1
10.2
LOAN AND SECURITY AGREEMENT
between
EAGLE GEOPHYSICAL, INC.,
as Debtor,
and
NATIONSBANC LEASING CORPORATION OF NORTH CAROLINA,
as Secured Party
dated as of February 6, 1997
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TABLE OF CONTENTS
ARTICLE I DEFINED TERMS; CREDIT FACILITIES; CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 1.2 Other Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 1.3 Term Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 1.4 Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE II SECURITY INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.1 Grant of Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.2 Security for Secured Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.3 Security Interest Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.4 Debtor as Agent for Secured Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.1 Debtor's Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.2 Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.3 Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE IV INSURANCE, TRANSFER, CONDEMNATION AND EVENT OF LOSS . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.1 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.2 Transfer of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.3 Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 4.4 Certain Events of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE V EVENTS OF DEFAULT AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 5.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 5.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.3 Proceeds of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 5.4 Waiver of Rights; Receiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE VI INDEMNITY AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.1 General Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.2 General Tax Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE VII FURTHER ASSURANCES; ATTORNEY-IN-FACT; DISCHARGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 7.1 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 7.2 Secured Party Appointed Attorney-in-Fact . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.3 Secured Party May Perform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.4 Secured Party's Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.5 Continuing Security Interest; Transfer of Note; Termination . . . . . . . . . . . . . . . . . . 28
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 8.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 8.2 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 8.3 Powers and Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 8.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 8.5 Lawful Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 8.6 Survival; Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 8.7 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 8.8 Amendment and Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 8.9 Headings; Execution in Counterpart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 8.10 Transaction Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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SECTION 8.11 APPLICABLE LAW; CONSENT TO JURISDICTION AND VENUE; WAIVER OF JURY TRIAL . . . . . . . . . . . 31
SECTION 8.12 Break-Funding Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 8.13 Intention of the Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
EXHIBIT A - Equipment Description
Schedule 1.3 - Notice of Borrowing
Schedule 1.3(a) - Form of Secured Term Note A
Schedule 1.3(b) - Form of Secured Term Note B
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT dated as of February 6, 1997 (as
amended, modified, supplemented, restated and/or replaced from time to time,
the "Agreement") is between EAGLE GEOPHYSICAL, INC., a Delaware corporation
("Debtor"), and NATIONSBANC LEASING CORPORATION OF NORTH CAROLINA, a North
Carolina corporation ("Secured Party").
PRELIMINARY STATEMENTS:
(1) Debtor has requested that Secured Party make loans in the
aggregate principal amount of $7,563,920.18 to Debtor pursuant to the terms of
the Agreement as evidenced by promissory notes in such amount to finance
Debtor's acquisition of the Equipment (hereinafter defined).
(2) Secured Party has agreed to make the Loans to Debtor on the
condition, among other things, that Debtor shall have executed and delivered
the Notes (hereinafter defined) payable to Secured Party, this Agreement, any
required amendment or supplement hereto Granting (hereinafter defined) Secured
Party a first priority security interest in the Collateral (hereinafter
defined), related UCC-1 financing statements and other filings reasonably
deemed necessary or prudent by Secured Party to perfect such security interest.
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Debtor and Secured Party hereby agree as follows:
ARTICLE I
DEFINED TERMS; CREDIT FACILITIES; CONDITIONS PRECEDENT
SECTION 1.1 DEFINITIONS.
When used in this Agreement, the following capitalized terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Affiliate" means a Person (i) which directly or indirectly through
one or more intermediaries controls, or is controlled by, or is under common
control with, Debtor; (ii) which beneficially owns or holds 10% or more of any
class of the voting stock of Debtor, or (iii) of which 10% or more of the
voting stock is beneficially owned or held by Debtor or a Subsidiary.
"Amortization Rate" means (i) for Term Loan A, the interpolated
generic two year U.S. Treasury yield as quoted by the Dow Xxxxx/Telerate
Inc. system at approximately 11:00 a.m. (Charlotte, North Carolina time) five
(5) Business Days prior to the Term Loan A Draw Termination Date plus 1.48% and
(ii) for Term Loan B, the interpolated generic three year U.S. Treasury yield
as quoted by the Dow Xxxxx/Telerate Inc. system at approximately 11:00 a.m.
(Charlotte, North Carolina time) plus 1.56%, in each case expressed on a per
annum basis; or, if such data for any reason ceases to be available on the Dow
Xxxxx/Telerate Inc. system, the applicable U.S. Treasury yield shall be
determined from any publicly available source of similar market data
selected by Secured Party; provided, however, to the extent any such date on
which the U.S. Treasury yield is to be determined is not a Business Day, then
the applicable U.S. Treasury yield in effect on the immediately preceding
Business Day shall be the effective yield.
"Assigned Agreements" has the meaning set forth in Section 2.1 lb)
hereof.
"Beneficiary" has the meaning set forth in Section 6.1 hereof.
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"Bills of Sale" means each warranty xxxx of sale in favor of the
Debtor duly executed by the Seller of the Equipment or other evidence of title
transfer satisfactory to Secured Party.
"Break-Funding Costs" means, in the case of any voluntary prepayment
of all or any portion of the unamortized balance of the Loans, an amount
reasonably Secured Party as shall compensate Secured Party as a result of the
inability of Secured Party in its reasonable discretion to redeploy the amount
so prepaid at an interest rate equal to or greater than the interest rate
on the applicable Loan and for a term equal to the remaining average life of
the applicable Loan.
"Business Day" means any day other than a day on which banking
institutions in the states of North Carolina or Georgia are authorized or
required by law to close.
"Closing Date" means February 6, 1997.
"Collateral" shall have the meaning set forth in Section 2.1 hereof.
"Default" shall mean an event or occurrence which upon the giving of
notice and/or the of time shall constitute an Event of Default.
"Equipment" means all items of equipment described in Exhibit A
attached hereto, together with any replacement parts which may from time to
time be incorporated in such equipment and title to which shall have vested in
Debtor.
"Equipment Cost" means, with respect to any item of Equipment, an
amount equal to the sum of (a) the total cost paid by Debtor for such item of
Equipment plus b) all excise, sales and use taxes and registration fees paid by
Debtor on or with respect to the acquisition of such item of Equipment, both as
evidenced by invoices, appraisals and/or bills of sale in form and
substance reasonably satisfactory to Secured Party.
"ERISA" has the meaning set forth in Section 3.1 (t) hereof.
"Eurodollar Rate" for a particular day means the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Telerate Page 3750 (or any successor page) as the London interbank offered rate
for deposits in U.S. dollars at approximately 11:00 a.m. (London time) for a
period of one month an amount substantially equal to the requested Term Loan A
advance or the requested Term Loan B advance, as appropriate. If for any
reason such rate is not available, the term "Eurodollar Rate" shall mean the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page as the London interbank offered rate for
deposits in U.S. dollars at approximately 11:00 a.m. (London time) for a period
of one month and in an amount substantially equal to the requested Term Loan A
Advance or the requested Term Loan B advance, as appropriate; provided,
however, if more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates.
"Event of Default" has the meaning set forth in Section 5.1 hereof.
"Event of Loss" with respect to an item of Equipment means any of the
following events: (i) loss of any item of Equipment or of the use thereof due
to theft or disappearance prior to the expiration or termination of this
Agreement, or the non-existence of any item of Equipment at the expiration or
termination of this Agreement, (ii) destruction, damage beyond repair, or
rendition of any item of Equipment permanently unfit for normal use for any
reason whatsoever, (iii) any damage to any item of Equipment which results in
an insurance settlement with respect to such item of Equipment on the basis of
a total loss, or (iv) the condemnation, confiscation, seizure, or requisition
of use or title to any item of Equipment by any governmental authority under
the power of eminent domain or otherwise.
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"Event of Loss Payment Date" has the meaning set forth in Section 4.3
hereof.
"Grant" means to grant, bargain, sell, warrant, remise, release,
convey, assign, transfer, mortgage, pledge, deposit, set over, confirm or
create a security interest under the North Carolina UCC. A grant with respect
to any instrument, document or agreement shall include all rights, powers and
options (but none of the obligations) of the granting party thereunder,
including without limitation the right to generally do anything which the
granting party then is or thereafter may be entitled to do thereunder or with
respect thereto.
"Guarantor" means Seitel, Inc., a Delaware corporation.
"Guaranty" means the Guaranty Agreement dated as of the date hereof,
as such may be amended, modified, supplemented, restated and/or replaced from
time to time, executed by Guarantor for the benefit of Secured Party.
"Installment Payment Date" means the last day of each calendar month
with respect to Term Loan A and/or Term Loan B.
"Lien" means any lien, claim, charge, security interest, mortgage
and/or other encumbrance.
"Loans" means each of Term Loan A and Term Loan B.
"North Carolina UCC" or "UCC" means the North Carolina Uniform
Commercial Code, N.C. Gen. Stat. Chapter 25, Articles 1-11, as now in effect
and as hereafter amended from time to time.
"Notes" means each of Secured Term Note A and Secured Term Note B.
"Notice of Borrowing" means a notice of borrowing delivered pursuant
to Section 1.3(a) or 1.3(b) substantially in the form of Schedule 1.3 hereto.
"PBGC" has the meaning set forth in Section 3.1 (t) hereof.
"Permitted Contest" means any contest by Debtor with respect to any
Lien, tax or imposition referred to in Section 6.2 hereof, so long as Debtor
shall contest, in good faith and at its expense, the existence, the amount or
the validity thereof, the amount of the damages caused thereby, or the extent
of its liability therefor, by appropriate Proceedings which do not result in
(i) the collection of, or other realization upon, the tax, assessment, levy,
fee, rent or Lien so contested, (ii) the sale, forfeiture or loss of any item
of Equipment or any material part thereof, or (iii) any interference with the
use of any item of Equipment or any material part thereof.
"Permitted Encumbrances", with respect to the Collateral, means (i)
this Agreement and any assignment permitted hereby, (ii) any Lien affecting the
Collateral for work or service performed or materials furnished securing
amounts which are not yet due and payable or which are not otherwise delinquent
and (iii) any Lien which is the subject of a Permitted Contest and (iv) any
other Lien incurred in the ordinary course of business which such Lien does not
exceed $50,000.
"Permitted Lease" shall mean a lease of all the Equipment or any
portion thereof entered into between Debtor and a Permitted Lessee; provided,
that the following conditions shall be met with respect to each such lease: (i)
Secured Party shall have given its prior written consent to such lease; (ii)
upon the effective date of such lease, there shall exist no Default or Event of
Default and no Liens on any of the Collateral other than the Permitted
Encumbrances; (iii) each such lease shall specify explicitly as a condition to
the effectiveness of such lease that (A) Debtor shall remain fully obligated
and in compliance with the terms and conditions of this Agreement and (B) upon
Secured Party's delivery to the lessee of notice specifying that an Event of
Default has occurred and is continuing and that the Secured Party has commenced
the exercise of remedies with respect to the Equipment, such lease will
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automatically terminate and be of no further force or effect and the lessee
will cause each item of Equipment then subject to such lease to be delivered to
Secured Party at a place to be designated by Secured Party.
"Permitted Lessee" shall mean any Person which (i) is domiciled in the
United States, (ii) in Debtor's reasonable opinion, is financially responsible
and (iii) at the time Debtor enters into such lease, is not the subject of any
filing by or against such Person of a petition under any federal bankruptcy law
or any federal law replacing or superseding such law or any state bankruptcy
law in which such Person is named as debtor.
"Person" means an individual or a corporation, partnership, trust,
association, joint venture, joint stock company, firm or other enterprise or
government (or a political subdivision or any agency, department or
instrumentality thereof) or other entity of any kind.
"Plan" means any "employee benefit pension plan" or other "plan"
(including a "multiemployer plan" as defined in Section 3(37) of ERISA)
established or maintained, as to which contributions have been made, by Debtor
or any Affiliate for either of their respective employees and which is covered
by Title IV of ERISA or to which Section 412 of the Internal Revenue Code of
1986, as amended applies.
"Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.
"Replacement Equipment" means an item (i) of comparable make, model
and manufacture as the item of Equipment with respect to which an Event of Loss
has occurred, (ii) selected by Debtor and consented to by Secured Party, such
consent not to be unreasonably withheld or delayed, (iii) owned by Debtor free
and clear of all Liens and other encumbrances other than Permitted Encumbrances
and (iv) having a value, utility and useful life at least equal to, and being
in as good operating condition as, the item of Equipment with respect to which
the Event of Loss occurred, assuming such item of Equipment was in the
condition and repair required by the terms hereof immediately prior to the
occurrence of the Event of Loss.
"Secured Obligations" has the meaning set forth in Section 2.2 hereof.
"Secured Party" means NationsBanc Leasing Corporation of North
Carolina, a North Carolina corporation, and its successors and assigns.
"Security Instrument" means each of this Agreement, and any other
instrument, document, financing statement or agreement with respect to which
any right or interest in or with respect to the Collateral has been
Granted to Secured Party or has been recorded with the appropriate filing
office.
"Secured Term Note A" means the promissory note of the Debtor in
favor of the Secured Party dated the Closing Date evidencing Term Loan A as
provided pursuant to Section 1.3(a)(iii), as amended, modified,
supplemented, extended, renewed or replaced from time to time.
"Secured Term Note B" means the promissory note of the Debtor in favor
of the Secured Party dated the Closing Date evidencing Term Loan B as provided
pursuant to Section 1.3(b)(iii), as amended, modified, supplemented, extended,
renewed or replaced from time to time.
"Seller" means each Person executing a Xxxx of Sale in favor of Debtor
with respect to any Equipment.
"Subsidiary" means any corporation, limited liability company,
partnership, joint venture, trust or estate of which (i) more than 50% of the
outstanding capital stock having ordinary voting power to elect a majority of
the board of directors of such corporation; or (ii) the interest in the capital
or profits of such corporation, limited liability company, partnership or joint
venture; or (iii) the beneficial interest of such trust or estate is owned
directly or indirectly by Guarantor and/or one of its Subsidiaries.
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"Taxes or Other Impositions" has the meaning set forth in Section 6.2
hereof.
"Term Loan A" means the term loan made pursuant to the provisions of
Section 1.3(a).
"Term Loan A Commitment" has the meaning set forth in Section 1.3(a)
hereof.
"Term Loan B" means the term loan made pursuant to the provisions of
Section 1.3(b).
"Term Loan B Commitment" has the meaning set forth in Section 1.3(b)
hereof.
"Term Loan A Draw Termination Date" has the meaning set forth in
Section 1.3(a) hereof.
"Term Loan B Draw Termination Date" has the meaning set forth in
Section 1.3(b) hereof.
"Termination Value" means, with respect to any or all item(s) of
Equipment, an amount equal to the Equipment Cost of such item(s) of Equipment
multiplied by the Termination Value Percentage as of such Installment Payment
Date.
"Termination Value Percentage" means the termination value percentage
for Term Loan A and/or Term Loan B, as appropriate, as of each Installment
Payment Date calculated as of the date on which the Amortization Rate is
determined for each of Term Loan A and Term Loan B.
SECTION 1.2 OTHER TERMS.
Unless otherwise defined in this Agreement, all terms defined in the
North Carolina UCC and used in this Agreement have the meanings set forth in
the North Carolina UCC.
SECTION 1.3 TERM LOANS.
(a) Term Loan A. Subject to and upon the terms and
conditions and relying upon the representations and warranties herein
set forth, the Secured Party agrees to make advances ("Term Loan A")
to the Debtor from time to time from the Closing Date to and including
February 28, 1997 (as such date may be extended from time to time in
the sole discretion of the Secured Party, the "Term Loan A Draw
Termination Date") in an aggregate principal amount of up to FIVE
HUNDRED FIFTY-SEVEN THOUSAND SEVEN HUNDRED SIXTY-EIGHT AND 14/100
DOLLARS ($557,768.14) (the "Term Loan A Commitment") for the purposes
hereinafter set forth. Amounts repaid on Term Loan A may not be
reborrowed.
(i) Term Loan A Advances. So long as the
conditions to advances have been satisfied, the Secured Party
will make Term Loan A advances to the Debtor from time to time
from the Closing Date to the Term Loan A Draw Termination Date
upon submission of a Notice of Borrowing substantially in the
form of Schedule 1.3 to the Secured Party five (5) Business
Days prior to the date of the requested advance. Each such
notice shall specify (A) the date of the requested advance
(which shall be a Business Day), (B) shall not exceed, taking
into account all prior Term Loan A advances, the Term Loan A
Commitment, (C) shall be in a minimum amount of $100,000 and
(D) shall be accompanied by any supporting invoices and
requisitions relating to the requested advance. The Secured
Party shall make such Term Loan A advances available by
deposit to the Debtor's account at the office of Bank One,
Texas, N.A. in Houston, Texas.
(ii) Payment of Principal and Interest.
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(A) Interest During Draw Period. Term Loan A
shall be subject to a draw period during which accrued
interest shall be payable monthly in arrears on the last day
of each calendar month beginning with the first of such dates
to occur after the Closing Date. Interest during such draw
period shall accrue at the applicable Eurodollar Rate plus
1.30% (computed on the basis of the actual number of days
elapsed over a year of 360 days) with respect to the Term Loan
A advance made on the Closing Date and with respect to each
Term Loan A advance made thereafter throughout the draw
period. The Eurodollar Rate applicable to the Term Loan A
advance made on the Closing Date shall be determined five (5)
Business Days prior to the Closing Date. The Eurodollar Rate
applicable to each Term Loan A advance made after the Closing
Date shall be determined five (5) Business Days prior to the
date of the requested advance.
(B) Principal and Interest after Draw Period.
The Term Loan A Commitment shall bear interest at a fixed rate
equal to the Amortization Rate. The Amortization Rate for
Term Loan A shall be determined five (5) Business Days prior
to the Term Loan A Draw Termination Date. Principal and
interest on Term Loan A shall be amortized and payable in
thirty-six (36) consecutive level monthly installments
beginning with the payment due on March 31, 1997. Payments
received on Term Loan A shall be applied first to accrued
interest and then to principal in inverse order of maturity.
Upon the occurrence and during the continuation of an Event of
Default hereunder, the principal of and, to the extent permitted by
law, interest on Term Loan A hereunder shall bear interest, payable on
demand, at a rate equal to 2.0% per annum in excess of the rate
otherwise applicable hereunder.
(iii) Secured Term Note A. Term Loan A shall be
evidenced by a duly executed promissory note of the Debtor to
the Secured Party dated the Closing Date in an original
principal amount equal to the Term Loan A Commitment and
substantially in the form of Schedule 1.3(a) hereto.
(b) Term Loan B. Subject to and upon the terms and
conditions and relying upon the representations and warranties herein
set forth, the Secured Party agrees to make advances ("Term Loan B")
to the Debtor from time to time from the Closing Date to and including
April 30, 1997 (as such date may be extended from time to time in the
sole discretion of the Secured Party, the "Term Loan B Draw
Termination Date") in an aggregate principal amount of up to SEVEN
MILLION SIX THOUSAND ONE HUNDRED FIFTY-TWO AND 04/100 DOLLARS
($7,006,152.04) (the "Term Loan B Commitment") for the purposes
hereinafter set forth. Amounts repaid on Term Loan B may not be
reborrowed.
(i) Term Loan B Advances. So long as the
conditions to advances have been satisfied, the Secured Party
will make Term Loan B advances to the Debtor from time to time
from the Closing Date to the Term Loan B Draw Termination
Date upon submission of a Notice of Borrowing substantially in
the form of Schedule 1.3 to the Secured Party five (5)
Business Days prior to the date of the requested advance.
Each such notice shall specify (A) the date of the requested
advance (which shall be a Business Day), (B) shall not exceed,
taking into account all prior Term Loan B advances, the Term
Loan B Commitment, (C) shall be in a minimum amount of
$100,000 and (D) shall be accompanied by any supporting
invoices and requisitions relating to the requested advance.
The Secured Party shall make such Term Loan B advances
available by deposit to the Debtor's account at the office of
Bank One, Texas, N.A. in Houston, Texas.
(ii) Payment of Principal and Interest.
(A) Interest during Draw Period. Term Loan B
shall be subject to a draw period during which accrued
interest shall be payable monthly in arrears on the last day
of each calendar month beginning with the first of such dates
to occur after the Closing Date. Interest during such
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draw period shall accrue at the applicable Eurodollar Rate
plus 1.30% (computed on the basis of the actual number of days
elapsed over a year of 360 days) with respect to the Term Loan
B advance made on the closing Date and with respect to each
Term Loan B advance made thereafter throughout the draw
period. The Eurodollar Rate applicable to the Term Loan B
advance made on the Closing Date shall be determined five (5)
Business Days prior to the Closing Date. The Eurodollar Rate
applicable to each Term Loan B advance made after the Closing
Date shall be determined five (5) Business Days prior to the
date of the requested advance.
(B) Principal and Interest after Draw Period. The
Term Loan B Commitment shall bear interest at a fixed rate
equal to the Amortization Rate. The Amortization Rate for
Term Loan B shall be determined five (5) Business Days prior
to the Term Loan 8 Draw Termination Date. Principal and
interest on Term Loan B shall be amortized and payable in
sixty (60) consecutive level monthly installments beginning
with the payment due on May 31, 1997. Payments received on
Term Loan B shall be applied first to accrued interest and
then to principal in inverse order of maturity.
Upon the occurrence and during the continuation of an
Event of Default hereunder, the principal of and, to the extent
permitted by law, interest on Term Loan B shall bear interest, payable
on demand, at a rate equal to 2.0% per annum in excess of the rate
otherwise applicable hereunder.
(iii) Secured Term Note B. Term Loan B shall be
evidenced by a duly executed promissory note of the Debtor to
the Secured Party dated the Closing Date in an original
principal amount equal to the Term Loan B Commitment and
substantially in the form of Schedule 1.3(b) hereto.
(c) Early Termination. (i) On any Installment Payment
Date on or after the second anniversary of the Closing Date, Debtor
may, upon sixty (60) days' prior written notice to Secured Party,
terminate the Loans and this Agreement. Debtor shall pay to Secured
Party on the applicable Installment Payment Date the sum of: (A) the
Termination Value as of such Installment Payment Date, plus (B) any
Break-Funding Costs, plus (C) any accrued but unpaid interest with
respect to either Loan, plus (D) all other obligations owing under the
Agreement on the termination date. Upon receipt of the amounts set
forth in (A)-(D) above, Secured Party shall release its Lien on the
Collateral.
(ii) On any Installment Payment Date on or after the second
anniversary of the Closing Date, Debtor may, upon sixty (60) days'
prior written notice to Secured Party, prepay a portion of the Loans
in accordance with the terms hereof. Debtor shall have the option to
make up to three (3) prepayments in the aggregate on the Loans, each
prepayment in an amount not less than $200,000. Debtor shall pay to
Secured Party on the applicable Installment Payment Date the sum of:
(A) the prepayment amount, plus (B) any Break-Funding Costs, plus (C)
any accrued but unpaid interest with respect to the prepayment.
Amounts so prepaid under this subsection (c)(ii) shall be applied to
outstanding obligations owing under this Agreement in the reasonable
discretion of the Secured Party.
SECTION 1.4 CONDITIONS PRECEDENT.
The obligation of Secured Party to make any Loan advance shall be
subject to the following conditions, as appropriate:
(a) Conditions to All Advances on Closing Date. Each
Loan advance on the Closing Date shall be subject to the delivery to
Secured Party of the following originally executed documents (unless
otherwise noted) each in form and substance satisfactory to Secured
Party and the satisfaction of the other conditions set forth herein:
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(i) the Agreement;
(ii) the Notes;
(iii) the Guaranty;
(iv) evidence of payment (or evidence of
exemption) of any and all sales, transfer, use, documentation
or similar taxes due in connection with the acquisition of the
Equipment by Debtor;
(v) a secretarial certificate from Debtor: (A)
certifying Debtor's articles of incorporation, by-laws and
resolutions, with such resolutions authorizing the overall
transaction and Debtor's execution, delivery and performance
of this Agreement and (B) containing an incumbency
certification of Debtor with the name(s), title(s) and
specimen signature(s) of the person or persons authorized on
behalf of Debtor to execute this Agreement.
(vi) an officer's certificate from Debtor: (A)
stating that no material adverse change has occurred in the
condition of Debtor (financial or otherwise) since the date of
the last financial statement of Guarantor which has been
delivered to Secured Party which would impair the ability of
Debtor to pay and perform its obligations under this Agreement
and (B) stating that no Default or Event of Default shall have
occurred and be continuing as of such date;
(vii) a secretarial certificate from Guarantor:
(A) certifying Guarantor's articles of incorporation, by-laws
and resolutions, with such resolutions authorizing the overall
transaction and Guarantor's execution, delivery and
performance of the Guaranty and (B) containing an incumbency
certification of Guarantor with the name(s), title(s) and
specimen signature(s) of the person or persons authorized on
behalf of Guarantor to execute the Guaranty;
(viii) an officer's certificate from Guarantor: (A)
stating that no material adverse change has occurred in the
condition of Guarantor (financial or otherwise) since the date
of the last financial statement of Guarantor which has been
delivered to Secured Party which would impair the ability of
Guarantor to pay and perform its obligations under the
Guaranty and (B) stating that no Default or Event of Default
shall have occurred and be continuing as of such date;
(ix) a written opinion of counsel for Debtor and
Guarantor;
(x) copies of the Bills of Sale;
(xi) certificates of insurance evidencing the
coverages required hereunder;
(xii) Uniform Commercial Code filings as deemed
appropriate by Secured Party's counsel duly executed by Debtor
and necessary third parties;
(xiii) good standing certificates from the Secretary
of State of Debtor's state of incorporation and the state of
Debtor's chief executive office; and
(xiv) good standing certificates from the Secretary
of State of Guarantor's state of incorporation and Guarantor's
chief executive office.
(xv) UCC, tax and judgment lien searches as deemed
necessary or advisable by Secured Party;
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(xvi) the absence on the date hereof of any Liens
on the Collateral, other than any Permitted Encumbrance in
favor of Secured Party; and
(xvii) Secured Party shall have received such other
documents, certificates, financing statements and other items,
in form and substance satisfactory to Secured Party, as
Secured Party may request.
(b) Term Loan Advances after the Closing Date. The
obligation of the Secured Party to make Term Loan A advances and/or
Term Loan B advances after the Closing Date is subject to satisfaction
of the following conditions:
(i) delivery to the Secured Party of a Notice of
Borrowing;
(ii) no material adverse change in the condition
of the Debtor (financial or otherwise) shall have occurred
since the Closing Date;
(iii) the absence on the date of such advance of
any Default or Event of Default; and
(iv) no Lien or other interest shall have been
permitted to attach to the Collateral superior or subordinate
to the interest of the Secured Party under this Agreement,
except for Permitted Encumbrances.
ARTICLE II
SECURITY INTEREST
SECTION 2.1 GRANT OF SECURITY INTEREST.
Debtor hereby Grants to Secured Party a first priority security
interest in the following (collectively, the items described in subsections
(a)-(d) may be referred to herein as the "Collateral"):
(a) All right, title and interest of the Debtor in and to
the Equipment as the same is now and will hereafter be constituted,
whether now owned by the Debtor or hereafter acquired, together with
all accessories, equipment, parts and appurtenances appertaining or
attached to the Equipment whether now owned or hereafter acquired, and
all substitutions, renewals and replacements of and additions,
improvements, accessions and accumulations to the Equipment together
with all the rents, issues, income, profits and avails thereof.
(b) All right, title, interest, claims and demands of
Debtor in, to and under the following (collectively the "Assigned
Agreements"):
(i) the Bills of Sale;
(ii) the Permitted Leases; and
(iii) any and all other contracts and agreements
(excluding this Agreement and any supplement or modification
thereto and the Notes) relating to the Equipment or any rights
or interests therein to which Debtor is now or may hereafter
be a party (excluding contracts or agreements by the Debtor
with vendors providing for the use of certain Equipment by
Debtor to record, produce and distribute seismic data),
together with all rights, powers, privileges, licenses,
easements, options and other benefits of Debtor under each
thereof, including without limitation the right to make all
waivers and agreements, to give and receive all notices and
other instruments
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or communications, to take such action upon the occurrence of
a default thereunder, including the commencement, conduct and
consummation of legal, administrative or other Proceedings, as
shall be permitted thereby or by law, and to do any and all
other things which Debtor is or may be entitled to do
thereunder.
(c) The proceeds from a sale or transfer of any right,
title or interest of Debtor in the Equipment or any portion thereof.
(d) All proceeds of any and all of the foregoing
Collateral, whether now owned or hereafter acquired by Debtor and
wherever located, including without limitation:
(i) cash, accounts receivable, instruments,
contract rights, chattel paper, documents of title and any
other obligation due to Debtor with respect to or in
connection with the foregoing Collateral; and
(ii) to the extent not otherwise included, all
payments under any casualty insurance (whether or not Secured
Party is the loss payee thereof), condemnation award,
indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing
Collateral.
The Collateral shall mean and include all personal property
and the proceeds of such personal property described in any and all
amendments to this Agreement hereafter executed by Debtor and Secured
Party in connection with the Loan.
SECTION 2.2 SECURITY FOR SECURED OBLIGATIONS.
This Agreement secures the payment of all indebtedness and other
obligations of Debtor to Secured Party with respect to: the Loans, whether now
or hereafter existing, including without limitation Debtor's obligations to
Secured Party under the Notes or any other instrument and all amendments
thereto and renewals and extensions thereof, whether for principal, interest,
fees, expenses or otherwise; all of Debtor's obligations of payment and
performance now or hereafter existing under this Agreement, including, without
limitation, all amendments hereto and renewals and extensions hereof (all such
obligations of Debtor described in this Section 2.2 being, collectively, the
"Secured Obligations").
SECTION 2.3 SECURITY INTEREST ABSOLUTE.
All rights of Secured Party and security interests hereunder and all
Secured Obligations shall be absolute and unconditional, irrespective of:
(i) any lack of validity or enforceability of the Notes,
this Agreement or any other Security Instrument or any other agreement
or instrument relating thereto;
(ii) any change in the time, manner, or place or payment
of, or in any other term of, all or any of the Secured Obligations or
any other amendment or waiver of or any consent to any departure from
the Notes, this Agreement or any other Security Instrument; or
(iii) any exchange, release or non-perfection of any other
collateral, or any release, amendment or waiver of or consent to
departure from any guaranty, for all or any of the Secured
Obligations.
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SECTION 2.4 DEBTOR AS AGENT FOR SECURED PARTY.
Title to each item of Equipment shall at all times remain in Debtor so
long as any Loans or other obligations under this Agreement remain outstanding;
provided, however, that with respect to each item of Equipment subject to motor
vehicle titling and registration laws, Secured Party appoints Debtor as the
agent of Secured Party and grants Debtor a limited power of attorney for the
sole and limited purpose of causing each item of such Equipment to be titled in
the name of Debtor with Secured Party noted as the first, and sole, lienholder.
Debtor shall keep possession of such original certificates of title and upon
reasonable notice Secured Party shall have the right to review such original
certificates of title during Debtor's normal business hours. In the case of a
Default or an Event of Default, Debtor shall promptly deliver within five (5)
Business Days the original certificates of title to Secured Party. The agency
and power of attorney created hereby shall immediately terminate upon the
occurrence of any Default or Event of Default under this Agreement.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 3.1 DEBTOR'S REPRESENTATIONS AND WARRANTIES.
Debtor hereby represents and warrants to Secured Party that:
(a) Debtor is a corporation duly organized and validly
existing under the laws of the State of Delaware and has all requisite
corporate power, authority and legal right to own its properties,
including without limitation the Collateral, to conduct its business
as is now being conducted and to execute, deliver and perform its
obligations under the Notes, this Agreement, each other Security
Instrument to which it is a party and each other document or agreement
related to the Collateral to which it is a party. Debtor is fully
qualified to do business and is in good standing in each jurisdiction
in which the failure to be in good standing would have a material
adverse effect on the business or operations of Debtor.
(b) The execution, delivery and performance by Debtor of
the Notes, this Agreement and each other Security Instrument to which
it is a party are within Debtor's corporate powers, have been duly
authorized by all requisite corporate action, do not contravene
Debtor's charter or by-laws or any law, governmental rule or
regulation, or any order, writ, injunction, decree, determination or
award currently in effect applicable to, or any contractual
restriction binding on or affecting, Debtor or any of its properties,
including without limitation the Collateral, and do not result in or
require the creation of any Lien, security interest, right of
acceleration, charge or encumbrance (other than pursuant to this
Agreement) upon or with respect to any of its properties.
(c) No authorization or approval or other action by, and
no notice to or filing (other than the filings referred to in
subparagraph (f) below) with, any governmental authority or regulatory
body, shareholders or any other Person is required for the due
execution, delivery and performance by Debtor of this Agreement or any
other Security Instrument to which it is a party.
(d) The Notes, this Agreement and each other Security
Instrument to which Debtor is a party are the legal, valid and binding
obligations of Debtor, enforceable against Debtor in accordance with
their respective terms, subject, in the case of enforceability, to
applicable bankruptcy, insolvency, reorganization, moratorium and
other laws affecting creditors' rights generally and to the
application of general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at
law).
(e) The proceeds of the Loans will be used only to
finance the purchase by Debtor of the Equipment; Debtor owns good and
marketable title to the Equipment; the Collateral is free and clear of
all Liens (except for Permitted Encumbrances in favor of Secured
Party); and the Equipment is in good
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condition and ready for operation. The Equipment is and will retain
its character as personal property, and neither Debtor, Guarantor, or
any Affiliate or Subsidiary of either Debtor or Guarantor shall affix
or attach any item of Equipment in any manner so as to alter the
character of the Equipment as personal property subject to the UCC.
(f) Except for the notation on the certificates of title
naming Secured Party as first lienholder with respect to all items of
Equipment subject to motor vehicle titling and registration laws, the
filing of Uniform Commercial Code financing statements in the office
of the Secretary of State of the State of Texas will create a valid
perfected first priority security interest in the Collateral, securing
the payment of the Secured Obligations, and all filings and other
actions necessary or desirable to perfect and protect such security
interests will have been taken. No Person other than Secured Party
holds any security interest affecting the Collateral. No effective
Security Instrument or other instrument similar in effect covering all
or any part of the Collateral is on file in any recording office,
except such as may have been filed in favor of Secured Party relating
to this Agreement.
(g) Debtor's chief executive office is located in Xxxxxx
County, Houston, Texas. The Debtor has not used any trade names or
other names.
(h) Contemporaneously with the execution and delivery of
this Agreement, Debtor is delivering to Secured Party evidence of
insurance satisfying the requirements of Section 4.1 hereof.
(i) Debtor is not currently insolvent, as defined in 11
U.S.C. 101(32) nor will it be rendered insolvent by virtue of entering
into the Notes, this Agreement or any other Security Instrument to
which it is a party or carrying out any of the transactions
contemplated hereby or thereby.
(j) Each financial statement of Guarantor which has been
furnished to Secured Party fairly presents the financial condition of
Guarantor as of the date of such financial statement. There has been
no material adverse change in Guarantor's financial condition since
the date of the most current financial statement delivered to Secured
Party.
(k) There is no pending, or to the Debtor's knowledge,
threatened, action or Proceeding affecting Debtor, Guarantor or any of
their properties before any court, governmental agency or arbitrator
which may materially and adversely affect the condition (financial or
otherwise) or operations of Debtor, Guarantor or any of their
properties or which purports to affect the validity or enforceability
of the Notes, this Agreement or any other Security Instrument to which
Debtor is a party.
(l) No Default or Event of Default has occurred and is
continuing.
(m) All sales, transfer, use, documentation or similar
taxes, fees or other charges due and payable prior to or as of the
date hereof have been paid to the extent such are in connection with
the sale to and purchase by Debtor of the Equipment.
(n) Debtor is not a party to, nor bound by, any contract,
agreement or instrument that would conflict with this Agreement, the
Notes or any other contracts, agreements or instruments executed in
connection with the transactions contemplated by this Agreement.
(o) Debtor has agreed, and hereby acknowledges, to accept
service of process at its address set forth in Section 8.1 hereof in
person or by registered or certified mail return receipt requested,
postage prepaid, in connection with any Proceeding initiated by
Secured Party in any of the courts referenced in Section 8.11 hereof.
(p) The Debtor has no Subsidiaries.
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(q) Debtor has not incurred any accumulated unfunded
deficiency within the meaning of the Employee Retirement Income
Security Act of 1974, as amended from time to time ("ERISA") nor has
Debtor incurred any material liability to the Pension Benefit Guaranty
Corporation ("PBGC") established under such Act (or any successor
thereto under such Act) in connection with any Plan. Debtor and its
Affiliates are in compliance in all material respects with those
provisions of ERISA and the regulations and public interpretations
thereunder which are applicable to Debtor and its Affiliates, except
for such noncompliance as would not have a material adverse effect on
the financial condition of Debtor and its Affiliates, taken as a
whole.
(r) Debtor has filed all income tax returns required to
be filed prior to the date hereof with the various governmental
entities having taxing authority with respect to Debtor.
(s) Debtor (i) is not an "investment company" as such
term is defined in, or otherwise subject to regulations under, the
Investment Company Act of 1940 and (ii) is not a Holding company" as
that term is defined in, and is not otherwise subject to regulations
under, the Public Utility Holding Company Act of 1935.
(t) Debtor has not sold, extended any offer to sell nor
accepted any offer to purchase regarding any of Debtor's interest in
the Collateral or with respect to the transactions described in the
Security instruments or the Notes.
(u) Debtor has delivered true and accurate copies of the
Bills of Sale executed by each Seller with respect to the transfer of
the Equipment to Debtor.
SECTION 3.2 AFFIRMATIVE COVENANTS.
Until all the Secured Obligations shall have been fully paid and
satisfied, Debtor covenants and agrees that it shall, unless Secured Party
shall have otherwise consented in writing:
(a) promptly pay the principal of, interest on, and any
other amounts due under the Notes as and when the same become due,
whether at maturity, by acceleration or otherwise;
(b) (i) duly, punctually and faithfully perform its
obligations under the Notes, this Agreement and each other Security
Instrument to which it is a party; (ii) maintain the Liens and
security interests created by this Agreement and each other Security
Instrument to which it is a party as valid and perfected Liens on and
security interests in all of the Collateral, prior in right to any
other Lien, security interest, claim or other encumbrance; (iii)
warrant and defend its interest in and to the Collateral against the
claims and demands of all Persons; and (iv) defend, at Debtor's cost,
any action, claim or Proceeding affecting the Collateral;
(c) use the proceeds of the Loans only to finance the
purchase by Debtor of the Equipment and maintain good and marketable
title to the Equipment, free and clear of any Liens, security
interests, charges or encumbrances except for the security interest
created by this Agreement and Permitted Encumbrances;
(d) notify Secured Party at least thirty (30) days prior
to the changing of the chief executive office of the Debtor from the
location specified in Section 3.1 (g);
(e) at no expense to Secured Party, cause each item of
Equipment to be serviced, maintained and preserved in the same
condition, repair and working order as when new, ordinary wear and
tear excepted, and in accordance with any manufacturer's suggested or
approved maintenance program and warranty requirements, and shall, in
the case of any loss or damage to any item of Equipment, promptly
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furnish to Secured Party a statement respecting any such loss or
damage and (unless an Event of Loss shall have occurred with respect
to an item of Equipment) as quickly as practicable after the
occurrence thereof make or cause to be made all repairs, replacements
and other improvements in connection therewith which are necessary or
desirable to keep each item of Equipment in proper working order;
(f) permit Secured Party to inspect the Equipment during
normal business hours upon reasonable prior notice to Debtor;
(g) from time to time execute and deliver all such
supplements and amendments hereto and to any other Security
Instrument, and all such financing statements, continuation
statements, instruments of further assurance and other instruments,
and take such other action, as the Secured Party requests and
reasonably deems necessary or advisable to: (i) further Grant,
maintain or preserve the Lien and security interest contemplated by
this Agreement or carry out more effectively the purposes hereof; (ii)
perfect or protect the validity of any Security Instrument or of any
Grant made or to be made by this Agreement; or (iii) enforce any
Security Instrument or preserve and defend title to the Collateral and
the rights of the Secured Party therein against the claims of all
Persons and parties;
(h) comply with all of its representations, warranties
and covenants set forth in this Agreement, in the Notes and each
Security Instrument to which it is a party; and punctually perform and
observe all of its obligations and agreements contained in this
Agreement, in the Notes and each Security Instrument to which it is a
party;
(i) promptly notify the Secured Party of any default by
any Person under any Security Instrument;
(j) remain a duly organized and validly existing
corporation under the laws of the state of its incorporation and
remain duly qualified to do business and in good standing in each
jurisdiction in which the failure to be in good standing would have a
material adverse effect on the business or operations of Debtor;
(k) comply in all material respects with all applicable
laws, rules, regulations and orders; and preserve and maintain all
federal, state and local licenses, privileges, franchises,
certificates and other permits necessary for the operation of its
business and the operation of each item of Equipment;
(l) pay or cause to be paid promptly when due (i)
(subject to the right of Debtor, in accordance with the provisions of
this Agreement to obtain extensions of the date on which such taxes
are due) all property and other taxes (including without limitation
income, sales, use, franchise and gross receipts taxes) and
governmental charges or levies which are at any time or from time to
time levied upon or assessed against it or any item of Equipment or
are otherwise associated with the ownership, use or operation of any
item of Equipment (except such taxes levied on the net income of
Secured Party) and (ii) all claims (including without limitation
claims for labor, materials and supplies) against any item of
Equipment; provided, that Debtor may contest any such tax or claim by
appropriate Proceedings so long as such Proceedings shall suspend the
collection thereof, no part of the Collateral would be subject to
sale, forfeiture or diminution during the pendency of such
Proceedings, Debtor shall have furnished such security as may be
required in the Proceedings or reasonably requested by Secured Party,
Debtor conducts such contests in good faith and with due diligence,
and promptly after the final determination of each such contest,
Debtor pays all amounts which shall be determined to be payable in
respect thereof;
(m) within 120 days after the end of each fiscal year
furnish to the Secured Party unaudited year end financial reports of
the Debtor including without limitation (i) a balance sheet and (ii)
statements of income and retained earnings, all prepared in accordance
with generally accepted accounting principles consistently applied and
certified by the president, chief financial officer or any vice
president of Debtor
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who prepared such financial statements as being true and accurate and
fairly representing the financial condition of Debtor;
(n) promptly report to Secured Party the commencement of
any Proceeding against Debtor if such litigation reasonably would be
expected to, in the event of an unfavorable outcome, cause an Event of
Default, have a material adverse effect on Debtor's financial
condition or operations, affect the validity or enforceability of the
Notes, this Agreement or any of the Security Instruments or affect
priority or enforceability of Secured Party's security interest in any
of the Collateral;
(o) promptly notify Secured Party in writing if a Default
or an Event of Default has occurred;
(p) upon the replacement of an item of Equipment with
Replacement Equipment, Debtor, at its own expense, will promptly (i)
cause a supplement hereto, in form and substance satisfactory to
Secured Party, subjecting such Replacement Equipment to this
Agreement, to be duly executed by Debtor, (ii) furnish Secured Party
with such evidence of Debtor's title to such Replacement Equipment, of
the condition of such Replacement Equipment, and of compliance with
the insurance provisions hereof with respect to such Replacement
Equipment and (iii) take such other action as Secured Party may
request in order that such Replacement Equipment be duly and properly
titled in Debtor and subject to this Agreement to the same extent as
the item of Equipment replaced thereby;
(q) (i) at all times, make prompt payment of all
contributions required under its Plans and required to meet the
minimum funding standard set forth in ERISA with respect to its Plans;
(ii) notify Secured Party immediately of any fact, including, but not
limited to, any Reportable Event (as defined in ERISA) arising in
connection with any of its Plans, which might constitute grounds for
termination thereof by the PBGC or for the appointment by the
appropriate United States District Court of a trustee to administer
such Plan, together with a statement, if requested by the Secured
Party, as to the reason therefor and the action, if any, proposed to
be taken with respect therefor; and (iii) furnish to Secured Party
upon its request, such additional information concerning any of its
Plans as may be reasonably requested;
(r) Debtor shall pay, and save Secured Party harmless
against, any and all losses, judgments, decrees and costs (including,
without limitation, all reasonable attorneys' fees and expenses) in
connection with any Permitted Contest and shall promptly after the
final settlement, compromise or determination (including any appeals)
of such contest, fully pay and discharge the amounts which shall be
levied, assessed, charged or imposed or be determined to be payable
therein or in connection therewith, together with all penalties,
fines, interest, costs and expenses thereof or in connection
therewith, and perform all acts, the performance of which shall be
ordered or decreed as a result thereof.
SECTION 3.3 NEGATIVE COVENANTS.
Until the Secured Obligations shall have been fully paid and
satisfied, Debtor shall not, without the prior written consent of Secured
Party:
(a) (i) sell, lease, assign, transfer, convey, Grant an
interest in, exchange or otherwise dispose of any of the Collateral or
any part thereof or (ii) cause or permit any subleasing of any of the
Equipment (except that Debtor may lease any or all items of Equipment
to a Permitted Lessee pursuant to a Permitted Lease);
(b) create or suffer to exist any Lien affecting the
Collateral or any part thereof, other than in favor of Secured Party
or other Permitted Encumbrances;
(c) use the Equipment for any unlawful purpose;
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(d) dissolve, wind up or liquidate or seek or permit the
dissolution or liquidation of Debtor in whole or in part;
(e) [intentionally omitted];
(f) as against Secured Party, claim any credit on, or
make any deduction from, the principal or interest payable on the
Notes, whether by reason of the payment of any taxes levied or
assessed upon any of the Collateral, or otherwise;
(g) take or permit any action which would result in an
Event of Default;
(h) [intentionally omitted];
(i) [intentionally omitted];
(j) enter into any new line of business or operation not
currently in existence with respect to the Debtor or materially alter
its existing operations;
(k) consolidate with or merge into any other corporation
or sell, assign, convey, transfer or lease substantially all of its
assets as an entirety to any Person unless:
(i) Debtor is the surviving entity of any such
consolidation or merger; or
(ii) (A) the corporation formed by such
consolidation or into which Debtor is merged, or the Person
which acquires by conveyance, transfer or lease of
substantially all of the assets of Debtor as an entirety,
shall be a solvent corporation organized and existing under
the laws of the United States or any state thereof or the
District of Columbia and shall execute and deliver to Secured
Party an agreement containing an effective assumption by such
successor, transferee or lessee corporation of the due and
punctual performance and observance of each covenant and
condition of this Agreement;
(B) immediately prior to and after
giving effect to such transaction, no Default or
Event of Default shall have occurred and be
continuing;
(C) Debtor shall have delivered to
Secured Party a certificate signed by an officer of
Debtor and an opinion of Debtor's counsel
satisfactory in form and substance to Secured Party
stating that such consolidation, merger, conveyance,
transfer or lease and the assumption agreement
mentioned in clause 3.3(k)(ii)(A) above comply with
the requirements of this Section 3.3(k) and that all
conditions precedent herein provided for relating to
such transaction have been complied with.
Upon any consolidation or merger in which Debtor is not the surviving
corporation, or any conveyance, transfer or lease of substantially all the
assets of Debtor as an entirety in accordance with this Section 3.3(k), the
successor corporation formed by such consolidation or into which Debtor is
merged or to which such conveyance, transfer or lease is made (x) shall succeed
to, and be substituted for (but without release of Debtor from any of its
obligations hereunder) and (y) may exercise every right and power of, Debtor
under this Agreement with the same effect as if such successor corporation had
been named as a Debtor herein.
(l) attach or affix any item of Equipment in any manner
so as to alter the character of the Equipment as personal property
subject to the UCC.
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ARTICLE IV
INSURANCE, TRANSFER, CONDEMNATION AND EVENT OF LOSS
SECTION 4.1 INSURANCE.
(a) Property and Liability Insurance. So long as this
Agreement is in effect, Debtor shall maintain and keep in force, or
cause to be maintained and kept in force, without cost or expense to
Secured Party, with respect to all items of Equipment prior to the
expiration or earlier termination of this Agreement (i) all-risk
property damage insurance in an amount not less than the aggregate
Termination Value for all items of Equipment of such type as shall be
satisfactory to Secured Party and (ii) commercial general liability
insurance, including blanket contractual and personal injury
insurance, covering any risks which Secured Party or Debtor might
incur by reason of the use or operation of the Equipment in or over
any area, in an amount not less than $6,000,000 per occurrence. Such
insurance policy or policies referenced to in clause (i) of the
preceding sentence will name Secured Party as a loss payee to the
extent of its interest; provided, that upon verification by Secured
Party that all amounts owing to Secured Party under the Agreement, the
Notes or any other Security Instrument have been paid in full, then
Secured Party shall remit all remaining property damage insurance
proceeds, respecting any item of Equipment, to the extent such
proceeds are controlled by Secured Party, to Debtor. Such insurance
policy or policies referenced to in clause (ii) of the preceding
sentence will name Secured Party as an additional insured. Each of the
policies required by this Section 4.1 will provide that (A) the same
may not be invalidated against Secured Party by reason of (1) any
violation of a condition or breach of warranty of the policies or the
application therefor by any Person excepting Secured Party, (2) the
use of any item of Equipment for purposes not permitted by such
policies by any Person excepting Secured Party, (3) any foreclosure
proceeding or notice of sale regarding any item of Equipment or (4)
the title or beneficial ownership of any item of Equipment being held
by a party other than Debtor; (B) the policies may be canceled or
materially amended by the insurer only after thirty (30) days' prior
written notice to Secured Party; (C) the interests of Secured Party in
such insurance policies (except with respect to commercial general
liability) are assignable and (D) such insurance policies shall be
primary insurance. Each of the policies required by this Section 4.1
shall otherwise be reasonably satisfactory to Secured Party. The
policies of insurance required under this Section shall be valid and
enforceable policies issued by insurers of recognized responsibility
acceptable to Secured Party. On or before the date hereof, and
thereafter at intervals of not more than twelve months, Debtor will
furnish or cause to be furnished to Secured Party a certificate or
other evidence satisfactory to Secured Party signed by an independent
insurance broker certifying to Secured Party's satisfaction that
Debtor has insurance in place with respect to all items of Equipment
which complies with the insurance requirements of this Agreement. If
Debtor shall fait to cause the insurance required under this Section
4.1 to be carried and maintained, Secured Party may, but shall have no
obligation to, provide such insurance and Debtor shall reimburse
Secured Party upon demand for the cost thereof as a supplemental
payment hereunder in addition to other amounts owing with respect to
the Notes or this Agreement.
SECTION 4.2 TRANSFER OF COLLATERAL.
Except as otherwise expressly provided by the provisions of this
Agreement, Debtor will not (prior to the satisfaction of all Obligations)
lease, Grant or otherwise transfer the Collateral or any part thereof or any
interest therein to any party other than Secured Party without Secured Party's
prior written consent and any and all such transfers shall be made under and
subject to Secured Party's security interest in such Collateral hereunder.
Prior to or simultaneously with any such transfer, the transferee shall accept,
agree to and execute an agreement assuming Debtor's Obligations to Secured
Party, in form and substance satisfactory to Secured Party.
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SECTION 4.3 CONDEMNATION.
Immediately upon obtaining knowledge thereof, Debtor shall notify
Secured Party of any condemnation or other eminent domain Proceedings with
respect to any item of Equipment. Secured Party may participate in any such
Proceedings, and Debtor shall provide Secured Party with all instruments
required by it to permit such participation upon obtaining actual knowledge
thereof. Debtor shall pay all reasonable fees and expenses incurred by Secured
Party in connection with Secured Party's participation in any such Proceedings.
All proceeds arising from any such eminent domain Proceedings shall be paid to
and applied by the Secured Party as specified in Section 5.3 hereof.
SECTION 4.4 CERTAIN EVENTS OF LOSS.
Upon the occurrence of an Event of Loss with respect to any item of
Equipment, Debtor shall pay Secured Party within thirty (30) days after receipt
of insurance proceeds after the occurrence of such Event of Loss (but in no
event shall such period extend 120 days beyond the date of the occurrence of
such Event of Loss) or, if such day is not a Business Day, on the next
occurring Business Day (the "Event of Loss Payment Date") an amount equal to
the sum of (a) the Termination Value (computed as of the Installment Payment
Date immediately preceding the Event of Loss Payment Date) for the items of
Equipment then subject to the Event of Loss, plus (b) all accrued but unpaid
interest, plus (c) any Break-Funding Costs with respect to the items of
Equipment then subject to the Event of Loss, plus (d) all other obligations
owing hereunder on the Event of Loss Payment Date. Upon payment of the amounts
set forth in (a)-(d) above, Secured Party shall release its Lien on the items
of Equipment then subject to the Event of Loss.
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
SECTION 5.1 EVENTS OF DEFAULT.
Any of the following occurrences or acts shall constitute an event of
default under this Agreement (individually, an "Event of Default"):
(a) Debtor shall fail to pay any principal of, or
interest on, the Notes or any other indebtedness of Debtor to Secured
Party, now or hereafter existing, within five (5) Business Days from
the date the same shall be due and payable, whether at maturity, by
acceleration or otherwise; or
(b) Except as specified in Section 5.1(a), Debtor shall
default in the payment of any costs or expenses incurred by Secured
Party in connection herewith or any other amounts hereunder or under
the Notes within ten (10) Business Days from the date on which Secured
Party notifies Debtor of such default; or
(c) Debtor shall fail to observe the terms and covenants
of Sections 3.2(b)(ii), 3.2(c), 3.2(l), 3.3(a)-(l) or 4.1; or
(d) Except as otherwise specified in Sections 5.1
(a)-(c), Debtor shall fail to perform or observe any other term,
covenant or agreement contained in the Notes, this Agreement or any
other Security Instrument and such failure shall remain unremedied for
a period of thirty (30) days from either the date Debtor first knows
of such failure or the date on which Secured Party notifies Debtor of
such failure; or
(e) Any representation or warranty made by Debtor in the
Notes, this Agreement, any other Security Instrument or in any
certificate or other document delivered pursuant hereto or thereto
shall prove to have been incorrect or misleading in any material
respect when made; or
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(f) Debtor shall admit in writing its inability to pay
its debts, or shall make a general assignment for the benefit of
creditors; or any Proceeding shall be instituted by or against Debtor
seeking to adjudicate it bankrupt or insolvent, or seeking
reorganization, liquidation, arrangement, adjustment or composition of
it or its debt under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking appointment of a
receiver, custodian, trustee, or other similar official for it or for
any substantial part of its property, and, in the case of any such
Proceeding instituted against Debtor, it shall remain undismissed for
a period of sixty (60) days; or Debtor shall take any action to
authorize any of the actions set forth in this subsection (f); or
(g) This Agreement shall, for any reason, except to the
extent permitted by the terms hereof, cease to create a valid first
priority Lien on and perfected first priority security interest in any
of the Collateral purported to be covered hereby; or
(h) Any provision of the Notes, this Agreement or the
other Security Instruments shall cease to be valid and binding on
Debtor, as a signatory thereto, or Debtor shall so state in writing;
or Secured Party shall be deprived of any of the benefits of the Note,
this Agreement or any other Security Instrument for any reason
whatsoever; or
(i) For any reason whatsoever, Debtor is not entitled to
or does not possess the property rights or other rights regarding the
Collateral which have been assigned or transferred to Secured Party;
or
(j) Debtor shall dissolve or any action shall be taken by
Debtor to wind up or liquidate Debtor's business, affairs or property
or assets or Debtor shall announce its intention to do so without
Secured Party's prior written consent; or
(k) Any sale, transfer, conveyance, abandonment,
condemnation, partition or change in ownership of any item or items of
Equipment in excess of $50,000, or any portion thereof shall occur,
whether in one transaction or a series of transactions without Secured
Party's prior written consent; or
(l) An attachment or other Lien shall be filed or levied
against a substantial part of the property of Debtor (or any Affiliate
of Debtor) and such judgment shall continue unstayed and in effect, or
such attachment or Lien shall continue undischarged or unbended, for a
period of sixty (60) days; or
(m) Guarantor shall fail to make a payment under the
Guaranty within five (5) Business Days from the date such payment is
due; or
(n) Except as specified in Section 5.1 (m), Guarantor
shall fail to perform or observe any other term, covenant or agreement
contained in the Guaranty and such failure shall remain unremedied for
a period of thirty (30) days from either the date Guarantor first
knows of such failure or the date on which Secured Party notifies
Guarantor of such failure; or
(o) Any representation or warranty made by Guarantor in
the Guaranty or in any certificate or other document delivered
pursuant thereto shall prove to have been incorrect or misleading in
any material respect when made; or
(p) Guarantor shall admit in writing its inability to pay
its debts, or shall make a general assignment for the benefit of
creditors; or any Proceeding shall be instituted by or against
Guarantor seeking to adjudicate it bankrupt or insolvent, or seeking
reorganization, liquidation, arrangement, adjustment or composition of
its finances or debt under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors, or seeking appointment of a
receiver, custodian, trustee, or other similar official for its
finances or for any substantial part of its property, and, in the case
of any such Proceeding instituted against
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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 unbended, for a
period of sixty (60) days; or
(r) Any provision of the Guaranty shall cease to be valid
and binding on Guarantor, as a signatory thereto, or Guarantor shall
so state in writing; or Secured Party shall be deprived of any of the
benefits of the Guaranty for any reason whatsoever; or
(s) Any action shall be taken by Guarantor to wind up or
liquidate Guarantor's business, affairs or property or assets or
Guarantor shall announce his intention to do so without Secured
Party's prior written consent.
SECTION 5.2 REMEDIES.
If any Event of Default shall have occurred and be continuing:
(a) the Secured Party may do one or more of the
following:
(i) declare the Notes and all interest thereon
and all other Secured Obligations to be forthwith due and
payable, whereupon the Notes, all such interest and all
Secured Obligations shall become and be forthwith due and
payable, without presentation, demand, protest or further
notice of any kind, all of which are hereby expressly waived
by Debtor;
(ii) exercise, in respect of the Collateral, in
addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a
secured party on default under the UCC and/or other applicable
law and also (A) require Debtor to, and Debtor hereby agrees
that it will at its expense and upon the request of Secured
Party forthwith, assemble all or part of the Collateral as
directed by Secured Party and make it available to Secured
Party at a place to be designated by Secured Party and (B)
without notice except as specified below, sell the Collateral
or any part thereof in one or more parcels at public or
private sale, at any of Secured Party's offices or elsewhere,
for cash, on credit or for future delivery, and upon such
other terms as Secured Party may deem commercially reasonable.
Debtor agrees that, to the extent notice of sale shall be
required by law, at least fifteen (15) days' notice to Debtor
of the time and place of any public sale or the time after
which any private sale is to be made shall constitute
reasonable notification. Secured Party shall not be obligated
to make any sale of Collateral regardless of notice
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of sale having been given. Secured Party may adjourn any
public or private sale from time to time by announcement at
the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was
so adjourned;
(iii) to the extent permitted by applicable law,
bring suit at law, in equity or through other appropriate
Proceedings, whether for the specific performance of any
covenant or agreement contained in this Agreement or any of
the other Security Instruments, for an injunction against a
violation of any of the terms hereof or thereof, in aid of the
exercise of any power Granted hereby or thereby, or by law, to
recover judgment for any and all amounts due on the Notes,
this Agreement, any of the other Security Instruments or
otherwise, including, without limitation, any deficiency
remaining after foreclosure hereunder;
(iv) exclude Debtor from the Collateral and take
immediate possession of interest therein, and, at the expense
of Debtor, maintain, repair, alter, use, add to, improve,
insure, lease, operate and manage the Collateral in such
manner as Secured Party shall see fit; and
(v) take any other appropriate action to protect
and enforce the rights and remedies of Secured Party
hereunder, or under or in respect of any other Security
Instrument, or otherwise.
(b) Notwithstanding any provision to the contrary
contained in this Agreement, the Notes or any other Security
Instrument, the unpaid principal amount of the Notes and all accrued
interest and other sums payable under the Notes or under this
Agreement shall be forthwith payable upon a sale of any portion of the
Collateral pursuant to subsection (a)(ii) of this Section 5.2. All
earnings, revenues, proceeds, rents, issues, profits and income
derived pursuant to subsection (a)(iv) of this Section 5.2 (after
deducting costs and expenses of operation and other proper charges),
all proceeds of any such sale and ail 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.
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(g) All rights and remedies from time to time conferred
upon or reserved to the Secured Party are cumulative, and none is
intended to be exclusive of another and shall be in addition to every
other right or remedy permitted by law. No delay or omission in
insisting upon the strict observance or performance of any provision
of this Agreement, or in exercising any right or remedy, shall be
construed as a waiver or relinquishment of such provision, nor shall
it impair such right or remedy. Every right and remedy may be
exercised from time to time and as often as deemed expedient in any
combination and order desired by Secured Party; provided, however,
that Secured Party shall exercise none of the remedies referenced in
this Section 5.2 with respect to the Collateral unless and until an
Event of Default shall have occurred and be continuing.
(h) Anything contained in this Agreement to the contrary
notwithstanding, until an Event of Default shall occur and be
continuing: (i) all rights, powers, privileges and other benefits of
or accruing to Debtor under the Assigned Agreements shall be
exercisable only by Debtor, without the consent or approval of the
Secured Party, (ii) Debtor shall retain full right to make all waivers
and agreements, to give and receive all notices and other instruments
or communications, and to take all action upon the occurrence of a
default under any Assigned Agreement, including the commencement,
conduct and consummation of legal, administrative or other
proceedings, as shall be permitted thereby or by law, and to do any
and all other things which Debtor is or may be entitled to do under
any Assigned Agreement.
SECTION 5.3 PROCEEDS OF COLLATERAL.
All cash proceeds received by Secured Party in respect of any sale of,
collection from, or other realization upon all or any part of the Collateral
shall be held by Secured Party as collateral for, and then promptly thereafter
applied by Secured Party against, all or any part of the amounts due under the
Notes and the other Secured Obligations in such order as Secured Party shall
elect. Any surplus of such cash or cash proceeds held by Secured Party and
remaining after payment in full of all the Secured Obligations shall be paid
over to Debtor or to whomsoever may be lawfully entitled to receive such
surplus.
SECTION 5.4 WAIVER OF RIGHTS; RECEIVER.
(a) Debtor consents to the appointment of one or more
receivers of all or part of the Collateral, upon the request of
Secured Party, if an Event of Default shall have occurred and be
continuing.
(b) To the extent permitted by law, Debtor hereby waives
its right to seek, and hereby agrees that it will not seek or derive
any benefit or advantage from, any of the following whether now
existing or hereafter in effect:
(i) any stay, extension, moratorium or similar
law with respect to the Collateral or the Secured Obligations;
(ii) any law allowing for the redemption of any
portion of the Collateral after a sale thereof under Section
5.2 hereof; and
(iii) any right to have any portion of the
Collateral after an Event of Default shall have occurred.
Debtor covenants not to hinder, delay or impede the exercise of any
right or remedy of Secured Party under or in respect of this Agreement
and agrees to suffer and permit the exercise of each such remedy.
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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 ail costs, fees and expenses (including, without
limitation, reasonable attorney's fees and expenses) incurred by such
Beneficiary in connection with such action, suit or Proceeding.
SECTION 6.2 GENERAL TAX INDEMNITY.
Debtor agrees to pay, and indemnify and hold each Beneficiary harmless
on an after-tax basis from, any and all federal, state, local and foreign
taxes, fees, withholdings, levies, imposts, duties, assessments and charges of
any kind and nature whatsoever, together with any penalties, fines or interest
therein (herein called "Taxes or Other Impositions") howsoever imposed, whether
levied or imposed upon or asserted against such Beneficiary, Debtor, any item
of Equipment or any part thereof, by any federal, state or local government or
taxing authority in the United States, or by any taxing authority or
governmental subdivision of a foreign country, upon or with respect to (a) any
item of Equipment (b) the manufacture, construction, ordering, purchase,
ownership, financing, delivery, leasing, releasing, 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
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which are imposed or levied by any federal, state or local taxing authority in
the United States. For purposes hereof, a "Covered Income Tax" shall mean an
income tax (including, without limitation, a tax imposed upon gross income or
receipts) imposed on any Beneficiary by any taxing authority (excluding the
United States federal government) in whose jurisdiction such Beneficiary
(including for this purpose all entities with which it is combined, integrated
or consolidated in such taxing authority's jurisdiction) would not engage in
business, would not maintain an office or other place of business and would not
otherwise be located therein, but for such Beneficiary's role in the
transaction associated with the financing of the Equipment, the operation of
the Equipment in such jurisdiction, the presence of Debtor or any use of the
Equipment or the transactions contemplated by the Bills of Sale, the Security
Instruments or the Notes.
Each Beneficiary shall furnish Debtor with copies of any requests for
information received by such Beneficiary from any taxing authority relating to
any taxes or other impositions with respect to which Debtor is required to
indemnify hereunder, and if a claim is made against such Beneficiary for any
such taxes or other impositions, with respect to which Debtor is liable for a
payment or indemnity hereunder, such Beneficiary shall give Debtor notice in
writing within (10) Business Days of such Beneficiary's receipt of such claim.
Debtor may, at its sole cost and expense, either in its own name or in the name
of any Beneficiary, contest the validity, applicability or amount of any such
tax or other imposition by means of a Permitted Contest. If any Beneficiary
shall obtain a refund of any amount paid by Debtor pursuant to this Section
6.2, such Beneficiary shall pay to Debtor the amount of such refund, together
with the amount of any interest actually received by such Beneficiary on
account of such refund. Debtor will promptly notify Secured Party of all
reports or returns required to be made with respect to any tax or other
imposition with respect to which Debtor is required to indemnify hereunder and
will promptly provide each Beneficiary with all information necessary for the
making and timely filing of such reports or returns by such Beneficiary. If any
Beneficiary requests that any such reports or returns be prepared and filed by
Debtor, Debtor will prepare and file the same if permitted by applicable law to
do so, and if not so permitted, Debtor shall prepare such reports or returns
for signature by such Beneficiary, and shall forward the same, together with
immediately available funds for payment of any tax or other imposition due, to
such Beneficiary, at least ten (10) Business Days in advance of the date such
payment is to be made. Upon written request, Debtor shall furnish each
Beneficiary with copies of all paid receipts or other appropriate evidence of
payment for all taxes or other impositions paid by Debtor pursuant to this
Section 6.2.
ARTICLE VII
FURTHER ASSURANCES; ATTORNEY-IN-FACT; DISCHARGE
SECTION 7.1 FURTHER ASSURANCES.
(a) Debtor agrees that from time to time, at the expense
of Debtor, Debtor will promptly execute and deliver all further
instruments and documents, and take all further action that Secured
Party may reasonably deem necessary or desirable, or that Secured
Party may otherwise reasonably request, in order to perfect and
protect any security interest Granted or purported to be Granted
hereby or to enable Secured Party to exercise and enforce its rights
and remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, Debtor will cooperate to
execute and file financing or continuation statements, or amendments
hereto or thereto, and such other instruments or notices, as may be
necessary or reasonably desirable, or as Secured Party may reasonably
request, in order to perfect and preserve the security interests
Granted or purported to be Granted hereby.
(b) A carbon, photographic or other reproduction of this
Agreement or any financing statement covering the Collateral or any
part thereof shall be sufficient as a financing statement where
permitted by law.
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(c) Debtor will furnish to Secured Party from time to
time statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as
Secured Party may reasonably request, all in reasonable detail.
SECTION 7.2 SECURED PARTY APPOINTED ATTORNEY-IN-FACT.
Debtor hereby irrevocably appoints Secured Party to serve as Debtor's
attorney-in-fact (provided, the parties hereto agree that Secured Party may not
act as Debtor's attorney-in-fact until the occurrence and during the
continuation of an Event of Default), with full authority in the place and
stead of Debtor and in the name of Debtor, Secured Party or otherwise, from
time to time in Secured Party's discretion, to take any action and to execute
any instrument, including without limitation financing statements or amendments
thereto, which Secured Party may deem necessary or advisable to accomplish the
purposes of this Agreement, including without limitation:
(a) to obtain and adjust insurance required to be paid to
Secured Party hereunder;
(b) to ask, demand, collect, xxx for, recover, compound,
receive and give acquittance and receipts for monies due and to become
due under or in respect of any of the Collateral;
(c) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with
subsections (a) or (b) above; and
(d) to file any claims or take any action or institute
any Proceedings which Secured Party may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce
the rights of Secured Party with respect to any of the Collateral.
SECTION 7.3 SECURED PARTY MAY PERFORM.
If Debtor fails to perform any agreement contained herein, Secured
Party may itself perform, or cause performance of, such agreement, and the
expenses of Secured Party incurred in connection therewith shall be payable by
Debtor under Section 6.1.
SECTION 7.4 SECURED PARTY'S DUTIES.
The powers conferred on Secured Party hereunder are solely to protect
its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Secured Party shall have no duty as to any Collateral
or as to the taking of any necessary steps to preserve rights against other
parties or any other rights pertaining to any Collateral.
SECTION 7.5 CONTINUING SECURITY INTEREST; TRANSFER OF NOTE;
TERMINATION.
This Agreement shall: (a) create a continuing security interest in the
Collateral and shall remain in full force and effect until payment in full of
the Secured Obligations, be binding upon Debtor, its successors and assigns and
(b) inure to the benefit of Secured Party and its permitted successors,
transferees and assigns. Without limiting the generality of the foregoing
clause, Secured Party may assign or otherwise transfer all or any part of
Secured Party's interest in the Notes and/or the Security Instruments to one or
more persons or entities, and such other persons or entities shall thereupon
become vested with all the benefits in respect thereof Granted to Secured Party
herein. Upon the payment in full of the Secured Obligations, the security
interest Granted hereby shall terminate and all rights to the Collateral shall
revert to Debtor. Upon any such termination, Secured Party will execute and
deliver to Debtor such documents as Debtor shall reasonably request to evidence
such termination.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 NOTICES.
Except as expressly permitted herein to the contrary, all notices and
other communications provided for hereunder shall be in writing (including
communication by telecopier) and mailed (postage prepaid, by registered or
certified mail, return receipt requested), telecopied or hand delivered:
if to Secured Party, at:
NationsBanc Leasing Corporation of
North Carolina
000 Xxxxx Xxxxx Xxxxxx, XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Manager of Corporate Lease
Administration
Telecopy: (000) 000-0000
or if to Debtor, at:
Eagle Geophysical, Inc.
00 Xxxxx Xxxxxx Xxxx, 0xx Xxxxx-Xxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy: (000) 000-0000
or, as to each party, at such other address as shall be designated by such
party in a written notice to the other party. All such notices and
communications shall be effective (a) five (5) days after such have been
deposited in the mail or (b) immediately (i) after such have been telecopied to
the appropriate telecopy number and (ii) after such have been hand delivered to
the appropriate address.
SECTION 8.2 RISK OF LOSS.
Debtor shall bear all risk of any loss of or damage to the Collateral
and in no event shall Secured Party be liable for such loss or damage.
SECTION 8.3 POWERS AND AGENCIES.
Whenever in this Agreement Secured Party or Debtor is Granted the
power of attorney or is appointed the agent and attorney-in-fact with respect
to any Person, such Grant or appointment is irrevocable and coupled with an
interest. Secured Party shall have full power of substitution and delegation
in respect of all such Grants and appointment.
SECTION 8.4 ENTIRE AGREEMENT.
The Notes, this Agreement and the other Security Instruments embody
the entire agreement between the parties and supersede all prior agreements and
understandings, if any, relating to the subject matter hereof.
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SECTION 8.5 LAWFUL INTEREST.
No provision in the Notes, this Agreement or any Security Instrument
or other document in favor of Secured Party shall require or permit the
collection of interest in excess of the maximum lawful rate which Debtor may
contract for, stipulate or agree to pay as determined by a court of competent
jurisdiction over the holder of the Notes or any such document. In determining
whether or not the interest paid or payable under any specific contingency
exceeds such maximum lawful rate, Debtor and Secured Party shall, to the full
extent permitted by applicable law, prorate, allocate and spread, in equal
parts, the total amount of interest throughout the entire contemplated term of
the Notes or other document, as the case may be, so that the interest rate is
uniform throughout the entire term of the Notes or such document. If it is so
determined that any interest in excess of such maximum lawful rate is provided
for, such excess shall be applied first to any other amounts not constituting
interest due or which may become due and payable to Debtor under the Notes or
any of such other documents, and the balance, if any, shall be refunded to
Debtor; provided, however, that in no event shall Debtor be obligated to pay,
and Secured Party hereby waives payment of, the amount of interest to the
extent it is in excess of the amount permitted by applicable law.
SECTION 8.6 SURVIVAL; SEVERABILITY.
If any word, phrase, sentence, paragraph, provision or section of this
Agreement, the Notes or any other Security Instrument shall be held, declared
or pronounced void, voidable, invalid, unenforceable or inoperative for any
reason by any court of competent jurisdiction, governmental authority or
otherwise, such holding, declaration or pronouncement shall not adversely
affect any other word, phrase, sentence, paragraph, provision or section of
this Agreement, the Notes or any other Security Instrument, which shall
otherwise remain in full force and effect and be enforced in accordance with
their respective terms, and the effect of such holding, declaration or
pronouncement shall be limited to the territory or the jurisdiction in which
made. All agreements, covenants, representations, warranties and conditions
contained in this Agreement or made pursuant to the provisions hereof shall
survive the execution and delivery of this Agreement until the Secured
Obligations shall have been paid and performed in full. All statements by
Debtor contained in any certificate or other instrument delivered pursuant to
the provisions of this Agreement or any other Security Instrument shall
constitute the representations and warranties of Debtor.
SECTION 8.7 BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefit of
Debtor and Secured Party and their respective successors and assigns, except
that Debtor shall not have the right to assign its rights hereunder of any
interest herein without the prior written consent of Secured Party. Secured
Party may assign all or any part of, or any interest in, its rights and
benefits hereunder, under the Notes and any Security Instrument as permitted
under Section 7.5 hereof, and to the extent of such permitted assignment each
such assignee shall have the same rights and benefits against Debtor as it
would have had if it were Secured Party hereunder.
SECTION 8.8 AMENDMENT AND WAIVER.
No amendment or waiver of any provision of the Notes, this Agreement
or any of the other Security Instruments, or consent to any departure by Debtor
therefrom, shall in any event be effective unless the same shall be in writing
and signed by Secured Party and Debtor, and such waiver and consent shall be
effective only in the specific instance and for the specific purpose for which
given. No failure on the part of Secured Party to exercise, and no delay in
exercising, any right under the Notes, this Agreement or any of the other
Security Instruments shall operate as a waiver thereof; nor shall any single or
partial exercise of any right under any such instrument or agreement preclude
any other or further exercise thereof or the exercise of any other right.
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SECTION 8.9 HEADINGS; EXECUTION IN COUNTERPART.
The section and article headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning of any
provision herein. This Agreement may be executed in counterparts, each of which
shall constitute an original, but all of which together shall constitute one
and the same Agreement.
SECTION 8.10 TRANSACTION COSTS.
Debtor shall pay all reasonable costs and out-of-pocket expenses of
Secured Party incurred in connection with preparation, negotiation, execution,
modification and/or enforcement of the Notes, this Agreement, the other
Security Instruments including without limitation (a) the reasonable legal fees
and expenses of Xxxxx & Xxx Xxxxx, PLLC, (b) all filing and registration costs,
(c) all fees and disbursements incurred by Secured Party in connection with the
custody, preservation, use or operation of, or the sale of, collection from, or
other realization upon, any of the Collateral, and (d) all fees and
disbursements incurred by Secured Party in connection with the failure by
Debtor to perform or observe any of the provisions hereof.
SECTION 8.11 APPLICABLE LAW; CONSENT TO JURISDICTION AND VENUE;
WAIVER OF JURY TRIAL.
THIS AGREEMENT, THE NOTES AND THE OTHER SECURITY INSTRUMENTS AND ALL
MATTERS RELATING THERETO SHALL, EXCEPT TO THE EXTENT OTHERWISE REQUIRED BY
APPLICABLE LAW, BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NORTH CAROLINA WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES. DEBTOR HEREBY SUBMITS TO THE JURISDICTION AND VENUE OF THE STATE
AND FEDERAL COURTS OF MECKLENBURG COUNTY, NORTH CAROLINA AND AGREES THAT
SECURED PARTY MAY, AT ITS OPTION, ENFORCE ITS RIGHTS HEREUNDER AND UNDER THE
NOTES AND OTHER SECURITY INSTRUMENTS IN SUCH COURTS. DEBTOR HEREBY IRREVOCABLY
WAIVES THE DEFENSE OF AN INCONVENIENT FORUM TO MAINTENANCE OF ANY ACTION OR
PROCEEDING BY SECURED PARTY IN SUCH COURTS. DEBTOR HEREBY IRREVOCABLY WAIVES,
TO THE EXTENT PERMITTED BY APPLICABLE LAW, ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE NOTES OR ANY OTHER SECURITY INSTRUMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
SECTION 8.12 BREAK-FUNDING COSTS.
Upon any early termination of this Agreement and/or any early
prepayment of the Notes for any reason which is not expressly permitted under
the Notes, Debtor shall promptly pay Secured Party (in addition to all other
amounts due and owing hereunder) an amount equal to the Break-Funding Costs
incurred by Secured Party, as such are (a) determined by Secured Party at such
time in its reasonable discretion and (b) specified in writing to Debtor.
SECTION 8.13 INTENTION OF THE PARTIES.
It is the intention of the parties to this Agreement that the
Equipment be and remain personal property, and at no time (so long as any of
the Secured Obligations remain outstanding) shall such Equipment be attached,
affixed or otherwise become a part of any vehicle or vessel. Further, each of
the parties hereto agree that it is their intent that the provisions of the UCC
govern the creation and perfection of a security interest in the Collateral.
[The remainder of this page has been intentionally left blank.]
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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.
EAGLE GEOPHYSICAL, INC., as Debtor
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President
NATIONSBANC LEASING CORPORATION OF
NORTH CAROLINA, as Secured Party
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Senior Vice President
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SCHEDULE 1.3(a)
SECURED TERM NOTE A
DUE FEBRUARY 29, 2000
$557,768.14 February 6, 1997
FOR VALUE RECEIVED, the undersigned EAGLE GEOPHYSICAL, INC., a
Delaware corporation (-Debtor") HEREBY PROMISES TO PAY to the order of
NATIONSBANC LEASING CORPORATION OF NORTH CAROLINA, a North Carolina corporation
("Secured Party"), the principal sum of FIVE HUNDRED FIFTY-SEVEN THOUSAND SEVEN
HUNDRED SIXTY-EIGHT AND 14/100 DOLLARS ($557,768.14) (the "Original Amount")
pursuant to the terms and conditions of that certain Loan and Security
Agreement dated as of the date hereof between the Debtor and the Secured Party,
as amended, modified or replaced from time to time (as so amended, modified or
replaced, the "Agreement" - all the terms, conditions, definitions and
covenants of such Agreement are expressly made a part hereof in the same manner
and with the same effect as if set forth herein at length, any holder of this
Secured Term Note A (the "Note") being entitled to the benefits and remedies
provided for in the Agreement).
The Bank has made a term loan to the Borrower as provided in Section
1.3(a) of the Loan Agreement. The outstanding principal balance hereof shall be
due and payable as provided in Section 1.3(a)(ii) of the Agreement.
Notwithstanding the foregoing, the final payment made on this Note shall be an
amount sufficient to discharge in full the unpaid Original Amount and all
accrued and unpaid interest on, and any other amounts due under this Note and
under the Agreement.
This Note shall bear interest on the outstanding balance hereof, and
such interest shall be payable hereunder, as provided in Section 1.3(a)(ii) of
the Agreement.
In the event the amounts owing under this Note shall be accelerated in
accordance with the terms of the Agreement, the amounts owing hereunder shall
become immediately due and payable without presentation, demand, protest or
notice of any kind, all of which are hereby expressly waived. Further, in the
event amounts owing hereunder are not paid when due (including any stated or
accelerated maturity), the Debtor agrees to pay promptly upon demand, in
addition to principal, interest and other amounts owing hereunder, all costs of
collection, including reasonable attorneys' fees.
All payments shall be payable, in lawful money of the United States
and in immediately available funds without setoff or counterclaim, to Secured
Party at its office at NationsBank Plaza, 101 South Xxxxx Street,
NC1-002-38-20, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 or such other address as the
holder thereof shall notify Debtor in writing.
In determining whether or not the interest paid or payable, under any
specific contingency, exceeds the maximum lawful rate permitted by law, Debtor
and Secured Party shall, to the full extent permitted by applicable law,
exclude voluntary prepayment and the effects thereof and amortize, prorate,
allocate and spread, in equal parts, the total amount of interest throughout
the entire contemplated term of this Note so that the interest rate is uniform
throughout the entire term of this Note. If it is so determined that any
interest in excess of such maximum lawful rate is provided for, then such
excess shall be applied first to any other amounts not constituting interest
due or which may become due under this Note or the Agreement and the balance,
if any, shall be refunded to Debtor; provided, however, that in no event shall
Debtor be obligated to pay, and Secured Party hereby waives payment of, the
amount of interest to the extent it is in excess of the amount permitted by
applicable law. No provision in this Note or the Agreement shall require or
permit the collection of interest in excess of the maximum lawful rate.
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This Note may be prepaid by the Debtor in accordance with Section
1.3(c) of the Agreement only if all amounts owing with respect to this Note,
Agreement and the other Security Instruments are paid in full. Except as
otherwise provided for herein and in the Agreement, this Note shall not be
subject to prepayment.
THIS NOTE, THE AGREEMENT AND THE SECURITY INSTRUMENTS AND ALL MATTERS
RELATING THERETO SHALL, EXCEPT TO THE EXTENT OTHERWISE REQUIRED BY APPLICABLE
LAW, BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NORTH CAROLINA WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
DEBTOR HEREBY SUBMITS TO THE JURISDICTION AND VENUE OF THE STATE AND FEDERAL
COURTS OF NORTH CAROLINA AND AGREES THAT THE SECURED PARTY MAY, AT ITS OPTION,
ENFORCE ITS RIGHTS HEREUNDER AND UNDER THE AGREEMENT AND THE OTHER SECURITY
INSTRUMENTS IN SUCH COURTS. DEBTOR HEREBY IRREVOCABLY WAIVES THE DEFENSE OF AN
INCONVENIENT FORUM TO MAINTENANCE OF ANY ACTION OR PROCEEDING BY SECURED PARTY
IN SUCH COURTS. DEBTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS NOTE,
THE AGREEMENT OR ANY OTHER SECURITY INSTRUMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
IN WITNESS WHEREOF, the Debtor has caused this Note to be executed as
of the date appearing above.
EAGLE GEOPHYSICAL, INC.
By:
-----------------------------------
Name (Printed):
-----------------------
Title:
--------------------------------
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SCHEDULE 1.3(b)
SECURED TERM NOTE B
DUE APRIL 30, 2002
$7,006,152.04 February 6, 1997
FOR VALUE RECEIVED, the undersigned EAGLE GEOPHYSICAL, INC., a
Delaware corporation ("Debtor") HEREBY PROMISES TO PAY to the order of
NATIONSBANC LEASING CORPORATION OF NORTH CAROLINA, a North Carolina corporation
("Secured Party"), the principal sum of SEVEN MILLION SIX THOUSAND ONE HUNDRED
FIFTY-TWO AND 04/100 DOLLARS ($7,006,152.04) (the "Original Amount") pursuant
to the terms and conditions of that certain Loan and Security Agreement dated
as of the date hereof between the Debtor and the Secured Party, as amended,
modified or replaced from time to time (as so amended, modified or replaced,
the "Agreement" - all the terms, conditions, definitions and covenants of such
Agreement are expressly made a part hereof in the same manner and with the same
effect as if set forth herein at length, any holder of this Secured Term Note B
(the "Note") being entitled to the benefits and remedies provided for in the
Agreement).
The Bank has made a term loan to the Borrower as provided in Section
1.3(b) of the Loan Agreement. The outstanding principal balance hereof shall be
due and payable as provided in Section 1.3(b)(ii) of the Agreement.
Notwithstanding the foregoing, the final payment made on this Note shall be an
amount sufficient to discharge in full the unpaid Original Amount and all
accrued and unpaid interest on, and any other amounts due under this Note and
under the Agreement.
This Note shall bear interest on the outstanding balance hereof, and
such interest shall be payable hereunder, as provided in Section 1.3(b)(ii) of
the Agreement.
In the event the amounts owing under this Note shall be accelerated in
accordance with the terms of the Agreement, the amounts owing hereunder shall
become immediately due and payable without presentation, demand, protest or
notice of any kind, all of which are hereby expressly waived. Further, in the
event amounts owing hereunder are not paid when due (including any stated or
accelerated maturity), the Debtor agrees to pay promptly upon demand, in
addition to principal, interest and other amounts owing hereunder, all costs of
collection, including reasonable attorneys' fees.
All payments shall be payable, in lawful money of the United States
and in immediately available funds without setoff or counterclaim, to Secured
Party at its office at NationsBank Plaza, 101 South Xxxxx Street,
NC1-002-38-20, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 or such other address as the
holder thereof shall notify Debtor in writing.
In determining whether or not the interest paid or payable, under any
specific contingency, exceeds the maximum lawful rate permitted by law, Debtor
and Secured Party shall, to the full extent permitted by applicable law,
exclude voluntary prepayment and the effects thereof and amortize, prorate,
allocate and spread, in equal parts, the total amount of interest throughout
the entire contemplated term of this Note so that the interest rate is uniform
throughout the entire term of this Note. If it is so determined that any
interest in excess of such maximum lawful rate is provided for, then such
excess shall be applied first to any other amounts not constituting interest
due or which may become due under this Note or the Agreement and the balance,
if any, shall be refunded to Debtor; provided, however, that in no event shall
Debtor be obligated to pay, and Secured Party hereby waives payment of, the
amount of interest to the extent it is in excess of the amount permitted by
applicable law. No provision in this Note or the Agreement shall require or
permit the collection of interest in excess of the maximum lawful rate.
This Note may be prepaid by the Debtor in accordance with Section
1.3(c) of the Agreement only if ail 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.
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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
EAGLE GEOPHYSICAL, INC.
By:
-----------------------------------
Name (Printed):
-----------------------
Title:
--------------------------------
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