaranteeing any indebtedness, dividend or other obligation of any other Person
in any manner, whether directly or indirectly, including (without limitation)
obligations incurred through an agreement, contingent or otherwise, by such
Person:
(a) to purchase such indebtedness or obligation or any
property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or
payment of such indebtedness or obligation, or (ii) to maintain any
working capital or other balance sheet condition or any income
statement condition of any other Person or otherwise to advance or
make available funds for the purchase or payment of such indebtedness
or obligation;
(c) to lease properties or to purchase properties or
services primarily for the purpose of assuring the owner of such
indebtedness or obligation of the ability of any other Person to make
payment of the indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or
obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obliger
under any Guaranty, the indebtedness or other obligations that are the subject
of such Guaranty shall be assumed to be direct obligations of such obliger.
Person -- means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
4
29
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 to the Bank
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 of the Company as of December 28,
1995; and
(b) each Subsidiary which owns, directly -or indirectly,
more than fifty percent (demo) of the Equity Interest of a Restricted
Subsidiary.
Subsidiary -- means, as to any Person, any corporation, limited
liability company, partnership, joint venture, trust or estate in which such
Person or one or more of the Subsidiaries or such Person and one or more of the
Subsidiaries own more than fifty percent (judo) of the Equity Interest. Unless
the context otherwise clearly requires, any reference to a "Subsidiary" is a
reference to a Subsidiary of the Company.
Total Capitalization -- means, at any time, the sum of Consolidated
Debt plus Consolidated Net Worth, in each case at such time.
Unrestricted Subsidiary -- means each Subsidiary other than a
Restricted Subsidiary.
Voting Stock -- shall mean 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.
5
30
ASSUMPTION AND LOAN MODIFICATION AGREEMENT
THIS ASSUMPTION AND LOAN MODIFICATION AGREEMENT (this "Agreement") is
entered into effective as of December 31, 1996 (this "Agreement") and is by and
among SEITEL GEOPHYSICAL, INC. a Delaware corporation ("Seitel"), EAGLE
GEOPHYSICAL, INC., a Delaware corporation ("Eagle"), COMPASS BANK (f/k/a
Central Bank of the South), an Alabama state banking corporation ("Compass"),
and SEITEL, INC., a Delaware corporation (the "Guarantor").
All capitalized terms used herein but not otherwise defined herein
shall have the meaning set forth in that certain Term Credit and Security
Agreement dated as of July 15, 1993, together with any Schedules thereto, al as
amended (the "Loan Agreement") between Seitel and Compass.
W I T N E S S E T H:
WHEREAS, Seitel and Compass are parties to the Loan Agreement.
WHEREAS, the Guarantor has provided to Compass a guaranty of, inter
alia, all amounts due and payable by Seitel under the Loan Agreement, the Note
and all other Loan Documents pursuant to that certain Continuing Guaranty
(Unlimited) dated July 15, 1993 executed by Guarantor in favor of Compass, as
amended (the "Guaranty").
WHEREAS, Seitel wishes to assign and delegate to Eagle all of its
right, title, interests and obligations in, to and under the Loan Agreement,
the Note, and the Loan Documents and Eagle wishes to accept such assignment and
delegation.
WHEREAS, the parties hereto have entered into this Agreement to, among
other things, (a) acknowledge and consent to the assignment and delegation from
Seitel to Eagle on the terms and conditions hereinafter set forth and (b)
provide for the Guarantor to acknowledge its continuing obligations under the
Guaranty with respect to Eagle.
A G R E E M E N T
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Assignment, Assumption and Modification. Seitel, in its
capacity as Borrower under the Loan Agreement, the Note and all the other Loan
Documents, hereby assigns and delegates to Eagle all of Seitel's rights, title,
interests and obligations in, to and under the Loan Agreement, the Note, and
the other Loan Documents pursuant to that certain Contribution and Assumption
Agreement effective as of December 31, 1996 (the "Contribution Agreement")
between Seitel and Eagle. Eagle hereby accepts and agrees to perform such
assignment and delegation and acknowledges and agrees that from and after
December 31, 1996 (the "Effective Date") it shall be a party to and be the
"Borrower" for all purposes under the Loan Agreement, the Note, the Guaranty
and all the other Loan Documents executed in connection therewith and agrees to
be bound by all of the terms of, and to assume, undertake and perform all the
obligations and liabilities of, the Borrower as set forth therein whether such
obligations and liabilities arise prior to, on or after the Effective Date.
Without limiting the foregoing, the Loan Documents shall be and the same hereby
are amended by deleting any and all references to the name "Seitel Geophysical,
Inc." and substituting in place thereof the name "Eagle Geophysical, Inc." The
Loan Documents also shall be and the same hereby are amended by deleting any
and all references to "Central Bank of the South" and substituting in place
thereof "Compass Bank".
2. Consent to Assignment. Compass hereby, subject to the terms
of this Agreement, consents to the Contribution Agreement and the assignment
and delegation by Seitel to Eagle of all of Seitel's right, title, interests
31
and obligations in, to and under the Loan Agreement, the Note and the other
Loan Documents.
3. Acknowledgement by Guarantor. The Guarantor hereby
acknowledges and consents to the Contribution Agreement and this Agreement.
Further, the Guarantor agrees that the Guaranty from the Guarantor to Compass
guaranteeing all obligations of Seitel to Compass shall guarantee all
obligations of Eagle to Compass. Without limiting the foregoing, (i) any and
all references in said Guaranty to "Seitel Geophysical, Inc." shall be and
hereby are amended to read and refer to "Eagle Geophysical, Inc." and (ii) any
and all references in said Guaranty to "Central Bank of the South" shall be and
hereby are amended to read and refer to "Compass Bank".
4. Absence of Defaults. Eagle, as Borrower, and the Guarantor
hereby represent and warrant that as of the date hereof no default or event of
default currently exists and is continuing with respect to the Borrower or the
Guarantor under any of the Loan Documents.
5. Conditions Precedent. Eagle, as Borrower, and Guarantor agree
to deliver to Compass the following items on or before the Effective Date, each
in form and substance satisfactory to Compass: (a) the Contribution Agreement
duly executed by the parties thereto; (b) this Agreement duly executed by the
parties hereto; (c) Good Standing Certificates from business; (d) a legal
opinion of counsel to Eagle and the Guarantor in form and substance
satisfactory to Compass; and (e) such other certificates, financing statements,
resolutions and opinions as deemed necessary or advisable by Compass.
6. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to be
an original and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such counterpart.
7. Effect on Loan Documents. Each of the Loan Documents shall be
deemed amended set forth hereinabove and to the extent necessary to carry out
the intent of this Agreement. Without limiting the generality of the
foregoing, each reference in the Loan Documents to the Note, the Guaranty or
any other Loan Documents shall be deemed to be references to said documents, as
heretofore and hereby amended. Except as is expressly set forth herein, all of
the Loan Documents shall remain in full force and effect in accordance with
their respective terms and shall continue to evidence, secure, guarantee or
relate to, as the case may be, the Term Loan.
8. Representations, Warranties, Covenants, etc. Each
representation, warranty, covenant, grant of security interest and other
agreement originally made by Seitel and contained or referenced in the Loan
Documents is hereby expressly affirmed, adopted, stated and ratified and agreed
to by Eagle, and incorporated herein by reference, as if fully set forth
herein. Seitel, Eagle and Guarantor hereby represent that neither Seitel,
Eagle nor Guarantor has any offsets or claims against Compass arising under,
related to, or connected with the Term Loan, the Loan Agreement, the Guaranty
or any of the other Loan Documents.
9. Expenses. Eagle shall pay any recording fees and all other
expenses incurred by Compass in connection with this Agreement and any other
transactions contemplated hereby, including, without limitation, legal
expenses, filing fees and taxes.
10. Execution by Guarantor. Guarantor has executed this Agreement
to evidence its consent to the modification, amendments and other matters
described herein, and to acknowledge the continuing effect of its Guaranty and
the obligations contained therein.
11. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Alabama.
12. Continuation of Lien and Security Interest. It is expressly
acknowledged and agreed that Eagle is taking the Assets (as defined in the
Contribution Agreement) subject to all liens and security interests of Compass
32
in such Assets and nothing contained or implied herein shall be deemed to be,
constitute or result in the release of any such liens and security interests.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered as of the Effective Date.
SEITEL GEOPHYSICAL, INC.
By:/s/ Xxx X. Xxxxxxxxx
Name: Xxx X. Xxxxxxxxx
Title:President
EAGLE GEOPHYSICAL, INC.
By:/s/ Xxx X. Xxxxxxxxx
Name: Xxx X. Xxxxxxxxx
Title: President
ACKNOWLEDGED, AGREED AND CONSENTED TO:
SEITEL, INC.
By:/s/ Xxxx X. Frame
Name: Xxxx X. Frame
Title:President
COMPASS BANK
By: /s/ Xxx X. Xxxxxx
Name: Xxx X. Xxxxxx
Title: Asst. Vice President
33
TERM NOTE
$4,300,000 July 15, 1993
Alabama
FOR VALUE RECEIVED, the undersigned SEITEL GEOPHYSICAL, INC., a
Delaware corporation ("Borrower"), hereby promises to pay to the order of
CENTRAL BANK OF THE SOUTH ("Bank"; Bank and any subsequent holder hereof being
hereinafter referred to as "Holder"), without grace at its office at 00 Xxxxx
00xx Xxxxxx, Xxxxxxxxxx, Xxxxxxx 00000, or such other place as Holder may
direct, in lawful money of the United States of America, with interest, charges
and expenses, the principal amount of FOUR MILLION THREE HUNDRED THOUSAND AND
NO/1OO DOLLARS ($4,300,000). Payment of principal, interest, charges and
expenses shall be in accordance with the following provisions:
1. Payments. Borrower promises to pay (i) monthly
principal and interest installment payments of $86,388.12 each on the first
(1st) day of each month beginning August 1, 1993; and (ii) a final payment of
all outstanding principal, accrued and unpaid interest and all related charges
and expenses hereunder on June 1, 1998, unless due sooner pursuant to the terms
of this Term Note or any of the Security Documents (defined below). In the
event Borrower tenders or otherwise desires to make principal reduction
pre-payments with good and immediately available funds, Bank will accept such
pre-payments and apply the same against the principal balance outstanding
hereunder, without penalty.
2. Interest. Except for purposes of calculating the
Highest Lawful Rate (defined below), interest shall be calculated on the basis
of a 360-day year applied to the actual number of days upon which principal is
outstanding by multiplying the principal amount outstanding by the applicable
interest rate, multiplying the product thereof by the actual number of days
elapsed, and dividing the product so obtained by 360. The applicable interest
rate is and shall be equal to 7.61%; provided, however, that in no event shall
the interest rate contracted for, taken, reserved, charged or received under
this Promissory Note be greater than the Highest Lawful Rate at any time.
Adjustments due to changes in the Highest Lawful Rate will be made on the
effective date of any change in the Highest Lawful Rate. Unless changed in
accordance with law, the applicable method of calculating the usury ceiling
rate under Texas law (if and to the extent the same shall be deemed applicable
notwithstanding Section 7 below) shall be the indicated (weekly) ceiling rate
from time to time in effect, as provided in Tex. Rev. Civ. Stat. Xxx. art.
5069-1.04, as amended, unless changed in accordance with law.
It is the intention of Holder and Borrower to conform strictly to any
applicable usury laws (including, without limitation the laws of Texas and the
United States if and to the extent such laws, other than Alabama laws, are
deemed applicable notwithstanding Section 7 below). Accordingly, if the
transactions contemplated hereby would be usurious under any applicable law,
then, in that event, notwithstanding anything to the contrary in this Term
Note, the Security Documents, or any other agreement or instrument entered into
in connection with or as security for or guaranteeing payment of the
indebtedness evidenced by this Term Note, it is agreed as follows: (i) the
aggregate of all consideration which constitutes interest under applicable law
that is contracted for, taken, reserved, charged, or received by Holder
under this Term Note, the Security Documents or under any other agreement or
instrument entered into in connection with or as security for or guaranteeing
payment of the indebtedness evidenced by this Term Note shall under no
circumstances exceed the Highest Lawful Rate, and any excess shall be canceled
automatically and, if theretofore paid, shall, at the option of Holder, be
credited by Holder on the principal amount of any indebtedness owed to Holder
by Borrower or refunded by Holder to Borrower, and (ii) in the event that the
payment of the indebtedness evidenced by this Term Note or any of the other
Liabilities (as defined in the Term Agreement (defined below)) is accelerated
or in the event of any required or permitted pre-payment, then such
consideration that constitutes interest under law applicable to Holder may
never include more
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34
than the Highest Lawful Rate and excess interest, if any, to Holder, provided
for in this Term Note, the Security Documents or otherwise shall be canceled
automatically as of the date of such acceleration or pre-payment and, if
theretofore paid, shall, at the option of Holder, be credited by Holder on the
principal amount of any indebtedness owed to Holder by Borrower or refunded by
Holder to Borrower.
"Highest Lawful Rate" means the maximum non-usurious interest rate
(computed on the basis of a year of 365 or 366 days, as applicable) that at any
time or from time to time may be contracted for, taken, reserved, charged, or
received on amounts due to Holder, under laws applicable to Holder with regard
to this Term Note that are presently in effect or, to the extent allowed by
law, under such applicable laws that allow a higher maximum non-usurious rate
than applicable laws now allow.
Any principal amounts outstanding hereunder shall continue to bear
interest at the rates set forth herein after maturity.
3. Security Documents. The indebtedness evidenced hereby is
secured by the following, along with other documents (the "Security
Documents"):
(a) Term Credit and Security Agreement executed by
Borrower on or about the date hereof, and all collateral and security
referred to therein (the "Term Agreement");
(b) Continuing (Unlimited) Guaranty executed by Seitel,
Inc. ("Guarantor"); and
(c) Revolving Credit and Security Agreement executed by
Guarantor on or about the date hereof, and all collateral and security
referenced to therein.
This Term Note is included in the indebtedness referred to in the
Security Documents and is entitled to the benefits of those documents, but
neither this reference to those documents nor any provisions thereof shall
affect or impair the absolute and unconditional obligation of Borrower to pay
the principal of, interest on, and charges and expenses related to this Term
Note as and when due.
4. Events of Default. In case of the happening of any one
or more of the following events of default:
(a) Default in the payment of the principal of, interest
on, or charges and expenses related to this Term Note, as and when
due;
(b) Failure by Borrower or Guarantor to pay or perform
any other loan, indebtedness, liability or obligation to as and when
due;
(c) Failure by Borrower or Guarantor or any other person
or entity to observe or comply with any covenant, obligation or
provision contained or referenced in this Term Note or in any of the
Security Documents or in any other document, agreement or instrument
executed in connection with or securing this Term Note (which failure
continues beyond any applicable cure period agreed upon by Bank in the
Security Documents or otherwise in writing); or
(d) The occurrence or continuation of any default or
event of default contained, specified or referenced in any of the
Security Documents or in any other document, agreement or instrument
executed in connection with or securing this Term Note (which is not
cured within any applicable cure period agreed upon by Bank in the
Security Documents or otherwise in writing); then, or at any time
thereafter, Holder may, with or without notice to Borrower, declare
this Term Note to be forthwith due and payable, as to principal and
interest and related charges and expenses, without presentment,
demand, protest, notice of
2
Initials: /s/
35
intent to accelerate, notice of acceleration, or other notice of any
kind, all of which are hereby expressly waived, anything contained
herein or in any of the Security Documents or in any other instrument
executed in connection with or securing this Term Note to the contrary
notwithstanding.
5. Waivers. Borrower and any endorser or guarantor hereof
hereby waive demand, presentment for payment, notice of dishonor, protest,
notice of protest, notice of intent to accelerate, notice of acceleration, and
diligence in collection or bringing suit and agree that Holder may accept
partial payment, or release or exchange security or collateral, without
discharging or releasing any unreleased collateral or the obligations evidenced
hereby. To the extent permitted by applicable law, Borrower further waives any
and all rights of exemption, both as to personal and real property, under the
constitution or laws of the United States, the State of Alabama, or any other
state or jurisdiction.
6. Attorneys' Fees and Costs. Borrower agrees to pay
reasonable attorneys' fees and costs incurred by Holder in collecting or
attempting to collect this Term Note, whether by suit or otherwise.
7. Applicable Law: Assigns. THIS TERM NOTE AND ALL RIGHTS AND
OBLIGATIONS HEREUNDER, INCLUDING MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF ALABAMA, EXCEPT THAT ANY CONFLICT OF LAWS RULE OF SUCH JURISDICTION
THAT WOULD REQUIRE REFERENCE TO THE LAWS OF SOME OTHER JURISDICTION SHALL BE
DISREGARDED. ANY SUITS, CLAIMS OR CAUSES OF ACTION ARISING DIRECTLY OR
INDIRECTLY FROM THIS TERM NOTE, THE SECURITY DOCUMENTS OR ANY OTHER AGREEMENTS
OR INSTRUMENTS BETWEEN BANK AND BORROWER RELATING TO SUCH DOCUMENTS SHALL BE
BROUGHT IN A COURT OF APPROPRIATE JURISDICTION ONLY IN JEFFERSON COUNTY,
ALABAMA AND OBJECTIONS TO VENUE AND PERSONAL JURISDICTION IN SUCH FORUM ARE
HEREBY EXPRESSLY WAIVED. BORROWER AGREES THAT THIS TERM NOTE AND ALL OTHER
AGREEMENTS, INSTRUMENTS AND DOCUMENTS REFERRED TO HEREIN SHALL BE GOVERNED BY
AND CONSTRUED UNDER THE LAWS OF THE STATE OF ALABAMA (WITHOUT REGARD TO CHOICE
OF LAW CONSIDERATIONS), INCLUDING, WITHOUT LIMITATION, APPLICABLE USURY LAWS.
THIS TERM NOTE HAS BEEN NEGOTIATED, AND IS BEING EXECUTED AND DELIVERED IN THE
STATE OF ALABAMA, OR, IF EXECUTED ELSEWHERE, SHALL BECOME EFFECTIVE UPON BANK'S
RECEIPT AND ACCEPTANCE OF THE EXECUTED ORIGINAL OF THIS TERM NOTE IN THE STATE
OF ALABAMA; PROVIDED, HOWEVER, THAT BANK SHALL HAVE NO OBLIGATION TO GIVE, NOR
SHALL BORROWER BE ENTITLED TO RECEIVE, ANY NOTICE OF SUCH ACCEPTANCE FOR THIS
TERM NOTE TO BECOME A BINDING OBLIGATION OF BORROWER. IT IS INTENDED, AND
BORROWER AND BANK SPECIFICALLY AGREE, THAT THE LAWS OF THE STATE OF ALABAMA
GOVERNING INTEREST SHALL APPLY TO THIS TERM NOTE AND THIS TRANSACTION.
BORROWER HEREBY ACKNOWLEDGES THAT (I) THE NEGOTIATION, EXECUTION, AND DELIVERY
OF THIS TERM NOTE AND THE SECURITY DOCUMENTS CONSTITUTES THE TRANSACTION OF
BUSINESS WITHIN THE STATE OF ALABAMA; (II) ANY CAUSE OF ACTION ARISING UNDER
THIS TERM NOTE AND/OR ANY OF THE SECURITY DOCUMENTS WILL BE A CAUSE OF ACTION
ARISING FROM SUCH TRANSACTION OF BUSINESS; AND (III) BORROWER UNDERSTANDS,
ANTICIPATES AND FORESEES THAT ANY ACTION FOR ENFORCEMENT OF THIS TERM NOTE
AND/OR ANY OF THE SECURITY DOCUMENTS MAY BE BROUGHT AGAINST BORROWER, ET AL.,
IN THE STATE OF ALABAMA. TO THE EXTENT ALLOWED BY LAW, BORROWER HEREBY
SUBMITS TO JURISDICTION IN THE STATE OF ALABAMA FOR ANY ACTION OR CAUSE OF
ACTION ARISING OUT OF OR IN CONNECTION WITH THIS TERM NOTE AND/OR ANY OF THE
SECURITY DOCUMENTS AND HEREBY WAIVES ANY AND ALL RIGHTS UNDER THE LAWS OF ANY
STATE OR JURISDICTION TO OBJECT TO JURISDICTION OR VENUE WITHIN JEFFERSON
COUNTY, ALABAMA. NOTWITHSTANDING THE FOREGOING, NOTHING CONTAINED IN THIS
PARAGRAPH SHALL PREVENT BANK FROM BRINGING ANY ACTION OR
3
Initials: /s/
36
EXERCISING ANY RIGHTS AGAINST BORROWER, ANY GUARANTOR, ANY SECURITY FOR THIS
TERM NOTE OR ANY OF BORROWER'S OR ANY GUARANTOR'S PROPERTIES IN ANY OTHER
COUNTY, STATE OR JURISDICTION. INITIATING SUCH ACTION OR PROCEEDING OR
TAKING ANY SUCH ACTION IN ANY OTHER STATE OR JURISDICTION SHALL IN NO EVENT
CONSTITUTE A WAIVER BY BANK OF ANY OF THE FOREGOING. As used herein, the terms
"Borrower", "Bank", "Guarantor" and "Holder" shall be deemed to include their
respective successors, legal representatives and assigns, whether by voluntary
action of the parties or by operation of law. This Term Note is given under
the seal of all parties hereto and it is intended that this Term Note shall
constitute and have the effect of a sealed instrument according to law.
IN WITNESS WHEREOF, Borrower has caused this Term Note to be
executed and delivered by its duly authorized officer in Alabama on this the
15th day of July, 1993.
BORROWER:
WITNESS: SEITEL GEOPHYSICAL, INC.
/s/ Xxxxx X. Xxxxxx
By: /s/ [illegible signature] By: Xxxxx X. Xxxxxx
---------------------------------- Secretary/Treasurer
STATE OF ALABAMA
COUNTY OF JEFFERSON
I, the undersigned, Notary Public in and for, said County in said
State, hereby certify that Xxxxx X. Xxxxxx, whose name as Secretary/Treasurer
of SEITEL GEOPHYSICAL, INC., a Delaware corporation, is signed to the foregoing
instrument and who is known to me, acknowledged before me on this day that,
being informed of the contents of the instrument she, as such officer and with
full authority, executed the same voluntarily for and as the act of said
corporation.
Given under my hand this 15th day of July, 1993.
/s/
----------------------------------------
Notary Public
My Commission Expires: 4-18-94
[NOTARIAL SEAL]
4
Initials: /s/
37
CENTRAL BANK OF THE SOUTH P.O. BOX 10566 XXXXXXXXXX, XXXXXXX 00000
SIDE LETTER AGREEMENT
July 15, 1993
Xx. Xxxxx Xxxxxx
Xxxxxx, Inc.
Xxxxxx Geophysical, Inc.
00 Xxxxx Xxxxxx Xxxx
0xx Xxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Dear Xx. Xxxxxx:
Reference is made to that certain Revolving Credit and Security Agreement (the
"Revolving Agreement") and that certain Master Revolving Promissory Note (the
"Revolving Note") executed by Seitel, Inc. (the "Borrower") on or about the
date hereof in connection with Borrower's $10,000,000 revolving line of credit
(the "Revolving Line") and that certain Term Credit and Security Agreement (the
"Term Agreement") and that certain Term Note (the "Term Note") executed by
Seitel Geophysical, Inc. ("Related Borrower") on or about the date hereof in
connection with Related Borrower's $4,300,000 term loan (the "Term Loan").
Notwithstanding anything to the contrary contained or implied in the Revolving
Agreement, the Term Agreement, the Revolving Note and/or the Term Note
(collectively with all other documents executed in connection therewith, the
"Loan Documents"), Central Bank of the South (the "Bank") agrees as follows:
Subject to and conditioned upon (i) Related Borrower paying in full (in
good and immediately available funds) all interest, charges, principal
and expenses outstanding under and in connection with the Term Loan,
(ii) the non-existence of any default or event of default under the
Revolving Agreement or the Revolving Note, (iii) Bank not having any
obligation to advance any funds to or on behalf of Related Borrower and
(iv) Related Borrower not having any Liabilities (as defined in the Term
Agreement) to Bank under the Term Agreement, the Bank agrees upon the
written request of Related Borrower (and receipt by Bank of such
certifications as Bank shall request concerning satisfaction of the
foregoing conditions) to then release its security interest in Related
Borrower's accounts, general intangibles, inventory and equipment (the
"Release") and terminate the Term Agreement (the "Termination"),
provided that (a) Borrower and Related Borrower shall pay to Bank any
and all expenses (including legal expenses), costs, taxes, filing fees,
and other costs and expenses associated or incurred by Bank in
connection with said Release and Termination and (b) Borrower and
Related Borrower shall (at Borrower's and Related Borrower's expense)
execute and deliver to Bank all such other documents, instruments and
agreements (in form and substance satisfactory to Bank) as may be
reasonably requested by Bank to effectuate the foregoing; provided,
however, that if Bank ever is required to repay or disgorge any payment
38
received under or in connection with the Term Loan ("Disgorged
Payment"), the Release and Termination shall be voided and the Term
Agreement and all of Bank's rights, remedies and interests shall be
reinstated in full as the same existed prior to the Bank's receiving the
Disgorged Payment without any loss of lien or priority.
CENTRAL BANK OF THE SOUTH
By: /s/ Xxxxx X. Xxxxxx
Its: Vice President
Acknowledged and agreed:
SEITEL, INC.
By: /s/ Xxxxx X. Xxxxxx
Its: Vice President - Finance
SEITEL GEOPHYSICAL, INC.
By: /s/ Xxxxx X. Xxxxxx
Its: Secretary/Treasurer
