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EXHIBIT 10.4
[BANK ONE, TEXAS, N.A. LETTERHEAD]
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LETTER LOAN AGREEMENT
December 8, 1997
Mitcham Industries, Inc.
P. O. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
This Letter Loan Agreement (the "Loan Agreement") will serve to set
forth the terms of the financing transactions by and between Mitcham
Industries, Inc., a Texas corporation ("Borrower"), and BANK ONE, TEXAS,
NATIONAL ASSOCIATION ("Bank"):
1. LOAN. Subject to the terms and conditions set forth in this
Loan Agreement and the other agreements, instruments and documents at any time
evidencing, securing, governing, guaranteeing and/or pertaining to the
Indebtedness, as hereinafter defined (collectively, together with this Loan
Agreement, referred to hereinafter as the "Loan Documents"), Bank and Borrower
hereby agree as follows:
(a) Revolving Line of Credit. Subject to the terms and
conditions set forth herein, Bank agrees to lend to Borrower, on a
revolving basis from time to time during the period commencing on the
date hereof and continuing through and including 11:00 a.m. (Houston,
Texas time) on December 8, 1999, (the "Termination Date"), such
amounts as Borrower may request hereunder (the "Revolving Line of
Credit"); provided, however, the total principal amount outstanding at
any time shall not exceed the lesser of (i) an amount equal to the
Borrowing Base (as hereinafter defined), or (ii) $15,000,000.00 (the
"Committed Sum"). If at any time the aggregate principal amount
outstanding under the Revolving Line of Credit shall exceed an amount
equal to the Borrowing Base, Borrower agrees to immediately repay to
Bank such excess amount, plus all accrued but unpaid interest thereon.
Subject to the terms and conditions hereof, Borrower may borrow, repay
and reborrow hereunder. All sums advanced hereunder, together with
all accrued but unpaid interest thereon, shall be due and payable in
full on the Termination Date.
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As used in this Loan Agreement, the term "Borrowing Base" shall have
the meaning set forth hereinbelow:
An amount equal to eighty (80%) of the Borrower's Eligible Accounts,
plus fifty percent (50%) of all equipment leased by Borrower to
companies or other entities whose principal place of business is
located in the United States or Canada.
As used herein, the term "Eligible Accounts" shall mean at any time,
an amount equal to the aggregate net invoice or ledger amount owing on
all trade accounts receivable of Borrower for goods sold or leased or
services rendered in the ordinary course of business, in which the
Bank has a perfected, first priority lien, after deducting (without
duplication): (i) each such account that is unpaid ninety (90) days or
more after the original invoice date thereof, (ii) the amount of all
discounts, allowances, rebates, credits and adjustments to such
accounts (iii) the amount of all contra accounts, setoffs, defenses or
counterclaims asserted by or available to the account debtors, (iv)
all accounts with respect to which goods are placed on consignment or
subject to a guaranteed sale or other terms by reason of which payment
by the account debtor may be conditional, (v) the amount billed for or
representing retainage, if any, until all prerequisites to the
immediate payment of retainage have been satisfied, (vi) all accounts
owing by account debtors for which there has been instituted a
proceeding in bankruptcy or reorganization under the United States
Bankruptcy Code or other law, whether state or federal, now or
hereafter existing for relief of debtors, (vii) all accounts owing by
any affiliates of Borrower, (viii) all accounts in which the account
debtor is the United States or any department, agency or
instrumentality of the United States, except to the extent an
acknowledgment of assignment to Bank of such account in compliance
with the Federal Assignment of Claims Act and other applicable laws
has been received by Bank, (ix) all accounts due Borrower by any
account debtor whose principal place of business is located outside
the United States of America and its territories, unless such accounts
are secured by ExIm Bank or guaranteed by a letter of credit in a form
and issued by an institution acceptable to Bank in its sole
discretion, (x) all accounts subject to any provision prohibiting
assignment or requiring notice of or consent to such assignment, (xi)
that portion of all account balances owing by any single account
debtor which exceeds twenty-five percent 25% of the aggregate of all
accounts otherwise deemed eligible hereunder which are owing to
Borrower by all account debtors, and (xii) any other accounts deemed
unacceptable by Bank in its sole and absolute discretion; provided,
however, if more than twenty percent (20%) of the then balance owing
by any single account debtor does not qualify as an Eligible Account
under the foregoing
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provisions, then the aggregate amount of all accounts owing by such
account debtor shall be excluded from Eligible Accounts.
The advances under the Revolving Line of Credit shall be collectively called
the "Loan". The term "Indebtedness", as used herein, shall mean the Loan and
all other indebtedness owing from time to time to Bank by Borrower.
2. PROMISSORY NOTE. The Loan shall be evidenced by one
promissory note (herein called, together with any renewals, extensions and
increases thereof, the "Note") of even date herewith, duly executed by
Borrower, in the stated principal amount of Fifteen Million and No/100 Dollars
($15,000,000.00) and in form and substance acceptable to Bank. Interest on the
Note shall accrue at the rate set forth therein. The principal of and interest
on the Note shall be due and payable in accordance with the terms and
conditions set forth in the Note and in this Loan Agreement.
3. GUARANTORS. As a condition precedent to the Bank's obligation
under this Loan Agreement to make the Loan to Borrower, Borrower agrees to
cause all current and future subsidiaries of Borrower (whether one or more, the
"Guarantors") to each execute and deliver to Bank contemporaneously herewith an
unlimited guaranty agreement, in form and substance satisfactory to Bank.
4. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents
and warrants, and upon each request for an advance under the Revolving Line of
Credit further represents and warrants, to Bank as follows:
(a) Existence. Borrower is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Texas and all other states where it is doing business, and has all
requisite power and authority to execute and deliver this Loan
Agreement and the other Loan Documents.
(b) Binding Obligations. The execution, delivery, and
performance of this Loan Agreement and all of the other Loan Documents
by Borrower have been duly authorized by all necessary corporate
action by Borrower, and constitute legal, valid and binding
obligations of Borrower, enforceable in accordance with their
respective terms, except as limited by bankruptcy, insolvency or
similar laws of general application relating to the enforcement of
creditors' rights and except to the extent specific remedies may
generally be limited by equitable principles.
(c) No Consent. The execution, delivery and performance
of this Loan Agreement and the other Loan
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Documents, and the consummation of the transactions contemplated
hereby and thereby, do not (i) conflict with, result in a violation
of, or constitute a default under (A) any provision of Borrower's
articles of incorporation or bylaws or any agreement or other
instrument binding upon Borrower, or (B) any law, governmental
regulation, court decree or order applicable to Borrower, or (ii)
require the consent, approval or authorization of any third party.
(d) Financial Condition. Each financial statement of
Borrower supplied to the Bank, including those dated
_________________, 19____ was prepared in accordance with generally
accepted accounting principles, consistently applied, in effect on the
date such statements were prepared and truly discloses and fairly
presents Borrower's financial condition as of the date of each such
statement, and there has been no material adverse change in such
financial condition or results of operations of Borrower subsequent to
the date of the most recent financial statement supplied to the Bank.
(e) Litigation. There are no actions, suits or
proceedings, pending or, to the knowledge of Borrower, threatened
against or affecting Borrower or the properties of Borrower, before
any court or governmental department, commission or board, which, if
determined adversely to Borrower, would have a material adverse effect
on the financial condition, properties, or operations of Borrower.
(f) Taxes; Governmental Charges. Borrower has filed all
federal, state and local tax reports and returns required by any law
or regulation to be filed by it and has either duly paid all taxes,
duties and charges indicated due on the basis of such returns and
reports, or made adequate provision for the payment thereof, and the
assessment of any material amount of additional taxes in excess of
those paid and reported is not reasonably expected.
5. CONDITIONS PRECEDENT TO ADVANCES. Bank's obligation to make
any advance under this Loan Agreement and the other Loan Documents shall be
subject to the conditions precedent that, as of the date of such advance and
after giving effect thereto (i) all representations and warranties made to
Bank by Borrower and any of the Guarantors in this Loan Agreement and the other
Loan Documents shall be true and correct, as of and as if made on such date,
(ii) no material adverse change in the financial condition of Borrower or any
of the Guarantors since the effective date of the most recent financial
statements furnished to Bank by Borrower or any of the Guarantors shall have
occurred and be continuing, (iii) no
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event has occurred and is continuing, or would result from the requested
advance, which with notice or lapse of time, or both, would constitute an Event
of Default, (iv) Bank's receipt of all Loan Documents appropriately executed by
Borrower and all other proper parties, and (v) Bank has received a notice of
borrowing with respect to such requested advance.
6. AFFIRMATIVE COVENANTS. Until (i) the Note and all other
obligations and liabilities of Borrower under this Loan Agreement and the other
Loan Documents are fully paid and satisfied, and (ii) Bank has no further
commitment to lend hereunder, Borrower agrees and covenants that it will,
unless Bank shall otherwise consent in writing:
(a) Records; Right of Inspection. Maintain its books and
records in accordance with generally accepted accounting principles,
applied on a consistent basis, and permit Bank to visit its properties
and installations to examine, audit and make and take away copies or
reproductions of Borrower's books and records, at all reasonable
times.
(b) Right to Additional Information. Furnish Bank with
such additional information and statements, lists of assets and
liabilities, tax returns, and other reports with respect to Borrower's
financial condition and business operations as Bank may reasonably
request from time to time.
(c) Taxes. Pay and discharge when due all of its
indebtedness and obligations, including without limitation, all
assessments, taxes, governmental charges, levies and liens, of every
kind and nature, imposed upon Borrower or its properties, income, or
profits, prior to the date on which penalties would attach, and all
lawful claims that, if unpaid, might become a lien or charge upon any
of Borrower's properties, income, or profits; provided, however,
Borrower will not be required to pay and discharge any such
assessment, tax, charge, ▇▇▇▇, ▇▇▇▇ or claim so long as (i) the
legality of the same shall be contested in good faith by appropriate
judicial, administrative or other legal proceedings, and (ii) Borrower
shall have established on its books adequate reserves with respect to
such contested assessment, tax, charge, ▇▇▇▇, ▇▇▇▇ or claim in
accordance with generally accepted accounting principles, consistently
applied.
(d) Compliance with Laws. Conduct its business in an
orderly and efficient manner consistent with good business practices,
and perform and comply with all statutes, rules, regulations and/or
ordinances imposed by any governmental unit upon Borrower or its
businesses,
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operations and properties (including without limitation, all
applicable environmental statutes, rules, regulations and ordinances).
(e) Insurance. Maintain insurance, including but not
limited to, fire insurance, comprehensive property damage, public
liability, worker's compensation, business interruption and other
insurance deemed necessary or otherwise required by Bank.
(f) Notice of Litigation. Promptly after the
commencement thereof, notify Bank of all actions, suits and
proceedings before any court or any governmental department,
commission or board affecting Borrower or any of its properties.
(g) Notice of Change in Financial Condition. Promptly
inform Bank of (i) any and all material adverse changes in Borrower's
financial condition, and (ii) all claims made against Borrower which
could materially affect the financial condition of Borrower.
(h) Notice of Indebtedness. Promptly inform Bank of the
creation, incurrence or assumption by Borrower of any actual or
contingent liabilities not permitted under this Loan Agreement.
(i) Evidence of Tax Payments. Upon demand of Bank,
provide Bank with evidence of payment of all assessments, taxes,
charges, levies, liens and claims on or against Borrower's properties,
income or profits, and authorize the appropriate governmental official
to deliver to Bank at any time a written statement of any assessments,
taxes, charges, levies, liens and claims against Borrower's
properties, income or profits.
(j) Additional Documentation. Execute and deliver, or
cause to be executed and delivered, any and all other agreements,
instruments or documents which Bank may reasonably request in order to
give effect to the transactions contemplated under this Loan Agreement
and the other Loan Documents.
7. NEGATIVE COVENANTS. Until (i) the Note and all other
obligations and liabilities of Borrower under this Loan Agreement and the other
Loan Documents are fully paid and satisfied, and (ii) the Bank has no further
commitment to lend hereunder, Borrower will not, without the prior written
consent of Bank:
(a) Nature of Business. Make any material change in the
nature of its business as carried on as of the date hereof.
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(b) Liquidation, Mergers, Consolidations. Liquidate,
merge or consolidate with or into any other entity.
(c) Sale of Assets. Sell, transfer or otherwise dispose
of any of its assets or properties, other than in the ordinary course
of business.
(d) Liens. Create, incur or assume any lien or
encumbrance on any of its assets or properties, including without
limitations, the Collateral.
(e) Indebtedness. Create, incur or assume any
indebtedness for borrowed money or issue or assume any other note,
debenture, bond or other evidences of indebtedness, or guarantee any
such indebtedness or such evidences of indebtedness of others, other
than (i) borrowings that do not exceed $1,000,000.00 in the aggregate
principal balance during each fiscal year of Borrower, (ii) borrowings
from Bank, or (iii) borrowings outstanding on the date hereof and
disclosed in writing to Bank.
(f) Change in Management. Permit a change in the
position of President held by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
(g) Loans. Make any loans to any person or entity,
including any Affiliate (as defined below) of Borrower, except
advances or extension of credit in the form of accounts receivable
incurred in the ordinary course of business.
(h) Transaction with Affiliates. Enter into any
transaction, including, without limitation, the purchase, sale or
exchange of property or the rendering of any service, with any
Affiliate (as hereinafter defined) of Borrower, except in the ordinary
course of and pursuant to the reasonable requirements of Borrower's
business and upon fair and reasonable terms no less favorable to
Borrower than would be obtained in a comparable arm's-length
transaction with a person or entity not an Affiliate of Borrower.
As used herein, the term "Affiliate" means any individual or entity
directly or indirectly controlling, controlled by, or under common control
with, another individual or entity.
8. FINANCIAL COVENANTS. Until (i) the Note and all other
obligations and liabilities of Borrower under this Loan Agreement and the other
Loan Documents are fully paid and satisfied, and (ii) the Bank has no further
commitment to lend hereunder, Borrower will maintain the following financial
covenants on a consolidated basis:
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(a) Tangible Net Worth. Borrower will maintain, at all
times, its Tangible Net Worth at not less than $33,500,000.00, which
Tangible Net Worth shall increase each fiscal quarter by an amount
equal to fifty percent (50%) of Borrower's net income for such
quarter.
(b) Debt Service. Borrower will maintain, as of the last
day of each fiscal quarter, a ratio (the "Debt Service Coverage
Ratio") of (a) net income after taxes plus depreciation, amortization
and other non-cash expenses for the 12 month period ending with such
fiscal quarter, less Distributions for such 12 month period, to (b)
current maturities of long-term debt (including an amount equal to
one-third (1/3) of the outstanding balance under the Revolving Line of
Credit) plus, without duplication, interest expense for such quarter,
of not less than 1.25 to 1.0.
(c) Dividends. Following the occurrence and continuance
of an Event of Default, or if an Event of Default would result from
such distribution or dividend, Borrower agrees not to declare or pay
any dividends on any shares of Borrower's capital stock, make any
other distributions with respect to any payment on account of the
purchase, redemption, or other acquisition or retirement of any shares
of Borrower's capital stock, or make any other distribution, sale,
transfer or lease of any of Borrower's assets other than in the
ordinary course of business, unless any such amounts are directly
utilized for the payment of principal or interest on indebtedness and
obligations owing from time to time by Borrower to Bank. Borrower
shall not pay any dividends on any shares of Borrower's capital stock,
make any other distributions with respect to any payment on account of
the purchase, redemption, or other acquisition or retirement of any
shares of Borrower's capital stock to Borrower's Affiliates at any
time, regardless of the existence of an Event of Default.
(d) Accounts Receivable. Borrower's accounts receivable
greater than 90 days from date of invoice shall not exceed 40% of
Borrower's total accounts receivable; provided, however, that any
overdue accounts receivable owed by a "Qualified Bankrupt Account
Debtor" (as such term is defined below) shall, solely for purposes of
this loan covenant, be excluded from the foregoing calculation. For
purposes hereof, the term "Qualified Bankrupt Account Debtor" shall
mean an account debtor of the Borrower, which account debtor is in
Chapter 11 bankruptcy or other similar reorganization proceeding,
where, based upon the good-faith judgment of the Borrower and its
bankruptcy legal counsel, the
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prospects for ultimate recovery of a substantial majority of such
account debtor's account receivable outstanding balance is reasonably
likely.
(e) Net Loss. Borrower shall not sustain a net loss for
any two consecutive calendar quarters as shown by the financial
statements required under Section 9(b) and (c) hereof.
As used herein, the term "Tangible Net Worth" means, as of any date, Borrower's
total assets excluding all intangible assets, less total liabilities excluding
any indebtedness owing by Borrower which has been subordinated by written
agreement to all indebtedness now or hereafter owing by Borrower to Lender,
such agreement to be in form and substance acceptable to Lender. As used
herein, "Distributions" shall mean all dividends and other distributions made
by Borrower to its shareholders or partners, as the case may be, other than
salary, bonuses and other compensation for services. Unless otherwise
specified, all accounting and financial terms and covenants set forth above are
to be determined according to generally accepted accounting principles,
consistently applied. "Affiliate" means any individual or entity directly or
indirectly controlling, controlled by, or under common control with, another
individual or entity.
9. REPORTING REQUIREMENTS. Until (i) the Note and all other
obligations and liabilities of Borrower under this Loan Agreement and the other
Loan Documents are fully paid and satisfied, and (ii) the Bank has no further
commitment to lend hereunder Borrower will, unless Bank shall otherwise consent
in writing, furnish to Bank:
(a) Notice of Default. As soon as possible and in any
event within ten (10) days after the occurrence of each Event of
Default, as defined herein, or each event which, with the giving of
notice or lapse of time or both, would constitute an Event of Default,
continuing on the date of such statement, the written statement of the
President and/or the Chief Financial Officer of Borrower setting forth
the details of such Event of Default or event and the action which
Borrower proposes to take with respect thereto.
(b) Interim Financial Statements. As soon as available,
and in any event within forty- five (45) days after the end of each
quarter of each fiscal year of Borrower, a balance sheet and income
statement of Borrower as of the end of such fiscal quarter, all in
form and substance and in reasonable detail satisfactory to Bank and
duly certified (subject to year-end review adjustments) by the
President and/or Chief Financial Officer of Borrower (i) as being true
and correct in all material aspects to the best of his or her
knowledge and
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(ii) as having been prepared in accordance with generally accepted
accounting principles, consistently applied.
(c) Annual Financial Statements. As soon as available
and in any event within one hundred twenty (120) days after the end of
each fiscal year of Borrower, a balance sheet and income statement of
Borrower as of the end of such fiscal year, in each case audited by
independent public accountants of recognized standing acceptable to
Bank, together with a certificate of such accountants to Bank stating
that in the course of the regular audit of the business of Borrower,
which audit was conducted by such accountants in accordance with
generally accepted standards, such accountants obtained no knowledge
that an Event of Default or an event which, with notice or lapse of
time or both, would constitute an Event of Default, has occurred and
is continuing, or if, in the opinion of such accountants, an Event of
Default or such an event has occurred and is continuing, a statement
as to the nature thereof.
(d) Compliance Certificate. Within forty-five (45) days
after the end of each fiscal quarter of Borrower, a certificate from
the President or Chief Financial Officer of Borrower stating that
Borrower is in full compliance with all of its obligations under this
Loan Agreement and the other Loan Documents and is not in default of
any term or provision hereof or thereof, and demonstrating compliance
with all financial ratios and covenants set forth in this Loan
Agreement.
(e) Borrowing Base Certificate. Within forty-five (45)
days after the end of each month, a borrowing base certificate signed
by the President or Chief Financial Officer of Borrower, in form and
substance satisfactory to Bank, along with such supporting
documentation as Bank may request.
(f) Accounts Aging. Within forty-five (45) days after
the end of each month, a current aging analysis of Borrower's
accounts receivable, in form and substance satisfactory to Bank.
Borrower shall provide Bank with a current aging analysis of
Borrower's accounts payable, in term and substance satisfactory to
Bank, within ten (10) days of each request therefor by Bank.
(g) Additional Information. Borrower shall provide Bank
with such other information respecting the business, properties or
condition of the operations, financial or otherwise, of Borrower as
Bank may from time to time request, including but not limited to
periodic listing of Borrower's inventory.
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(h) Equipment Location. Borrower shall provide Bank with
a report stating the location of all equipment owned by Borrower
within forty-five (45) days after the end of each fiscal quarter of
Borrower.
(i) Additional Information. Borrower shall provide Bank
with such other information respecting the business, properties or
condition of the operations, financial or otherwise, of Borrower as
Bank may from time to time request, including but not limited to
periodic listing of Borrower's inventory.
10. EVENTS OF DEFAULT. Each of the following shall constitute an
"Event of Default" under this Loan Agreement:
(a) The failure, refusal or neglect of Borrower to make
any payment of principal or interest on the Indebtedness, or any
portion thereof, as the same shall become due and payable.
(b) The failure of Borrower to timely and properly
observe, keep or perform any covenant, agreement, warranty or
condition required herein or in any of the other Loan Documents and,
with respect to the covenants contained in Subparagraphs 9(a)-(e),
such failure continues for a period of thirty (30) days after the
occurrence thereof.
(c) The occurrence of an event of default under any of
the other Loan Documents or under any other agreement now existing or
hereafter arising between Bank and Borrower.
(d) Any representation contained herein or in any of the
other Loan Documents made by Borrower or any Guarantor is false or
misleading in any material respect.
(e) The occurrence of any event which permits the
acceleration of the maturity of any indebtedness owing by Borrower to
any third party under any agreement or understanding.
(f) If Borrower or any Guarantor: (i) becomes insolvent,
or makes a transfer in fraud of creditors, or makes an assignment for
the benefit of creditors, or admits in writing its inability to pay
its debts as they become due; (ii) generally is not paying its debts
as such debts become due; (iii) has a receiver, trustee or custodian
appointed for, or take possession of, all or substantially all of the
assets of such party, either in a proceeding brought by such party or
in a proceeding
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brought against such party and such appointment is not discharged or
such possession is not terminated within sixty (60) days after the
effective date thereof or such party consents to or acquiesces in such
appointment or possession; (iv) files a petition for relief under the
United States Bankruptcy Code or any other present or future federal
or state insolvency, bankruptcy or similar laws (all of the foregoing
hereinafter collectively called "Applicable Bankruptcy Law") or an
involuntary petition for relief is filed against such party under any
Applicable Bankruptcy Law and such involuntary petition is not
dismissed within sixty (60) days after the filing thereof, or an order
for relief naming such party is entered under any Applicable
Bankruptcy Law, or any composition, rearrangement, extension,
reorganization or other relief of debtors now or hereafter existing is
requested or consented to by such party; (v) fails to have discharged
within a period of sixty (60) days any attachment, sequestration or
similar writ levied upon any property of such party; or (vi) fails to
pay within thirty (30) days any final money judgment against such
party.
(g) The liquidation, dissolution, merger or consolidation
of Borrower or any Guarantor (excluding any merger of any Guarantor
with and into Borrower).
Nothing contained in this Loan Agreement shall be construed to limit the events
of default enumerated in any of the other Loan Documents and all such events of
default shall be cumulative.
11. REMEDIES. Upon the occurrence of any one or more of the
foregoing Events of Default, (a) the entire unpaid balance of principal of the
Note and all other Indebtedness, together with all accrued but unpaid interest
thereon, and all other Indebtedness shall, at the option of Bank, become
immediately due and payable without further notice, demand, presentation,
notice of dishonor, notice of intent to accelerate, notice of acceleration,
protest or notice of protest of any kind, all of which are expressly waived by
Borrower, and (b) Bank may, at its option, cease further advances under any of
the Note; provided, however, concurrently and automatically with the occurrence
of an Event of Default under subparagraph (f) in the immediately preceding
paragraph (i) further advances under the Note shall cease, and (ii) the Note
and all other Indebtedness shall, without any action by Bank, become due and
payable, without further notice, demand, presentation, notice of dishonor,
notice of acceleration, notice of intent to accelerate, protest or notice of
protest of any kind, all of which are expressly waived by Borrower. All rights
and remedies of Bank set forth in this Loan Agreement and in any of the other
Loan Documents may also be exercised by Bank, at its option to be
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exercised in its sole discretion, upon the occurrence of an Event of Default.
12. RIGHTS CUMULATIVE. All rights of Bank under the terms of this
Loan Agreement shall be cumulative of, and in addition to, the rights of Bank
under any and all other agreements between Borrower and Bank (including, but
not limited to, the other Loan Documents), and not in substitution or
diminution of any rights now or hereafter held by Bank under the terms of any
other agreement.
13. WAIVER AND AGREEMENT. Neither the failure nor any delay on
the part of Bank to exercise any right, power or privilege herein or under any
of the other Loan Documents shall operate as a waiver thereof, nor shall any
single or partial exercise of such right, power or privilege preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. No waiver of any provision in this Loan Agreement or in any of the
other Loan Documents and no departure by Borrower therefrom shall be effective
unless the same shall be in writing and signed by Bank, and then shall be
effective only in the specific instance and for the purpose for which given and
to the extent specified in such writing. No modification or amendment to this
Loan Agreement or to any of the other Loan Documents shall be valid or
effective unless the same is signed by the party against whom it is sought to
be enforced.
14. BENEFITS. This Loan Agreement shall be binding upon and inure
to the benefit of Bank and Borrower, and their respective successors and
assigns, provided, however, that Borrower may not, without the prior written
consent of Bank, assign any rights, powers, duties or obligations under this
Loan Agreement or any of the other Loan Documents.
15. NOTICES. All notices, requests, demands or other
communications required or permitted to be given pursuant to this Agreement
shall be in writing and given by (i) personal delivery, (ii) expedited delivery
service with proof of delivery, or (iii) United States mail, postage prepaid,
registered or certified mail, return receipt requested, sent to the intended
addressee at the address set forth on the signature page hereof (if to Bank, to
the attention of the Corporate Banking I Group) and shall be deemed to have
been received either, in the case of expedited delivery service, as of the date
of first attempted delivery at the address and in the manner provided herein,
or in the case of mail, upon deposit in a depository receptacle under the care
and custody of the United States Postal Service. Either party shall have the
right to change its address for notice hereunder to any other location within
the continental United States by notice to the other party of such new address
at least thirty (30) days prior to the effective date of such new address.
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16. CONSTRUCTION. This Loan Agreement and the other Loan
Documents have been executed and delivered in the State of Texas, shall be
governed by and construed in accordance with the laws of the State of Texas,
and shall be performable by the parties hereto in Houston, ▇▇▇▇▇▇ County,
Texas.
17. INVALID PROVISIONS. If any provision of this Loan Agreement
or any of the other Loan Documents is held to be illegal, invalid or
unenforceable under present or future laws, such provision shall be fully
severable and the remaining provisions of this Loan Agreement or any of the
other Loan Documents shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its
severance.
18. EXPENSES. Borrower shall pay all costs and expenses
(including, without limitation, reasonable attorneys' fees) in connection with
(i) the preparation of this Loan Agreement and the other Loan Documents, and
any and all extensions, renewals, amendments, supplements, extensions or
modifications thereof, (ii) any action required in the course of administration
of the indebtedness and obligations evidenced by the Loan Documents, and (iii)
any action in the enforcement of Bank's rights upon the occurrence of Event of
Default.
19. ENTIRE AGREEMENT. This Loan Agreement (together with the
other Loan Documents) contains the entire agreement among the parties regarding
the subject matter hereof and supersedes all prior written and oral agreements
and understandings among the parties hereto regarding same.
20. CONFLICTS. In the event any term or provision hereof is
inconsistent with or conflicts with any provisions of the other Loan Documents,
the terms and provisions contained in this Loan Agreement shall be controlling.
21. COUNTERPARTS. This Loan Agreement may be separately executed
in any number of counterparts, each of which shall be an original, but all of
which, taken together, shall be deemed to constitute one and the same
agreement.
If the foregoing correctly sets forth our mutual agreement, please so
acknowledge by signing and returning this Loan Agreement to the undersigned.
Very truly yours,
BANK ONE, TEXAS, N.A.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Title: Vice President
----------------------------------
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Bank's Address:
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇
Attn: Corporate Banking I Group
ACCEPTED AS OF THE DATE
FIRST WRITTEN ABOVE.
BORROWER:
MITCHAM INDUSTRIES, INC.,
a Texas corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
---------------------------------
Title: President and CEO
--------------------------------
Borrower's Address:
P. O. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
15
