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10.1.1
LOAN AND SECURITY AGREEMENT
between
SEITEL GEOPHYSICAL, INC.,
as Debtor,
and
NATIONSBANC LEASING CORPORATION OF NORTH CAROLINA,
as Secured Party,
dated as of July 9, 1996
THIS LOAN AND SECURITY AGREEMENT dated as of July 9, 1996 (as amended,
modified, supplemented, restated and/or replaced from time to time, the
"Agreement"), between SEITEL GEOPHYSICAL, INC., a Delaware corporation
("Debtor"), and NATIONSBANC LEASING CORPORATION OF NORTH CAROLINA, a North
Carolina corporation ("Secured Party").
PRELIMINARY STATEMENTS:
(1) Debtor has requested that Secured Party make loans in the
aggregate principal amount of $7,264,211.13 to Debtor pursuant to the terms of
the Agreement as evidenced by promissory notes in such amount to finance
Debtor's acquisition of the Equipment (hereinafter defined).
(2) Secured Party has agreed to make the Loans to Debtor on the
condition, among other things, that Debtor shall have executed and delivered
the Notes (hereinafter defined) payable to Secured Party, this Agreement, any
required amendment or supplement hereto Granting (hereinafter defined) Secured
Party a first priority security interest in the Collateral (hereinafter
defined), related UCC-1 financing statements and other filings reasonably
deemed necessary or prudent by Secured Party to perfect such security interest.
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Debtor and Secured Party hereby agree as follows:
ARTICLE I
DEFINED TERMS; CREDIT FACILITIES; CONDITIONS PRECEDENT
SECTION 1.1 Definitions. When used in this Agreement, the
following capitalized terms shall have the following meanings (such meanings to
be equally applicable to both the singular and plural forms of the terms
defined):
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"Affiliate" means a Person (i) which directly or indirectly through
one or more intermediaries controls, or is controlled by, or is under common
control with, Debtor; (ii) which beneficially owns or holds 10% or more of any
class of the voting stock of Debtor, or (iii) of which 10% or more of the
voting stock is beneficially owned or held by Debtor or a Subsidiary.
"Assigned Agreements" has the meaning set forth in Section 2.1 (b)
hereof.
"Beneficiary" has the meaning set forth in Section 6.1 hereof.
"Bills of Sale" means each warranty ▇▇▇▇ of sale in favor of the
Debtor duly executed by the Seller of the Equipment.
"Break-Funding Costs" means, in the case of any voluntary prepayment
of all or any portion of the unamortized balance of the Loans, an amount
reasonably determined by Secured Party as shall compensate Secured Party as a
result of the inability of Secured Party in its reasonable discretion to
redeploy the amount so prepaid at an interest rate equal to or greater than the
interest rate on the applicable Loan and for a term equal to the remaining
average life of the applicable Loan.
"Business Day" means any day other than a day on which banking
institutions in the states of North Carolina or Georgia are authorized or
required by law to close.
"Closing Date" means July 12, 1996.
"Collateral" shall have the meaning set forth in Section 2.1 hereof.
"Default" shall mean an event or occurrence which upon the giving of
notice and/or the lapse of time shall constitute an Event of Default.
"Equipment" means each item of marine-based or land-based seismic
recordation equipment as more specifically described in Exhibit A attached
hereto and made a part hereof.
"Equipment Cost" means, with respect to any item of Equipment, an
amount equal to the sum of (a) the total cost paid by Debtor for such item of
Equipment plus (b) all excise, sales and use taxes and registration fees paid
by Debtor on or with respect to the acquisition of such item of Equipment, both
as evidenced by invoices, appraisals and/or bills of sale in form and substance
reasonably satisfactory to Secured Party.
"ERISA" has the meaning set forth in Section 3.1(t) hereof.
"Event of Default" has the meaning set forth in Section 5.1 hereof.
"Event of Loss" with respect to an item of Equipment means any of the
following events: (i) loss of any item of Equipment or of the use thereof due
to theft or disappearance prior to the
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expiration or termination of this Agreement, or the non-existence of any item
of Equipment at the expiration or termination of this Agreement, (ii)
destruction, damage beyond repair, or rendition of any item of Equipment
permanently unfit for normal use for any reason whatsoever, (iii) any damage to
any item of Equipment which results in an insurance settlement with respect to
such item of Equipment on the basis of a total loss, or (iv) the condemnation,
confiscation, seizure, or requisition of use or title to any item of Equipment
by any governmental authority under the power of eminent domain or otherwise.
"Event of Loss Payment Date" has the meaning set forth in Section 4.3
hereof.
"Grant" means to grant, bargain, sell, warrant, remise, release,
convey, assign, transfer, mortgage, pledge, deposit, set over, confirm or
create a security interest under the North Carolina UCC. A grant with respect
to any instrument, document or agreement shall include all rights, powers and
options (but none of the obligations) of the granting party thereunder,
including without limitation the right to generally do anything which the
granting party then is or thereafter may be entitled to do thereunder or with
respect thereto.
"Guarantor" means Seitel, Inc., a Delaware corporation.
"Guaranty" means the Guaranty Agreement dated as of the date hereof,
as such may be amended, modified, supplemented, restated and/or replaced from
time to time, executed by Guarantor for the benefit of Secured Party.
"Installment Payment Date" means the last day of each monthly period
with respect to Term Loan A and Term Loan B.
"Lien" means any lien, claim, charge, security interest, mortgage
and/or other encumbrance.
"Loans" means each of Term Loan A and Term Loan B.
"North Carolina UCC" or "UCC" means the North Carolina Uniform
Commercial Code, N.C. Gen. Stat. Chapter 25, Articles 1-11, as now in effect
and as hereafter amended from time to time.
"Notes" means each of Secured Term Note A and Secured Term Note B.
"Notice of Borrowing" means a notice of borrowing delivered pursuant
to Section 1.3(b)(i) substantially in the form of Schedule 1.3(b)(i) hereto.
"PBGC" has the meaning set forth in Section 3.1(t) hereof.
"Permitted Contest" means any contest by Debtor with respect to any
Lien, tax or imposition referred to in Section 6.2 hereof, so long as Debtor
shall contest, in good faith and
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at its expense, the existence, the amount or the validity thereof, the amount
of the damages caused thereby, or the extent of its liability therefor, by
appropriate Proceedings which do not result in (i) the collection of, or other
realization upon, the tax, assessment, levy, fee, rent or Lien so contested,
(ii) the sale, forfeiture or loss of any item of Equipment or any material part
thereof, or (iii) any interference with the use of any item of Equipment or any
material part thereof.
"Permitted Encumbrances", with respect to the Collateral, means (i)
this Agreement and any assignment permitted hereby, (ii) any Lien affecting the
Collateral for work or service performed or materials furnished securing
amounts which are not yet due and payable or which are not otherwise delinquent
and (iii) any Lien which is the subject of a Permitted Contest and (iv) any
other Lien incurred in the ordinary course of business which such Lien does not
exceed $50,000.
"Permitted Lease" shall mean a lease of all the Equipment or any
portion thereof entered into between Debtor and a Permitted Lessee; provided,
that the following conditions shall be met with respect to each such lease:
(i) Secured Party shall have given its prior written consent to such lease;
(ii) upon the effective date of such lease, there shall exist no Default or
Event of Default and no Liens on any of the Collateral other than the Permitted
Encumbrances; (iii) each such lease shall specify explicitly as a condition to
the effectiveness of such lease that (A) Debtor shall remain fully obligated
and in compliance with the terms and conditions of this Agreement and (B) upon
Secured Party's delivery to the lessee of notice specifying that an Event of
Default has occurred and is continuing and that the Secured Party has commenced
the exercise of remedies with respect to the Equipment, such lease will
automatically terminate and be of no further force or effect and the lessee
will cause each item of Equipment then subject to such lease to be delivered to
Secured Party at a place to be designated by Secured Party. For purposes of
this definition, the subleases entered between Debtor, as lessor, and Seller,
as lessee, with respect to the Equipment shall be considered a "Permitted
Lease."
"Permitted Lessee" shall mean any Person which (i) is domiciled in the
United States, (ii) in Debtor's reasonable opinion, is financially responsible
and (iii) at the time Debtor enters into such lease, is not the subject of any
filing by or against such Person of a petition under any federal bankruptcy law
or any federal law replacing or superseding such law or any state bankruptcy
law in which such Person is named as debtor. For purposes of this definition,
Seller shall be considered a "Permitted Lessee."
"Person" means an individual or a corporation, partnership, trust,
association, joint venture, joint stock company, firm or other enterprise or
government (or a political subdivision or any agency, department or
instrumentality thereof) or other entity of any kind.
"Plan" means any "employee benefit pension plan" or other "plan"
(including a "multi-employer plan" as defined in Section 3(37) of ERISA)
established or maintained, as to which contributions have been made, by Debtor
or any Affiliate for either of their respective employees
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and which is covered by Title IV of ERISA or to which Section 412 of the
Internal Revenue Code of 1986, as amended applies.
"Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.
"Replacement Equipment" means an item (i) of comparable make, model
and manufacture as the item of Equipment with respect to which an Event of Loss
has occurred, (ii) selected by Debtor and consented to by Secured Party, such
consent not to be unreasonably withheld or delayed, (iii) owned by Debtor free
and clear of all Liens and other encumbrances other than Permitted Encumbrances
and (iv) having a value, utility and useful life at least equal to, and being
in as good operating condition as, the item of Equipment with respect to which
the Event of Loss occurred, assuming such item of Equipment was in the
condition and repair required by the terms hereof immediately prior to the
occurrence of the Event of Loss.
"Secured Obligations" has the meaning set forth in Section 2.2 hereof.
"Secured Party" means NationsBanc Leasing Corporation of North
Carolina, a North Carolina corporation, and its successors and assigns.
"Security Instrument" means each of this Agreement, and any other
instrument, document, financing statement or agreement with respect to which
any right or interest in or with respect to the Collateral has been Granted to
Secured Party or has been recorded with the appropriate filing office.
"Secured Term Note A" means the promissory note of the Debtor in favor
of the Secured Party dated the Closing Date evidencing Term Loan A as provided
pursuant to Section 1.3 (a) (iii), as amended, modified, supplemented,
extended, renewed or replaced from time to time.
"Secured Term Note B", means the promissory note of the Debtor in
favor of the Secured Party dated the Closing Date evidencing Term Loan B as
provided pursuant to Section 1. 3 (b) (iii), as amended, modified,
supplemented, extended, renewed or replaced from time to time.
"Seller" means Horizon Exploration Ltd., a company organized and
existing under the laws of England.
"Subsidiary" means any corporation, limited liability company,
partnership, joint venture, trust or estate of which (i) more than 50% of the
outstanding capital stock having ordinary voting power to elect a majority of
the board of directors of such corporation; or (ii) the interest in the capital
or profits of such corporation, limited liability company, partnership or joint
venture; or (iii) the beneficial interest of such trust or estate is owned
directly or indirectly by Guarantor and/or one of its Subsidiaries.
"Taxes or Other Impositions" has the meaning set forth in Section 6.2
hereof.
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"Term Loan A" means the term loan made pursuant to the provisions of
Section 1.3(a).
"Term Loan A Commitment" has the meaning set forth in Section 1.3(a)
hereof.
"Term Loan B" means the term loan made pursuant to the provisions of
Section 1.3(b).
"Term Loan B Commitment" has the meaning set forth in Section 1.3(b)
hereof.
"Term Loan B Draw Termination Date" has the meaning set forth in
Section 1.3 (b) hereof.
"Termination Value" means, with respect to any or all item(s) of
Equipment, an amount equal to the Equipment Cost of such item(s) of Equipment
multiplied by the Termination Value Percentage as of such Installment Payment
Date.
"Termination Value Percentage" means the termination value percentage
as of each Installment Payment Date as s forth in Exhibit B hereto.
SECTION 1.2 Other Terms. Unless otherwise defined in this
Agreement, all terms defined in the North Carolina UCC and used in this
Agreement have the meanings set forth in the North Carolina UCC.
SECTION 1.3 Term Loans.
(a) Term Loan A. Subject to and upon the terms and
conditions and relying upon the representations and warranties herein
set forth, the Secured Party agrees to make a term loan ("Term Loan
A") to the Debtor on the Closing Date in the principal amount of FIVE
MILLION NINE HUNDRED TWO THOUSAND THREE HUNDRED AND SEVENTY-TWO
DOLLARS ($5,902,372) (the "Term Loan A Commitment") for the purposes
hereinafter set forth. Amounts repaid on Term Loan A may not be
reborrowed. The Secured Party will make Term Loan A available to the
Debtor by deposit in U.S. dollars of immediately available funds to
the Debtor's account at the offices of Compass Bank in Houston, Texas.
(i) Payment of Principal and Interest. Principal
and interest on Term Loan A shall be payable in sixty (60)
consecutive monthly installments on the last day of each
monthly period, beginning with the first of such dates to
occur after the Closing Date. Each installment shall be in
payments of principal and interest equal to 2.027639% of the
Term Loan A Commitment. Payments received on Term Loan A
shall be applied first to accrued interest and then to
principal in inverse order of maturity. In the event the
actual rate of interest exceeds the assumed rate, additional
payments of interest will be made in the amount of the excess
thereof, payable on demand.
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(ii) Interest. Term Loan A shall bear interest at a
per annum rate equal to eight percent (8%); provided, however,
that upon the occurrence and during the continuation of an
Event of Default hereunder, the principal of and, to the
extent permitted by law, interest on Term Loan A hereunder
shall bear interest, payable on demand, at a rate equal to
2.0% per annum in excess of the rate otherwise applicable
hereunder.
(iii) Secured Term Note A. Term Loan A shall be
evidenced by a duly executed promissory note of the Debtor to
the Secured Party dated the Closing Date in an original
principal amount equal to the Term Loan A Commitment and
substantially in the form of Schedule 1.3(a) hereto.
(b) Term Loan B. Subject to and upon the terms and
conditions and relying upon the representations and warranties herein
set forth, the Secured Party agrees to make two (2) advances ("Term
Loan B") to the Debtor from time to time from the Closing Date until
August 31, 1996 (as such date may be extended from time to time in the
sole discretion of the Secured Party, (the "Term Loan B Draw
Termination Date")) in an aggregate principal amount of up to ONE
MILLION THREE HUNDRED SIXTY-ONE THOUSAND EIGHT HUNDRED AND THIRTY-NINE
AND 13/100 DOLLARS ($1,361,839.13) (the" Term Loan B Commitment") for
the purposes hereinafter set forth. Amounts repaid on Term Loan B may
not be reborrowed.
(i) Term Loan B Advances. So long as the
conditions to advances have been satisfied, the Secured Party
will make Term Loan B advances to the Debtor from time to time
from the Closing Date to the Term Loan B Draw Termination Date
upon submission of a Notice of Borrowing substantially in the
form of Schedule 1.3(b)(i) to the Secured Party on the
Business Day prior to the date of the requested advance. Each
such notice shall specify (A) the date of the requested
advance (which shall be a Business Day), (B) shall not exceed,
taking into account all prior Term Loan B advances, the Term
Loan B Commitment and (C) shall be accompanied by any
supporting invoices and requisitions relating to the requested
advance. The Secured Party shall make such Term Loan B
advances available by deposit to the Debtor's account at the
office of Compass Bank in Houston, Texas.
(ii) Payment of Principal and Interest. Term Loan
B shall be subject to a draw period during which accrued
interest shall be payable monthly in arrears on the last day
of each monthly period beginning with the first of such dates
to occur after the Closing Date. Interest during such draw
period shall accrue at the daily equivalent rate of eight and
six hundredths percent (8.06%) per annum for the actual number
of days elapsed with respect to Term Loan B advances made on
the Closing Date and throughout the draw period. Beginning on
the last day of the first monthly period after the Term Loan B
Draw Termination Date, Debtor shall make payments of principal
and interest on Term Loan B in thirty-six (36)
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consecutive monthly installments on the last day of each
monthly period. Each installment shall be in payments of
principal and interest equal to 3.136405% of the Term Loan B
Commitment. Payments received on Term Loan B shall be applied
first to accrued interest and then to principal in inverse
order of maturity. In the event the actual rate of interest
exceeds the assumed rate, additional payments of interest will
be made in the amount of the excess thereof, payable on
demand.
(iii) Interest. Term Loan B shall bear interest at
a per annum rate equal to eight and six hundredths percent
(8.06%); provided, however, that upon the occurrence and
during the continuation of an Event of Default hereunder, the
principal of and, to the extent permitted by law, interest on
Term Loan B hereunder shall bear interest, payable on demand,
at a rate equal to 2.0% per annum in excess of the rate
otherwise applicable hereunder.
(iv) Secured Term Note B. Term Loan B shall be
evidenced by a duly executed promissory note of the Debtor to
the Secured Party dated the Closing Date in an original
principal amount equal to the Term Loan B Commitment and
substantially in the form of Schedule 1.3(b) hereto.
(c) Early Termination. (i) On any Installment Payment
Date on or after the second anniversary of the Closing Date,
Debtor may, upon sixty (60) days' prior written notice to
Secured Party, terminate the Loans and this Agreement. Debtor
shall pay to Secured Party on the applicable Installment
Payment Date the sum of: (A) the Termination Value as of such
Installment Payment Date, plus (B) any Break- Funding Costs,
plus (C) any accrued but unpaid interest with respect to
either Loan to the extent the Installment Payment Date for
Term Loan A and Term Loan B are not the same date each month,
plus (D) all other obligations owing under the Agreement on
the termination date. Upon receipt of the amounts set forth
in (A)-(D) above, Secured Party shall release its Lien on the
Collateral.
(ii) On any Installment Payment Date on or after
the second anniversary of the Closing Date, Debtor may, upon
sixty (60) days' prior written notice to Secured Party, prepay
a portion of the Loans in accordance with the terms hereof.
Debtor shall have the option to make up to three (3)
prepayments in the aggregate on the Loans, each prepayment in
an amount not less than $200,000. Debtor shall pay to Secured
Party on the applicable Installment Payment Date the sum of:
(A) the prepayment amount, plus (B) any Break-Funding Costs,
plus (C) any accrued but unpaid interest with respect to the
prepayment. Amounts so prepaid under this subsection (c)(ii)
shall be applied to outstanding obligations owing under this
Agreement in the reasonable discretion of the Secured Party.
SECTION 1.4 Conditions Precedent. The obligation of Secured
Party to make any Loan advance shall be subject to the following conditions, as
appropriate:
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(a) Conditions to All Advances on Closing Date. Each
Loan advance on the Closing Date shall be subject to the delivery to
Secured Party of the following originally executed documents (unless
otherwise noted) each in form and substance satisfactory to Secured
Party and the satisfaction of the other conditions set forth herein:
(i) the Agreement;
(ii) the Notes;
(iii) the Guaranty;
(iv) evidence of payment (or evidence of
exemption) of any and all sales, transfer, use, documentation
or similar taxes due in connection with the acquisition of the
Equipment by Debtor;
(v) a secretarial certificate from Debtor: (A)
certifying Debtor's articles of incorporation, by-laws and
resolutions, with such resolutions authorizing the overall
transaction and Debtor's execution, delivery and performance
of this Agreement and (B) containing an incumbency
certification of Debtor with the name(s), title(s) and
specimen signature(s) of the person or persons authorized on
behalf of Debtor to execute this Agreement.
(vi) an officer's certificate from Debtor: (A)
stating that no material adverse change has occurred in the
condition of Debtor (financial or otherwise) since the date of
the last financial statement of Guarantor which has been
delivered to Secured Party which would impair the ability of
Debtor to pay and perform its obligations under this Agreement
and (B) stating that no Default or Event of Default shall have
occurred and be continuing as of such date;
(vii) a secretarial certificate from Guarantor:
(A) certifying Guarantor's articles of incorporation, by-laws
and resolutions, with such resolutions authorizing the overall
transaction and Guarantor's execution, delivery and
performance of the Guaranty and (B) containing an incumbency
certification of Guarantor with the name(s), title(s) and
specimen signature(s) of the person or persons authorized on
behalf of Guarantor to execute the Guaranty;
(viii) an officer's certificate from Guarantor: (A)
stating that no material adverse change has occurred in the
condition of Guarantor (financial or otherwise) since the date
of the last financial statement of Guarantor which has been
delivered to Secured Party which would impair the ability of
Guarantor to pay and perform its obligations under the
Guaranty and (B) stating that no Default or Event of Default
shall have occurred and be continuing as of such date;
(ix) a written opinion of counsel for Debtor and
Guarantor;
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(x) copies of the Bills of Sale;
(xi) certificates of insurance evidencing the
coverages required hereunder;
(xii) Uniform Commercial Code filings as deemed
appropriate by Secured Party's counsel duly executed by Debtor
and necessary third parties;
(xiii) good standing certificates from the Secretary
of State of Debtor's state of incorporation and the state of
Debtor's chief executive office; and
(xiv) good standing certificates from the Secretary
of State of Guarantor's state of incorporation and Guarantor's
chief executive office.
(xv) UCC, tax and judgment lien searches as deemed
necessary or advisable by Secured Party;
(xvi) the absence on the date hereof of any Liens
on the Collateral, other than any Permitted Encumbrance in
favor of Secured Party; and
(xvii) Secured Party shall have received such other
documents, certificates, financing statements and other
items, in form and substance satisfactory to Secured Party, as
Secured Party may request.
(b) Term Loan B Advances. The obligation of the Secured
Party to make Term Loan B advances after the Closing Date is subject
to satisfaction of the following conditions:
(i) delivery to the Secured Party of a Notice of
Borrowing;
(ii) no material adverse change in the condition
of the Debtor (financial or otherwise) shall have occurred
since the Closing Date;
(iii) the absence on the date of such advance of
any Default or Event of Default; and
(iv) no Lien or other interest shall have been
permitted to attach to the Collateral superior or subordinate
to the interest of the Secured Party under this Agreement,
except for Permitted Encumbrances.
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ARTICLE II
SECURITY INTEREST
SECTION 2.1 Grant of Security Interest. Debtor hereby Grants to
Secured Party a first priority security interest in the following
(collectively, the items described in subsections (a)-(d) may be referred to
herein as the "Collateral"):
(a) All right, title and interest of the Debtor in and
to the Equipment as the same is now and will hereafter be constituted,
whether now owned by the Debtor or hereafter acquired, together with
all accessories, equipment, parts and appurtenances appertaining or
attached to the Equipment whether now owned or hereafter acquired, and
all substitutions, renewals and replacements of and additions,
improvements, accessions and accumulations to the Equipment together
with all the rents, issues, income, profits and avails thereof.
(b) All right, title, interest, claims and demands of
Debtor in, to and under the following (collectively the "Assigned
Agreements"):
(i) the Bills of Sale;
(ii) the Permitted Leases; and
(iii) any and all other contracts and agreements
(excluding this Agreement and any supplement or modification
thereto and the Notes) relating to the Equipment or any rights
or interests therein to which Debtor is now or may hereafter
be a party, together with all rights, powers, privileges,
licenses, easements, options and other benefits of Debtor
under each thereof, including without limitation the right to
make all waivers and agreements, to give and receive all
notices and other instruments or communications, to take such
action upon the occurrence of a default thereunder, including
the commencement, conduct and consummation of legal,
administrative or other Proceedings, as shall be permitted
thereby or by law, and to do any and all other things which
Debtor is or may be entitled to do thereunder.
(c) The proceeds from a sale or transfer of any right,
title or interest of Debtor in the Equipment or any portion thereof.
(d) All proceeds of any and all of the foregoing
Collateral, whether now owned or hereafter acquired by Debtor and
wherever located, including without limitation:
(i) cash, accounts receivable, instruments,
contract rights, chattel paper, documents of title and any
other obligation due to Debtor with respect to or in
connection with the foregoing Collateral; and
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(ii) to the extent not otherwise included, all
payments under any casualty insurance (whether or not Secured
Party is the loss payee thereof), condemnation award,
indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing
Collateral.
The Collateral shall mean and include all personal property
and the proceeds of such personal property described in any and all
amendments to this Agreement hereafter executed by Debtor and Secured
Party in connection with the Loan.
SECTION 2.2 Security for Secured Obligations. This Agreement
secures the payment of all indebtedness and other obligations of Debtor to
Secured Party with respect to: the Loans, whether now or hereafter existing,
including without limitation Debtor's obligations to Secured Party under the
Notes or any other instrument and all amendments thereto and renewals and
extensions thereof, whether for principal, interest, fees, expenses or
otherwise; all of Debtor's obligations of payment and performance now or
hereafter existing under this Agreement, including, without limitation, all
amendments hereto and renewals and extensions hereof (all such obligations of
Debtor described in this Section 2.2 being, collectively, the "Secured
Obligations").
SECTION 2.3 Security Interest Absolute. All rights of Secured
Party and security interests hereunder and all Secured Obligations shall be
absolute and unconditional, irrespective of:
(i) any lack of validity or enforceability of the Notes,
this Agreement or any other Security Instrument or any other agreement
or instrument relating thereto;
(ii) any change in the time, manner, or place or payment
of, or in any other term of, all or any of the Secured Obligations or
any other amendment or waiver of or any consent to any departure from
the Notes, this Agreement or any other Security Instrument; or
(iii) any exchange, release or non-perfection of any other
collateral, or any release, amendment or waiver of or consent to
departure from any guaranty, for all or any of the Secured
Obligations.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 3.1 Debtor's Representations and Warranties. Debtor
hereby represents and warrants to Secured Party that:
(a) Debtor is a corporation duly organized and
validly existing under the laws of the State of its incorporation and
has all requisite corporate power, authority and legal right to own
its properties, including without limitation the Collateral, to
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conduct its business as is now being conducted and to execute, deliver
and perform its obligations under the Notes, this Agreement, each
other Security Instrument to which it is a party and each other
document or agreement related to the Collateral to which it is a
party. Debtor is fully qualified to do business and is in good
standing in each jurisdiction in which the failure to be in good
standing would have a material adverse effect on the business or
operations of Debtor.
(b) The execution, delivery and performance by Debtor of
the Notes, this Agreement and each other Security Instrument to which
it is a party are within Debtor's corporate powers, have been duly
authorized by all requisite corporate action, do not contravene
Debtor's charter or by-laws or any law, governmental rule or
regulation, or any order, writ, injunction, decree, determination or
award currently in effect applicable to, or any contractual
restriction binding on or affecting, Debtor or any of its properties,
including without limitation the Collateral, and do not result in or
require the creation of any Lien, security interest, right of
acceleration, charge or encumbrance (other than pursuant to this
Agreement) upon or with respect to any of its properties.
(c) No authorization or approval or other action by, and
no notice to or filing (other than the filings referred to in
subparagraph (f) below) with, any governmental authority or regulatory
body, shareholders or any other Person is required for the due
execution, delivery and performance by Debtor of this Agreement or any
other Security Instrument to which it is a party.
(d) The Notes, this Agreement and each other Security
Instrument to which Debtor is a party are the legal, valid and binding
obligations of Debtor, enforceable against Debtor in accordance with
their respective terms, subject, in the case of enforceability, to
applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of affecting creditors' rights generally and to the
application of general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at
law).
(e) The proceeds of the Loans will he used only to
finance the purchase by Debtor of the Equipment; Debtor owns good and
marketable title to the Equipment; the Collateral is free and clear of
all Liens (except for Permitted Encumbrances in favor of Secured
Party); and the Equipment is in good condition and ready for
operation. The Equipment is and will retain its character as personal
property, and neither Debtor, Guarantor, or any Affiliate or
Subsidiary of either Debtor or Guarantor shall affix or attach any
item of Equipment in any manner so as to alter the character of the
Equipment as personal property subject to the UCC.
(f) The filing of Uniform Commercial Code financing
statements in the office of the Secretary of State of the State of
Texas will create a valid perfected first priority security interest
in the Collateral, securing the payment of the Secured Obligations,
and all filings and other actions necessary or desirable to perfect
and protect such security
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interests will have been taken. No Person other than Secured Party
holds any security interest affecting the Collateral. No effective
Security Instrument or other instrument similar in effect covering all
or any part of the Collateral is on file in any recording office,
except such as may have been filed in favor of Secured Party relating
to this Agreement.
(g) Debtor's chief executive office is located in ▇▇▇▇▇▇
County, Houston, Texas. The Debtor has not used any trade names or
other names, except for "Eagle Geophysical."
(h) Contemporaneously with the execution and delivery of
this Agreement, Debtor is delivering to Secured Party evidence of
insurance satisfying the requirements of Section 4.1 hereof.
(i) Debtor is not currently insolvent, as defined in 11
U.S.C. 101(32) nor will it be rendered insolvent by virtue of entering
into the Notes, this Agreement or any other Security Instrument to
which it is a party or carrying out any of the transactions
contemplated hereby or thereby.
(j) Each financial statement of Guarantor which has been
furnished to Secured Party fairly presents the financial condition of
Guarantor as of the date of such financial statement. There has been
no material adverse change in Guarantor's financial condition since
the date of the most current financial statement delivered to Secured
Party.
(k) There is no pending, or to the Debtor's knowledge,
threatened, action or Proceeding affecting Debtor, Guarantor or any of
their properties before any court, governmental agency or arbitrator
which may materially and adversely affect the condition (financial or
otherwise) or operations of Debtor, Guarantor or any of their
properties or which purports to affect the validity or enforceability
of the Notes, this Agreement or any other Security Instrument to which
Debtor is a party.
(l) No Default or Event of Default has occurred and is
continuing.
(m) All sales, transfer, use, documentation or similar
taxes, fees or other charges due and payable prior to or as of the
date hereof have been paid to the extent such are in connection with
the sale to and purchase by Debtor of the Equipment.
(n) Debtor is not a party to, nor bound by, any contract,
agreement or instrument that would conflict with this Agreement, the
Notes or any other contracts, agreements or instruments executed in
connection with the transactions contemplated by this Agreement.
(o) Debtor has agreed, and hereby acknowledges, to accept
service of process at its address set forth in Section 8.1 hereof in
person or by registered or certified mail
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return receipt requested, postage prepaid, in connection with any
Proceeding initiated by Secured Party in any of the courts referenced
in Section 8.11 hereof.
(p) The Debtor has no Subsidiaries, except for African
Geophysical, Inc., a corporation organized and existing under the laws
of the Cayman Islands.
(q) Debtor has not incurred any accumulated unfunded
deficiency within the meaning of the Employee Retirement Income
Security Act of 1974, as amended from time to time ("ERISA") nor has
Debtor incurred any material liability to the Pension Benefit Guaranty
Corporation ("PBGC") established under such Act (or any successor
thereto under such Act) in connection with any Plan. Debtor and its
Affiliates are in compliance in all material respects with those
provisions of ERISA and the regulations and public interpretations
thereunder which are applicable to Debtor and its Affiliates, except
for such noncompliance as would not have a material adverse effect on
the financial condition of Debtor and its Affiliates, taken as a
whole.
(r) Debtor has filed all income tax returns required to
be filed prior to the date hereof with the various governmental
entities having taxing authority with respect to Debtor.
(s) Debtor (i) is not an "investment company" as such
term is defined in, or otherwise subject to regulations under, the
Investment Company Act of 1940 and (ii) is not a "holding company" as
that term is defined in, and is not otherwise subject to regulations
under, the Public Utility Holding Company Act of 1935.
(t) Debtor has not sold, extended any offer to sell nor
accepted any offer to purchase regarding any of Debtor's interest in
the Collateral or with respect to the transactions described in the
Security Instruments or the Notes.
(u) Debtor has delivered true and accurate copies of the
Bills of Sale executed by Seller with respect to the transfer of the
Equipment to Debtor.
SECTION 3.2 Affirmative Covenants. Until all the Secured
Obligations shall have been fully paid and satisfied, Debtor covenants and
agrees that it shall, unless Secured Party shall have otherwise consented in
writing:
(a) promptly pay the principal of, interest on, and any
other amounts due under the Notes as and when the same become due,
whether at maturity, by acceleration or otherwise;
(b) (i) duly, punctually and faithfully perform its
obligations under the Notes, this Agreement and each other Security
Instrument to which it is a party; (ii) maintain the Liens and
security interests created by this Agreement and each other Security
Instrument to which it is a party as valid and perfected Liens on and
security interests in all of the
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Collateral, prior in right to any other Lien, security interest, claim
or other encumbrance; (iii) warrant and defend its interest in and to
the Collateral against the claims and demands of all Persons; and (iv)
defend, at Debtor's cost, any action, claim or Proceeding affecting
the Collateral;
(c) use the proceeds of the Loans only to finance the
purchase by Debtor of the Equipment and maintain good and marketable
title to the Equipment, free and clear of any Liens, security
interests, charges or encumbrances except for the security interest
created by this Agreement and Permitted Encumbrances;
(d) notify Secured Party at least thirty (30) days prior
to the changing of the chief executive office of the Debtor from the
location specified in Section 3.1(g);
(e) at no expense to Secured Party, cause each item of
Equipment to be serviced, maintained and preserved in the same
condition, repair and working order as when new, ordinary wear and
tear excepted, and in accordance with any manufacturer's suggested or
approved maintenance program and warranty requirements, and shall, in
the case of any loss or damage to any item of Equipment, promptly
furnish to Secured Party a statement respecting any such loss or
damage and (unless an Event of Loss shall have occurred with respect
to an item of Equipment) as quickly as practicable after the
occurrence thereof make or cause to be made all repairs, replacements
and other improvements in connection therewith which are necessary or
desirable to keep each item of Equipment in proper working order;
(f) permit Secured Party to inspect the Equipment during
normal business hours upon reasonable prior notice to Debtor;
(g) from time to time execute and deliver all such
supplements and amendments hereto and to any other Security
Instrument, and all such financing statements, continuation
statements, instruments of further assurance and other instruments,
and take such other action, as the Secured Party requests and
reasonably deems necessary or advisable to: (i) further Grant,
maintain or preserve the Lien and security interest contemplated by
this Agreement or carry out more effectively the purposes hereof; (ii)
perfect or protect the validity of any Security Instrument or of any
Grant made or to be made by this Agreement; or (iii) enforce any
Security Instrument or preserve and defend title to the Collateral and
the rights of the Secured Party therein against the claims of all
Persons and parties;
(h) comply with all of its representations, warranties
and covenants set forth in this Agreement, in the Notes and each
Security Instrument to which it is a party; and punctually perform and
observe all of its obligations and agreements contained in this
Agreement, in the Notes and each Security Instrument to which it is a
party;
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(i) promptly notify the Secured Party of any default by
any Person under any Security Instrument;
(j) remain a duly organized and validly existing
corporation under the laws of the state of its incorporation and
remain duly qualified to do business and in good standing in each
jurisdiction in which the failure to be in good standing would have a
material adverse effect on the business or operations of Debtor;
(k) comply in all material respects with all applicable
laws, rules, regulations and orders; and preserve and maintain all
federal, state and local licenses, privileges, franchises,
certificates and other permits necessary for the operation of its
business and the operation of each item of Equipment;
(l) pay or cause to be paid promptly when due (i)
(subject to the right of Debtor, in accordance with the provisions of
this Agreement to obtain extensions of the date on which such taxes
are due) all property and other taxes (including without limitation
income, sales, use, franchise and gross receipts taxes) and
governmental charges or levies which are at any time or from time to
time levied upon or assessed against it or any item of Equipment or
are otherwise associated with the ownership, use or operation of any
item of Equipment (except such taxes levied on the net income of
Secured Party) and (ii) all claims (including without limitation
claims for labor, materials and supplies) against any item of
Equipment; provided, that Debtor may contest any such tax or claim by
appropriate Proceedings so long as such Proceedings shall suspend the
collection thereof, no part of the Collateral would be subject to
sale, forfeiture or diminution during the pendency of such
Proceedings, Debtor shall have furnished such security as may be
required in the Proceedings or reasonably requested by Secured Party,
Debtor conducts such contests in good faith and with due diligence,
and promptly after the final determination of each such contest,
Debtor pays all amounts which shall be determined to be payable in
respect thereof;
(m) within 120 days after the end of each fiscal year
furnish to the Secured Party unaudited year end financial reports of
the Debtor including without limitation (i) a balance sheet and (ii)
statements of income and retained earnings, all prepared in accordance
with generally accepted accounting principles consistently applied and
certified by the president, chief financial officer or any vice
president of Debtor who prepared such financial statements as being
true and accurate and fairly representing the financial condition of
Debtor;
(n) promptly report to Secured Party the commencement of
any Proceeding against Debtor if such litigation reasonably would be
expected to, in the event of an unfavorable outcome, cause an Event of
Default, have a material adverse effect on Debtor's financial
condition or operations, affect the validity or enforceability of the
Notes, this Agreement or any of the Security Instruments or affect
priority or enforceability of Secured Party's security interest in any
of the Collateral;
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(o) promptly notify Secured Party in writing if a Default
or an Event of Default has occurred;
(p) upon the replacement of an item of Equipment with
Replacement Equipment, Debtor, at its own expense, will promptly (i)
cause a supplement hereto, in form and substance satisfactory to
Secured Party, subjecting such Replacement Equipment to this
Agreement, to be duly executed by Debtor, (ii) furnish Secured Party
with such evidence of Debtor's title to such Replacement Equipment, of
the condition of such Replacement Equipment, and of compliance with
the insurance provisions hereof with respect to such Replacement
Equipment and (iii) take such other action as Secured Party may
request in order that such Replacement Equipment be duly and properly
titled in Debtor and subject to this Agreement to the same extent as
the item of Equipment replaced thereby;
(q) (i) at all times, make prompt payment of all
contributions required under its Plans and required to meet the
minimum funding standard set forth in ERISA with respect to its Plans;
(ii) notify Secured Party immediately of any fact, including, but not
limited to, any Reportable Event (as defined in ERISA) arising in
connection with any of its Plans, which might constitute grounds for
termination thereof by the PBGC or for the appointment by the
appropriate United States District Court of a trustee to administer
such Plan, together with a statement, if requested by the Secured
Party, as to the reason therefor and the action, if any, proposed to
be taken with respect therefor; and (iii) furnish to Secured Party
upon its request, such additional information concerning any of its
Plans as may be reasonably requested;
(r) Debtor shall pay, and save Secured Party harmless
against, any and all losses, judgments, decrees and costs (including,
without limitation, all reasonable attorneys' fees and expenses) in
connection with any Permitted Contest and shall promptly after the
final settlement, compromise or determination (including any appeals)
of such contest, fully pay and discharge the amounts which shall be
levied, assessed, charged or imposed or be determined to be payable
therein or in connection therewith, together with all penalties,
fines, interest, costs and expenses thereof or in connection
therewith, and perform all acts, the performance of which shall be
ordered or decreed as a result thereof.
SECTION 3.3 Negative Covenants. Until the Secured Obligations
shall have been fully paid and satisfied, Debtor shall not, without the prior
written consent of Secured Party:
(a) (i) sell, lease, assign, transfer, convey, Grant an
interest in, exchange or otherwise dispose of any of the Collateral or
any part thereof or (ii) cause or permit any subleasing of any of the
Equipment (except that Debtor may lease any or all items of Equipment to
a Permitted Lessee pursuant to a Permitted Lease);
(b) create or suffer to exist any Lien affecting the
Collateral or any part thereof, other than in favor of Secured Party or
other Permitted Encumbrances;
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(c) use the Equipment for any unlawful purpose;
(d) dissolve, wind up or liquidate or seek or permit the
dissolution or liquidation of Debtor in whole or in part;
(e) [intentionally omitted];
(f) as against Secured Party, claim any credit on, or make
any deduction from, the principal or interest payable on the Notes,
whether by reason of the payment of any taxes levied or assessed upon
any of the Collateral, or otherwise;
(g) take or permit any action which would result in an
Event of Default;
(h) [intentionally omitted];
(i) [intentionally omitted];
(j) enter into any new line of business or operation not
currently in existence with respect to the Debtor or materially alter
its existing operations;
(k) consolidate with or merge into any other corporation
or sell, assign, convey, transfer or lease substantially all of its
assets as an entirety to any Person unless:
(i) Debtor is the surviving entity of any such
consolidation or merger; or
(ii) (A) the corporation formed by such
consolidation or into which Debtor is merged, or the Person
which acquires by conveyance, transfer or lease of
substantially all of the assets of Debtor as an entirety,
shall be a solvent corporation organized and existing under
the laws of the United States or any state thereof or the
District of Columbia and shall execute and deliver to Secured
Party an agreement containing an effective assumption by such
successor, transferee or lessee corporation of the due and
punctual performance and observance of each covenant and
condition of this Agreement;
(B) immediately prior to and after
giving effect to such transaction, no Default or Event
of Default shall have occurred and be continuing;
(C) Debtor shall have delivered to
Secured Party a certificate signed by an officer of
Debtor and an opinion of Debtor's counsel satisfactory
in form and substance to Secured Party stating that
such consolidation, merger, conveyance, transfer or
lease and the assumption agreement mentioned in clause
3.3(k)(ii)(A) above comply with the
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requirements of this Section 3.3(k) and that all
conditions precedent herein provided for relating to
such transaction have been complied with.
Upon any consolidation or merger in which Debtor is not the surviving
corporation, or any conveyance, transfer or lease of substantially all the
assets of Debtor as an entirety in accordance with this Section 3.3(k), the
successor corporation formed by such consolidation or into which Debtor is
merged or to which such conveyance, transfer or lease is made (x) shall succeed
to, and be substituted for (but without release of Debtor from any of its
obligations hereunder) and (y) may exercise every right and power of, Debtor
under this Agreement with the same effect as if such successor corporation had
been named as a Debtor herein.
(1) attach or affix any item of Equipment in any manner so
as to alter the character of the Equipment as personal property subject
to the UCC.
ARTICLE IV
INSURANCE, TRANSFER, CONDEMNATION AND EVENT OF LOSS
SECTION 4.1 Insurance.
(a) Property and Liability Insurance. So long as this
Agreement is in effect, Debtor shall maintain and keep in force, or
cause to be maintained and kept in force, without cost or expense to
Secured Party, with respect to all items of Equipment prior to the
expiration or earlier termination of this Agreement (i) all-risk
property damage insurance in an amount not less than the aggregate
Termination Value for all items of Equipment of such type as shall be
satisfactory to Secured Party and (ii) comprehensive general public
liability insurance, including blanket contractual and personal injury
insurance, covering any risks which Secured Party or Debtor might incur
by reason of the use or operation of the Equipment in or over any area,
in an amount not less than $6,000,000 per occurrence. Such insurance
policy or policies referenced to in clause (i) of the preceding sentence
will name Secured Party as a loss payee to the extent of its interest;
provided, that upon verification by Secured Party that all amounts owing
to Secured Party under the Agreement, the Notes or any other Security
Instrument have been paid in full, then Secured Party shall remit all
remaining property damage insurance proceeds, respecting any item of
Equipment, to the extent such proceeds are controlled by Secured Party,
to Debtor. Such insurance policy or policies referenced to in clause
(ii) of the preceding sentence will name Secured Party as an additional
insured. Each of the policies required by this Section 4.1 will provide
that (A) the same may not be invalidated against Secured Party by reason
of (1) any violation of a condition or breach of warranty of the
policies or the application therefor by any Person excepting Secured
Party, (2) the use of any item of Equipment for purposes not permitted
by such policies any Person excepting Secured Party, (3) any foreclosure
proceeding or notice of sale regarding any item of Equipment or (4) the
title or beneficial ownership of any item of Equipment being held by a
party other than Debtor; (B) the policies may be canceled or materially
amended by
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the insurer only after thirty (30) days' prior written notice to Secured
Party; (C) the interests of Secured Party in such insurance policies are
assignable and (D) such insurance policies shall be primary insurance.
Each of the policies required by this Section 4.1 shall otherwise be
reasonably satisfactory to Secured Party. The policies of insurance
required under this Section shall be valid and enforceable policies
issued by insurers of recognized responsibility acceptable to Secured
Party. On or before the date hereof, and thereafter at intervals of not
more than twelve months, Debtor will furnish or cause to be furnished to
Secured Party a certificate or other evidence satisfactory to Secured
Party signed by an independent insurance broker certifying to Secured
Party's satisfaction that Debtor has insurance in place with respect to
all items of Equipment which complies with the insurance requirements of
this Agreement. If Debtor shall fail to cause the insurance required
under this Section 4.1 to be carried and maintained, Secured Party may,
but shall have no obligation to, provide such insurance and Debtor shall
reimburse Secured Party upon demand for the cost thereof as a
supplemental payment hereunder in addition to other amounts owing with
respect to the Notes or this Agreement.
SECTION 4.2 Transfer of Collateral. Except as otherwise expressly
provided by the provisions of this Loan and Security Agreement, Debtor will not
(prior to the satisfaction of all Obligations) lease, Grant or otherwise
transfer the Collateral or any part thereof or any interest therein to any
party other than Secured Party without Secured Party's prior written consent
and any and all such transfers shall be made under and subject to Secured
Party's security interest in such Collateral hereunder. Prior to or
simultaneously with any such transfer, the transferee shall accept, agree to
and execute an agreement assuming Debtor's Obligations to Secured Party, in
form and substance satisfactory to Secured Party.
SECTION 4.3 Condemnation. Immediately upon obtaining knowledge
thereof, Debtor shall notify Secured Party of any condemnation or other eminent
domain Proceedings with respect to any item of Equipment. Secured Party may
participate in any such Proceedings, and Debtor shall provide Secured Party
with all instruments required by it to permit such participation upon obtaining
actual knowledge thereof. Debtor shall pay all reasonable fees and expenses
incurred by Secured Party in connection with Secured Party's participation in
any such Proceedings. All proceeds arising from any such eminent domain
Proceedings shall be paid to and applied by the Secured Party as specified in
Section 5.3 hereof.
SECTION 4.4 Certain Events of Loss. Upon the occurrence of an
Event of Loss with respect to any item of Equipment, Debtor shall pay Secured
Party within thirty (30) days after receipt of insurance proceeds after the
occurrence of such Event of Loss (but in no event shall such period extend 120
days beyond the date of the occurrence of such Event of Loss) or, if such day
is not a Business Day, on the next occurring Business Day (the "Event of Loss
Payment Date") an amount equal to the sum of (a) the Termination Value
(computed as of the Installment Payment Date immediately preceding the Event of
Loss Payment Date) for the items of Equipment then subject to the Event of
Loss, plus (b) all accrued but unpaid interest, plus (c) any Break-Funding
Costs with respect to the items of Equipment then subject to the Event of Loss,
plus (d) all other obligations owing hereunder on the Event of Loss Payment
Date. Upon
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payment of the amounts set forth in (a)-(d) above, Secured Party shall release
its Lien on the items of Equipment then subject to the Event of Loss.
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
SECTION 5.1 Events of Default. Any of the following occurrences
or acts shall constitute an event of default under this Agreement
(individually, an "Event of Default"):
(a) Debtor shall fail to pay any principal of, or interest
on, the Notes or any other indebtedness of Debtor to Secured Party, now
or hereafter existing, within five (5) Business Days from the date the
same shall be due and payable, whether at maturity, by acceleration or
otherwise; or
(b) Except as specified in Section 5.1(a), Debtor shall
default in the payment of any costs or expenses incurred by Secured
Party in connection herewith or any other amounts hereunder or under the
Notes within ten (10) Business Days from the date on which Secured Party
notifies Debtor of such default; or
(c) Debtor shall fail to observe the terms and covenants
of Sections 3.2(b)(ii), 3.2(c), 3.2(l), 3.3(a)-(1) or 4.1; or
(d) Except as otherwise specified in Sections 5.1(a)-(c),
Debtor shall fail to perform or observe any other term, covenant or
agreement contained in the Notes, this Agreement or any other Security
Instrument and such failure shall remain unremedied for a period of
thirty (30) days from either the date Debtor first knows of such failure
or the date on which Secured Party notifies Debtor of such failure; or
(e) Any representation or warranty made by Debtor in the
Notes, this Agreement, any other Security Instrument or in any
certificate or other document delivered pursuant hereto or thereto shall
prove to have been incorrect or misleading in any material respect when
made; or
(f) Debtor shall admit in writing its inability to pay its
debts, or shall make a general assignment for the benefit of creditors;
or any Proceeding shall be instituted by or against Debtor seeking to
adjudicate it bankrupt or insolvent, or seeking reorganization,
liquidation, arrangement, adjustment or composition of it or its debt
under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking appointment of a receiver, custodian,
trustee, or other similar official for it or for any substantial part of
its property, and, in the case of any such Proceeding instituted against
Debtor, it shall remain undismissed for a period of sixty (60) days; or
Debtor shall take any action to authorize any of the actions set forth
in this subsection (f); or
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(g) This Agreement shall, for any reason, except to the
extent permitted by the terms hereof, cease to create a valid first
priority Lien on and perfected first priority security interest in any
of the Collateral purported to be covered hereby; or
(h) Any provision of the Notes, this Agreement or the
other Security Instruments shall cease to be valid and binding on
Debtor, as a signatory thereto, or Debtor shall so state in writing; or
Secured Party shall be deprived of any of the benefits of the Note, this
Agreement or any other Security Instrument for any reason whatsoever; or
(i) For any reason whatsoever, Debtor is not entitled to
or does not possess the property rights or other rights regarding the
Collateral which have been assigned or transferred to Secured Party; or
(j) Debtor shall dissolve or any action shall be taken by
Debtor to wind up or liquidate Debtor's business, affairs or property or
assets or Debtor shall announce its intention to do so without Secured
Party's prior written consent; or
(k) Any sale, transfer, conveyance, abandonment,
condemnation, partition or change in ownership of any item or items of
Equipment in excess of $50,000, or any portion thereof shall occur,
whether in one transaction or a series of transactions without Secured
Party's prior written consent; or
(l) An attachment or other Lien shall be filed or levied
against a substantial part of the property of Debtor (or any Affiliate
of Debtor) and such judgment shall continue unstayed and in effect, or
such attachment or Lien shall continue undischarged or unbonded, for a
period of sixty (60) days; or
(m) Guarantor shall fail to make a payment under the
Guaranty within five (5) Business Days from the date such payment is
due; or
(n) Except as specified in Section 5.1(m), Guarantor shall
fail to perform or observe any other term, covenant or agreement
contained in the Guaranty and such failure shall remain unremedied for a
period of thirty (30) days from either the date Guarantor first knows of
such failure or the date on which Secured Party notifies Guarantor of
such failure; or
(o) Any representation or warranty made by Guarantor in
the Guaranty or in any certificate or other document delivered pursuant
thereto shall prove to have been incorrect or misleading in any material
respect when made; or
(p) Guarantor shall admit in writing its inability to pay
its debts, or shall make a general assignment for the benefit of
creditors; or any Proceeding shall be instituted by or against Guarantor
seeking to adjudicate it bankrupt or insolvent, or seeking
reorganization, liquidation, arrangement, adjustment or composition of
its finances or debt
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under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking appointment of a receiver, custodian,
trustee, or other similar official for its finances or for any
substantial part of its property, and, in the case of any such
Proceeding instituted against Guarantor, it shall remain undismissed for
a period of sixty (60) days; or Guarantor shall take any action to
authorize any of the actions set forth in this subsection (p); or
(q) Guarantor (or any Affiliate of Guarantor) shall be in
default (i) under any lease, loan agreement or other agreement,
instrument or document respecting any such obligation of Guarantor (or
any Affiliate of Guarantor) in excess of $10,000,000, now or hereafter
entered into between Guarantor (or any Affiliate of Guarantor) and
Secured Party, or between Guarantor (or any Affiliate of Guarantor) and
any parent, subsidiary or affiliate of Secured Party, and such default
shall have been declared by the party entitled to declare the same, (ii)
under any promissory note, now or hereafter executed by Guarantor (or
any Affiliate of Guarantor) and delivered to any party referred to in
clause (i) above evidencing a loan made by any such party to Guarantor
(or any Affiliate of Guarantor) or (iii) in the payment of any single
amount due by Guarantor (or any Affiliate of Guarantor) to any Person
(other than Secured Party, or any parent, subsidiary or affiliate of
Secured Party) in excess of $10,000,000 (excluding any such obligation
which is being contested in good faith by Guarantor (or any Affiliate of
Guarantor) by appropriate proceedings, and the liability for which has
not been reduced to judgment) relating to the payment of borrowed money
or the payment of rent or hire under any lease agreement and such
default shall have continued for more than thirty (30) days after the
date Guarantor (or any Affiliate of Guarantor) obtained knowledge or
received notice thereof; or an attachment or other Lien shall be filed
or levied against a substantial part of the property of Guarantor or
Debtor and such judgment shall continue unstayed and in effect, or such
attachment or Lien shall continue undischarged or unbonded, for a period
of sixty (60) days; or
(r) Any provision of the Guaranty shall cease to be valid
and binding on Guarantor, as a signatory thereto, or Guarantor shall so
state in writing; or Secured Party shall be deprived of any of the
benefits of the Guaranty for any reason whatsoever; or
(s) Any action shall be taken by Guarantor to wind up or
liquidate Guarantor's business, affairs or property or assets or
Guarantor shall announce his intention to do so without Secured Party's
prior written consent.
SECTION 5.2 Remedies. If any Event of Default shall have occurred
and be continuing:
(a) the Secured Party may do one or more of the following:
(i) declare the Notes and all interest thereon
and all other Secured Obligations to be forthwith due and
payable, whereupon the Notes, all such interest and all
Secured Obligations shall become and be forthwith due and
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payable, without presentation, demand, protest or further
notice of any kind, all of which are hereby expressly waived
by Debtor;
(ii) exercise, in respect of the Collateral, in
addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a
secured party on default under the UCC and/or other applicable
law and also (A) require Debtor to, and Debtor hereby agrees
that it will at its expense and upon the request of Secured
Party forthwith, assemble all or part of the Collateral as
directed by Secured Party and make it available to Secured
Party at a place to be designated by Secured Party and (B)
without notice except as specified below, sell the Collateral
or any part thereof in one or more parcels at public or
private sale, at any of Secured Party's offices or elsewhere,
for cash, on credit or for future delivery, and upon such
other terms as Secured Party may deem commercially reasonable.
Debtor agrees that, to the extent notice of sale shall be
required by law, at least fifteen (15) days' notice to Debtor
of the time and place of any public sale or the time after
which any private sale is to be made shall constitute
reasonable notification. Secured Party shall not be obligated
to make any sale of Collateral regardless of notice of sale
having been given. Secured Party may adjourn any public or
private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so
adjourned;
(iii) to the extent permitted by applicable law,
bring suit at law, in equity or through other appropriate
Proceedings, whether for the specific performance of any
covenant or agreement contained in this Agreement or any of
the other Security Instruments, for an injunction against a
violation of any of the terms hereof or thereof, in aid of the
exercise of any power Granted hereby or thereby, or by law, to
recover judgment for any and all amounts due on the Notes,
this Agreement, any of the other Security Instruments or
otherwise, including, without limitation, any deficiency
remaining after foreclosure hereunder;
(iv) exclude Debtor from the Collateral and take
immediate possession of interest therein, and, at the expense
of Debtor, maintain, repair, alter, use, add to, improve,
insure, lease, operate and manage the Collateral in such
manner as Secured Party shall see fit; and
(v) take any other appropriate action to protect
and enforce the rights and remedies of Secured Party
hereunder, or under or in respect of any other Security
Instrument, or otherwise.
(b) Notwithstanding any provision to the contrary
contained in this Agreement, the Notes or any other Security Instrument,
the unpaid principal amount of the Notes and all accrued interest and
other sums payable under the Notes or under this Agreement shall be
forthwith payable upon a sale of any portion of the Collateral pursuant
to subsection
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(a)(ii) of this Section 5.2. All earnings, revenues, proceeds, rents,
issues, profits and income derived pursuant to subsection (a)(iv) of
this Section 5.2 (after deducting costs and expenses of operation and
other proper charges), all proceeds of any such sale and all other money
and property received or recovered by the Secured Party pursuant to this
Section 5.2 shall be held and applied as set forth in Section 5.3
hereof.
(c) The power to effect any sale under this Section 5.2
shall not be exhausted by any one or more sales as to any portion of the
Collateral remaining unsold, but shall continue unimpaired until all of
the Collateral shall have been sold or all of the Secured obligations
shall have been paid in full.
(d) Secured Party may bid for and acquire any portion of
the Collateral in connection with a sale thereof under this Section 5.2,
and may pay all or part of the purchase price by crediting against
amounts owing on the Secured Obligations, all or part of the net
proceeds of such sale after deducting the costs, charges and expenses
incurred by Secured Party in connection with such sale. The Notes need
not be produced in order to complete any such sale or effect such
credit. Secured Party may hold, lease, operate, manage or otherwise
deal with any property so acquired in any manner permitted by law.
(e) Secured Party shall execute and deliver an appropriate
instrument of conveyance transferring its interest in any portion of the
Collateral in connection with a sale thereof under this Section 5.2. In
addition, Debtor hereby irrevocably appoints Secured Party as its agent
and attorney-in-fact to transfer and convey its interest in any portion
of the Collateral in connection with such a sale thereof and to take all
action necessary to effect such sale. No purchaser or transferee at
such a sale shall be bound to ascertain Secured Party's authority,
inquire into the satisfaction of any condition precedent or see to the
application of any monies.
(f) Secured Party's right to seek and recover judgment on
the Secured Obligations shall not be affected by the seeking, obtaining
or application of any other relief under or with respect to this
Agreement. Neither the Lien of this Agreement nor any rights or
remedies of Secured Party shall be impaired by the recovery of any
judgment by Secured Party against Debtor or by the levy of an execution
under such judgment upon any portion of the Collateral.
(g) All rights and remedies from time to time conferred
upon or reserved to the Secured Party are cumulative, and none is
intended to be exclusive of another and shall be in addition to every
other right or remedy permitted by law. No delay or omission in
insisting upon the strict observance or performance of any provision of
this Agreement, or in exercising any right or remedy, shall be construed
as a waiver or relinquishment of such provision, nor shall it impair
such right or remedy. Every right and remedy may be exercised from time
to time and as often as deemed expedient in any combination and order
desired by Secured Party; provided, however, that Secured Party shall
exercise none
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of the remedies referenced in this Section 5.2 with respect to the
Collateral unless and until an Event of Default shall have occurred and
be continuing.
(h) Anything contained in this Agreement to the contrary
notwithstanding, until an Event of Default shall occur and be
continuing: (i) all rights, powers, privileges and other benefits of or
accruing to Debtor under the Assigned Agreements shall be exercisable
only by Debtor, without the consent or approval of the Secured Party,
(ii) Debtor shall retain full right to make all waivers and agreements,
to give and receive all notices and other instruments or communications,
and to take all action upon the occurrence of a default under any
Assigned Agreement, including the commencement, conduct and consummation
of legal, administrative or other proceedings, as shall be permitted
thereby or by law, and to do any and all other things which Debtor is or
may be entitled to do under any Assigned Agreement.
SECTION 5.3 Proceeds of Collateral. All cash proceeds received by
Secured Party in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral shall be held by Secured Party as
collateral for, and then promptly thereafter applied by Secured Party against,
all or any part of the amounts due under the Notes and the other Secured
Obligations in such order as Secured Party shall elect. Any surplus of such
cash or cash proceeds held by Secured Party and remaining after payment in full
of all the Secured Obligations shall be paid over to Debtor or to whomsoever
may be lawfully entitled to receive such surplus.
SECTION 5.4 Waiver of Rights; Receiver.
(a) Debtor consents to the appointment of one or more
receivers of all or part of the Collateral, upon the request of Secured
Party, if an Event of Default shall have occurred and be continuing.
(b) To the extent permitted by law, Debtor hereby waives
its right to seek, and hereby agrees that it will not seek or derive any
benefit or advantage from, any of the following whether now existing or
hereafter in effect:
(i) any stay, extension, moratorium or similar
law with respect to the Collateral or the Secured Obligations;
(ii) any law allowing for the redemption of any
portion of the Collateral after a sale thereof under Section
5.2 hereof; and
(iii) any right to have any portion of the
Collateral after an Event of Default shall have occurred.
Debtor covenants not to hinder, delay or impede the exercise of any
right or remedy of Secured Party under or in respect of this Agreement
and agrees to suffer and permit the exercise of each such remedy.
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ARTICLE VI
INDEMNITY AND EXPENSES
SECTION 6.1 General Indemnity. Debtor hereby assumes liability
for, and does hereby agree, whether or not any of the transactions contemplated
hereby, by the Security Instruments or the Notes are consummated, to indemnify,
protect, save, defend and hold harmless Secured Party and each of its officers,
directors, stockholders, successors, assigns, agents and servants (for purposes
of this Article VI, each of the foregoing may be referred to individually as a
"Beneficiary") from and against any and all obligations, fees, liabilities,
losses, damages, penalties, claims, demands, actions, suits, judgments, costs
and expenses, including, without limitation, reasonable legal fees and
expenses, of every kind and nature whatsoever imposed on, incurred by, or
asserted against any Beneficiary, in any way relating to or arising out of (a)
the manufacture, construction, ordering, purchase, acceptance or rejection,
financing, ownership, titling or retitling, registration or re-registration,
acceptance, leasing, subleasing, possession, use, operation, maintenance,
storage, removal, sale, delivery or other disposition of any item of Equipment,
including, without limitation, any of such as may arise from (i) loss or damage
to any property or death or injury to any person, (ii) patent or latent defects
in any item of Equipment (whether or not discoverable by Debtor or any
Beneficiary), (iii) any claims based on strict liability in tort or otherwise,
(iv) any claims based on patent, trademark or copyright infringement and (v)
any claims based on liability arising under the applicable environmental or
noise or pollution control law or regulation or (b) any failure on the part of
Debtor to perform or comply with any of the terms of the Security Instruments
or the Notes or (c) any Security Instrument or the Notes. Debtor shall not be
required to indemnify any Beneficiary for any claims resulting from acts which
would constitute the willful misconduct or gross negligence of such
Beneficiary. Debtor shall give Secured Party prompt notice of any occurrence,
event or condition known to Debtor as a consequence of which any Beneficiary is
or is reasonably likely to be entitled to indemnification hereunder. Debtor
shall promptly upon demand of any such Beneficiary reimburse such Beneficiary
for amounts expended by it in connection with any of the foregoing or pay such
amounts directly. Debtor shall be subrogated to a Beneficiary's rights in any
matter with respect to which Debtor has actually reimbursed such Beneficiary
for amounts expended by it or has actually paid such amounts directly pursuant
to this Section 6.1. In case any action, suit or Proceeding is brought against
any Beneficiary in connection with any claim indemnified against hereunder,
such Beneficiary will, after receipt of notice of the commencement of such
action, suit or Proceeding, notify Debtor thereof, enclosing a copy of all
papers served upon such Beneficiary. Debtor may, and upon any Beneficiary's
request will, at Debtor's expense, resist and defend such action, suit or
Proceeding, or cause the same to be resisted or defended by counsel selected by
Debtor and reasonably satisfactory to such Beneficiary and in the event of any
failure by Debtor to do so, Debtor shall pay all costs, fees and expenses
(including, without limitation, reasonable attorney's fees and expenses)
incurred by such Beneficiary in connection with such action, suit or
Proceeding.
SECTION 6.2 General Tax Indemnity. Debtor agrees to pay, and
indemnify and hold each Beneficiary harmless on an after-tax basis from, any
and all federal, state, local and foreign taxes,
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fees, withholdings, levies, imposts, duties, assessments and charges of any
kind and nature whatsoever, together with any penalties, fines or interest
therein (herein called "Taxes or Other Impositions") howsoever imposed, whether
levied or imposed upon or asserted against such Beneficiary, Debtor, any item
of Equipment or any part thereof, by any federal, state or local government or
taxing authority in the United States, or by any taxing authority or
governmental subdivision of a foreign country, upon or with respect to (a) any
item of Equipment (b) the manufacture, construction, ordering, purchase,
ownership, financing, delivery, leasing, re-leasing, possession, use,
maintenance, registration, titling, licensing, documentation, return, sale
(including, without limitation, sale to a third party) or other application or
disposition thereof, (c) the payments, receipts or earnings arising from any
item of Equipment or (d) the Bills of Sale, the Security Instruments or the
Notes, or upon the payments by Debtor under the Bills of Sale, the Notes or the
Security Instruments; provided, however, that the foregoing indemnity shall not
apply to any taxes or other impositions to the extent based upon or measured by
any Beneficiary's net income (unless such tax or other imposition is a Covered
Income Tax as hereinafter defined), and which are imposed or levied by any
federal, state or local taxing authority in the United States. For purposes
hereof, a "Covered Income Tax" shall mean an income tax (including, without
limitation, a tax imposed upon gross income or receipts) imposed on any
Beneficiary by any taxing authority (excluding the United States federal
government) in whose jurisdiction such Beneficiary (including for this purpose
all entities with which it is combined, integrated or consolidated in such
taxing authority's jurisdiction) would not engage in business, would not
maintain an office or other place of business and would not otherwise be
located therein, but for such Beneficiary's role in the transaction associated
with the financing of the Equipment, the operation of the Equipment in such
jurisdiction, the presence of Debtor or any use of the Equipment or the
transactions contemplated by the Bills of Sale, the Security Instruments or the
Notes.
Each Beneficiary shall furnish Debtor with copies of any requests for
information received by such Beneficiary from any taxing authority relating to
any taxes or other impositions with respect to which Debtor is required to
indemnify hereunder, and if a claim is made against such Beneficiary for any
such taxes or other impositions, with respect to which Debtor is liable for a
payment or indemnity hereunder, such Beneficiary shall give Debtor notice in
writing within (10) Business Days of such Beneficiary's receipt of such claim.
Debtor may, at its sole cost and expense, either in its own name or in the name
of any Beneficiary, contest the validity, applicability or amount of any such
tax or other imposition by means of a Permitted Contest. If any Beneficiary
shall obtain a refund of any amount paid by Debtor pursuant to this Section
6.2, such Beneficiary shall pay to Debtor the amount of such refund, together
with the amount of any interest actually received by such beneficiary on
account of such refund. Debtor will promptly notify Secured Party of all
reports or returns required to be made with respect to any tax or other
imposition with respect to which Debtor is required to indemnify hereunder and
will promptly provide each Beneficiary with all information necessary for the
making and timely filing of such reports or returns by such Beneficiary. If
any Beneficiary requests that any such reports or returns be prepared and filed
by Debtor, Debtor will prepare and file the same if permitted by applicable law
to do so, and if not so permitted, Debtor shall prepare such reports or returns
for signature by such Beneficiary, and shall forward the same, together with
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immediately available funds for payment of any tax or other imposition due, to
such Beneficiary, at least ten (10) Business Days in advance of the date such
payment is to be made. Upon written request, Debtor shall furnish each
Beneficiary with copies of all paid receipts or other appropriate evidence of
payment for all taxes or other impositions paid by Debtor pursuant to this
Section 6.2.
ARTICLE VII
FURTHER ASSURANCES; ATTORNEY-IN-FACT; DISCHARGE
SECTION 7.1 Further Assurances.
(a) Debtor agrees that from time to time, at the expense
of Debtor, Debtor will promptly execute and deliver all further
instruments and documents, and take all further action that Secured
Party may reasonably deem necessary or desirable, or that Secured Party
may otherwise reasonably request, in order to perfect and protect any
security interest Granted or purported to be Granted hereby or to enable
Secured Party to exercise and enforce its rights and remedies hereunder
with respect to any Collateral. Without limiting the generality of the
foregoing, Debtor will cooperate to execute and file financing or
continuation statements, or amendments hereto or thereto, and such other
instruments or notices, as may be necessary or reasonably desirable, or
as Secured Party may reasonably request, in order to perfect and
preserve the security interests Granted or purported to be Granted
hereby.
(b) A carbon, photographic or other reproduction of this
Agreement or any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement where permitted by
law.
(c) Debtor will furnish to Secured Party from time to time
statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as
Secured Party may reasonably request, all in reasonable detail.
SECTION 7.2 Secured Party Appointed Attorney-in-Fact. Debtor
hereby irrevocably appoints Secured Party to serve as Debtor's attorney-in-fact
(provided, the parties hereto agree that Secured Party may not act as Debtor's
attorney-in-fact until the occurrence and during the continuation of an Event
of Default), with full authority in the place and stead of Debtor and in the
name of Debtor, Secured Party or otherwise, from time to time in Secured
Party's discretion, to take any action and to execute any instrument, including
without limitation financing statements or amendments thereto, which Secured
Party may deem necessary or advisable to accomplish the purposes of this
Agreement, including without limitation:
(a) to obtain and adjust insurance required to be paid to
Secured Party hereunder;
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(b) to ask, demand, collect, ▇▇▇ for, recover, compound,
receive and give acquittance and receipts for monies due and to become
due under or in respect of any of the Collateral;
(c) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with subsections
(a) or (b) above; and
(d) to file any claims or take any action or institute any
Proceedings which Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights
of Secured Party with respect to any of the Collateral.
SECTION 7.3 Secured Party May Perform. If Debtor fails to perform
any agreement contained herein, Secured Party may itself perform, or cause
performance of, such agreement, and the expenses of Secured Party incurred in
connection therewith shall be payable by Debtor under Section 6.1.
SECTION 7.4 Secured Party's Duties. The powers conferred on
Secured Party hereunder are solely to protect its interest in the Collateral
and shall not impose any duty upon it to exercise any such powers. Secured
Party shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against other parties or any other rights
pertaining to any Collateral.
SECTION 7.5 Continuing Security Interest; Transfer of Note;
Termination. This Agreement shall: (a) create a continuing security interest
in the Collateral and shall remain in full force and effect until payment in
full of the Secured Obligations, be binding upon Debtor, its successors and
assigns and (b) inure to the benefit of Secured Party and its permitted
successors, transferees and assigns. Without limiting the generality of the
foregoing clause, Secured Party may assign or otherwise transfer all or any
part of Secured Party's interest in the Notes and/or the Security Instruments
to one or more persons or entities, and such other persons or entities shall
thereupon become vested with all the benefits in respect thereof Granted to
Secured Party herein. Upon the payment in full of the Secured Obligations, the
security interest Granted hereby shall terminate and all rights to the
Collateral shall revert to Debtor. Upon any such termination, Secured Party
will execute and deliver to Debtor such documents as Debtor shall reasonably
request to evidence such termination.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Notices. Except as expressly permitted herein to the
contrary, all notices and other communications provided for hereunder shall be
in writing (including communication by telecopier) and mailed (postage prepaid,
by registered or certified mail, return receipt requested), telecopied or hand
delivered:
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if to Secured Party, at:
NationsBanc Leasing Corporation of
North Carolina
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Manager of Corporate Lease
Administration
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or if to Debtor, at:
Seitel Geophysical, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or, as to each party, at such other address as shall be designated by such
party in a written notice to the other party. All such notices and
communications shall be effective (a) five (5) days after such have been
deposited in the mail or (b) immediately (i) after such have been telecopied to
the appropriate telecopy number and (ii) after such have been hand delivered to
the appropriate address.
SECTION 8.2 Risk of Loss. Debtor shall bear all risk of any loss
of or damage to the Collateral and in no event shall Secured Party be liable
for such loss or damage.
SECTION 8.3 Powers and Agencies. Whenever in this Agreement
Secured Party is Granted the power of attorney or is appointed the agent and
attorney-in-fact with respect to any Person, such Grant or appointment is
irrevocable and coupled with an interest. Secured Party shall have full power
of substitution and delegation in respect of all such Grants and appointment.
SECTION 8.4 Entire Agreement. The Notes, this Agreement and the
other Security Instruments embody the entire agreement between the parties and
supersede all prior agreements and understandings, if any, relating to the
subject matter hereof.
SECTION 8.5 Lawful Interest. No provision in the Notes, this
Agreement or any Security Instrument or other document in favor of Secured
Party shall require or permit the collection of interest in excess of the
maximum lawful rate which Debtor may contract for, stipulate or agree to pay as
determined by a court of competent jurisdiction over the holder of the Notes or
any such document. In determining whether or not the interest paid or payable
under any specific contingency exceeds such maximum lawful rate, Debtor and
Secured Party shall, to the full extent permitted by applicable law, prorate,
allocate and spread, in equal parts, the total amount of interest throughout
the entire contemplated term of the Notes or other document, as the case may
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be, so that the interest rate is uniform throughout the entire term of the
Notes or such document. If it is so determined that any interest in excess of
such maximum lawful rate is provided for, such excess shall be applied first to
any other amounts not constituting interest due or which may become due and
payable to Debtor under the Notes or any of such other documents, and the
balance, if any, shall be refunded to Debtor; provided, however, that in no
event shall Debtor be obligated to pay, and Secured Party hereby waives payment
of, the amount of interest to the extent it is in excess of the amount
permitted by applicable law.
SECTION 8.6 Survival; Severability. If any word, phrase,
sentence, paragraph, provision or section of this Agreement, the Notes or any
other Security Instrument shall be held, declared or pronounced void, voidable,
invalid, unenforceable or inoperative for any reason by any court of competent
jurisdiction, governmental authority or otherwise, such holding, declaration or
pronouncement shall not adversely affect any other word, phrase, sentence,
paragraph, provision or section of this Agreement, the Notes or any other
Security Instrument, which shall otherwise remain in full force and effect and
be enforced in accordance with their respective terms, and the effect of such
holding, declaration or pronouncement shall be limited to the territory or the
jurisdiction in which made. All agreements, covenants, representations,
warranties and conditions contained in this Agreement or made pursuant to the
provisions hereof shall survive the execution and delivery of this Agreement
until the Secured Obligations shall have been paid and performed in full. All
statements by Debtor contained in any certificate or other instrument delivered
pursuant to the provisions of this Agreement or any other Security Instrument
shall constitute the representations and warranties of Debtor.
SECTION 8.7 Binding Effect. This Agreement shall be binding upon
and inure to the benefit of Debtor and Secured Party and their respective
successors and assigns, except that Debtor shall not have the right to assign
its rights hereunder of any interest herein without the prior written consent
of Secured Party. Secured Party may assign all or any part of, or any interest
in, its rights and benefits hereunder, under the Notes and any Security
Instrument as permitted under Section 7.5 hereof, and to the extent of such
permitted assignment each such assignee shall have the same rights and benefits
against Debtor as it would have had if it were Secured Party hereunder.
SECTION 8.8 Amendment and Waiver. No amendment or waiver of any
provision of the Notes, this Agreement or any of the other Security
Instruments, or consent to any departure by Debtor therefrom, shall in any
event be effective unless the same shall be in writing and signed by Secured
Party and Debtor, and such waiver and consent shall be effective only in the
specific instance and for the specific purpose for which given. No failure on
the part of Secured Party to exercise, and no delay in exercising, any right
under the Notes, this Agreement or any of the other Security Instruments shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right under any such instrument or agreement preclude any other or further
exercise thereof or the exercise of any other right.
SECTION 8.9 Headings; Execution in Counterpart. The section and
article headings herein are for convenience of reference only, and shall not
limit or otherwise affect the meaning
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of any provision herein. This Agreement may be executed in counterparts, each
of which shall constitute an original, but all of which together shall
constitute one and the same Agreement.
SECTION 8.10 Transaction Costs. Debtor shall pay all reasonable
costs and out-of-pocket expenses of Secured Party incurred in connection with
preparation, negotiation, execution, modification and/or enforcement of the
Notes, this Agreement, the other Security Instruments including without
limitation (a) the reasonable legal fees and expenses of ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇,
PLLC, (b) all filing and registration costs, (c) all fees and disbursements
incurred by Secured Party in connection with the custody, preservation, use or
operation of, or the sale of, collection from, or other realization upon, any
of the Collateral, and (d) all fees and disbursements incurred by Secured Party
in connection with the failure by Debtor to perform or observe any of the
provisions hereof.
SECTION 8.11 APPLICABLE LAW; CONSENT TO JURISDICTION AND VENUE;
WAIVER OF JURY TRIAL. THIS AGREEMENT,THE NOTES AND THE OTHER SECURITY
INSTRUMENTS AND ALL MATTERS RELATING THERETO SHALL, EXCEPT TO THE EXTENT
OTHERWISE REQUIRED BY APPLICABLE LAW, BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES. DEBTOR HEREBY SUBMITS TO THE
JURISDICTION AND VENUE OF THE STATE AND FEDERAL COURTS OF MECKLENBURG COUNTY,
NORTH CAROLINA AND AGREES THAT SECURED PARTY MAY, AT ITS OPTION, ENFORCE ITS
RIGHTS HEREUNDER AND UNDER THE NOTES AND OTHER SECURITY INSTRUMENTS IN SUCH
COURTS. DEBTOR HEREBY IRREVOCABLY WAIVES THE DEFENSE OF AN INCONVENIENT FORUM
TO MAINTENANCE OF ANY ACTION OR PROCEEDING BY SECURED PARTY IN SUCH COURTS.
DEBTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
NOTES OR ANY OTHER SECURITY INSTRUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
SECTION 8.12 Break-Funding Costs. Upon any early termination of
this Agreement and/or any early prepayment of the Notes for any reason which is
not expressly permitted under the Notes, Debtor shall promptly pay Secured
Party (in addition to all other amounts due and owing hereunder) an amount
equal to the Break-Funding Costs incurred by Secured Party, as such are (a)
determined by Secured Party at such time in its reasonable discretion and (b)
specified in writing to Debtor.
SECTION 8.13 Intention of the Parties. It is the intention of
the parties to this Agreement that the Equipment be and remain personal
property, and at no time (so long as any of the Secured Obligations remain
outstanding) shall such Equipment be attached, affixed or otherwise become a
part of any vehicle or vessel. Further, each of the parties hereto agree that
it is their intent that the provisions of the UCC govern the creation and
perfection of a security interest in the Collateral.
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IN WITNESS WHEREOF, Debtor and Secured Party have caused this Agreement
to be executed by their respective officers thereunto duly authorized as of the
date first above written.
SEITEL GEOPHYSICAL, INC., as Debtor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
NATIONSBANC LEASING CORPORATION OF
NORTH CAROLINA, as Secured Party
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President
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SCHEDULE 1.3(a)
SECURED TERM NOTE A
DUE JULY 12, 2001
$5,902,372.00 July 12, 1996
FOR VALUE RECEIVED, the undersigned SEITEL GEOPHYSICAL, INC., a Delaware
corporation ("Debtor") HEREBY PROMISES TO PAY to the order of NATIONSBANC
LEASING CORPORATION OF NORTH CAROLINA, a North Carolina corporation ("Secured
Party"), the principal sum of FIVE MILLION NINE HUNDRED TWO THOUSAND THREE
HUNDRED AND SEVENTY-TWO DOLLARS ($5,902,372.00) (the "Original Amount")
pursuant to the terms and conditions of that certain Loan and Security
Agreement dated as the date hereof between the Debtor and the Secured Party, as
amended, modified or replaced from time to time (as so amended, modified or
replaced, the "Agreement" - all the terms, conditions, definitions and
covenants of such Agreement are expressly made a part hereof in the same manner
and with the same effect as if set forth herein at length, any holder of this
Secured Term Note A (the "Note") being entitled to the benefits and remedies
provided for in the Agreement).
The Bank has made a term loan to the Borrower as provided in Section
1.3(a) of the Loan Agreement. The outstanding principal balance hereof shall
be due and payable as provided in Section 1.3(a)(i) of the Agreement.
Notwithstanding the foregoing, the final payment made on this Note shall be an
amount sufficient to discharge in full the unpaid Original Amount and all
accrued and unpaid interest on, and any other amounts due under this Note and
under the Agreement.
This Note shall bear interest on the outstanding balance hereof, and
such interest shall be payable hereunder, as provided in Section 1.3(a)(i) and
(a)(ii) of the Agreement.
In the event the amounts owing under this Note shall be accelerated in
accordance with the terms of the Agreement, the amounts owing hereunder shall
become immediately due and payable without presentation, demand, protest or
notice of any kind, all of which are hereby expressly waived. Further, in the
event amounts owing hereunder are not paid when due (including any stated or
accelerated maturity), the Debtor agrees to pay promptly upon demand, in
addition to principal, interest and other amounts owing hereunder, all costs of
collection, including reasonable attorneys' fees.
All payments shall be payable, in lawful money of the United States and
in immediately available funds without setoff or counterclaim, to Secured Party
at its office at NationsBank Plaza, 101 South ▇▇▇▇▇ Street, NC1-002-38-20,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or such other address as the holder thereof
shall notify Debtor in writing.
In determining whether or not the interest paid or payable, under any
specific contingency, exceeds the maximum lawful rate permitted by law, Debtor
and Secured Party shall, to the full
37
extent permitted by applicable law, exclude voluntary prepayment and the
effects thereof and amortize, prorate, allocate and spread, in equal parts, the
total amount of interest throughout the entire contemplated term of this Note
so that the interest rate is uniform throughout the entire term of this Note.
If it is so determined that any interest in excess of such maximum lawful rate
is provided for, then such excess shall be applied first to any other amounts
not constituting interest due or which may become due under this Note or the
Agreement and the balance, if any, shall be refunded to Debtor; provided,
however, that in no event shall Debtor be obligated to pay, and Secured Party
hereby waives payment of, the amount of interest to the extent it is in excess
of the amount permitted by applicable law. No provision in this Note or the
Agreement shall require or permit the collection of interest in excess of the
maximum lawful rate.
This Note may be prepaid by the Debtor in accordance with Section 1.3(c)
of the Agreement only if all amounts owing with respect to this Note, Agreement
and the other Security Instruments are paid in full. Except as otherwise
provided for herein and in the Agreement, this Note shall not be subject to
prepayment.
THIS NOTE, THE AGREEMENT AND THE SECURITY INSTRUMENTS AND ALL MATTERS
RELATING THERETO SHALL, EXCEPT TO THE EXTENT OTHERWISE REQUIRED BY APPLICABLE
LAW, BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NORTH CAROLINA WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
DEBTOR HEREBY SUBMITS TO THE JURISDICTION AND VENUE OF THE STATE AND FEDERAL
COURTS OF NORTH CAROLINA AND AGREES THAT THE SECURED PARTY MAY, AT ITS OPTION,
ENFORCE ITS RIGHTS HEREUNDER AND UNDER THE AGREEMENT AND THE OTHER SECURITY
INSTRUMENTS IN SUCH COURTS. DEBTOR HEREBY IRREVOCABLY WAIVES THE DEFENSE OF AN
INCONVENIENT FORUM TO MAINTENANCE OF ANY ACTION OR PROCEEDING BY SECURED PARTY
IN SUCH COURTS. DEBTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS NOTE,
THE AGREEMENT OR ANY OTHER SECURITY INSTRUMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
IN WITNESS WHEREOF, the Debtor has caused this Note to be executed as of
the date appearing above.
SEITEL GEOPHYSICAL, INC.
By:
--------------------------------
Name (Printed):
--------------------
Title:
-----------------------------
38
SCHEDULE 1.3(b)
SECURED TERM NOTE B
DUE AUGUST 31, 1999
$1,361,839.13 July 12, 1996
FOR VALUE RECEIVED, the undersigned SEITEL GEOPHYSICAL, INC., a Delaware
corporation ("Debtor") HEREBY PROMISES TO PAY to the order of NATIONSBANC
LEASING CORPORATION OF NORTH CAROLINA, a North Carolina corporation ("Secured
Party"), the principal sum of ONE MILLION THREE HUNDRED SIXTY-ONE THOUSAND
EIGHT HUNDRED THIRTY-NINE AND 13/100 DOLLARS ($1,361,839.13) (the "Original
Amount") pursuant to the terms and conditions of that certain Loan and Security
Agreement dated as of the date hereof between the Debtor and the Secured Party,
as amended, modified or replaced from time to time (as so amended, modified or
replaced, the "Agreement" - all the terms, conditions, definitions and
covenants of such Agreement are expressly made a part hereof in the same manner
and with the same effect as if set forth herein at length, any holder of this
Secured Term Note B (the "Note") being entitled to the benefits and remedies
provided for in the Agreement).
The Bank has made a term loan to the Borrower as provided in Section
1.3(b) of the Loan Agreement. The outstanding principal balance hereof shall
be due and payable as provided in Section 1.3(b)(ii) of the Agreement.
Notwithstanding the foregoing, the final payment made on this Note shall be an
amount sufficient to discharge in full the unpaid Original Amount and all
accrued and unpaid interest on, and any other amounts due under this Note and
under the Agreement.
This Note shall bear interest on the outstanding balance hereof, and
such interest shall be payable hereunder, as provided in Section 1.3(b)(ii) and
(b)(iii) of the Agreement.
In the event the amounts owing under this Note shall be accelerated in
accordance with the terms of the Agreement, the amounts owing hereunder shall
become immediately due and payable without presentation, demand, protest or
notice of any kind, all of which are hereby expressly waived. Further, in the
event amounts owing hereunder are not paid when due (including any stated or
accelerated maturity), the Debtor agrees to pay promptly upon demand, in
addition to principal, interest and other amounts owing hereunder, all costs of
collection, including reasonable attorneys' fees.
All payments shall be payable, in lawful money of the United States and
in immediately available funds without setoff or counterclaim, to Secured Party
at its office at NationsBank Plaza, 101 South ▇▇▇▇▇ Street, NC1-002-38-20,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or such other address as the holder thereof
shall notify Debtor in writing.
39
In determining whether or not the interest paid or payable, under any
specific contingency, exceeds the maximum lawful rate permitted by law, Debtor
and Secured Party shall, to the full extent permitted by applicable law,
exclude voluntary prepayment and the effects thereof and amortize, prorate,
allocate and spread, in equal parts, the total amount of interest throughout
the entire contemplated term of this Note so that the interest rate is uniform
throughout the entire term of this Note. If it is so determined that any
interest in excess of such maximum lawful rate is provided for, then such
excess shall be applied first to any other amounts not constituting interest
due or which may become due under this Note or the Agreement and the balance,
if any, shall be refunded to Debtor; provided, however, that in no event shall
Debtor be obligated to pay, and Secured Party hereby waives payment of, the
amount of interest to the extent it is in excess of the amount permitted by
applicable law. No provision in this Note or the Agreement shall require or
permit the collection of interest in excess of the maximum lawful rate.
This Note may be prepaid by the Debtor in accordance with Section 1.3(c)
of the Agreement only if all amounts owing with respect to this Note, the
Agreement and the other Security Instruments are paid in full. Except as
otherwise provided for herein and in the Agreement, this Note shall not be
subject to prepayment.
THIS NOTE, THE AGREEMENT AND THE SECURITY INSTRUMENTS AND ALL MATTERS
RELATING THERETO SHALL, EXCEPT TO THE EXTENT OTHERWISE REQUIRED BY APPLICABLE
LAW, BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NORTH CAROLINA WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
DEBTOR HEREBY SUBMITS TO THE JURISDICTION AND VENUE OF THE STATE AND FEDERAL
COURTS OF NORTH CAROLINA AND AGREES THAT THE SECURED PARTY MAY, AT ITS OPTION,
ENFORCE ITS RIGHTS HEREUNDER AND UNDER THE AGREEMENT AND THE OTHER SECURITY
INSTRUMENTS IN SUCH COURTS. DEBTOR HEREBY IRREVOCABLY WAIVES THE DEFENSE OF AN
INCONVENIENT FORUM TO MAINTENANCE OF ANY ACTION OR PROCEEDING BY SECURED PARTY
IN SUCH COURTS. DEBTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS NOTE,
THE AGREEMENT OR ANY OTHER SECURITY INSTRUMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
40
IN WITNESS WHEREOF, the Debtor has caused this Note to be executed as of
the date appearing above.
SEITEL GEOPHYSICAL, INC.
By:
--------------------------------
Name (Printed):
--------------------
Title:
-----------------------------
41
SCHEDULE 1.3(b)(i)
NOTICE OF BORROWING
NationsBanc Leasing Corporation of
North Carolina
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Manager of Corporate Lease Administration
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Re: Notice of Borrowing under Loan and Security Agreement dated as of July
___, 1996 (the "Loan Agreement") between Seitel Geophysical, Inc.
("Debtor") and NationsBanc Leasing Corporation of North Carolina
("Secured Party")
Dear Sir:
The Debtor hereby requests an advance under the above-referenced Loan Agreement
in accordance with the following information:
1. Debtor:
-------------------------------------------
2. Date of Requested Advance:
------------------------
3. Amount of Requested Advance:
----------------------
4. ▇▇▇▇ of Sale Supporting Requested Advance: See Attached Rider
The Debtor hereby certifies that as of the date hereof no Default or Event of
Default currently exists under the Loan Agreement and no Default or Event of
Default shall exist as a result of the making of the Requested Advance.
Sincerely,
[DEBTOR]
