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Exhibit 10.2

 

REVOLVING PROMISSORY NOTE

 

$30,000,000.00

May 4, 2015

For value received, GEOSPACE TECHNOLOGIES CORPORATION, a Texas corporation
(“Borrower”), does hereby promise to pay to the order of FROST BANK, a Texas
state bank (“Lender”), at P.O.  Box 34746, San Antonio, Texas 78265, or at such
other address as Lender shall from time to time specify in writing, in lawful
money of the United States of America, the sum of THIRTY MILLION AND NO/100
DOLLARS ($30,000,000.00), or so much thereof as from time to time may be
disbursed by Lender to Borrower under the terms of that certain Loan Agreement
dated September 27, 2013, between Borrower, Guarantor (as defined therein) and
Lender (as amended by that certain First Amendment to Loan Agreement executed by
the parties thereto on December 16, 2013, and effective as of September 27,
2013, and that certain Second Amendment to Loan Agreement executed by the
parties thereto dated May 4, 2015, and as from time to time further amended,
restated, supplemented, modified or replaced, the “Loan Agreement”), and be
outstanding, together with interest from the date hereof on the principal
balance outstanding from time to time as hereinafter provided.  Interest shall
be computed on a per annum basis of a year of 360 days and for the actual number
of days elapsed, unless such calculation would result in a rate greater than the
highest rate permitted by applicable law, in which case interest shall be
computed on a per annum basis of a year of 365 days or 366 days in a leap year,
as the case may be.  Any capitalized terms used in this Note and not otherwise
defined herein shall have the meaning ascribed to them in the Loan Agreement.

1. Payment Terms.  Interest only on amounts outstanding hereunder shall be due
and payable monthly as it accrues, on the 1st day of each and every calendar
month, beginning May 1, 2015, and continuing regularly and monthly thereafter
until the Termination Date, when the entire amount hereof, principal and accrued
interest then remaining unpaid, shall be then due and payable; interest being
calculated on the unpaid principal each day principal is outstanding and all
payments made credited to any collection costs and late charges, to the
discharge of the interest accrued and to the reduction of the principal, in such
order as Lender shall determine.

2. Interest Rate. Interest on the outstanding and unpaid principal balance
hereof shall be computed at a per annum rate equal to the lesser of (a) a rate
equal to the Prime Rate, plus zero percent (0.0%) per annum, or (b) the Maximum
Rate.  The term “Prime Rate,” as used herein, shall mean the maximum “Latest”
“U.S.” prime rate of interest per annum published from time to time in the Money
Rates section of The Wall Street Journal (U.S. Edition) or in any successor
publication to The Wall Street Journal.  Borrower understands that the Prime
Rate may not be the best, lowest, or most favored rate of Lender or The Wall
Street Journal, and any representation or warranty in that regard is expressly
disclaimed by Lender.  Borrower acknowledges that (i) if more than one U.S.
prime rate is published at any time by The Wall Street Journal, the highest of
such prime rates shall constitute the Prime Rate hereunder, and (ii) if at any
time The Wall Street Journal ceases to publish a U.S. prime rate, Lender shall
have the right to select a substitute rate that Lender determines, in the
exercise of its reasonable commercial discretion, to be comparable to such prime
rate, and the substituted rate as so selected, upon the sending of written
notice thereof to Borrower, shall constitute the Prime Rate hereunder.  Upon
each increase or decrease hereafter in the Prime Rate, the rate of interest upon
the unpaid principal balance hereof shall be increased or decreased by the same
amount as the increase or decrease in the Prime Rate, such increase or decrease
to become effective as of the day of each such change in the Prime Rate and
without notice to Borrower or any other person.

3. Late Charge.  If a payment is made more than 10 days after it is due,
Borrower will be charged, in addition to interest, a delinquency charge of (a)
5% of the unpaid portion of the regularly scheduled payment, or (b) $250.00,
whichever is less.  Additionally, upon maturity of this Note, if the outstanding
principal balance (plus all accrued but unpaid interest) is not paid within 10
days of the maturity date, Borrower will be charged a delinquency charge of (i)
5% of the sum of the outstanding principal balance (plus all accrued but unpaid
interest), or (ii) $250.00, whichever is less.  Borrower agrees with Lender that
the charges set forth herein are reasonable compensation to Lender for the
handling of such late payments.

4. Default Rate.  For so long as any Event of Default exists, regardless of
whether or not there has been an acceleration of the indebtedness evidenced by
this Note, and at all times after the maturity of the indebtedness evidenced by
this Note (whether by acceleration or otherwise), and in addition to all other
rights and remedies of Lender hereunder, interest shall accrue at the applicable
rate stated in Section 2 above plus two percent (2%) per annum, but in no event
in excess of the Maximum Rate, and such accrued interest shall be immediately
due and payable.  Borrower acknowledges that it would be extremely difficult or
impracticable to determine Lender’s actual damages resulting from any Event of
Default, and such accrued interest is a reasonable estimate of those damages and
does not constitute a penalty.

 

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5. Revolving Line of Credit.  Under the Loan Agreement, Borrower may request
advances and make payments hereunder from time to time, provided that it is
understood and agreed that the aggregate principal amount outstanding from time
to time hereunder shall not at any time exceed the amount permitted under the
terms of the Loan Agreement.  The unpaid balance of this Note shall increase and
decrease with each new advance or payment hereunder, as the case may be.  This
Note shall not be deemed terminated or canceled prior to the date of its
maturity other than in accordance with the terms of the Loan Agreement, although
the entire principal balance hereof may from time to time be paid in
full.  Borrower may borrow, repay and re-borrow hereunder.  All payments and
prepayments of principal or interest on this Note shall be made in lawful money
of the United States of America in immediately available funds, at the address
of Lender indicated above, or such other place as the holder of this Note shall
designate in writing to Borrower.  If any payment of principal or interest on
this Note shall become due on a day which is not a Business Day, such payment
shall be made on the next succeeding Business Day and any such extension of time
shall be included in computing interest in connection with such payment.  The
books and records of Lender shall be prima facie evidence of all outstanding
principal of and accrued and unpaid interest on this Note.

6. Prepayment.  Borrower reserves the right from time to time to prepay, prior
to maturity, all or any part of the principal of this Note without premium or
penalty.  Any prepayments shall be applied first to accrued interest and then to
principal.  Borrower will provide written notice to the holder of this Note of
any such prepayment of all or any part of the principal at the time
thereof.  All payments and prepayments of principal or interest on this Note
shall be made in lawful money of the United States of America in immediately
available funds, at the address of Lender indicated above, or such other place
as the holder of this Note shall designate in writing to Borrower.

7. Default.  It is expressly provided that upon the occurrence and during the
continuance of an Event of Default the holder of this Note may, at its option,
exercise the remedies of Lender provided in Section 9.02 of the Loan Agreement;
and in the event default is made in the prompt payment of this Note when due or
declared due, and the same is placed in the hands of an attorney for collection,
or suit is brought on same, or the same is collected through probate, bankruptcy
or other judicial proceedings, then the Borrower agrees and promises to pay all
out-of-pocket costs of collection, including reasonable attorney’s fees.

8. No Usury Intended; Usury Savings Clause.  In no event shall interest
contracted for, charged or received hereunder, plus any other charges in
connection herewith which constitute interest, exceed the Maximum Rate.  The
amounts of such interest or other charges previously paid to the holder of the
Note in excess of the amounts permitted by applicable law shall be applied by
the holder of the Note to reduce the principal of the indebtedness evidenced by
the Note, or, at the option of the holder of the Note, be refunded.  To the
extent permitted by applicable law, determination of the Maximum Rate shall at
all times be made by amortizing, prorating, allocating and spreading in equal
parts during the period of the full stated term of the loan and indebtedness,
all interest at any time contracted for, charged or received from the Borrower
hereof in connection with the loan and indebtedness evidenced hereby, so that
the actual rate of interest on account of such indebtedness is uniform
throughout the term hereof.

9. Security.  This Note has been executed and delivered pursuant to the Loan
Agreement and is secured by a Security Agreement dated as of September 27, 2013,
by and among Borrower, each of the domestic subsidiaries of Borrower identified
on Schedule 1 attached hereto and Lender, covering certain collateral as more
particularly described therein.  The holder of this Note is entitled to the
benefits and security provided in the Loan Documents.

10. Joint and Several Liability; Waiver.  Each maker, signer, surety and
endorser hereof, as well as all successors and assigns of said parties, shall be
directly and primarily, jointly and severally, liable for the payment of all
indebtedness hereunder.  Lender may release or modify the obligations of any of
the foregoing persons or entities, or guarantors hereof, in connection with this
Note without affecting the obligations of the others.  All such persons or
entities expressly waive presentment and demand for payment, notice of default,
notice of intent to accelerate maturity, notice of acceleration of maturity,
protest, notice of protest, notice of dishonor, and all other notices and
demands for which waiver is not prohibited by applicable law, and diligence in
the collection hereof; and agree to all renewals, extensions, indulgences,
partial payments, releases or exchanges of collateral, or taking of additional
collateral, with or without notice, before or after maturity.  No delay or
omission of Lender in exercising any right hereunder shall be a waiver of such
right or any other right under this Note.

11. Texas Finance Code.  In no event shall Chapter 346 of the Texas Finance Code
(which regulates certain revolving loan accounts and revolving tri-party
accounts) apply to this Note.  To the extent that Chapter 303 of the Texas
Finance Code is applicable to this Note, the “weekly ceiling” specified in such
article is the applicable ceiling; provided that, if any applicable law permits
greater interest, the law permitting the greatest interest shall apply.

 

Revolving Promissory Note

2

 

 

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12. Governing Law; Venue.  This Note is being executed and delivered, and is
intended to be performed in the State of Texas.  Except to the extent that the
laws of the United States of America may apply to the terms hereof, the
substantive laws of the State of Texas (without regard to conflicts of laws)
shall govern the validity, construction, enforcement and interpretation of this
Note.  In the event of a dispute involving this Note or any other instruments
executed in connection herewith, the undersigned irrevocably agrees that venue
for such dispute shall lie in any court of competent jurisdiction in Bexar
County, Texas.

13. Purpose of Loan.  Borrower agrees that no advances under this Note shall be
used for personal, family or household purposes, and that all advances hereunder
shall be used solely for business, commercial, investment, or other similar
purposes.

14. Captions.  The captions in this Note are inserted for convenience only and
are not to be used to limit the terms herein.

15. Renewal.  This Note is given in renewal, extension and decrease, but not
extinguishment, of all amounts left owing and unpaid on that certain Revolving
Promissory Note dated September 27, 2013, executed and delivered by Borrower,
formerly known as Geospace Technologies Corporation, a Delaware corporation, and
payable to the order of Lender in the original face amount of $50,000,000.00.

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Revolving Promissory Note

3

 

 

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BORROWER:

 

GEOSPACE TECHNOLOGIES CORPORATION, a Texas corporation

 

By:

  /s/ Thomas T. McEntire

 

  Thomas T.  McEntire, Vice President,

 

  Chief Financial Officer and Secretary

 

 

 

Revolving Promissory Note

Signature Page

to Revolving Promissory Note

 

 

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SCHEDULE 1

TO

REVOLVING PROMISSORY NOTE

(1)

GTC, Inc., a Texas corporation

(2)

Exile Technologies Corporation, a Texas corporation

(3)

Geospace Engineering Resources International, Inc., a Texas corporation

(4)

Geospace Finance Corp., a Texas corporation

(5)

Geospace J.V., Inc., a Texas corporation

(6)

Geospace Technologies, Sucursal Sudamericana LLC, a Texas limited liability
company

 

Revolving Promissory Note

Schedule 1

to Revolving Promissory Note