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

  



 

















 


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 


 


5

















 


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

  



 


8

















 


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

  



 






* (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


 


2

















 


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.


 


3

















 


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.


 


4

















 


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

















 


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

  



 


1

















 


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

  	
   

  



 

















 


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