Exhibit 10.1

 

Texas Equipment Lease

 

This form is subject to Federal and State legal requirements.

 

1.             Equipment Leased.

 

Lessor hereby leases to Lessee, and Lessee hereby hires and takes from Lessor
the following-described personal property (hereinafter, with all attachments,
replacement parts, substitutions, additions, repairs and accessories 
incorporated therein and/or affixed thereto, and proceeds referred to as
“Equipment”): (Describe Equipment fully, including make, kind of unit, model and
serial numbers, and any other pertinent information.)

 

See Schedule “A” consisting of four (4) pages attached hereto and made a part
hereof.and Lessor agrees within               days from the date hereof to cause
said Equipment to be delivered to Lessee, f.o.b.

 

2.             Term.

 

This lease is for a term of 36 months, beginning on 7-28-2006 and ending on
7-28-2009.

 

3.             Rentals.

 

Lessee, having been quoted a cash price of $6,000,000.00 and a time price of
$6,840,728.56 hereby elects to lease the Equipment on a time price basis and
agrees to pay the Lessor that portion of said time price which represents the
aggregate rentals of $ 6,840,628.56 as follows:

 

$ 0.00 is herewith paid in advance and the balance of the rentals, $6,840,628.56
is payable in 36  equal, successive, monthly rental payments of $ 190,017.46, of
which the first is due 8-28-06, and the others on a like date of each month
thereafter until fully paid.

 

4.             Purchase Option.

 

See Rider D consisting of one (1) page attached hereto and made a part hereof.

 

5.             Late Charges.

 

Any payment not made when due shall, at the option of Lessor, bear late charges
thereon calculated at the rate of 1 1/2% per month, but in no event greater than
the highest rate permitted by relevant law. Lessee shall be responsible for and
pay to Lessor a returned check fee, not to exceed the maximum permitted by law,
which fee will be equal to the sum of (i) the actual bank charges incurred by
Lessor plus (ii) all other actual costs and expenses incurred by Lessor. The
returned check fee is payable upon demand as additional rent under this
Equipment Lease.

 

6.             Use, Nature and Location of Equipment.

 

 Lessee warrants and agrees that the Equipment is to be used primarily for:

 

x business or commercial purposes (other than agricultural),

o  agricultural purposes (see definition on the final page), or

o  both agricultural and business or commercial purposes.

 

Lessee and Lessor agree that regardless of the manner of affixation, the
Equipment shall remain personal property and not become part of the real estate.
Lessee agrees to keep the Equipment, when not in service, at

 

903 Franklin

 

Brookshire

 

Harris

 

TX

 

77423

Address

 

City

 

County

 

State

 

Zip Code

 

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and will at all other times keep the Equipment within the lower 48 continental
United States. Lessee will notify Lessor promptly in writing of its intention to
change the location of the collateral to a location other than what is provided
for herein and will only do so with the prior written consent of Lessor.

 

7.             Repairs.

 

Lessor shall not be obligated to install, erect, test, adjust, service or make
any repairs or replacements; Lessee shall not  incur for Lessor’s account or
liability any expense therefor without Lessor’s prior written consent. Lessee
shall inspect the Equipment within 48 hours after its receipt; unless within
said time Lessee notifies Lessor, stating the details of any defects, Lessee
shall be conclusively presumed to have accepted the Equipment in its then
condition. Thereafter, Lessee shall effect and bear the expense of all necessary
repairs, maintenance, operation and replacements required to be made to maintain
the Equipment in good condition, normal wear and tear excepted.

 

8.             Operators.

 

Lessee shall cause the Equipment to be operated by competent employees only, and
shall pay all expenses of operation.

 

9.             Liability.

 

Lessee shall indemnify and save Lessor harmless from any and all injury to or
loss of the Equipment from whatever cause, and from liability arising out of the
use, maintenance and/or delivery thereof, but shall be credited with any amounts
received by Lessor from insurance procured by Lessee. Damage for any loss or
injury shall be based on the then true and reasonable market value of the
Equipment irrespective of rentals theretofore paid or accrued.

 

10.          Insurance.

 

All risk of loss, damage to or destruction of the Equipment shall at all times
be on Lessee. Lessee will procure forthwith and maintain at Lessee’s expense
insurance against all risks of loss or physical damage to the Equipment for the
full insurable value thereof for the life of this lease plus breach of warranty
insurance and such other insurance thereon in amounts and against such risks as
Lessor may specify, and shall promptly deliver each policy to Lessor with a
standard long-form mortgagee endorsement attached thereto showing loss payable
to Lessor; and providing Secured Party with not less than 30 days written notice
of cancellation; each such policy shall be in form, terms and amount and with
insurance carriers satisfactory to Lessor; Lessor’s acceptance of policies in
lesser amounts or risks shall not be a waiver of Lessee’s foregoing obligations.
As to Lessor’s interest in such policy, no act or omission of Lessee or any of
its officers, agents, employees or representatives shall affect the obligations
of the insurer to pay the full amount of any loss.

 

Lessee hereby assigns to Lessor any monies which may become payable under any
such policy of insurance and irrevocably constitutes and appoints Lessor as
Lessee’s attorney in fact (a) to hold each original insurance policy, (b) to
make, settle and adjust claims under each policy of insurance, (c) to make
claims for any monies which may become payable under such and other insurance on
the Equipment including returned or unearned premiums, and (d) to endorse
Lessee’s name on any check, draft or other instrument received in payment of
claims or returned or unearned premiums under each policy and to apply the funds
to the payment of the indebtedness owing to Lessor; provided, however, Lessor is
under no obligation to do any of the foregoing.

 

Should Lessee fail to furnish such insurance policy to Lessor, or to maintain
such policy in full force, or to pay any premium in whole or in part relating
thereto, then Lessor, without waiving or releasing any default or obligation by
Lessee, may (but shall be under no obligation to) obtain and maintain insurance
and pay the premium and any administrative costs therefor on behalf of Debtor
and charge the premium and any administrative costs to Lessee’s indebtedness
under this lease. The full amount of any such premium and any administrative
costs paid by Lessor shall be payable by Lessee upon demand, and failure to pay
same shall constitute an event of default under this lease.

 

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11.          Taxes.

 

Lessee shall comply with and conform to all laws, ordinances and regulations
relating to the ownership, possession, use or maintenance of the Equipment, and
save Lessor harmless against actual or asserted violations, and pay all costs
and expenses of every character occasioned by or arising out of such use. Lessee
agrees that, during the term of this lease, in addition to the rent and all
other amounts provided herein to be paid, it will promptly pay all taxes,
assessments and other governmental charges (including penalties and interest, if
any, and fees for titling or registration, if required) levied or assessed:

 

(a)           upon the interest of the Lessee in the Equipment or upon the use
or operation thereof or on the earnings arising therefrom; and

 

(b)           against Lessor on account of its acquisition or ownership of the
Equipment or any part thereof; or the use or operation thereof or the leasing
thereof to the Lessee, or the rent herein provided for, or the earnings
arising     therefrom,  exclusive, however, of any taxes based on net income of
Lessor.

 

Lessor will file tax returns and reports concerning the Equipment with all
appropriate governmental agencies, (unless Lessor notifies Lessee writing) and
Lessee agrees to reimburse Lessor for any taxes as it relates to this Master
Lease or the Equipment. Applicable laws may also require Lessee to report the
Equipment covered by this Master Lease. Lessor does not have to contest any
taxes, fines or penalties, however Lessee may do so provided that: (a) Lessee
does so in its own name and at its own expense; (b) the contest does not and
will not result in any lien attaching to any Equipment or otherwise jeopardize
Lessor’s right to any Equipment; and (c) Lessee indemnifies Lessor for all
expenses (including legal fees and costs), liabilities and losses that Lessor
incurs as a result of any such contest. Lessee will pay estimated property taxes
with each lease payment or as invoiced.

 

12.          Title.

 

All said Equipment shall remain personal property, and except as provided in the
next sentence, title thereto shall remain in Lessor exclusively. With respect to
any software financed hereunder as to which Lessor is not the licensee or
licensor, Lessee hereby grants Lessor a security interest in such software to
secure the payment and performance of Lessee’s obligations under this Lease.
Lessee shall keep the Equipment free from any and all liens and claims, and
shall do or permit no act or thing whereby Lessor’s title or rights may be
encumbered or impaired. Upon expiration or termination hereof by other than
default, the Equipment shall be returned unencumbered to Lessor by Lessee at the
place where the rent is payable or to such other place as Lessor and Lessee
agree upon, at Lessee’s sole expense and in the same condition as when received
by Lessee, reasonable wear and tear resulting from proper use thereof alone
excepted. Lessee shall pay rent at the said rate until all said Equipment
arrives at Lessor’s premises, or other place designated by Lessor.

 

13.          Inspection.

 

Lessee shall, whenever requested, advise Lessor of the exact location and
condition of the Equipment and shall give Lessor immediate notice of any
attachment or other judicial process affecting the Equipment, and indemnify and
save Lessor harmless from any loss or damage caused thereby. Lessor may, for the
purpose of inspection, at all reasonable times enter upon any job, building or
place where the Equipment is located; and may remove the Equipment forthwith,
without notice to Lessee, if the Equipment is, in the opinion or Lessor, being
used beyond its capacity or in any manner improperly cared for or abused.

 

14.          Non-Waiver.

 

Time is of the essence. Lessor’s failure at any time to require strict
performance by Lessee of any of the provisions hereof shall not waive or
diminish Lessor’s right thereafter to demand strict compliance therewith or with
any other provision. Waiver of any default shall not waive any other default. No
remedy of Lessor hereunder shall be exclusive of any other remedy herein or by
law provided, but each shall be cumulative and in addition to every other
remedy.

 

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15.          No Warranty.

 

Lessor, not being the manufacturer of the Equipment, nor manufacturer’s agent,
makes no warranty or representation, either expressed  or implied, as to  the
fitness, quality, design, condition, capacity, suitability, merchantability or
performance of the Equipment or of the material or workmanship thereof, it being
agreed that the Equipment is leased “as is”

 

and that all such risks, as between the Lessor and the Lessee, are to be borne
by the Lessee at its sole risk and expense. Lessee accordingly agrees not to
assert any claim whatsoever against the Lessor based thereon. Lessee further
agrees, regardless of cause, not to assert any claim whatsoever against the
Lessor for loss of anticipatory profits or consequential damages. No oral
agreement, guaranty, promise, condition, representation or warranty shall be
binding; all prior conversations, agreements or representations related hereto
and/or to said Equipment are integrated herein.

 

16.          Possession.

 

Lessor covenants to and with Lessee that Lessor is the lawful owner of said
Equipment free from all encumbrances and that, conditioned upon Lessee’s
performing the conditions hereof, Lessee shall peaceably and quietly hold,
possess and use the Equipment during said term without let or hindrance.

 

17.          Performance of Obligations of Lessee by Lessor.

 

In the event that the Lessee shall fail duly and promptly to perform any of its
obligations under the provisions of this lease, the Lessor may, at its option,
perform the same for the account of Lessee without thereby waiving such default,
and any amount paid or expenses (including reasonable attorneys’ fees), penalty
and other liability incurred by the Lessor in such performance, together with
interest at the applicable rate stated in Paragraph 5 until paid by the Lessee
to the Lessor, shall be payable by the Lessee upon demand as additional rent for
the Equipment.

 

18.          Further Assurances.

 

Lessee shall execute and deliver to Lessor, upon Lessor’s request such
instruments and assurances as Lessor deems necessary or advisable for the
confirmation or perfection of this lease and Lessor’s right hereunder. If any of
the Equipment consists of software, Lessee agrees, at Lessor’s request, to
inform Lessor of the name of the licensor of such software and to provide Lessor
with a copy of the license agreement.

 

19.          Default.

 

An event of default shall occur if:

 

(a)           Lessee fails to pay when due any installment of rent and such
failure continues for a period of 10 days;

 

(b)           Lessee fails to perform or observe any covenant, condition or
agreement to be performed or observed by it hereunder and such failure continues
uncured for 15 days after written notice thereof to Lessee by Lessor;

 

(c)           Lessee dies, ceases doing business as a going concern, makes an
assignment for the benefit of creditors, admits in writing its inability to pay
its debts as they become due, files a voluntary petition in bankruptcy, is
adjudicated a bankrupt or an insolvent, files a petition seeking for itself any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution  or similar arrangement under any present or future statute, law or
regulation or files an answer admitting the material allegations of a petition
filed against it in any such proceeding, consents to or acquiesces in the
appointment of a trustee, receiver, or liquidator of it or of all or any
substantial part of its assets or properties, or if it or its shareholders shall
take any action looking to its dissolution or liquidation;

 

(d)           within 60 days after the commencement of any proceedings against
Lessee seeking reorganization, arrangement, readjustment, liquidation,
dissolution or similar relief under any present or future statute, law or
regulation, such proceedings shall not have been dismissed, or if within 60 days
after the appointment without Lessee’s consent or

 

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acquiescence of any trustee, receiver or liquidator of it or of all or any
substantial part of its assets and properties, such appointment shall not be
vacated;

 

(e)           Lessee attempts to remove, sell, transfer, encumber, part with
possession or sublet the Equipment or any item thereof, except as provided for
herein; or

 

(f)            a third party takes any action to foreclose on, obtain possession
or control of, collect, sell or otherwise dispose of or exercise any rights with
respect to any of the Equipment without the express written consent of Lessor.

 

Upon the occurrence of an event of default, Lessor, at its option, may:

 

(a)  declare all sums due and to become due hereunder immediately due and
payable, but in no event shall the Lessee,  upon demand by Lessor for payment of
the unpaid time price balance, upon acceleration of the maturity thereof or 
otherwise, be obligated to pay any time price differential in excess of that
permitted by law;

 

(b)           proceed by appropriate court action or actions or other
proceedings either at law or equity to enforce performance by the Lessee of any
and all covenants of this lease and to recover damages for the breach thereof;

 

(c)           demand that Lessee deliver the Equipment forthwith to Lessor at
Lessee’s expense at such place as Lessor may designate; and

 

(d)           Lessor and/or its agents may without notice or liability or legal
process, enter into any premises of or under control or jurisdiction of Lessee
or any agent of Lessee where the Equipment may be or by Lessor is believed to
be, and repossess all or any item thereof, disconnecting and separating all
thereof from any other property and using all  force necessary or permitted by
applicable law so to do, Lessee hereby expressly waiving all further rights to
possession of the Equipment and all claims for injuries suffered through or loss
caused by such repossession; Lessor may sell or lease the Equipment at a time
and location of its choosing provided that the Lessor acts in good faith and in
a commercially reasonable manner, but the Lessor shall, nevertheless, be
entitled to recover immediately as liquidated damages for loss of the bargain
and not as a penalty any unpaid rent that accrued on or before the occurrence of
the event of default plus an amount equal to the difference between the
aggregate rent reserved hereunder for the unexpired term of this lease and the
then aggregate rental value of all Equipment for such unexpired term, provided,
however, that if any statute governing the proceeding in which such damages are
to be proved specifies the amount of such claim, Lessor shall be entitled to
prove as and for damages for the breach an amount equal to that allowed under
such statute.

 

The provisions of this Paragraph shall be without prejudice to any rights given
to the Lessor by such statute to prove for any amounts allowed thereby. Should
any proceedings be instituted by or against Lessor for monies due to Lessor
hereunder and/or for possession of any or all of the Equipment or for any other
relief, Lessee shall pay a reasonable sum as attorneys’ fees.

 

20.          Assignments.

 

Neither this lease nor Lessee’s rights hereunder shall be assignable except with
Lessor’s written consent; the conditions  hereof shall bind any permitted
successors and assigns of Lessee. Lessor may assign the rents reserved herein or
all or any of Lessor’s other rights hereunder. After such assignment, Lessor
shall not be assignee’s agent for any purpose; Lessee will settle all claims
arising out of alleged breach of warranties or otherwise, defenses, setoffs and
counterclaims it may have against Lessor directly with Lessor, and not set up
any such against Lessor’s assignee, Lessor hereby agreeing to remain responsible
therefor. Lessee, on receiving notice of any such assignment, shall abide
thereby and make payment as may therein be directed. Following such assignment,
solely for the purpose of determining assignee’s rights hereunder, the term
“Lessor” shall be deemed to include or refer to Lessor’s assignee.

 

21.          Miscellaneous.

 

Lessee will not change or remove any insignia or lettering on the Equipment and
shall conspicuously identify each item of the Equipment by suitable lettering
thereon to indicate Lessor’s ownership. All transportation charges shall be
borne by Lessee. All notices relating hereto shall be sent certified mail return
receipt requested to Lessor or Lessee at its respective address shown herein or
at any later address last known to the sender. If any part hereof is contrary
to, prohibited by or

 

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deemed invalid under applicable laws or regulations of any jurisdiction, such
provision shall be inapplicable and deemed omitted but shall not invalidate the
remaining provisions hereof. Lessee waives all rights under all exemption laws.
Lessee acknowledges the receipt of a true copy of this lease. This lease is
irrevocable for the full term hereof and for the aggregate rental herein
reserved, and the rent shall not abate by reason of termination of Lessee’s
right of possession and/or the taking of possession by Lessor or for any other
reason.

 

In no event shall the Lessee, by acceleration or prepayment of the unpaid time
price balance hereunder or otherwise, be obligated to pay any time price balance
differential in excess of the amount permitted by law. Any acceleration or
prepayment of the unpaid time price balance shall be subject to all applicable
laws, including rebates of unearned charges. If in any event whatsoever, Lessor
shall receive anything of value deemed interest under applicable law which would
exceed the maximum amount of interest under applicable law, the excess amount
shall be applied to the reduction of the unpaid time price balance or shall be
refunded to the Lessee. All sums paid or agreed to be paid by Lessee to Lessor
for the use, forbearance or detention of money shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full
term of this transaction so that the amount of consideration constituting
interest is uniform throughout the term hereof and does not exceed the maximum
permitted by applicable law.

 

In the event this Lease is deemed to create a security interest, Lessee grants
Lessor a security interest in the Equipment as security for all of Lessee’s
indebtedness and obligations owing under this Lease as well as all other present
and future indebtedness and obligations of Lessee to Lessor of every kind and
nature whatsoever. Lessee authorizes Lessor to file a financing statement with
respect to the Equipment and ratifies the filing by Lessor of any such financing
statement previously filed.

 

If Lessee is an organization, Lessee (a) is the type of organization, (b) is
organized under the laws of the jurisdiction, (c) has its chief executive
office, and (d) if it is a “registered organization” as defined in Article 9 of
the Uniform Commercial Code (i.e., organized solely under the laws of a single
State and as to which the State must maintain a public record showing the
organization to have been organized), has the organizational identification
number (or, if none, has been assigned no such number by the State of
organization), all as set forth under Lessee’s name (which is its exact and
complete legal name) at the signature line of this Lease. If Lessee is an
individual, Lessee’s exact and complete legal name and principal residence are
as set forth at and under Lessee’s name at the signature line of this Lease.
Lessee agrees to notify Lessor immediately in the event of a change in any of
the foregoing facts and information.

 

If Lessee is a corporation, this Lease is executed by authority of its Board of
Directors.

 

22.          Entire Agreement.

 

This written agreement and the other documents described or contemplated herein
represent the final agreement between the parties, embody the entire agreement
and understanding between the parties hereto and thereto, supersede all prior
agreements and understandings relating to the subject matter hereof and thereof,
and may not be contradicted by evidence of prior, contemporaneous, or subsequent
oral agreements of the parties. There are no unwritten oral agreements between
the parties. Lessee’s initials     

 

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23.          Special Provisions.

 

See Rider “B” consisting of one (1) page attached hereto and made a part hereof.

See Rider “C” consisting of one (1) page attached hereto and made a part hereof.

See Rider “D” consisting of one (1) page attached hereto and made a part hereof.

See Rider “T” consisting of one (1) page attached hereto and made a part hereof.

 

THIS TEXAS EQUIPMENT LEASE IS MADE AND SHALL BE CONSTRUED UNDER THE LAWS OF THE
STATE OF ARIZONA.

 

The undersigned agree to all the terms and conditions set forth herein, and in
witness whereof, they hereby execute this lease.

 

 Dated: July 25, 2006

 

Lessee:

 

Quantum Geophysical, Inc.

 

 

By

/s/ Thomas J. Concannon

 

Title

 Treasurer

 

 

One Riverway, Suite 2100

Address

 

Houston

TX

77056

City

State

Zip Code

 

If an organization, Type of organization:  Corporation

 

If an individual, Principal residence:

 

Jurisdiction of organization: Texas

 

Organizational identification Number (or “None”): 76-0547282

 

Location of chief executive office: Houston, TX

 

Lessor:

 

 The CIT Group/Equipment Financing, Inc.

 

 

By

 

/s/ Don A. Luttenegger

 

Title

V.P. Specialty Funding

 

 If corporation, give official title . If owner or partner, state which.

 

 1540 W Fountainhead Pkwy

Address

 

 Tempe

AZ

 

 85282

 

City

State

 

Zip Code

 

 

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If Lessee is a partnership, enter:

 

Partners’ names

Home addresses

 

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Schedule A

to Texas Equipment Lease

 

Seismic Survey Equipment consisting of:

•      Three Thousand (3000) Geophone Strings

•      Land String 6 per

•      SCI-Element 10hx 375 Ohm 2.5% tolerance

•      HP-1 Land Case w/3” steel spike

•      HCL-2P 15FT connectors each end

•      25FT Interval 3-70-210/F d-loop

•      Hasp

•      Cases & hasp marked

 

•      Vibrators AHVIV-362, GVW 58K with Options

•      Vibrator Specifications:

•      Mass Model: PLS 362-A P-WAVE TYPE

•      Mass Weight: 8,120 LB

•      Peak Force: 61,800 LBF

•      Piston Area: 20.6 SQ. IN

•      Usable Stroke: 3.87 IN

•      Displacement Limit: 6.3 HZ

•      Frequency Range: 5 – 250 HZ

•      Mass Balancing: AIR BAG

•      Mass Accumulators: FLOW-THRU TYPE. ONE (1) LITER EACH IN SERVO VALVE
SUPPLY & RETURN
PORTS

•      Mass Rebound: POLYURETHANE

•      Stilt Structure Type: I/O PATENTED TIE ROD TYPE CONSTRUCTION WITH
HYDRAULIC MEANS TO
ADJUST ACTUATOR PRELOAN. ALLOY STEEL AND STAINLESS STEEL

•      Baseline Dimensions: 7.2 x 42 x 92 IN

•      Baseplate Area: 3,864 SQ. IN.

•      Driven Structure Weight: 4,020 LB

•      Lift Cylinder: 4” BORE X 38” STROKE, CAST IRON RINGS, NFPA. TIE-ROD
DESIGN, BLIND END CUSHION.
DOWN PRESSURE GAGE

•      Lift Valve: INTEGRATED CIRCUIT CARTRIDGE VALVE DESIGN FOR 4-WAY AND
REDUCING FUNCTIONS.

•      Servo Valve: ATLAS 240 HD DRILLED AND PLUGGED TO ACCEPT DR MODIFICATION,
MOOG 760C928A
PILOT VALVE, PELTON DR MODIFICATION FOR SERVO VALVE

•      Servo Filter: PARKER 3 MICRON ABSOLUTE

•      Vibrator Pump: DUAL DENNISION P7 SERIES, 7.25 CU. IN. 160 GPM AVAILABLE
TO VIBRATOR @ 3000
PSID, ELECTRONIC DISPLACEMENT CONTROL

•      System Accumulators: 2.5 GAL BLADDER TYPE, TOP REPAIRABLE

•      Hydraulic Reservoir: 55 GALLON, SCHROEDER 3.5 MICRON ABSOLUTE DUAL
ELEMENT RETURN FILTER

•      Hydraulic Oil Filtration: HIGH PRESSURE SCHROEDER TRIPLE ELEMENT FILTER
ON BOTH HIGH AND
LOW PRESSURE, 3.5 MICRON ABSOLUTE

•      Hydraulic System Pressure: 3,200 PSI HIGH PRESSURE, 200 PSI LOW PRESSURE

•      Heat Exchanger: STEEL CORE, FOR VIBRATOR TESTED TO 500 PSI, HYDRAULIC FAN
DRIVE WITH
CROWLEY MULTI-WING FAN, HINGED GUARD FOR CLEANING

•      Engine Specifications:

•      Model: DETROIT DIESEL SERIES 60

•      Type: WATER COOLED 4-CYCLE

•      Cylinders: IN-LINE SIX, OVERHEAD CAM

•      Displacement: 854 CU. IN.

•      Horsepower: 425 BHP @ 1950 RPM

•      Torque: 1,244 LB-FT @ 1900 RPM

•      Weight: 2,670 LB

•      RPM (setup): 1950 RPM

•      Fuel Consumption: 6 TO 9 GAL/HR DEPENDING ON CONDITIONS

 

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•      Air Cleaner: DONALDSON 3-STAGE STG16, PRIMARY AND SECONDARY ELEMENTS WITH
EXHAUST ASPIRATOR

•      Engine Shutdown System:   USER SELECTABLE—AUDIO/VISUAL WARNING ONELY OR
FULL SHUTDOWN: HIGH TEMPERATURE, LOW COLLANT, LOW OIL PRESSURE, LOW HYDRAULIC
FLUID, LAMP CHECK ON START UP

•      Fuel Filters: DAVCO PRIMARY W/ WATER SEPERATOR AND SPIN-ON SECONDARY

•      Antifreeze & Coolant Inhibitor

•      Carrier Specifications:

•      Buggy Dimensions (w/66 x 43 Tires)

•      Length: 394 IN.

•      Width: 134 IN.

•      Height A: 118 IN.

•      AT CR: 123 IN.

•      AT EXHAUST: 136 IN.

•      Wheelbase: 188 IN.

•      Turning Radius: 273 IN (Inside)

: 428 IN (Outside)

(using 66 x 43 tires)

•      Ground Clearance: 18 IN

•

Buggy Weights:

MINIMUM

MAXIMUM*

•

Gross Vehicle:

57,250 LB

66,000 LB

•

Hold Down:

50,350 LB

64,000 LB

•

Front Axle:

30,400 LB

34,950 LB

•

Rear Axle:

26,850 LB

31,050 LB

 

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* (Desired weight to be achieved with removable slide-on frame weights)

 

•      Buggy Model: AHV4 ARTICULATED HYDROSTATICALLY DRIVEN VIBRATOR BUGGY

•      Axle: JOHN DEERE 1400 SERIES INBOARD,  PLANATARY AXLE WITH ENCLOSED WET
DISC BRAKES AND DIFFERENTIAL LOCK GEAR RATIO 26.18:1

•      Air Compressor: 12 CFM WATER COOLED

•      Air Conditioner 20,000 BTU, HFC 134A REFRIGERANT

•      Brakes, Service: HDRAULIC WET DISC BRAKES W/ACCUMULATOR STORAGE FOR (20)
STOPS MINIMUM AFTER SHUTDOWN

•      CAB: FABRICATED STEEL, HIGH VISIBILITY CONSTRUCTION, INSULATED
W/ADJUSTABLE DRIVER AND PASSENGER SEAT. (2) 3-POINT SHOULDER BELTS, AIR
CONDITIONING, HEATER, DEFROSTER, WIPER AND DOME LIGHT 12V OUTLET, SIDE MOUNTED
MIRRORS

•      Transmission: FUNK POWERSHIFT 6-SPED W/GATE HFE SUNDSTRAND 90 SERIES 100
CC WITH ELECTRIC DISPLACEMENT CONTROL

•      Drive Motors: SUNSTRAND 90 SERIES 100 CC

•      Driveshaft: MECHANICS 7C

•      Electrical: 24 VOLT START, 12 VOLT RUN WITH 105 AMP ALTERNATOR AND TWO
HEAVY DUTY 12 VOLT 8D BATTERIES. BATTERY DISCONNECT SWITCH. BACKUP ALARM

•      Engine Cooling Frame: HEAVY DUTY RADIATOR & CHARGE AIR COOLER SOLID STEEL
3” FRAME RAILS, 30 DEGREE ARTICULATING STEERING AND 16.5 DEGREE OSCILLATING
CENTER JOINT, FRONT AND REAR STEEL BUMPERS, REAR RUBBER BUMPER COLLISION
BUMPERS, TOW HOOKS, LIFTING EYES. ROPS CERTIFICATION

•      Steering: ARTICULATED, HYDRAULIC POWER STEERING, 4” BORE X 12” STROKE
CYLINDERS, EATON STEERING CONTROL VALVE

•      Fuel Tank: FABRICATED, 220 GAL CAPACITY

•      Heat Exchanger: STEEL CORE, FOR DRIVE, TESTED TO 500 PSI. HYDRAULIC FAN
DRIVE FOR CROWLEY MULTI-WING FAN, HINGED GUARD FOR CLEANING

•      Lighting: HEAD LIGHTS, TAIL LIGHTS, TURN SIGNALS, STOP LIGHTS, EMERGENCY
FLASHERS, BACK-UP LIGHTS, FOG LIGHT TWO (2) WORKLIGHTS ON REAR OF CAB

•      Pump Drive: TERRELL DOUBLE PUMP DRIVE, 1.41:1 SPEEDUP RATION, W/COOLING
CIRCUIT & FILTER

•      Roadspeed (maximum): 16 MPH

•      Tractive Effort: 1ST GEAR: 1.51 MPH 98.5%    GRADABILITY

2ND GEAR: 2.68 MPH 55.74% GRADABILITY

3RD GEAR: 3.51 MPH 42.48% GRADABILITY

 

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4TH GEAR: 6.21 MPH 24.03% GRADABILITY

5TH GEAR: 8.77 MPH 17.07% GRADABILITY

6TH GEAR: 16.0 MPH 9.23%   GRADABILITY

(Theoretical w/no loss of traction)

•      Hydraulic Hoses: AEROQUIP, JIC AND FLANGE FITTINGS

•      Hydraulic Fluid: CONFORMS TO ISO 6074 TYPE HLP:

VG 32: 0 DEG F MIN. STARTUP

150 DEG F MAX. CONTINUOUS

176 DEG F MAX INTERMITTENT

VG 68: 32 DEG F MIN. STARTUP

183 DEG F MAX. CONTINUOUS

210 DEG F MAX. INTERMITTENT

OTHER GRADES AVAILABLE FOR OTHER EXTREMES

 

•      Engine Oil: API CF-2, SAE 40 (SAE 50 OVER 200 DEG F COOLANT OUT)

•      Tires & Wheels: NOT INCLUDED

•      I/O System Two – RSR-3

•      Central Transceiver Controller, CTC, C2/

•      Module, Electronics, CITC C2/V2

•      Module, Power, CTC

•      Cable Assy, Power, I2V Central Electronics

•      Cable Assy, DB9 to D89 F-F10’

•      Cable Assy, CTC to VR PC

•      Cable Assy, CTC SSI to Power Module

•      Cable Assy, CTC Elec Module Power

•      Cable Assy, CTC CTR Power

•      Cable Assy, CTC to CTR

•      Kit, Software, V2 System

•      Transcriber Two (T2), software T2, ver 1.6.4

•      RSR-3, 1 GBYTE Flash

•      Dynacon Lids

•      1 Gbyte Flash Memory

•      8 Mbyte RAM

•      Analog Board is PAAD

•      RSR-3, 1 Gbyte Flash

•      Dynacon Lids

•      1 Gbyte Flash Memory

•      8 Mbyte RAM

•      Analog Board Set is PA-5 with AD

•      Includes refurnished analog boards and other mechanical parts from MRX
boxes

•      Antenna ASSY, VRSR, Radome, 3FT

 

All of the above to include attachments, replacements, substitutions, additions
and accessions thereof, plus the proceeds of all the foregoing.

 

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Collateral shall mean all of the following property of Lessee:

 

(a)           All of the Lessee’s now existing and future: (i) accounts, as
defined in the Uniform Commercial Code (“UCC”), and any and all other
receivables, including, without limitation, all accounts created by, or arising
from, all of the Lessee’s sales, leases, rentals of goods or renditions of
services to its customers, including but not limited to, those accounts arising
under any of, the Lessee’s trade names or styles, or through any of the Lessee’s
divisions; (ii) any and all instruments, documents, chattel paper (including
electronic chattel paper); (iii) unpaid seller’s or lessor’s rights (including
rescission, replevin, reclamation, repossession and stoppage in transit)
relating to the foregoing or arising therefrom; (iv) rights to any goods
represented by any of the foregoing, including rights to returned, reclaimed or
repossessed goods; (v) reserves and credit balances arising in connection with
or pursuant hereto; (vi) guarantees, supporting obligations, payment intangibles
and letter of credit rights; (vii) insurance policies or rights relating to any
of the foregoing; (viii) all rights to payment, including those arising in
connection with bank and non-bank credit cards and including any electronic
media and software, pertaining to any and all of the foregoing; and (ix) notes,
deposits or property of account debtors securing the obligations of any such
account debtors to the Lessee;

 

(b)           All of the Lessee’s present and hereafter acquired inventory (as
defined in the UCC) and including, without limitation, all additions,
substitutions and replacements thereof, wherever located, together with all
goods and materials used or usable in manufacturing, processing, packaging or
shipping same in all stages of production - from raw materials through
work-in-process to finished goods;

 

(c)           All present and hereafter acquired general intangibles (as defined
in the UCC), and shall include, without limitation, all present and future
right, title and interest in and to: (i) all trademarks, tradenames, corporate
names, logos and designs, (ii) patents, together with any improvements on said
patents, utility models, industrial models and designs, (iii) copyrights, (iv)
trade secrets, (iv) licenses, (v) all applications with respect to the
foregoing, (vi) all right, title and interest in and to any and all extensions
and renewals,
(vii) goodwill with respect to any of the foregoing, and (viii) customer lists,
distribution agreements, licensing agreements, supply agreements,
indemnification rights and tax refunds, together with all monies and claims for
monies now or hereafter due and payable in connection with any of the foregoing
or otherwise;

 

(d)           All present and hereafter acquired equipment (as defined in the
UCC) including, without limitation, all machinery, equipment, furnishings and
fixtures, and all additions, substitutions and replacements thereof, wherever
located, together with all attachments, components, parts, and accessories
installed thereon or affixed thereto;

 

(e)           All present and future documents (as defined in the UCC) and any
and all warehouse receipts, bills of lading, shipping documents, chattel paper,
instruments and similar documents, all whether negotiable or not and all goods
and Inventory relating thereto; and

 

(f)            All present and future cash and non-cash proceeds of all of the
foregoing.

 

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Rider “B”- PREPAYMENT RIDER

 

Attached to and made part of the Texas Equipment Lease (“Lease”) dated 07/25/06
between Quantum Geophysical, Inc., as Lessee and The CIT Group/Equipment
Financing, Inc., as Lessor.

 

If this Lease is prepaid prior to the date provided for repayment in the Lease,
the Lessee agrees to pay the following fees:

 

four percent (4%) of the unpaid balance if such prepayment occurs during the
first year
two percent (2%) of the unpaid balance if such prepayment occurs during the
second year
one percent (1%) of the unpaid balance if such prepayment occurs during the
third year

 

 

Lessee:

 

Quantum Geophysical Inc.

 

 

By

/s/ Thomas J. Concannon

 

Title

Treasurer

 

 

 

Lessor:

 

 

 

The CIT Group/Equipment Financing, Inc.

 

 

 

 

 

 

Don A. Luttenegger

 

By

/s/ Don A. Luttenegger

 

Title

V.P. Specialty Funding

 

 

1

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Rider “C”- COVENANT RIDER

 

ATTACHED TO AND BY THIS REFERENCE MADE A PART OF THE TEXAS EQUIPMENT LEASE
(“LEASE”)
WHEREIN QUANTUM GEOPHYSICAL, INC. IS LESSEE AND THE CIT GROUP/EQUIPMENT
FINANCING, INC. IS
LESSOR DATED 7/25/06.

 

LESSEE COVENANTS AND AGREES THAT DURING THE TERM OF THIS LEASE, IT WILL BE AN
EVENT OF DEFAULT IF IT SHALL BREACH OR FAIL TO COMPLY WITH ANY OF THE FOLLOWING
COVENANTS:

 

1.     ON A QUARTERLY BASIS, NO LATER THAN 45 DAYS AFTER THE END OF EACH FISCAL
QUARTER, LESSEE SHALL PROVIDE DIRECTLY TO The CIT Group/Equipment Financing,
Inc. (CIT) COMPLETE FINANCIAL STATEMENTS (BALANCE SHEET, INCOME STATEMENT AND
STATEMENT OF CASH FLOWS) CERTIFIED BY THE CHIEF FINANCIAL OFFICER.

 

2.     ON AN ANNUAL BASIS, NO LATER THAN 90 DAYS AFTER THE END OF ITS FISCAL
YEAR, LESSEE SHALL PROVIDE DIRECTLY TO The CIT Group/Equipment Financing, Inc.
(CIT) COMPLETE FINANCIAL STATEMENTS (BALANCE SHEET, INCOME STATEMENT AND
STATEMENT OF CASH FLOWS) CERTIFIED BY THE CHIEF FINANCIAL OFFICER.

 

3.     AT ANY TIME DURING THE TERM OF THIS LEASE, THE OWNERSHIP OF LESSEE
CHANGES SUCH THAT GEOKINETICS INC. FAILS TO OWN AT LEAST 80% OF THE OUTSTANDING
VOTING CAPITAL STOCK OF LESSEE WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR.

 

4.     LESSEE IS IN DEFAULT OF ANY OBLIGATION TO PNC BANK.

 

5.     FROM TIME TO TIME, LESSEE SHALL FURNISH TO LESSOR SUCH FURTHER
INFORMATION REGARDING THE BUSINESS AFFAIRS AND FINANCIAL CONDITION OF LESSEE AS
LESSOR MAY REASONABLY REQUIRE.

 

LESSEE:

 

QUANTUM GEOPHYSICAL, INC.

 

 

By

/s/ Thomas J. Concannon

 

Title

Treasurer

 

 

 

Send to the attention of:

Credit Compliance Department

 

The CIT Group/Equipment Financing, Inc.

 

1540 W. Fountainhead Pkwy.

 

Tempe, AZ 85282

 

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Rider “D” - PUT RIDER

 

Attached to and made a part of the Texas Equipment Lease (“Lease”) dated
7/25/2006 between, Quantum Geophysical, Inc. as Lessee and The CIT
Group/Equipment Financing, Inc. as Lessor.

 

Notwithstanding anything to the contrary stated in Section A of the Lease at the
expiration of the original term of the Lease, Lessee shall exercise its purchase
option set forth in the Lease and agrees that, in addition to other amounts due
and to become due under the Lease, to pay Lessor the purchase price of $100.00
provided, however, Lessee shall not be entitled to receive title to the leased
equipment until Lessee has paid in full all rentals owing under the Lease and
has fulfilled all of its other obligations thereunder.

 

Upon completion of the foregoing, Lessor shall transfer title to Lessee AS-IS,
WHERE-IS, without recourse, representation or warranty of any kind except that
Lessor will warrant that the Equipment is free and clear of any liens created by
Lessor.

 

Lessee:

 

Quantum Geophysical, Inc.

 

 

By

/s/ Thomas J. Concannon

 

Title

Treasurer

 

 

 

Lessor:

 

The CIT Group/Equipment Financing, Inc.

 

 

 

 

 

 

Don A. Luttenegger

 

By

/s/ Don A. Luttenegger

 

Title

V.P. Specialty Funding

 

 

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RIDER “T”

 

Texas Usury Savings Language

 

Attached to and made a part of the Texas Equipment Lease dated 7/25/2006 between
The CIT Group/Equipment Financing, Inc. as Lessor and Quantum Geophysical, Inc.
as Lessee (“Lease”).

 

RATE PROVISION: In no event shall Lessee, by acceleration or prepayment of
unpaid amounts hereunder or otherwise, be obligated to pay any interest in
excess of the amount permitted by applicable law. Any acceleration or prepayment
of unpaid amounts hereunder shall be subject to all applicable laws, including
rebated of unearned charges. If in any event whatsoever, Lessor shall receive
anything or value deemed interest under applicable law which would exceed the
maximum amount of interest under applicable law, the excess amount shall be
applied to the reduction of the unpaid payments or shall be refunded to Lessee.
All sums paid or agreed to be paid by Lessee to Lessor for the use, forbearance
or detention of money shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full term of this
transaction so that the amount of consideration constituting interest is uniform
throughout the term of the Lease and does not exceed the maximum permitted by
applicable law.

 

FINANCE CHARGES: In the event that the Lease is deemed to be a financing lease
or loan agreement, Lessor and Lessee hereby acknowledge and agree that the
difference between (i) the cost of the Equipment, which is $6,000,000,00, and
(ii) the total sum of the payments $6,840,628.56 shall be interest on the
Equipment cost, which is equal to the rate of 8.72% per annum, and which Lessee
hereby agrees to pay.

 

 

Lessee:

 

Quantum Geophysical, Inc.

 

 

By

/s/ Thomas J. Concannon

 

Title

Treasurer

 

 

 

Lessor:

 

The CIT Group/Equipment Financing. Inc.

 

 

 

 

 

 

Don A. Luttenegger

 

By

/s/ Don A. Luttenegger

 

Title

V.P. Specialty Funding

 

 

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