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EXHIBIT 10.6.2
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (the "Agreement") is entered
into as of the 31st day of December, 1996, between SEITEL GEOPHYSICAL. INC.,
dba, Eagle Geophysical ("Assignor") a Delaware corporation, with its principal
place of business at 00 Xxxxx Xxxxxx Xxxx Xxxx, 0xx Xxxxx, Xxxxxxx, Xxxxx 00000
and EAGLE GEOPHYSICAL. INC. ("Assignee"), a Delaware corporation, with its
principal place of business at 00 Xxxxx Xxxxxx Xxxx Xxxx, 0xx Xxxxx, Xxxxxxx,
Xxxxx 00000.
RECITALS
A. Assignor, as Lessee, has entered into a Master Equipment Lease
Agreement, dated May 20, 1994, and the respective schedules,
amendments, and addendums thereto, (collectively referred to herein as
the "Lease") with MetLife Capital, Limited Partnership, a Delaware
limited partnership ("MetLife"), as Lessor, whereby Assignor has
leased from MetLife: Opseis Eagle Recording System and Ancillary
Equipment; Opseis Eagle Telemetry Seismic Data Acquisition System;
ATV's, Engine and Generator, Three 1994 Circle M Utility Trailers; One
Spectrum Analyzer with Cables; Cable Strings Land/Xxxxx; MGA with
hardware, Geophone Analyzer Test Equipment; Multiple Cables, all more
fully described in the attached copies of the Lease documents herein
as Exhibit "A" (the "Equipment"). Terms used in the agreement are,
unless defined herein, used as defined in the Lease.
B. Lease documents attached as Exhibit "A". herein incorporated by this
reference, are as follows: Master Equipment Lease Agreement dated
5/20/94; Addendum No. One dated 5/20/94; Amendment No. One dated
5/20/94; Amendment No. Two dated 9/16/94; Request to Purchase Addendum
No. One dated 5/20/94 as amended by Amendment No. One dated 5/20/94
and Amendment No. Two dated 9/16/94; Request to Purchase Addendum No.
Two dated 5/20/94 as amended by Amendment No. One dated 5/20/94 and
Amendment No. Two dated 9/16194; Lease Closing Schedules 001, 002,
003, 004, 005, 006, 007, and 008 dated 7129194, 717194, 717194,
7125194, 7125194, 7129194, 7129194, and 9/19/94, consecutively; and
the 9/16/94 Letter of Correction (collectively referred to herein as
"the Lease").
C. The Assignor wishes to assign to the Assignee, and the Assignee wishes
to accept an assignment from the Assignor, of the Assignor's right,
title and interest in and to the Lease.
D. Pursuant to the terms of the Lease, MetLife's consent to the
assignment of Assignor's interest in the Lease is required. One of the
conditions to MetLife's willingness to give that consent is that the
parties enter into the covenants and make the representations and
warranties set forth in this Agreement.
NOW, THEREFORE, The parties agree as follows:
1. Assignment and Assumption.
Assignor hereby sells, assigns, transfers and sets over unto Assignee
and unto Assignee's successors and assigns, all right, title, and
interest of Assignor under, in and to the Lease. The Assignee hereby
assumes, and covenants with Assignor and MetLife to perform fully, all
the duties of the Assignor under the Lease. It is expressly understood
and agreed that Assignee assumes all such obligations notwithstanding
the fact that some of such obligations may have accrued prior to the
date hereof.
2. Representations and Warranties of Assignee and Assignor.
Assignee and Assignor represent and warrant individually and
respectively as applicable, to MetLife as follows:
a. The Assignee is a corporation duly organized and validly
existing in good standing under the laws of the State of
Delaware and has the power and authority to enter into and
perform its obligations under this Agreement. The execution,
delivery and performance of this Agreement has been duly
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authorized by all necessary action on the part of the Assignee
and the Assignor, does not require any stockholder approval, or
approval or consent of any general or limited partner, trustee
or holders of any indebtedness or obligations of the Assignee
or Assignor except such as have been duly obtained and does not
and will not contravene any law, judgment, governmental rule,
regulation or order applicable to or binding on the Assignee or
Assignor or any of their subsidiaries or the certificates of
incorporation or bylaws of the Assignee or Assignor or any of
their subsidiaries or contravene the provisions of, or
constitute a default under, or result in the creation of any
lien (other than as permitted under the Lease) upon the
property of the Assignee or Assignor under any indenture,
mortgage, chattel mortgage, deed of trust, conditional sales
contract, bank loan or agreement or instrument, or other
contract or agreement to which the Assignee or Assignor or any
of their subsidiaries are a party or by which they or any of
their subsidiaries may be bound or affected;
b. This agreement constitutes the legal, valid and binding
obligation of the Assignee and Assignor enforceable against
said pa ties in accordance with its terms;
c. Except for the filings and recordings consummated at the time
of execution of the Lease and except for the filing and
recording of this Agreement, no further action, including any
filing or recording of any document, is necessary or advisable
in order to establish and protect MetLife's title to and
interest in the Equipment as against the Assignee, the
Assignor, and any third parties in any applicable
jurisdictions in the United States.
3. Assignor's Continuing Obligation and Guaranty.
Assignor covenants with MetLife that notwithstanding its assignment of
the Lease to the Assignee, Assignor will duly and punctually perform
and observe each and every obligation, covenant, representation,
warranty and agreement to be performed and observed by the Lessee
under the provisions of the Lease, notwithstanding the fact that
Assignee is similarly obligated by the terms of this Agreement to
perform or observe those obligations, covenants, representations or
warranties of Lessee arising pursuant to the terms of the Lease;
provided, however, that Assignor shall have no obligation hereunder to
make any payment to MetLife required by any Lease provision to the
extent that Assignee has satisfied the obligations of the Lessee
arising pursuant to such Lease provision. Except as expressly set
forth in the preceding sentence, Assignor is not released in any
respect from its obligations to MetLife arising under the Lease or
related documents. The Assignor hereby acknowledges and consents that
MetLife may agree with the Assignee to extend the time for making
payments for any or all of the amounts due or to become due under the
Lease and documents executed in conjunction therewith or that the
Lease and documents in conjunction therewith may be changed in any
manner at the option of said Assignee and without Assignor's consent
and that Assignor's obligation to perform in accordance with this
Paragraph 3 shall extend to such agreements as changed in the same
manner as if such changes had been part of the agreements as
originally executed and delivered.
The Assignor hereby absolutely and unconditionally guarantees to
MetLife the full and timely performance by the Assignee of all
obligations whatsoever which the Assignee has incurred or is under or
which the Assignee may at any time incur or be under to MetLife
pursuant to or in connection with any of the transactions contemplated
by the Lease and this Agreement; including but not limited to all
obligations of the Assignee for the payment of money whether by reason
of covenant, indemnity, breach of warranty or otherwise. MetLife shall
not be bound to exhaust their recourse nor to take any other action
against the Assignee or other parties or on any collateral they may
hold before being entitled to payment by the Assignor of all amounts
hereby guaranteed. The Assignor specifically agrees that it shall not
be necessary or required in order to enforce the obligations of the
Assignor hereunder that there be, and specifically waives: notice of
performance or nonperformance of the Lease; demand of payment from the
Assignee; presentment for payment upon Assignee or the making of any
protest; notice of the amount of guaranteed obligations outstanding at
any time; notice of nonpayment or failure to perform on the part of
the Assignee;
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and any other circumstances which might otherwise constitute a legal
or equitable defense or discharge of a Guarantor.
4. Financial Data. During the term of this Agreement, Assignee will
furnish to MetLife and will cause any guarantor of Assignees
obligations to furnish to MetLife on request (i) annual balance sheet
and profit and loss statements prepared in accordance with generally
accepted accounting principles and practices consistently applied and,
if MetLife so requires, accompanied by the annual audit report of an
independent certified public accountant reasonably acceptable to
MetLife, and (ii) all other financial information and reports that
MetLife may from time to time reasonably request, including, if
MetLife so requires, income tax returns of Assignee and any guarantor
of Assignee's obligations hereunder.
Assignee shall, from time to time, furnish all such information as
MetLife may reasonably request concerning Assignee and its affairs and
shall execute and deliver such documents and perform all such other
acts that MetLife may reasonably request in order to carry out any
transactions contemplated by this Agreement.
5. Miscellaneous.
This Agreement may not be amended without the express written consent
of MetLife. This Agreement supersedes all prior agreements between the
parties relating to the assignment from Assignor to Assignee of the
Assignor's interest in the Lease or the Equipment.
6. Counterparts.
This Agreement may be signed in any number of counterparts required
for the convenience of the parties, all of which when taken together
shall form one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
ASSIGNOR:
SEITEL GEOPHYSICAL, INC., dba EAGLE GEOPHYSICAL
By /s/ Xxx X. Xxxxxxxxx
Its President
By /s/ Xxxxxx X. Xxxxxxxx
Its Assistant Secretary
ASSIGNEE:
EAGLE GEOPHYSICAL, INC.
By /s/ Xxx X. Xxxxxxxxx
Its President
By /s/ Xxxxxx X. Xxxxxxxx
Its Assistant Secretary
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CONSENT OF METLIFE
On the terms and conditions set forth above, MetLife Capital, Limited
Partnership hereby consents to the assignment by SEITEL GEOPHYSICAL, INC., dba
Eagle Geophysical of its interest under the Lease described above to EAGLE
GEOPHYSICAL, INC. dated this 30th day of December, 1996.
METLIFE CAPITAL, LIMITED PARTNERSHIP
By: MetLife Capital Corporation
Its: General Partner
By /s/ [illegible signature]
Its Vice President
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[ ] METROPOLITAN LIFE
AND AFFILIATED COMPANIES
MASTER EQUIPMENT LEASE AGREEMENT
METLIFE CAPITAL CORPORATION
THIS AGREEMENT is entered into the 20th day of May, 1994 between METLIFE
CAPITAL, LIMITED PARTNERSHIP ("Lessor") whose address is 10900 N. E. 8th
Street, mailing address C-97550, Xxxxxxxx, Xxxxxxxxxx 00000 and Seitel
Geophysical, Inc. d/v/a Eagle Geophysical ("Lessee") whose address is 50 Briar
Hollow Lane West, 7th Floor, Houston, Texas 77027, Lessor and Lessee from time
to time may enter into written agreements in the form of "Request to Purchase
Addenda" for the purchase by Lessor of equipment and leasing of such equipment
to Lessee. To facilitate such transactions, Lessor and Lessee are entering
into this Master Equipment Lease Agreement (the "Master Lease"), the terms and
provisions of which shall be incorporated by reference in each such Request to
Purchase, and they MUTUALLY AGREE AS FOLLOWS:
1. REQUEST TO PURCHASE
If Lessor agrees to acquire and lease equipment when requested by Lessee, the
parties shall sign a Request to Purchase Addendum ("Request to Purchase")
setting forth the particulars regarding the transaction, including, without
limitation, the list of items of equipment (individually, an "Item" and,
collectively, the "Equipment"), the prices of each Item (including disclosure
of all rebates, discounts and other incentives received or receivable with
respect thereto), "Related Costs," including taxes, transportation,
installation and other applicable costs, the aggregate of the foregoing ("Total
Cost"), length of the Basic Term, rental rates and other applicable provisions.
"Cost of an Item" shall mean the price of the Item plus its applicable portion
of Related Costs. In the absence of a signed Request to Purchase, this Master
Lease shall not constitute a lease or a commitment by either party to enter
into a lease.
2. PURCHASE; ACCEPTANCE
(a) REQUEST; SPECIFICATIONS. Signing a Request to Purchase shall
constitute the request from Lessee to Lessor to purchase the Equipment, and the
Request to Purchase and this Master Lease shall constitute the lease and
agreement (the "Lease") regarding the Equipment. Lessee will assign to Lessor
purchase orders or agreements issued or entered into by Lessee for the
Equipment, or Lessor shall issue Lessor's purchase orders to the suppliers of
the Equipment, as Lessor at the time shall deem appropriate, all in form and
substance satisfactory to Lessor. At the time of signing the Request to
Purchase, Lessee shall furnish Lessor detailed specifications
("Specifications") for the purchase of the Items, including descriptions,
prices, delivery terms and instructions, installation provisions and all other
applicable specifications. Lessee assumes full responsibility with respect to
the selection of Items supplied for lease and the specification thereof; the
Lessor shall have no liability or responsibility with respect thereto
regardless of whether the specifications prove inadequate for the intended
purpose or use.
(b) INSPECTION; ACCEPTANCE. It is Lessee's responsibility to
receive and promptly inspect and test each Item tendered for delivery by a
supplier and the installation thereof. Lessee shall give Lessor written notice
of acceptance of an Item as soon as it can be determined that the Item and its
installation are in compliance with Specifications. As between Lessee and
Lessor, the giving of such written notice shall constitute Lessee's irrevocable
acceptance of the Item or Items designated in the notice, whether or not such
items or their installation or Lessor's title to the same are defective in any
respect, and notwithstanding any failure of an Item or its installation to
conform to Specifications, without prejudice however to rights which Lessor and
Lessee, or either of them, may have against any other person, whether with
respect to design, manufacture, condition or otherwise.
(c) PURCHASE CUT-OFF DATE. If, by the "Purchase Cut-Off Date" set
forth in a Request to Purchase, Lessee shall not have given Lessor written
notice of acceptance of an Item, Lessor shall have no obligation to purchase
the Item or to lease it to Lessee. In such event, Lessee shall immediately pay
all accrued interim Rental and reimburse Lessor for all sums Lessor may have
paid for or with respect to the Item and for all Lessor's costs and expenses
with respect thereto, and Lessee shall indemnify and defend Lessor against and
hold Lessor harmless from any and all cost, expense, loss, liability and damage
that Lessor may suffer or that may be asserted against Lessor by reason of
Lessor's failure or refusal to purchase such Item. Any such item shall be
deemed to be deleted from the Request to Purchase and no longer included in the
Equipment.
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(d) CONDITIONS. Lessee shall deliver to Lessor such further
instruments, documents and certifications as Lessor reasonably may request,
including without limitation evidences of authority (e.g., corporate
certificates, corporate resolutions, partnership documents and authorizations),
evidence of insurance, purchase orders and acceptances thereof, purchase and
sale agreements and financial information, and instruments and documents to
implement, perfect or continue the perfection of Lessor's rights and remedies
as owner and Lessor of the Equipment, including Uniform Commercial Code forms.
Notwithstanding the execution, delivery or filing of any instruments or
documents, it is agreed that this transaction is a lease and is not intended as
security. Lessee's delivery of the foregoing and of the Specifications are
conditions precedent to any obligation of Lessor to purchase or to make any
commitments to purchase or pay for the Equipment or any item.
(e) SUPPLEMENTAL LEASE SCHEDULE. If at any time prior to the
Closing Date Lessee requests Lessor to add further Items to the Equipment, and
if Lessor so agrees, Lessee shall execute a Supplemental Request to Purchase in
a form supplied by Lessor, which shall become part of the Request to Purchase,
subject to all of its provisions and the provisions of this Master Lease, and
the equipment specified therein shall be Items of Equipment under the Lease.
If at any time after the Closing Date Lessee requests Lessor to add further
Items to the Equipment, and if Lessor so agrees, Lessee shall execute an
additional Request to Purchase Addendum, amending the Lease to include such
Items as part of the equipment and setting forth the particulars with respect
thereto. The Basic Term with respect to all Equipment, including Items covered
by a Supplemental Lease Schedule, shall terminate in accordance with the
provisions of the original Request to Purchase.
(f) CLOSING. Following the date ("Closing Date") which is the
earlier of (i) the date Lessee gives Lessor written notice of acceptance of the
last Item or (ii) the Purchase Cut-Off Date (or on such other day as is
mutually agreed), Lessor shall send Lessee a Closing Schedule, setting forth
any adjustments to descriptions and Costs of Items and Total Cost and
confirming the Closing Date and amount of Periodic Rental installments and
payment schedules. Such Closing Schedule and the facts and determinations set
forth therein shall be conclusive unless, within sixty (60) days after the
Closing Schedule is sent by Lessor to Lessee, Lessee shall give Lessor written
notice specifying any claimed error therein. Notwithstanding any such notice,
Lessee shall pay all rentals as they become due. If Lessee establishes an
error that affects the amount of rentals, Lessor shall give Lessee a credit for
any overpayment of rentals, and Lessee promptly shall pay Lessor any
underpayments.
3. LESSEE'S WARRANTIES
(a) Lessee represents and warrants to Lessor that it is a
corporation or partnership duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and that it is
qualified to do business in every jurisdiction where the failure to qualify
would have a materially adverse effect on Lessor's rights hereunder; it has
taken all corporate or partnership action which may be required to authorize
the execution, delivery and performance of this Lease, and such execution,
delivery and performance will not conflict with or violate any provision of its
Charter or Articles or Certificate of Incorporation, By-laws or any provisions
thereof, or in the case of a partnership, its Certificate of Partnership or
Limited Partnership and its Partnership Agreement, or result in a default or
acceleration of any obligation under any agreement, order, decree or judgment
to which it is a party or by which it is bound, nor is it now in default under
any of the same; there is no litigation or proceeding pending or threatened
against it which may have a materially adverse effect on Lessee or which would
prevent or hinder the performance by it of its obligation hereunder; this lease
and the attendant documents constitute valid obligations of the Lessee, binding
and enforceable against it in accordance with their respective terms; no action
by or with any commission or administrative agency is required in connection
herewith; it has the power to own its assets and to transact business in which
it is engaged; it will give to Lessor prompt notice of any change in its name,
identity or structure.
(b) Lessee's written acceptance of an Item and its installation
shall constitute a REPRESENTATION AND WARRANTY BY Lessee to Lessor that: (i)
the Item is personal property in good order and condition and, unless Lessor
otherwise agrees in writing, has not been used prior to the time of such
written notice of acceptance, the Equipment does not constitute "imported
property covered by an Executive order" as defined in Section 168(g)(6) of the
Internal Revenue Code of 1986 ("Code"), and that the recovery period set forth
in the Request to Purchase is the period applicable under the Code to the
Equipment; and (ii) at all times Lessee shall keep the Equipment in Lessee's
possession at the address specified in the Request to Purchase unless Lessor
shall otherwise consent in writing. Lessee shall not cause, suffer or permit
any Item to be attached or affixed to real property or improvements
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thereon (collectively, "Realty") unless Lessor first shall consent thereto in
writing and Lessee shall have obtained from all persons having any interest in
the Realty written consents which approve such attachment, waive any claims to
or encumbrances upon attached Items and consent to the detachment and removal
of such Items at any time by Lessor or Lessee. Notwithstanding attachment of
any Items to Realty, all the Equipment at all times shall be and remain
personal property. Upon termination of Lessee's right to possession of the
Equipment, whether by expiration of the Term or otherwise, Lessee at its sole
cost and expense shall detach and remove the Equipment from the Realty and save
Lessor harmless from and indemnify and defend Lessor against any claim, demand,
loss, liability, and damage arising from such detachment, removal or both.
4. TERM OF LEASE
The term of the Lease ("Term") shall consist of an "Interim Term" and a "Basic
Term." The Interim Term shall begin on the date that Lessee first gives Lessor
written notice of acceptance of an Item or written approval for partial
payment, whichever is earlier, and shall continue until the time the Basic Term
begins. The Basic Term shall begin on the Closing Date and shall continue for
the length of the Basic Term set forth in the Request to Purchase.
5. INTERIM RENTAL
During the Interim Term, Lessee shall pay rent monthly ("Interim Rental"), on a
calendar month basis, in an amount determined by Lessor by applying the
"Interim Rental Rate" set forth in the Request to Purchase to portions of the
Total Cost then or theretofore expended by Lessor, for the number of days such
sums are outstanding during such calendar month. The "prime rate" referred to
in this Lease shall mean the rate per annum announced by Chase Manhattan Bank,
New York City, from time to time as its prime rate, whether or not such rate is
applied by said bank to any then outstanding loans, changing with each
announced change of such prime rate. Lessee shall pay Lessor each installment
of Interim Rental on the fifteenth day after the end of such calendar month.
6. PERIODIC RENTAL
Lessee shall pay rent ("Periodic Rental") for the Basic Term in an amount
calculated by multiplying the Total Cost by the Periodic Rental Rate set forth
in the Request to Purchase multiplied by the number of months constituting the
length of the Basic Term. Lessee shall pay installments of Periodic Rental to
Lessor in accordance with the payment schedule set forth in the Request to
Purchase.
7. LATE PAYMENT
If any installment of rent or other sum owing under the Lease shall not be paid
when due and shall remain unpaid for ten (10) days, Lessee shall pay Lessor a
late charge equal to five percent (5%) of the amount delinquent, but in no
event at a rate greater than limited by any applicable law. Such late charge
is in addition to and not in lieu of other rights and remedies Lessor may have.
8. INSURANCE
Lessee shall procure and continuously maintain and pay for (a) all risk
physical damage insurance covering loss or damage to the Equipment for not less
than the full replacement value thereof naming Lessor as Loss Payee and (b)
bodily injury and property damage combined single limit liability insurance
naming Lessor as Additional Insured, all in such amounts and against such risks
and hazards as are set forth in the Request to Purchase, with insurance
companies and pursuant to contract or policies and with deductibles thereon
satisfactory to Lessor. All contracts and policies shall include provisions
for the protection of Lessor notwithstanding any act or neglect of or breach or
default by Lessee, shall provide that they may not be modified, terminated or
cancelled unless Lessor is given at least ten (10) days' advance written notice
thereof, and shall provide that the coverage is "primary coverage" for the
protection of Lessee or Lessor notwithstanding any other coverage carried by
Lessee or Lessor protecting against similar risks. Lessee shall promptly
notify any appropriate insurer and Lessor of each and every occurrence which
may become the basis of a claim or cause of action against the insureds and
provide Lessor with all data pertinent to such occurrence. Lessee shall
furnish Lessor with certificates of such insurance or copies of policies upon
request, and shall furnish Lessor with renewal certificates not less than ten
(10) days prior to the renewal date. Proceeds of all insurance shall be
payable first to Lessor to the extent of its liability or interest as the case
may be.
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9. TAXES
Lessee shall pay or reimburse Lessor for the payment of all taxes, fees,
assessments and other governmental charges of whatsoever kind or character and
by whomsoever payable on or relating to any Item of Equipment or the sale,
purchase, ownership, use, value, value added, possession, shipment,
transportation, delivery or operation thereof or the exercise of any option,
election or performance of any obligation by Lessee hereunder, which may accrue
or be levied, assessed or imposed during the Term and any Renewal Term or which
remain unpaid as of the date of surrender of such Item to Lessor, and all taxes
of any kind imposed by any federal, state, local or foreign taxing authority
against Lessor on or measured by any amount payable by Lessee hereunder,
including, without limitation, all license and registration fees and all sales,
use, value, ad valorem, personal property, excise, gross receipts, stamp or
other taxes, imposts, duties and charges together with any penalties, fines or
interest thereon, except taxes of Lessor on net income imposed by the United
States or any state. Lessee shall reimburse Lessor for any payments made by
Lessor which are the obligation of Lessee under the Lease, but Lessee shall not
be obligated to pay any amount under this Section so long as it shall in good
faith and by appropriate proceedings contest the validity or the amount
thereof, unless such contest would adversely affect the title of Lessor to any
Item of Equipment or would subject any Item to forfeiture or sale. Lessee
shall indemnify Lessor on an after-tax basis against any loss, claim, demand
and expense, including legal expense, resulting from such nonpayment or
contest, and further agrees to indemnify Lessor against any and all taxes,
assessments and other charges imposed upon Lessor under the laws of any
federal, state, local or foreign government or taxing authority, as a result of
any payment made by Lessee pursuant to this Section. Whenever this lease
terminates as to any Item, Lessee will, on request, advance to Lessor the
amount estimated by Lessor to equal personal property taxes on the Item which
are not yet payable but for which Lessee will afterward become liable
hereunder; Lessor will account to Lessee for such advances. On request of
either Lessor or Lessee, the other will submit written evidence of all payments
required of it under this section.
10. MAINTENANCE, ETC.
(a) Lessee at its expense at all times shall: (i) keep the
Equipment in good and efficient working order, condition and repair, ordinary
wear and tear excepted, and make all inspections and repairs, including
replacement of worn parts, to effect the foregoing and to comply with
requirements of laws, regulations, rules and provisions and conditions of
insurance policies; and (ii) pay all costs, expenses, fees and charges incurred
in connection with the use or operation of the Equipment and of each Item,
including but not limited to repairs, maintenance, storage and servicing.
Lessee shall not make any alterations, substitutions, improvements or additions
to the Equipment or Items, except those required in order to comply with laws,
regulations, rules and insurance policies, unless Lessor first shall have
consented thereto in writing. Notwithstanding any consent by Lessor, Lessee
shall pay all costs and expenses of the foregoing. All replacements, repairs,
improvements, alterations, substitutions and additions shall constitute
accessions to the Equipment and title thereto shall vest in Lessor.
(b) Lessor hereby transfers and assigns to Lessee, for so long
during the Term and any Renewal Term as Lessee is not in default, Lessor's
right, title and interest in, under and to any assignable factory and dealer
warranty, whether express or implied, with respect to the Equipment. All
claims and actions upon any warranty shall be made and prosecuted by Lessee at
its sole cost and expense. Lessor shall have no obligation to make or
prosecute any claim upon or under a warranty. So long as Lessee shall not be
in default, Lessor shall cooperate with Lessee with respect to a claim on a
non-assignable warranty, at Lessee's expense. Lessee shall have proceeds of a
warranty claim or recovery paid to Lessor. Lessor shall make such proceeds
available for any repair, restoration or replacement to correct such warranted
condition. Excess proceeds shall be used to reduce Lessee's Lease obligations.
11. USE
So long as Lessee shall not be in default, Lessee shall be entitled to the
possession, use and quiet enjoyment of the Equipment during the Term and any
Renewal Term in accordance with the terms of the Lease. Unless a purchase
option is exercised, Lessee shall deliver and surrender the Equipment to Lessor
at the end of the Term or Renewal Term in accordance with paragraph 20, hereof.
Lessee warrants that the Equipment will at all times be used and operated
solely in the conduct of Lessee's business for the purpose for which it was
designed and intended and under and in compliance with applicable laws and all
lawful acts, rules, regulations and orders of any governmental bodies or
officers having power to regulate or supervise the use of such property, except
that Lessee may in good faith and by appropriate proceedings contest the
application of any such rule, regulation or order in any reasonable manner
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that will not adversely affect the title of Lessor to any Equipment or subject
the same to forfeiture or sale. Lessee will not permit its rights or interests
hereunder to be subject to any lien, charge or encumbrance and will keep the
Equipment free and clear of any and all liens, charges, encumbrances and
adverse claims (except those arising from acts of Lessor).
12. NET LEASE; LOSS AND DAMAGE
(a) This is a net lease. Lessee assumes all risk of and shall
indemnify Lessor against all damage to and loss of the Equipment from any cause
whatsoever, whether or not such loss or damage is or could have been covered by
insurance. Except as otherwise specifically provided herein, the Lease shall
not terminate and there shall be no abatement, reduction, suspension or
deferment of Interim or Periodic Rental for any reason, including damage to or
loss of the Equipment or any one or more Items. Lessee promptly shall give
Lessor written notice of any material loss or damage, describing completely and
in detail the cause and the extent of loss and damage. At its option, Lessee
shall (i) repair or restore the damaged or lost Items to good condition and
working order; or (ii) replace the damaged or lost Items with similar equipment
in good condition and working order; or (iii) pay Lessor in cash the Stipulated
Loss Value of the damaged or lost Items. Upon Lessee's complying with the
foregoing, Lessor shall pay or cause to be paid over to Lessee the net proceeds
of insurance, if any, with respect to such damage or loss. "Damage" and "loss"
shall include damages and losses of any kind whatsoever including, without
limitation, physical damage and partial or complete destruction, including
intentionally caused damage and destruction, and theft.
(b) If Lessee pays Lessor the Stipulated Loss Value for an Item,
then the Lease shall terminate with respect to that Item, that Item shall no
longer be deemed part of the Equipment and Lessee shall be entitled to retain
the Item. However, it is understood that Lessor makes no representation or
warranty with respect to the Item, and further that Lessor shall have no
obligation to pay any tax with respect thereto. In the event that Lessee pays
Lessor the Stipulated Loss Value for an Item, no further Interim Rental shall
be payable with respect to the Item, and Periodic Rental for the remainder of
the Term shall be reduced by multiplying the Cost of that Item by the Periodic
Rental Rate by the number of months then remaining in the Basic Term.
13. STIPULATED LOSS VALUE
The Stipulated Loss Value of an Item shall be a sum computed by Lessor, which
shall not exceed the amount determined by multiplying the Cost of the Item by
the Stipulated Loss Factor as set forth in the Request to Purchase for the
Lease Year during which the loss of the Item occurs. Stipulated Loss Value is
based on the recovery period specified in the Request to Purchase.
14. OWNERSHIP AND MARKING
Lessee has not and by execution and performance hereof will not have or obtain
any title to the Equipment or any other interest therein except as Lessee
hereunder and subject to all the terms hereof. Title to the Equipment shall at
all times remain in Lessor and Lessee at its expense shall protect and defend
the title of Lessor and keep it free of all claims and liens other than the
rights of Lessee hereunder and claims and liens created by or arising through
Lessor. Lessee will treat this transaction as a lease for tax purposes and
will not claim any credit or deduction inconsistent with Lessor's ownership of
the Equipment. On or before the delivery thereof, Lessee will cause each Item
of Equipment (to the extent practicable and, to the extent not practicable,
then each major component) to be plainly, permanently and conspicuously marked
by stenciling or by a metal tag or plate or decal affixed thereto with the
following legend:
PROPERTY OF AND LEASED FROM METLIFE CAPITAL, LIMITED PARTNERSHIP
00000 X.X. 0XX, XXXXX 000 X-00000, XXXXXXXX, XXXXXXXXXX 00000
Lessee shall replace any such marking which may be removed or destroyed or
become illegible and keep the Equipment free from any markings or labelings
which might be interpreted as a claim of ownership thereof by Lessee or any
other person except Lessor or its assigns.
15. LESSEE'S INDEMNITIES
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(a) GENERAL INDEMNITIES. Lessee will defend, indemnify and hold
harmless Lessor from and against any claim, cause of action, damage, liability,
cost or expense (including but not limited to legal fees and costs) which may
be asserted against or incurred in any manner by or for the account of Lessor
or Lessee (i) relating to the Equipment or any part thereof, including without
limitation the manufacture, construction, purchase, delivery, acceptance or
rejection, installation, ownership, sale, leasing, removal or return of the
Equipment, or as a result of the use, maintenance, repair, replacement,
operation or the condition thereof (whether defects are latent or
discoverable); (ii) by reason or as a result of any act or omission of Lessee
for itself; (iii) as a result of claims for patent, trademark or copyright
infringement; or (iv) as a result of product liability claims or claims for
strict liability.
(b) FEDERAL TAX INDEMNITIES. If Lessor shall lose the right to
claim, suffer a disallowance of or be required to recapture all or any portion
of (i) the accelerated cost recovery deductions pursuant to Code Section 168
with respect to the Total Cost for property with recovery period(s) referred to
in the Request to Purchase, then, unless such result is due to Lessor's act or
omission (other than its exercise of remedies after default) or to a loss for
which Lessee pays the Stipulated Loss Value of the affected Equipment, Lessee
shall pay to Lessor on demand a sum equal to the amount of deductions or
credits lost by Lessor as a result of such event, plus the amount of any
interest, penalties and additions to tax payable by Lessor as a result of such
event. The amount of lost deductions and credits to be paid by Lessee pursuant
to this Section shall be computed by Lessor so as to cause Lessor's after-tax
rate of return on investment and after-tax cash flows in respect of the Lease
to equal that which would have been realized by Lessor if such event had not
occurred, but without regard to whether Lessor has or would have had taxable
income sufficient to use the lost deductions or credits.
(c) Lessee shall indemnify Lessor against any and all taxes,
assessments and other charges imposed upon Lessor under the laws of any
federal, state, local or foreign government or taxing authority, as a result of
any payment made by Lessee pursuant to this Section 15.
16. PURCHASE AND RENEWAL OPTIONS
(a) PURCHASE OPTION. Lessee may purchase all, but not less than
all of the Equipment on the last day of the Term or any Renewal Term (the
"Option Date"), for cash, at the Equipment's then Fair Market Value, provided
Lessee is not then in breach or default and that Lessee gives Lessor written
notice of election to purchase at least sixty (60) days prior to the Option
Date. Upon payment of the purchase price and all Rentals and other sums owing
or to become owing to and including the Option Date, Lessor shall transfer to
Lessee all of Lessor's right, title and interest in the Equipment, in its then
condition, without any representation or warranty other than the warranty that
the Equipment is not subject to any liens resulting from acts of Lessor. For
purposes of this Lease, the term "Fair Market Value" shall be an amount agreed
upon by Lessor and Lessee or if such parties are unable to agree prior to the
Option Date, such value shall be determined by an appraiser chosen by mutual
agreement. Lessee shall pay the fees and expenses of the appraiser.
(b) RENEWAL OPTION. At the end of the Term or of a Renewal Term
(the "Option Date"), provided there shall be no breach or default by Lessee or
event which with the giving of notice or passage of time, or both, might mature
into an event of default, Lessee may renew the lease for such additional period
of time (the "Renewal Term") as may be agreed upon by Lessor and Lessee, by
giving Lessor written notice of election to renew at least sixty (60) days
before the Option Date. If Lessor and Lessee do not otherwise agree on the
length of the Renewal Term, it shall be for a period of twelve (12) calendar
months. The rental for the Renewal Term shall be the Equipment's fair market
rental value as of the first day of the Renewal Term. If by the Option Date
the parties do not agree as to the rental, the fair market rental value shall
be determined by an independent appraiser selected by mutual agreement. Lessee
shall pay rental installments based on Lessor's estimate of fair market rental
value until the issue is resolved, at which time appropriate additional
payments or credits shall be made or given. Lessee shall pay the fees and
expenses of the appraiser. All provisions of the Lease shall continue in full
force and effect during a Renewal Term except for the amount of the rental.
17. LESSOR MAY PERFORM
If Lessee at any time shall fail to pay to any person any sum which Lessee is
required by the Lease to pay or shall fail to do or perform any other thing
Lessee is required by the Lease to do or perform, Lessor at its option may pay
such sum or do or perform such thing, and Lessee shall reimburse Lessor on
demand for the amount of such payment
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and for the cost and expense which may be incurred by Lessor for such acts or
performance, together with interest thereon at the Default Rate from the date
of demand until paid.
18. DEFAULT
(a) EVENTS OF DEFAULT. Each of the following shall constitute an
event of default: (i) failure to perform and comply with the provisions and
conditions of Section 8 hereof or to pay any sum, including installments of
rental, on the date when due; (ii) failure to perform and comply with any other
provision or condition of the Lease within thirty (30) days after Lessor shall
have given Lessee written notice of default with respect thereto, or failure to
make good, within thirty (30) days after written notice by Lessor to Lessee,
any representation or warranty, whether made in the Lease or in any
certificate, agreement, instrument or statement, including income and financial
statements, which shall prove to have been incorrect in any material respect
when made; (iii) any event of default occurs with respect to any obligations of
Lessee to Lessor on or with respect to any transactions, debts, undertakings or
agreements other than the Lease; (iv) the failure of Lessee generally to pay
debts as they become due in the ordinary course of business or the filing of
any application for the appointment of a receiver for a major part of Lessee's
assets or the filing of any petition or application by or against Lessee under
any present or future laws for the relief of debtors or for the subjection of
the property of a debtor to the control of any court, tribunal or agency for
the benefit of creditors, including proceedings under the Bankruptcy Code, if
the proceeding commenced by such filing shall not be dismissed within sixty
(60) days from the date of filing; (v) the execution by Lessee of a general
assignment for the benefit of creditors; (vi) the merger, consolidation,
reorganization, conversion to a Subchapter "S" status or dissolution of a
corporate or partnership Lessee, which has a materially adverse effect upon
Lessor's position under the Lease.
(b) EFFECT ON REQUEST TO PURCHASE. Upon the occurrence of an
Event of Default, Lessor shall have no further obligation to Lessee to purchase
Equipment or Items or to lease any thereof to Lessee.
(c) REMEDIES. (i) Upon the occurrence of an event of default as
provided above, Lessor may at its option (1) proceed by appropriate court
action or actions, either at law or in equity, to enforce performance by the
Lessee of the applicable covenants of this Lease or to recover damages for the
breach thereof; or (2) by notice in writing to the Lessee terminate Lessee's
right of possession of the Equipment, whereupon all rights of the Lessee to use
the Equipment shall absolutely cease and terminate, but Lessee shall remain
liable as herein provided. Upon such a termination, Lessee at its expense
shall redeliver the Equipment to Lessor. If Lessee shall fail to do so, Lessor
may retake possession of the Equipment by entering upon any premises at any
reasonable time and thereafter Lessor may hold, possess, sell, upgrade, lease
to others or enjoy the same, free from any right of Lessee, or its successors
or assigns. If Lessor is required to retake possession, Lessee upon demand
shall reimburse Lessor for all costs and expenses relating thereto.
Notwithstanding such redelivery or retaking Lessor shall have a right to
recover from Lessee any and all amounts which under the terms of the Lease may
be then due or which may have accrued to the date of such termination, and also
to recover forthwith from the Lessee its damages for loss of a bargain and not
as a penalty, an amount equal to the higher of Fair Market Value or the
Stipulated Loss Value of the Equipment as of the rent payment date on or next
preceding the date of default, less: (1) the amount Lessor in fact receives
from the sale of the Equipment, after deduction of all estimated expenses of
such sale (Equipment which Lessor is unable to recover shall at Lessor's option
be deemed worthless.) or, (2) at Lessor's election, the present value of the
non-cancellable regularly scheduled rentals receivable from a subsequent lease
of all or part of the Equipment entered into by Lessor (discounted at the
Default Rate), and taking into account only the rentals receivable from the
commencement date of such subsequent lease until the end of the Lease Term
specified in the Request to Purchase for such Equipment. In addition, Lessee
shall be liable to Lessor for all costs and expenses incurred by Lessor by
reason of Lessee's breach or default. In addition to the foregoing, the Lessee
shall be liable for interest on any of the above referenced amounts from and
after the due date at the Default Rate, or the legal limit, whichever is
smaller. (ii) "Lessor's costs and expenses incurred by reason of Lessee's
breach or default" shall include, without limitation, costs and expenses of
receiving or retaking possession of the Equipment, storing, holding,
transporting, insuring, caring for, servicing, maintaining and renting the
Equipment or Items and collecting rents and professional fees and expenses with
respect to or incurred by reason of the breach or default, including legal fees
and expenses for advice and legal services in any actions or proceedings which
Lessor may commence or in which Lessor may appear or participate to exercise or
enforce any rights or remedies or to protect or preserve any rights or
interests, and in all reviews of and appeals from any such actions or
proceedings. (iii) The "Default Rate" of interest shall be a rate per
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annum computed monthly which shall be five (5) percentage points above the
prime rate, but not greater than the maximum rate, if any, limited by
applicable law.
19. RIGHTS CUMULATIVE
Unless otherwise expressly provided herein, all rights and remedies of Lessor
are concurrent and cumulative. The exercise or partial exercise of any remedy
shall not restrict Lessor from further exercise of that remedy or any other
remedy.
20. SURRENDER
At any time that Lessee is required to deliver the Equipment to Lessor, Lessee
shall immediately cease using the Equipment and at Lessee's expense shall
redeliver and surrender the Equipment to Lessor in good order, condition and
repair, ordinary wear and tear excepted, securely crated and safely packed, at
a place to be designated by Lessor in the State where the Equipment by the
terms of the Request to Purchase is required to be kept, and, if Lessor so
specifies, loaded FOB a common or contract carrier designated by Lessor.
21. HOLDOVER
If Lessee shall not immediately redeliver and surrender any Item of Equipment
to Lessor when required by the terms hereof, Lessee shall pay Lessor, at such
time or times as Lessor may demand, a sum equal to a one-month installment of
Periodic Rental for each calendar month or fraction of a month during which
such failure to redeliver and surrender continues.
22. INSPECTION; REPORTS
Lessor, its agents and employees shall have the right to enter upon any
premises where the Equipment or Items are then located to inspect and examine
the same during normal business hours and at any other times if Lessor
reasonably believes any Items or Lessor's rights are in jeopardy of damage or
loss. So long as Lessee's not in default, Lessor shall give Lessee not less
than twenty-four (24) hours notice of such inspection. Lessee shall
immediately give Lessor written notice of any damage to or loss of the
Equipment or any Items from any cause, including without limitation damage or
loss caused by accident, the elements, intentional acts and theft. Such notice
shall set forth an itemization of the affected Items and a detailed account of
the event, including names of any injured persons and a description of any
damaged property arising from any such event or from any use or operation of
the Equipment or any Items. All rights granted to Lessor herein are for the
benefit of Lessor and shall not be construed to impose any obligation on
Lessor, whether or not Lessor makes any inspections or receives any reports.
23. FINANCIAL AND OTHER DATA
During the Term and any Renewal Term, Lessee: (a) shall furnish Lessor annual
balance sheets and profit and loss statements of Lessee and any guarantor of
Lessee's obligations accompanied, at Lessor's request, by the audit report of
an independent certified public accountant acceptable to Lessor; and (b) at
Lessor's request, shall furnish Lessor all other financial information and
reports reasonably requested by Lessor at any time, including quarterly or
other interim balance sheets and profit and loss statements of Lessee and any
such guarantor. Lessee shall furnish such other information as Lessor may
reasonably request at any times concerning Lessee and its affairs.
24. WARRANTY OF INFORMATION
Lessee warrants that all information furnished and to be furnished to Lessor is
accurate and that all financial statements it has furnished and hereafter may
furnish Lessor, including operating statements and statements of condition, are
and will be prepared in accordance with generally accepted accounting
principles, consistently applied, and reasonably reflect and will reflect, as
of their respective dates, results of the operations and the financial
condition of Lessee and any other entity they purport to cover.
25. NON-WAIVER
Neither the acceptance by Lessor of any payment or any other performance, nor
any act or failure of Lessor to act or to exercise any rights, remedies or
options in any one or more instances shall constitute a waiver of any such
right, remedy or option or of any other then existing or thereafter accruing
right, remedy or option, or of any breach of
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default then existing or thereafter occurring. No purported waiver by Lessor
of any right, remedy, option, breach or default shall be binding unless in
writing and signed by an officer of Lessor. A written waiver by Lessor of any
right, remedy, option, breach or default shall not constitute a waiver or any
other then existing or thereafter accruing right, remedy or option or of any
other then existing or thereafter occurring breach or default.
26. NOTICES; PAYMENTS
(a) A written notice may be given: (i) by delivering the same to a
corporate officer of the party to whom it is directed (the "Addressee"), or to
a general partner if the Addressee is a partnership, or to the owner if the
Addressee is a sole proprietorship; or (ii) by mailing the notice to the
Addressee by first class mail, registered or certified, with postage prepaid,
addressed to the Addressee at the address following its name in the opening
paragraph of the Request to Purchase or to such other address as Addressee may
specify by notice in writing given in accordance with this Section. A notice
so mailed shall be deemed given on the third business day following the date of
mailing. A "business day" shall be any day that is not a Saturday or Sunday or
legal holiday.
(b) The Lessee shall make all payments to Lessor at the place
where the notice is to be mailed to Lessor pursuant to subparagraph (a).
Payments are deemed paid when received by Lessor.
27. ASSIGNMENT
(a) Lessee shall not assign the Lease or any rights in or to the
Equipment or Items. Any attempted assignment shall be of no effect, unless
Lessor first shall have consented thereto in writing. Lessor's consent to an
assignment in any one or more instances shall not impose any obligation upon
Lessor to consent to any other or further assignments. Lessor's consent to an
assignment shall not release Lessee from any obligations with respect to the
Lease unless expressly so stated in the written consent.
(b) All rights of Lessor hereunder may be assigned, pledged,
mortgaged, transferred or otherwise disposed of, either in whole or in part,
without notice to Lessee but subject always to the rights of Lessee under this
Lease. If Lessee is given notice of any such assignment, Lessee shall
acknowledge receipt thereof in writing. In the event that Lessor assigns this
Lease or the rent due or to become due hereunder or any other interest herein,
whether as security for any of its indebtedness or otherwise, no breach of
default by Lessor hereunder or pursuant to any other agreement between Lessor
and Lessee, should there be one, shall excuse performance by Lessee of any
provision hereof, it being understood that in no event of such default or
breach by Lessor that Lessee shall pursue any rights on account thereof solely
against Lessor. No such assignee shall be obligated to perform any duty,
covenant or condition requested to be performed by Lessor under the terms of
this Lease.
28. SURVIVAL
The representations warranties, indemnities and agreements of Lessee, and
Lessee's obligations under any and all provisions of the Lease, shall survive
the expiration or other termination of the Lease, shall be binding upon its
successors and assigns and are expressly made for the benefit of and shall be
enforceable by Lessor and its successors and assigns.
29. MISCELLANEOUS
(a) The term "Lessor" shall mean the Lessor named herein and its
successors and assigns.
(b) Whenever the context so requires, any pronoun gender includes
all other genders, and the singular includes the plural. If more than one
person constitute Lessee, whether as a partnership or otherwise, all such
persons are and shall be jointly and severally liable for all agreements,
undertakings and obligations of Lessee.
(c) All captions and section, paragraph and other divisions and
subdivisions are for convenience of reference only and shall not affect the
construction, interpretation or meaning of the agreement or Lease or of any of
the provisions thereof.
(d) This Lease shall be governed by and construed according to the
law of the State of Washington.
(e) This Lease shall be binding upon and, except as limited in
Section 27 hereof, shall inure to the benefit of Lessor and Lessee and their
respective successors and assigns.
(f) This lease cannot be cancelled or terminated except as
expressly provided herein.
(g) Wherever Lessor's consent is required hereunder, such consent
will not be unreasonably withheld.
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(h) Lessee's obligation to pay or reimburse Lessor for expenses as
provided hereunder shall be limited to reasonable expenses.
30. LESSOR'S DISCLAIMER
Lessee acknowledges and agrees that it has selected both the Equipment of the
type and quantity which is the subject of this Lease and the supplier from whom
Lessor purchased the Equipment. LESSOR MAKES NO REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, AS TO THE DESIGN, COMPLIANCE WITH SPECIFICATIONS,
CONDITION, QUALITY, WORKMANSHIP, OR THE SUITABILITY, ADEQUACY, OPERATION, USE
OR PERFORMANCE OF THE EQUIPMENT OR AS TO ITS MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE. ANY DELAY IN DELIVERY SHALL NOT AFFECT THE VALIDITY OF
THIS LEASE. The Lessee understands and agrees that neither the supplier nor
any salesman or any agent of the supplier is an agent of Lessor. No salesman
or agent of supplier is authorized to waive or alter any term or condition of
this Lease, and no representation as to the Equipment or any other matter by
the supplier shall in any way affect Lessee's duty to pay the rent and perform
its obligations as set forth in this Lease. Lessor shall not be liable to
Lessee for any incidental, consequential, or indirect damages or for any act,
neglect, omission, breach or default by any third party.
31. NO AFFILIATION WITH SUPPLIERS
Lessee warrants that neither it nor any of its officers, directors (if a
corporation) or partners (if a partnership) has, directly or indirectly, a
substantial financial interest in the manufacturer or supplier of any Equipment
except as previously disclosed in writing to Lessor.
32. ENTIRE AGREEMENT.
This Lease and any Requests to Purchase hereto shall constitute the entire
agreement between the parties and shall not be altered or amended except by an
agreement in writing signed by the parties hereto or their successors or
assigns.
IN WITNESS WHEREOF Lessor and Lessee have signed this agreement as of the day
and year first hereinabove written.
LESSOR: LESSEE:
METLIFE CAPITAL, SEITEL GEOPHYSICAL, INC.
Limited Partnership dba Eagle Geophysical
By METLIFE CAPITAL CORPORATION,
General Partner By: /s/ [illegible signature]
By: /s/ [illegible signature] Its President
Its: Sr. Vice President By ___________________________________
Its __________________________________
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