SECURITY AGREEMENT
THIS SECURITY AGREEMENT dated as of May 29, 1996, is by and between 3-D
GEOPHYSICAL, INC., a Delaware corporation (the "Debtor") whose address is 7076
S. Alton Way, Englewood, Colorado 80112, and FIRST INTERSTATE BANK OF TEXAS,
N.A., a national banking association ("Secured Party") whose address is 1000
Louisiana, Houston, Texas.
R E C I T A L S:
A. Debtor and Secured Party have entered into that certain Loan
Agreement dated of even date herewith (such Loan Agreement, as the same may be
amended or modified from time to time, being hereinafter referred to as the
"Loan Agreement") pursuant to which Secured Party has agreed to make a revolving
credit loan to Borrower in the aggregate principal amount not to exceed
$3,000,000.00 and a term loan to Borrower in the aggregate principal amount not
to exceed $15,000,000.00, subject to the terms and conditions of the Loan
Agreement.
B. Secured Party has conditioned its obligations under the Loan
Agreement upon the execution and delivery of this Agreement by Debtor.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.1 Definitions. All terms used herein which are defined in the
Uniform Commercial Code as adopted and in effect from time to time in the State
of Texas ("UCC") shall have the same meanings herein as in the UCC unless the
context in which such terms are used herein indicates otherwise. All capitalized
terms used but not otherwise defined herein or which are defined in the UCC that
are defined in the Loan Agreement shall have the meanings ascribed to such terms
in the Loan Agreement, the applicable provisions of which Loan Agreement are
incorporated herein.
ARTICLE II
Security Interest
Section 2.1 Security Interest. To secure the prompt payment and
performance in full of the Obligations, Debtor hereby grants to Secured Party a
security interest in, and assigns and pledges, the following property, whether
now owned or existing or hereafter arising or acquired
and wherever arising or located (such property being hereinafter sometimes
called the "Collateral"):
(a) all accounts, accounts receivable, documents, instruments,
chattel paper, general intangibles of Debtor, including, without
limitation, all income tax returns, copyrights, patents, patent rights,
trademarks, tradenames, tradestyles, goodwill, going concern value,
franchise and distributorship agreements, whether now owned or
hereafter acquired, and all products and proceeds thereof;
(b) all equipment, inventory, machinery, and fixtures of Debtor,
whether now owned or hereafter acquired, and all accessions thereto and
all products and proceeds thereof;
(c) all investment property of Debtor, whether now owned or
hereafter acquired, and all accessions thereto and all products and
proceeds thereof;
(d) the Lockbox Account, any other deposit accounts now or
hereafter maintained by Debtor at or with Secured Party and all cash,
checks, instruments, securities, funds and monies now or hereafter
deposited in the foregoing; and
(e) all books and records (including computer software, diskettes,
information stored in computers and the like) pertaining to the
property described in clauses (a) and (d) above.
Section 2.1 Debtor Remains Liable. Notwithstanding anything to the
contrary contained herein, (a) the Debtor shall remain liable under the
contracts and agreements included in the Collateral to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by the
Secured Party of any of its rights hereunder shall not release the Debtor from
any of its duties or obligations under the contracts and agreements included in
the Collateral, and (c) the Secured Party shall not have any obligation or
liability under any of the contracts and agreements included in the Collateral
by reason of this Agreement, nor shall the Secured Party be obligated to perform
any of the obligations or duties of the Debtor thereunder or to take any action
to collect or enforce any claim for payment assigned hereunder.
ARTICLE III
Representations and Warranties; Etc.
To induce Secured Party to enter into this Agreement and the Loan
Agreement, represents and warrants to, and covenants and agrees with, Secured
Party that:
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Section 3.1 Title. Except for the security interest granted herein,
Debtor owns, and with respect to Collateral acquired after the date hereof
Debtor will own, the Collateral free and clear of any Lien, other than Permitted
Liens.
Section 3.2 Accounts. Unless Debtor has given Secured Party written
notice to the contrary, whenever the security interest granted hereunder
attaches to an account, Debtor shall be deemed to have represented and wan-anted
to Secured Party as to each and all of its accounts that (i) each account is
genuine and in all respects what it purports to be, (ii) each account represents
the legal, valid, and binding obligation of the account debtor evidencing
indebtedness unpaid and owed by such account debtor arising out of the
performance of labor or services by Debtor or the sale or lease of goods by
Debtor, (iii) the amount of each account represented as owing is the correct
amount actually and unconditionally owing except for normal trade discounts
granted in the ordinary course of business, and (iv) no account is subject to
any offset counterclaim, or other defense.
Section 3.3 Financing Statements. No financing statement, security
agreement, or other lien instrument covering all or any part of the Collateral
is on file in any public office, except as may have been filed in favor of
Secured Party pursuant to this Agreement.
Section 3.4 Organization and Authority. Debtor is a corporation duly
organized, validly existing, and in good standing under the laws of its state of
incorporation. Debtor has the partnership power and authority to execute,
deliver, and perform this Agreement, and the execution, delivery, and
performance of this Agreement by Debtor have been authorized by all necessary
corporate action on the part of Debtor and do not and will not violate any law,
rules or regulation or partnership agreement of Debtor and do not and will not
conflict with, result in a breach of, or constitute a default under the
provisions of any indenture, mortgage, deed of trust, security agreement, or
other instrument or agreement pursuant to which Debtor or any of its property is
bound.
Section 3.5 Principal Place of Business. The principal place of
business and chief executive office of Debtor, and the office where Debtor keeps
its books and records, is located at the address of Debtor shown at the
beginning of this Agreement.
Section 3.6 Location of Collateral; Markings. Debtor intends to place
all or part of the Collateral on certain vessels (collectively, "Vessel").
Debtor shall advise and notify Secured Party in writing from time to time, and
at any time upon Secured Party's request, the name, flag and name of owner of
the Vessels on which the Collateral is located; or, if not on a Vessel, the
other location of such Collateral. Debtor agrees to mark all equipment and
inventory Co now or hereafter located on a Vessel with a prominent nameplate
indicating that the Debtor owns such Collateral and Secured Party has a Lien
thereon.
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Section 3.7 Intellectual Property. No patents, trademarks, copyrights,
rights of use or other intellectual property are necessary, advisable or useful
for the conduct of Debtor's business and Debtor has none of the same.
Section 3.8 Perfection. Upon the filing of Uniform Commercial Code
financing statements in the jurisdictions listed on Schedule 2 attached hereto,
and upon the Secured Party's obtaining possession of all documents, instruments,
and chattel paper of the Debtor, the security interest in favor of the Secured
Party created herein will constitute a valid and perfected Lien upon and
security interest in the Collateral, subject to no equal or prior Lien.
Section 3.9 Inventory. All inventory has been produced in compliance
with all requirements of the Fair Labor Standards Act.
Section 3.10 Intellectual Property. No patents, trademarks, copyrights,
rights of use or other intellectual property are necessary, advisable or useful
for the conduct of Debtor's business and Debtor has none of the same.
ARTICLE IV
Covenants
Debtor covenants and agrees with Secured Party that until the
Obligations are paid and performed in full:
Section 4.1 Maintenance. Debtor shall maintain the Collateral in good
operating condition and repair and shall not permit any waste or destruction of
the Collateral or any part thereof. Debtor shall not use or permit the
Collateral to be used in violation of any law or inconsistently with the terms
of any policy of insurance. Debtor shall not use or permit the Collateral to be
used in any manner or for any purpose that would impair the value of the
Collateral or expose the Collateral to unusual risk.
Section 4.2 Liens and Encumbrances. (a) Neither Debtor, owner,
charterer, agent, master, nor any member of the crew of any Vessel has, nor
shall have, any right, power or authority to create, incur or permit to be
placed or imposed on any Collateral, or any part thereof, any lien whatsoever
other than to Secured Party. Debtor shall defend the Collateral against, any
lien, security interest, or other encumbrance on the Collateral except the
security interest of Secured Party hereunder, and shall defend Debtor's rights
in the Collateral and Secured Party's security interest in the Collateral
against the claims of all persons and entities. Debtor shall further obtain
consent from the owner of each of the Vessel, each mortgagee of real property
owned by Debtor, and each landlord of real property leased by Debtor upon which
any Collateral is located not to create, permit, or suffer to exist any lien,
security interest, or other encumbrances on the Collateral.
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(b) Debtor shall promptly pay and discharge, or caused to be paid,
discharged and released, any and all taxes, assessments, governmental charges,
fines, penalties, or Liens that may attach to or be imposed upon the Collateral
by virtue that the Collateral is located on the Vessel. If any Vessel shall be
detained, seized, levied upon or taken into custody under process or under color
of any authority, Debtor shall promptly notify Secured Party in writing and
shall promptly cause the Vessel to be discharged or released therefrom.
Section 4.3 Modification of Accounts. Debtor shall do nothing to impair
the rights of Secured Party in the Collateral. The Debtor shall, in accordance
with prudent business practices, endeavor to collect or cause to be collected
from each account debtor under its accounts, as and when due, any and all
amounts owing under such accounts. Without the prior written consent of Secured
Party, Debtor shall not (a) grant any extension of time for any payment with
respect to the Accounts, (b) compromise, compound, or settle any of the
Accounts, (c) release in whole or in part any person or entity liable for
payment with respect to the Accounts, (d) allow any credit or discount for
payment with respect to the Accounts other than (i) normal trade discounts
granted in the ordinary course of business or (ii) discounts not to exceed
(without Secured Party's consent) $150,000 individually or $400,000 in the
aggregate that are given to avoid a greater loss or maximize recovery of monies
due to Debtor, or (e) release any lien, security interest, or assignment
securing the Accounts, or otherwise amend or modify any of the Accounts.
Section 4.4 Disposition of Collateral. Debtor shall not sell, lease, or
otherwise dispose of the Collateral or any part thereof without the prior
written consent of Secured Party, except Debtor may sell inventory in the
ordinary course of business.
Section 4.5 Further Assurances. At any time and from time to time, upon
the request of Secured Party, and at the sole expense of Debtor, Debtor shall
promptly execute and deliver all such further instruments and documents and take
such further action as Secured Party may deem necessary or desirable to preserve
and perfect its security interest in the Collateral and carry out the provisions
and purposes of this Agreement, including, without limitation, the execution and
filing of such financing statements as Secured Party may require. A carbon,
photographic, or other reproduction of this Agreement or of any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement and may be filed as a financing statement. Debtor shall
promptly endorse and deliver to Secured Party all documents, instruments, and
chattel paper that it now owns or may hereafter acquire.
Section 4.6 Risk of Loss; Insurance. Debtor shall be responsible for
any loss of or damage to the Collateral. Debtor shall maintain, with financially
sound and reputable companies, insurance policies (i) insuring the Collateral
against all marine risks, loss by fire, explosion, theft, and such other risks
and casualties as are customarily insured against by companies engaged in the
same or a similar business, and (ii) insuring Debtor and Secured Party against
liability for personal injury and property damage relating to the Collateral,
such policies to be in such amounts and covering such risks as are customarily
insured against by companies engaged in the same or a similar business, with
losses payable to Debtor and Secured Party as their respective interests
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may appear and with the Secured Party being named as an additional assured
thereunder. All insurance with respect to the Collateral shall provide that no
cancellation, reduction in amount, or change in coverage thereof shall be
effective unless Secured Party has received 30 days prior written notice
thereof. Debtor shall deliver to Secured Party copies of all insurance policies
covering the Collateral or any part thereof.
Section 4.7 Warehouse Receipts Non-Negotiable. Debtor agrees that if
any warehouse receipt or receipt in the nature of a warehouse receipt is issued
with respect to any of its inventory, such warehouse receipt or receipt in the
nature thereof shall not be "negotiable" (as such term is used in Section 7-104
of the Uniform Commercial Code as adopted by the State of Texas).
Section 4.8 Inspection Rights. Debtor shall permit and obtain consent
from the Vessel Owner to permit Secured Party and its representatives to examine
or inspect the Collateral wherever located and to examine, inspect, and copy
Debtor's books and records at any reasonable time and as often as Secured Party
may desire.
Section 4.9 Vessel Owner, Mortgagee and Landlord Waivers, Etc. Debtor
shall cause each owner of a Vessel on, which the Collateral is located to
execute and deliver instruments satisfactory in form and substance to Secured
Party pursuant to which such Vessel owner (i) waives its rights, if any, in the
Collateral, (ii) confirms that it will not create, incur or place upon any
Collateral located on its Vessel any Lien, security interest, or other
encumbrance, (iii) covenants not to remove the Vessel from the territorial
waters of the United States, Canada or Mexico in the Gulf of Mexico without
prior written notification to Secured Party, (iv) confirms that there is no Lien
upon the Vessel or that it has notified the holder of the Lien that the Debtor's
Property located thereon is not the owner's nor the Vessel's, and (v) covenants
not to abandon a Vessel in any port. Debtor shall cause each mortgagee of real
property owned by Debtor and each landlord of real property leased by the Debtor
upon which any of the Collateral is located to execute and deliver instruments
satisfactory in form and substance to Secured Party pursuant to which such
mortgagee or landlord (i) waives its rights, if any, in the Collateral, and (ii)
confirms that it will not create, incur or place upon any Collateral located on
its property any Lien, security interest, or other encumbrance.
Section 4.10 Taxes. Debtor agrees to pay or discharge prior to
delinquency all taxes, assessments, levies, and other governmental charges
imposed on it or its property, except Debtor shall not be required to pay or
discharge any tax, assessment, levy, or other governmental charge if (i) the
amount or validity thereof is being contested by Debtor in good faith by
appropriate proceedings diligently pursued, (ii) such proceedings do not involve
any risk of sale, forfeiture, or loss of the Collateral or any interest therein,
and (iii) adequate reserves therefor have been established in conformity with
GAAP.
Section 4.11 Obligations. Debtor shall duly and punctually pay and
perform the Obligations.
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Section 4.12 Notification. Debtor shall promptly notify Secured Party
of (i) any Lien made or threatened against the Collateral, (ii) any material
change in the Collateral, including, without limitation, any material damage to
or loss of the Collateral, and (iii) the occurrence or existence of any Event of
Default or the occurrence or existence of any condition or event that, with the
giving of notice or lapse of time or both, would be an Event of Default.
Section 4.13 Corporate Changes. Debtor shall not change its name,
identity, or corporate structure in any manner that might make any financing
statement filed in connection with this Agreement seriously misleading unless
Debtor shall have given Secured Party 30 days prior written notice thereof and
shall have taken all action deemed necessary by Secured Party to make each
financing statement not seriously misleading. Debtor shall not change its
principal place of business, chief executive office, or the place where it keeps
its books and records unless it shall have given Secured Party 30 days prior
written notice thereof and shall have taken all action deemed necessary by
Secured Party to cause its security interest in the Collateral to be perfected
with the priority required by this Agreement.
Section 4.14 Books and Records; Information. Debtor shall keep accurate
and complete books and records of the Collateral and Debtor's business and
financial condition in accordance with generally accepted accounting principles
consistently applied. Debtor shall from time to time at the request of Secured
Party deliver to Secured Party such information regarding the Collateral and
Debtor as Secured Party may request, including, without limitation, lists and
descriptions of the Collateral and evidence of the identity and existence of the
Collateral. Debtor shall mark its books and records to reflect the security
interest of Secured Party under this Agreement.
Section 4.15 Compliance with Agreements. Debtor shall comply in all
material respects with all mortgages, deeds of trust, instruments, and other
agreements binding on it or affecting its properties or business.
Section 4.16 Compliance with Laws. Debtor shall comply with all
applicable laws, rules, regulations, and orders of any court or governmental
authority.
Section 4.17 Equipment and Inventory. The Debtor shall keep the
equipment and inventory at the locations specified on Schedule 1 hereto or, upon
30 days prior written notice to the Secured Party, at such other places within
the United States of America where all action required to perfect the Secured
Party's security interest in the equipment and inventory with the priority
required by this Agreement shall have been taken.
Section 4.18 Collection of Accounts. Accounts shall be collected
through the Lockbox (Secured Party, recognizing that some Accounts arising in
the first several months of this Agreement cannot effectively be directed to the
Lockbox). In connection with such collections, the Debtor may take (and, at the
Secured Party's direction, shall take) such actions as the Debtor or the Secured
Party may deem necessary or advisable to enforce collection of the accounts. In
addition to the foregoing, the Debtor agrees that if any Proceeds of any
Collateral (including
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payments made in respect of accounts) shall be received by the Debtor rather
than through the Lockbox, the Debtor shall promptly deliver such Proceeds to the
Secured Party with any necessary endorsements. Until such Proceeds are delivered
to the Secured Party, such Proceeds shall be held in trust by the Debtor for the
benefit of the Secured Party and shall not be commingled with any other funds or
property of the Debtor. All Proceeds of Collateral received by the Secured Party
pursuant to this Section may be applied by the Secured Party to the Obligations
in such order and manner as. the Secured Party may elect in its sole discretion.
Section 4.19 Location of Collateral. Debtor shall not move any of the
Collateral from the Vessel or Vessels identified hereunder without the prior
written consent of Secured Party.
Section 4.20 Lockbox Account. The Debtor agrees to notify each account
debtor and other obligors to deliver all payments and amounts owed to the Debtor
directly to the Lockbox and to renotify, from time to time and in any event
promptly upon request of the Secured Party, those account debtors and obligors
who do not deliver all payments due to the Debtor directly to the Lockbox that
the same must be delivered to the Lockbox (the Secured Party being granted such
renotification right if the Debtor fails or refuses so to do). The Lockbox shall
be under the sole control of the Secured Party. The Debtor shall have no right
to effect withdrawals from the Lockbox Account and the Lockbox Account shall be
maintained in the name and under the domain and control of the Secured Party.
After Default and upon instructions from I/O, funds to be disbursed to the
Borrower may be restricted or applied to the Obligations, or both.
ARTICLE V
Rights of Secured Party
Section 5.1 Power of Attorney. Debtor hereby irrevocably constitutes
and appoints Secured Party and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the name of Debtor or in its own name, to take any and
all action and to execute any and all documents and instruments which Secured
Party at any time and from time to time deems necessary or desirable to
accomplish the purposes of this Agreement and, without limiting the generality
of the foregoing, Debtor hereby gives Secured Party the power and right on
behalf of Debtor and in its own name to do any of the following, without notice
to or the consent of Debtor:
(i) to demand, sue for, collect, or receive in the name of Debtor
or in its own name, any money or property at any time payable or
receivable on account of or in exchange for any of the Collateral and,
in connection therewith, endorse checks, notes, drafts, acceptances,
money orders, documents of title, or any other instruments for the
payment of money under the Collateral or any policy of insurance;
(ii) to pay or discharge taxes, liens, security interests, or
other encumbrances levied or placed on or threatened against the
Collateral;
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(iii) to send requests for verification to account debtors and
other obligors;
(iv) to notify post office authorities to change the address for
delivery of mail of Debtor to an address designated by Secured Party
and to receive, open, and dispose of mail addressed to Debtor;
(v) (A) to direct account debtors and any other parties liable for
any payment under any of the Collateral to make payment of any and all
monies due and to become due thereunder directly to Secured Party or as
Secured Party shall direct; (B) to receive payment of and receipt for
any and all monies, claims, and other amounts due and to become due at
any time in respect of or arising out of any Collateral; (C) to sign
and endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
proxies, stock powers, verifications, and notices in connection with
accounts and other documents relating to the Collateral; (D) to
commence and prosecute any suit, action, or proceeding at law or in
equity in any court of competent jurisdiction to collect the Collateral
or any part thereof and to enforce any other right in respect of any
Collateral; (E) to defend any suit, action, or proceeding brought
against Debtor with respect to any Collateral; (F) to settle,
compromise, or adjust any suit, action, or proceeding described above
and, in connection therewith, to give such discharges or releases as
Secured Party may deem appropriate; (G) to exchange any of the
Collateral for other property upon any merger, consolidation,
reorganization, recapitalization, or other readjustment of the issuer
thereof and, in connection therewith, deposit any of the Collateral
with any committee, depositary, transfer agent, registrar, or other
designated agency upon such terms as Secured Party may determine; (H)
to add or release any guarantor, endorser, surety, or other party to
any of the Collateral or the Obligations; (I) to renew, extend, or
otherwise change the terms and conditions of any of the Collateral or
Obligations; (J) to insure, and to make, settle, compromise, or adjust
claims under any insurance policy covering, any of the Collateral; and
(K) to sell, transfer, pledge, make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as
though Secured Party were the absolute owner thereof for all purposes,
and to do, at Secured Party's option and Debtors expense, at any time,
or from time to time, all acts and things which Secured Party deems
necessary to protect, preserve, or realize upon the Collateral and
Secured Party's security interest therein.
This power of attorney is a power coupled with an interest and shall be
irrevocable. Secured Party shall be under no duty to exercise or withhold the
exercise of any of the rights, powers, privileges, and options expressly or
implicitly granted to Secured Party in this Agreement, and shall not be liable
for any failure to do so or any delay in doing so. SECURED PARTY SHALL NOT BE
LIABLE FOR ANY ACT OR OMISSION OR FOR ANY ERROR OF JUDGMENT OR ANY MISTAKE OF
FACT OR LAW IN ITS INDIVIDUAL CAPACITY OR IN ITS CAPACITY AS ATTORNEY-IN-FACT
EXCEPT ACTS OR OMISSIONS RESULTING FROM ITS GROSS NEGLIGENCE MISCONDUCT. This
power
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of attorney is conferred on Secured Party solely to protect, preserve, and
realize upon its security interest in the Collateral. Secured Party shall not be
responsible for any decline in the value of the Collateral and shall not be
required to take any steps to preserve rights against prior parties or to
protect, preserve, or maintain any security interest or lien given to secure the
Collateral.
Section 5.2 Performance by Secured Party. If Debtor fails to perform or
comply with any of its agreements contained herein, Secured Party itself may, at
its sole discretion, cause or attempt to cause performance or compliance with
such agreement and the expenses of Secured Party, together with interest thereon
at the maximum nonusurious per annum rate permitted by applicable law, shall be
payable by Debtor to Secured Party on demand and shall constitute Obligations
secured by this Agreement. Notwithstanding the foregoing, it is expressly agreed
that Secured Party shall not have any liability or responsibility for the
performance of any obligation of Debtor under this Agreement.
Section 5.3 Setoff; Property Held by Secured Party. Secured Party shall
have the right to set off and apply against the Obligations, at any time and
without notice to Debtor, and is hereby granted a contractual Lien and right to
setoff, any and all deposits (general or special, time or demand, provisional or
final) or other sums at any time credited by or owing from Secured Party to
Debtor whether or not the Obligations are then due. As additional security for
the Obligations, Debtor hereby grants Secured Party a security interest in all
money, instruments, and other property of Debtor now or hereafter held by
Secured Party, including, without limitation, property held in safekeeping. In
addition to Secured Party's right of setoff and as further security for the
Obligations, Debtor hereby grants Secured Party a security interest in all
deposits (general or special, time or demand, provisional or final) and other
accounts of Debtor now or hereafter deposited with or held by Secured Party and
all other sums at any time credited by or owing from Secured Party to Debtor.
The rights and remedies of Secured Party hereunder are in addition to other
rights and remedies (including, without limitation, other rights of setoff)
which Secured Party may have.
Section 5.4 Assignment by Secured Party. Secured Party may from time to
time assign the Obligations and any portion thereof and/or the Collateral and
any portion thereof, and the assignee shall be entitled to all of the rights and
remedies of Secured Party under this Agreement in relation thereto.
ARTICLE VI
Default
Section 6.1 Upon the occurrence of an Event of Default, Secured Party
shall have the following rights and remedies and may do any one or more of the
following:
(i) Secured Party may declare the Obligations or any part thereof
immediately due and payable, without notice, demand, presentment,
notice of dishonor, notice of
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acceleration, notice of intent to accelerate, notice of intent to
demand, protest, or other formalities of any kind, all of which are
hereby expressly waived by Debtor; provided, however, that upon the
occurrence of an Event of Default under Section 9.1(d) or Section
9.1(e) of the Loan Agreement, the Obligations shall become immediately
due and payable without notice, demand, presentment, notice of
dishonor, notice of acceleration, notice of intent to accelerate,
notice of intent to demand, protest, or other formalities of any kind,
all of which are hereby expressly waived by Debtor.
(ii) In addition to all other rights and remedies granted to
Secured Party in this Agreement and in any other instrument or
agreement securing, evidencing, or relating to the Obligations or any
part thereof, Secured Party shall have all of the rights and remedies
of a secured party under the UCC as adopted by the State of Texas.
Without limiting the generality of the foregoing, Secured Party may (A)
without demand or notice to Debtor, collect, receive, or take
possession of the Collateral or any part thereof and for that purpose
Secured Party may enter upon any premises on which the Collateral is
located and remove the Collateral therefrom or render it inoperable,
and/or (B) sell, lease, or otherwise dispose of the Collateral, or any
part thereof, in one or more parcels at public or private sale or
sales, at Secured Party's offices or elsewhere, for cash, on credit, or
for future delivery. Upon the request of Secured Party, Debtor shall
assemble the Collateral and make it available to Secured Party at any
place designated by Secured Party that is reasonably convenient to
Debtor and Secured Party. Debtor agrees that Secured Party shall not be
obligated to give more than five days written notice of the time and
place of any public sale or of the time after which any private sale
may take place and that such notice shall constitute reasonable notice
of such matters. Debtor shall be liable for all expenses of retaking,
holding, preparing for sale, or the like, and all attorneys' fees,
legal expenses, and all other costs and expenses incurred by Secured
Party in connection with the collection of the Obligations and the
enforcement of Secured Party's rights under this Agreement. Secured
Party may apply the Collateral against the Obligations in such order
and manner as Secured Party may elect in its sole discretion. Debtor
shall remain liable for any deficiency if the proceeds of any sale or
disposition of the Collateral are insufficient to pay the Obligations
in full. Debtor waives all rights of marshalling in respect of the
Collateral.
(iii) Secured Party may cause any or all of the Collateral held by
it to be transferred into the name of Secured Party or the name or
names of Secured Party's nominee or nominees.
(iv) Secured Party may exercise or cause to be exercised all
voting rights and corporate powers in respect of the Collateral.
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ARTICLE VII
Miscellaneous
Section 7.1 Expenses; Indemnification. Debtor agrees to pay on demand
all costs and expenses incurred by Secured Party in connection with the
preparation, negotiation, and execution of the Agreement and any and all
amendments, modifications, and supplements hereto. Debtor agrees to pay and to
hold Secured Party harmless from and against all fees and all excise, sales,
stamp, and other taxes payable in connection with this Agreement or the
transactions contemplated hereby. Debtor hereby indemnifies Secured Party and
each affiliate thereof and their respective officers, directors, employees,
attorneys, and agents from, and holds each of them harmless against, any and all
losses, liabilities, claims, damages, penalties, judgments, costs, and expenses
(including attorneys' fees) to which any of them may become subject which
directly or indirectly arise from or relate to (i) the negotiation, execution,
delivery, performance, administration, or enforcement of this Agreement or any
other instrument or agreement securing, evidencing, or relating to the
Obligations or any part thereof, (ii) any of the transactions contemplated by
this Agreement or any other instrument or agreement securing, evidencing, or
relating to the Obligations or any part thereof, (iii) any breach by Debtor of
any representation, warranty, covenant, or other agreement contained in this
Agreement or any other instrument or agreement securing, evidencing, or relating
to the Obligations or any part thereof, or (iv) any investigation, litigation,
or other proceeding, including, without limitation, any threatened
investigation, litigation, or other proceeding relating to any of the foregoing.
WITHOUT LIMITING ANY PROVISION OF THIS AGREEMENT OR ANY OTHER INSTRUMENT, OR
AGREEMENT SECURING, EVIDENCING, OR RELATING TO THE OBLIGATIONS OR ANY PART
THEREOF, IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH PERSON OR
ENTITY TO BE INDEMNIFIED UNDER THIS SECTION SHALL BE INDEMNIFIED FROM AND HELD
HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES,
JUDGMENTS, COSTS, AND EXPENSES (INCLUDING ATTORNEYS' FEES) ARISING OUT OF OR
RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF THE PERSON OR ENTITY TO BE
INDEMNIFIED, but no indemnitee shall be indemnified for their own gross
negligence or willful misconduct.
Section 7.2 No Waiver; Cumulative Remedies. No failure on the part of
Secured Party to exercise and no delay in exercising, and no course of dealing
with respect to, any right, power, or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power, or privilege under this Agreement preclude any other or further
exercise thereof or the exercise of any other right, power, or privilege. The
rights and remedies provided for in this Agreement are cumulative and not
exclusive of any rights and remedies provided by law.
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Section 7.3 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of Debtor and Secured Party and their respective
heirs, successors, and assigns, except that Debtor may not assign any of its
rights or obligations under this Agreement without the prior written consent of
Secured Party.
Section 7.4 AMENDMENT; ENTIRE AGREEMENT. THIS AGREEMENT EMBODIES THE
FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDES ANY AND ALL
PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER
WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTERHEREOF AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS
AMONG THE PARTIES HERETO. The provisions of this Agreement may be amended or
waived only by an instrument in writing signed by the parties hereto.
Section 7.5 Notices. All notices and other communications provided for
in this Agreement shall be given or made in accordance with the terms of the
Loan Agreement.
Section 7.6 APPLICABLE LAW; VENUE; SERVICE OF PROCESS. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. THIS AGREEMENT
HAS BEEN ENTERED INTO IN HARRIS COUNTY, TEXAS, AND IT SHALL BE PERFORMABLE FOR
ALL PURPOSES IN HARRIS COUNTY, TEXAS.
Section 7.7 Headings. The headings, captions, and arrangements used in
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
Section 7.8 Survival of Representations and Warranties. All
representations and warranties made in this Agreement or in any certificate
delivered pursuant hereto shall survive the execution and delivery of this
Agreement, and no investigation by Secured Party shall affect the
representations and warranties or the right of Secured Party to rely upon them.
Section 7.9 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 7.10 Waiver of Bond. In the event Secured Party seeks to take
possession of any or all of the Collateral by judicial process, Debtor hereby
irrevocably waives any bonds and any surety or security relating thereto that
may be required by applicable law as an incident to such possession, and waives
any demand for possession prior to the commencement of any such suit or action.
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Section 7.11 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 7.12 Construction. Debtor and Secured Party acknowledge that
each of them has had the benefit of legal counsel of its own choice and has been
afforded an opportunity to review this Agreement with its legal counsel and that
this Agreement shall be construed as if jointly drafted by Debtor and Secured
Party.
Section 7.13 Obligations Absolute. The obligations of Debtor under this
Agreement shall be absolute and unconditional and shall not be released,
discharged, reduced, or in any way impaired by any circumstance whatsoever,
including, without limitation, any amendment, modification, extension, or
renewal of this Agreement, the Obligations, or any document or instrument
evidencing, securing, or otherwise relating to the Obligations, or any release
or subordination of collateral, or any waiver, consent, extension, indulgence,
compromise, settlement, or other action or inaction in respect of this
Agreement, the Obligations, or any document or instrument evidencing, securing,
or otherwise relating to the Obligations, or any exercise or failure to exercise
any right, remedy, power, or privilege in respect of the Obligations.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first written above.
DEBTOR: SECURED PARTY:
3-D GEOPHYSICAL, INC. FIRST INTERSTATE BANK OF TEXAS, N.A.
By: ________________________ By: ________________________________
J.D. White, Secretary Randy Wick
Banking Officer
Address for Notices: Address for Notices:
7076 S. Alton Way 1000 Louisiana
Englewood, Colorado 80112 Houston, Texas 77002
Fax No.: (303) 290-0447 Fax No.: (713) 250-7031
Telephone No.: (303) 741-3700 Telephone No.: (713) 250-7240
Attention: President Attention: Mr. Marc A. Dunmire
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