Document:

10-K

Exhibit 10.ii 

PLEDGE AGREEMENT 

	 	        PLEDGE
AGREEMENT, dated as of December 25, 2007, Merhav (m.n.f.) Limited a company established
under the laws of Israel (“Pledgor”) and Ampal-American Israel Corporation, a
New York Corporation (“Pledgee”).  

W
I T N E S S E T H: 

	 	        WHEREAS,
concurrently with the execution and delivery of this Agreement, Pledgee has loaned the
Pledgor $20,000,000 (the “Loan”) pursuant to a Promissory Note, dated the date
hereof, in the (the “Note”); and  

	 	        WHEREAS,
it is a condition precedent to the Loan that the Pledgor shall have made the pledge
contemplated by this Agreement.  

	 	        NOW,
THEREFORE, in consideration of the premises and in order to induce the Pledgee to
consummate the transactions contemplated by the Note, the parties hereto hereby agree as
follows:  

        SECTION
1. Pledge. The Pledgor hereby pledges with, hypothecates to, delivers and transfers
into the possession of the Pledgee, his assigns, heirs and legal representatives and
grants to the Pledgee, its assigns, heirs and legal representatives a continuing first
priority security interest in, the following (collectively the “Pledged
Collateral”): 

		    (i)        all
Class A Stock, par value $1.00 per share (the “Class A Stock”), of
          Ampal-American Israel Corporation (collectively, the “Pledged Shares”)
          currently owned or hereinafter acquired;  

		    (ii)        the
certificates representing the shares referred to in clauses (i) above; and  

		    (iii)        subject
to Section 6, all dividends, cash, instruments, options, rights and           other
property or proceeds, from time to time received, receivable or otherwise
          distributed or distributable in respect of or in exchange for any or all of the
          shares referred to in clause (i) above.  

        SECTION
2. Security for Obligations. This Agreement secures and the Pledged Collateral is
security for the indefeasible payment in full when due, whether at the stated maturity, by
acceleration or otherwise, of the obligations of the Pledgor pursuant to the Note, and all
obligations of the Pledgor now or hereafter existing under this Agreement (all such
obligations of the Pledgor being referred to herein as the “Secured
Obligations”). 

        SECTION
3. Delivery of Pledged Collateral. All certificates or instruments representing or
evidencing the Pledged Collateral shall be delivered to and held by Pledgee and shall be
accompanied by undated stock powers duly endorsed in blank and irrevocable proxies
substantially in the form of Exhibit A hereto. 

        SECTION
4. Representations and Warranties. (a) The Pledgor represents and warrants as follows:  

		    (i)        The
Pledgor currently is the legal and beneficial owner of 4,476,389 shares of
          Class A Stock and such shares are all of the Class A Stock of Pledgee owned by
          Pledgor. There are no existing options, warrants, calls, commitments, rights
          (pre-emptive or otherwise), or subscriptions of any character whatsoever
          relating to any of the Pledged Shares except for those created or incurred by
or           at the direction of the Pledgee.  

		    (ii)        The
Pledgor is the direct and beneficial owner of the Pledged Collateral free           and
clear of any lien, claim or encumbrance other than the encumbrance granted           to
the Pledgee hereunder.  

		    (iii)        This
Agreement has been duly executed and delivered by the Pledgor and           constitutes
the legal, valid and binding obligation of the Pledgor, enforceable           against the
Pledgor in accordance with its terms.  

		    (iv)        The
pledge of the Pledged Collateral pursuant to this Agreement creates a valid           and
perfected first priority security interest in the Pledged Collateral           securing
the payment of the Secured Obligations, subject to no prior lien or to           any
agreement purporting to grant to any third party a security interest in the
          property or assets of the Pledgor which would include the Pledged Collateral.  

    (b)        The
representations and warranties set forth in this Section 4 shall survive the
          execution and delivery of this Agreement.  

        SECTION
5. Further Assurances; Supplements. (a) The Pledgor agrees that at any time and
from time to time, at the expense of the Pledgor, the Pledgor will promptly execute and
deliver all further instruments and documents, and take all further action, that may be
necessary or desirable in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable the Pledgee to exercise and enforce its
rights and remedies hereunder with respect to any Pledged Collateral including, without
limitation, the execution and delivery of UCC-1 financing statements for filing by and at
the sole expense of Pledgee. Pledgor hereby authorizes Pledgee to file all UCC-1
financing statements or other instruments that Pledgee deems necessary or desirable to
perfect the Pledgee and security interest created hereunder.  

    (b)        The
Pledgor will defend Pledgee’s right, title, special property and           security
interest in and to the Pledged Collateral pledged by it hereunder and           the
encumbrances of the Pledgee thereon against the claim of any person and will
          maintain and preserve such Encumbrances so long as any Secured Obligations are
          outstanding.  

    (c)        If
the Pledgor shall become entitled to receive or shall receive any certificate
          or other instrument (including, without limitation, any certificate
representing           a stock dividend or distribution in connection with any
reclassification,           increase or reduction in capital), option or right, whether
in addition to, in           substitution of, or in exchange for any of the Pledged
Collateral, the Pledgor           shall accept any such certificate or other instrument
as the Pledgee’s           agent, shall hold them in trust for the Pledgee, and
shall deliver them           forthwith to Pledgee in the exact form received, together
with appropriate           undated stock powers duly endorsed in blank and other
instruments of transfer           which may be necessary or desirable duly executed in
blank, to be held by the           Pledgee, subject to the terms hereof, as further
collateral for the Secured           Obligations and the same shall for all purposes be
deemed to be Pledged           Collateral hereunder.  

2

        SECTION
6. Voting Rights; Dividends; Etc. (a) As long as no Default (as defined in Section
10) shall have occurred and be continuing and, in the case of Section 6(a)(i), as long as
no notice thereof shall have been given by the Pledgee to the Pledgor):  

		    (i)        The
Pledgor shall be entitled to exercise any and all voting and other
               consensual rights pertaining to the Pledged Collateral pledged by it
hereunder                or any part thereof for any purpose not inconsistent with the
terms of this                Agreement or the Note; provided, however, that the
Pledgor shall not                exercise or refrain from exercising any such right if
such action would have an                adverse effect on the value of the Pledged
Collateral or any part thereof.  

		    (ii)        The
Pledgor shall be entitled to receive and retain any and all dividends paid
               in respect of the Pledged Collateral pledged by it hereunder, other than
any and                all  

		    (A)        dividends
paid or payable other than in cash in respect of, and instruments and
               other property received, receivable or otherwise distributed in respect
of, or                in exchange for, any Pledged Collateral,  

		    (B)        dividends
and other distributions paid or payable in cash in respect of any                Pledged
Collateral in connection with a partial or total liquidation or
               dissolution or in connection with a reduction of capital, capital surplus
or                paid-in-surplus, and  

		    (C)        cash
paid, payable or otherwise distributed in redemption of, or in exchange
               for, any Pledged Collateral, all of which shall be, and all of which shall
be forthwith delivered to the Pledgee to hold as Pledged Collateral and shall, if
received by the Pledgor, be received in trust for the benefit of the Pledgee, be
segregated from the other property or funds of the Pledgor, and be forthwith delivered to
the Pledgee as Pledged Collateral in the same form as so received (with any necessary
endorsement).  

		    (iii)        The
Pledgee shall execute and deliver (or cause to be executed and delivered) to
               the Pledgor all such proxies and other instruments as the Pledgor may
reasonably                request for the purpose of enabling the Pledgor to exercise the
voting and other                rights which it is entitled to exercise pursuant to
paragraph (i) above and to                receive the dividends which it is authorized to
receive and retain pursuant to                paragraph (ii) above.  

    (b)        Upon
the occurrence and during the continuance of a Default:  

3

		    (i)        All
rights of the Pledgor to exercise the voting and other consensual rights
               which it would otherwise be entitled to exercise pursuant to Section
6(a)(i)                above shall cease upon notice from the Pledgee to the Pledgor, and
all such                rights shall thereupon become vested in the Pledgee who shall
thereupon have the                sole right to exercise such voting and other consensual
rights and any and all                rights of conversion, exchange, subscription or any
other rights, privileges or                options pertaining to the Pledged Collateral
or any part thereof, and Pledgee                may exercise such powers in such manner
as the Pledgee may elect, but the                Pledgee shall have no duty to exercise
any of the aforesaid right, privileges or                options and shall not be
responsible for any failure to do so or delay in doing                so.  

		    (ii)        All
rights of the Pledgor to receive the dividends which it or he would
               otherwise be authorized to receive and retain pursuant to Section 6(a)(ii)
above                shall cease, and all such rights shall thereupon become vested in
the Pledgee                who shall thereupon have the sole right to receive and hold as
Pledged                Collateral such dividends.  

		    (iii)        All
dividends which are received by the Pledgor contrary to the provisions of
               paragraph (ii) of this Section 6(b) shall be received in trust for the
benefit                of the Pledgee, shall be segregated from other funds of the
Pledgor and shall be                forthwith paid over to the Pledgee as Pledged
Collateral in the same form as so                received (with any necessary
endorsement).  

    (c)        In
order to permit the Pledgee to exercise the voting and other rights which it
          may be entitled to exercise pursuant to Section 6(b)(i) above, and to receive
          all dividends and distributions which it may be entitled to receive under
          Section 6(b)(ii) above, the Pledgor shall, if necessary, upon written notice of
          the Pledgee, from time to time execute and deliver to the Pledgee appropriate
          proxies, dividend payment orders and other instruments as the Pledgee may
          reasonably request including, without limitation, the irrevocable proxies in
the           form of Exhibit A hereto delivered by the Pledgor to the Pledgee on the
date           hereof.  

        SECTION
7. Transfers and Other Liens; Additional Shares or Warrants. (a) The Pledgor
agrees that it will not (i) sell, assign or transfer or otherwise dispose of, or grant
any option, warrant, subscription, call, warrants or other agreements with respect to,
any of the Pledged Collateral, or (ii) create or permit to exist any encumbrance upon or
with respect to any of the Pledged Collateral, except for the encumbrance in favor of the
Pledgee under this Agreement.  

    (b)        The
Pledgor agrees that it will not cause, consent to or approve the issuance of
          any additional shares of any class of capital stock of the Companies, except in
          each instance to the Pledgor, with delivery thereof to be made to the Pledgee
to           be held as additional Pledged Collateral hereunder.  

4

        SECTION
8. Power of Attorney. The Pledgor hereby authorizes the Pledgee and does
hereby make, constitute and appoint the Pledgee and any officer of agent of the Pledgee,
with full power of substitution, as the Pledgor’s true and lawful attorney-in-fact,
with power, in its own name and in the name of the Pledgor upon the occurrence and
continuance of a Default, to endorse any notes, checks, drafts, money orders or other
instruments of payments in respect of the Pledged Collateral that may come into possession
of the Pledgee; to sign and endorse any drafts against debtors, assignments, verifications
and notices in connection with accounts and other documents relating to the Pledged
Collateral; to pay or discharge taxes, liens, security interests or other encumbrances at
any time levied or places on or threatened against the Pledged Collateral; to demand,
collect, receipt for, comprise, settle and sue for monies due in respect of the Pledged
Collateral; and generally, to do, at the Pledgee’s option each at the Pledgor’s
expense, at any time, or from time to time, all acts and things, which the Pledgee deems
necessary to protect, preserve and realize upon the Pledged Collateral and Pledgee’s
security interest therein in order to effect the intent of this Agreement all as fully and
effectually as the Pledgor might or would do; and the Pledgor hereby ratifies all that
said attorney shall lawfully do or cause to be done by virtue hereof. This power of
attorney shall be irrevocable for the term of this Agreement and thereafter as long as any
of the Secured Obligations shall be outstanding. 

        SECTION
9. Pledgee May Perform. If the Pledgor fails to perform any agreement contained
herein, the Pledgee may itself perform, or cause performance of, such agreement, and the
expenses of the Pledgee incurred in connection therewith shall be payable by the Pledgor
under Section 11 of this Agreement. 

        SECTION
10. Remedies Upon Default. For purposes of this Agreement, “Default”
shall mean (i) a default in Pledgor’s obligations under the Note, and (ii) any breach
or default under the terms of this Agreement, which breach or default under this clause
(ii) has not been cured within 30 days after receipt of written notice of the occurrence
thereof. Upon the occurrence of an Event of Default and the delivery of the Pledged
Collateral to the Pledgee pursuant to Section 10, in addition to any other rights and
remedies provided for herein or available to him, the Seller may cause all or any part of
the Pledged Collateral to be registered in the name of Pledgee or his designee and, in
addition: 

    (a)        The
Pledgee may exercise in respect of the Pledged Collateral, all the rights           and
remedies of a secured party in default under the Uniform Commercial Code           (the
“Code”) in effect in the State of New York at that time, and the
          Pledgee may also, without notice except as specified below, sell the Pledged
          Collateral or any part thereof in one or more parcels at public or private
sale,           at any exchange, broker’s board or at any of the Pledgee’s
offices or           elsewhere, for cash, on credit or for future delivery, and upon such
other terms           as the Pledgee may deem commercially reasonable and the Pledgee may
be the           purchaser of any or all of the Pledged Collateral so sold. Each
purchaser at any           such sale, including, without limitation, the Pledgee, shall
hold the property           sold, absolutely, free and clear from any claim or right of
redemption of the           Pledgor, whom specifically waives all rights of redemption,
stay or appraisal           which he may has or may have under any rule or law or statute
now existing or           hereafter adopted. The Pledgor agrees that, to the extent
notice of sale shall           be required by law, at least ten business days’ notice
to the Pledgor of           the time and place of any public sale or the time after which
any private sale           is to be made shall constitute reasonable notification. The
Pledgee shall not be           obligated to make any sale of Pledged Collateral
regardless of notice of sale           having been given. The Pledgee may adjourn any
public or private sale from time           to time by announcement at the time and place
fixed therefor, and such sale may,           without further notice, be made at the time
and place to which it was so           adjourned.  

5

    (b)        The
Pledgor recognizes that, by reason of certain requirements and prohibitions
          contained in the Securities Act of 1933, as amended (the “Securities
          Act”), and applicable state securities laws, the Pledgee may with respect
          to any sale of all or any part of the Pledged Collateral, limit purchasers to
          those who will agree, among other things, to acquire such securities for their
          own account, for investment, and not with a view to the distribution or resale
          thereof. The Pledgor acknowledges and agrees that any such sale may result in
          prices and other terms less favorable to the seller than if such sale were a
          public sale without such restrictions and, notwithstanding such circumstances,
          agrees that any such sale shall be deemed to have been made in a commercially
          reasonable manner. The Pledgee shall be under no obligation to delay the sale
of           any of the Pledged Shares for the period of time necessary to permit the
Pledgor           to register such securities for public sale under the Securities Act,
or under           applicable state securities laws, even if the Pledgor would agree to
do so.  

    (c)        If
the Pledgee determines to exercise its right to sell any or all of the           Pledged
Collateral, upon written request, the Pledgor shall, from time to time,           furnish
to the Pledgee all such information as the Pledgee may reasonably           request in
order to determine the number of shares and other instruments           included in the
Pledged Collateral which may be sold by the Pledgee as exempt           transactions
under the Securities Act and rules of the Securities and Exchange           Commission
thereunder, as the same are from time to time in effect.  

    (d)        Any
cash held by the Pledgee as Pledged Collateral and all cash proceeds           received
by the Pledgee in respect of any sale of, collection from, or other           realization
upon all or any part of the Pledged Collateral shall be applied by           the Pledgee:  

	 	        First,
to the payment of the reasonable costs and expenses of such sale, including reasonable
compensation to the Pledgee and its agents and counsel, and all reasonable expenses,
liabilities and advances made or incurred by the Pledgee in connection therewith;  

	 	        Next,
to the Pledgee on account of the Secured Obligations in such order as the Pledgee may
elect; and 

	 	        Finally,
after indefeasible payment in full of all Secured Obligations, to the payment to the
Pledgor, or his assigns, heirs or legal representatives or to whomsoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction may direct, of any
surplus then remaining from such proceeds.  

        SECTION
12. Expenses. The Pledgor will upon demand pay to the Pledgee the amount of any and
all expenses, including the reasonable fees and expenses of its counsel and of any experts
and agents, which the Pledgee may incur in connection with the exercise or enforcement of
any of the rights of the Pledgee hereunder with respect to its Pledged Collateral or the
failure by the Pledgor to perform or observe any of the provisions hereof. 

        SECTION
13. Security Interest Absolute. All rights of the Pledgee and security interests
hereunder, and all obligations of the Pledgor hereunder, shall be absolute and
unconditional irrespective of any change in the time, manner or place of payment of, or in
any other term of, all or any of the Secured Obligations, or any other amendment or waiver
of or any consent to any departure from the Note. 

6

        SECTION
14. Waiver. No delay on the Pledgee’s part in exercising any power of sale,
encumbrance, option or other right hereunder, and no notice or demand which may be given
to or made upon the Pledgor by the Pledgee with respect to any power of sale, encumbrance,
option or other right hereunder, shall constitute a waiver thereof, or limit or impair the
Pledgee’s right to take any action or to exercise any power of sale, encumbrance,
option, or any other right hereunder, without notice or demand, or prejudice the
Pledgee’s rights hereunder or the rights of the Pledgee under the Note. 

        SECTION
15. Amendments, Etc. No amendment or waiver of any provision of this Agreement, nor
consent to any departure by the Pledgor herefrom, shall in any event be effective unless
the same shall be in writing and signed by the Pledgee, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose for which
given. 

        SECTION
16. Addresses for Notices. All notices and other communications provided for
hereunder shall be in writing and deemed delivered (i) upon receipt if by hand, overnight
courier or telecopy (provided a copy is mailed by certified mail, return receipt
requested, postage prepaid) and (ii) three days after mailing by certified mail, return
receipt requested, postage prepaid, to the Pledgor or to the Pledgee at the address
provided for in the Note, or at such other address as shall be designated by such person
in a written notice to each other person complying as to delivery with the terms of this
Section. 

        SECTION
17. Continuing Security Interest. (a) This Agreement shall create a continuing
first priority security interest in the Pledged Collateral, and shall (a) remain in full
force and effect until indefeasible payment in full of the Secured Obligations; (b)
continue to be effective or be reinstated, as the case may be, if at any time payment and
performance of the Secured Obligations, or any part thereof, is, pursuant to applicable
law, rescinded or reduced in amount, or must otherwise be restored or returned by the
obligee of the Secured Obligations, all as though such payment or performance had not been
made; (c) be binding upon the Pledgor, his assigns; heirs and legal representatives and
(d) inure to the benefit of the Pledgee and his heirs, legal representatives, transferees
and assigns. 

    (b)        Upon
the indefeasible payment in full of the Secured Obligations the security
          interest created by this Agreement shall be terminated an released without
          further action, and the Pledgor shall be entitled to the return, upon his
          request, of such of the Pledged Collateral pledged by him hereunder as shall
not           have been sold or otherwise applied pursuant to the terms hereof. Pledgee
shall           take such actions and execute such documents (at Pledgor’s expense)
          reasonably requested by Pledgor to effectuate the release of the security
          interest created hereunder.  

        SECTION
18. Severability. If for any reason any provision or provisions hereof are
determined to be invalid and contrary to any existing or future law, such invalidity shall
not impair the operation of or effect those portions of this Agreement which are valid. 

        SECTION
19. Section Titles. The Section titles contained in this Agreement are and shall be
without substantive meaning or content of any kind whatsoever and are not a part of the
agreement between the parties hereto. 

7

        SECTION
20. Waiver of Jury Trial. The parties hereto hereby agree to waive any right they
may have to a jury trial in connection with any action, suit or proceeding arising out of
or related in any way to this Agreement. 

        SECTION
21. Governing Law; Terms. This Agreement shall be governed by, and construed and
enforced in accordance with, the internal laws of the State of New York. 

8

        IN
WITNESS WHEREOF, the Pledgor has caused this Agreement to be duly executed and delivered
by its officer thereunto duly authorized, as of the date first above written. 

      [Release
and further assurance]

			PLEDGOR:

MERHAV (M.N.F.) LIMITED

By:
——————————————

Name: Yosef A. Maiman
Title:            Director

			PLEDGEE:

AMPAL-AMERICAN ISRAEL CORPORATION

By:
——————————————

Name: Irit Eluz, Yoram Firon
Title:      CFO,                 VPFulbright & Jaworski Document

FIFTH AMENDMENT TO LOAN AGREEMENT

THIS FIFTH AMENDMENT TO LOAN AGREEMENT (this "Amendment"), dated as of March ____, 2008, is between CONCORD TECHNOLOGIES, L.P., a Texas limited partnership ("Concord"), GEOSPACE ENGINEERING RESOURCES INTERNATIONAL, LP, a Texas limited partnership ("Engineering"), GEOSPACE TECHNOLOGIES, LP, a Texas limited partnership ("Geospace"), OYO INSTRUMENTS, LP, a Texas limited partnership ("Instruments"), and OYOG OPERATIONS, LP, a Texas limited partnership ("Operations", and together with Concord, Engineering, Geospace and Instruments, the "Borrowers"), jointly and severally, and REGIONS BANK (F/K/A UNION PLANTERS BANK, N.A.) ("Lender").

RECITALS:

Borrowers and Lender entered into that certain Loan Agreement dated as of November 22, 2004, as amended by First Amendment to Loan Agreement dated as of September 19, 2005, Second Amendment to Loan Agreement dated as of June 16, 2006, Third Amendment to Loan Agreement dated as of January 10, 2007, and Fourth Amendment to Loan Agreement dated as of October 12, 2007 (as amended, the "Agreement").

Pursuant to the Agreement, OYO Geospace Corporation, OYOG, LLC and OYOG Limited Partner, LLC ("Guarantors") executed those certain Guaranty Agreements dated as of January 10, 2007 (the "Guaranty Agreements") pursuant to which Guarantors guaranteed to Lender the payment and performance of the Obligations (as defined in the Agreement).

Borrowers and Lender now desire to amend the Agreement as herein set forth.

NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE 

Definitions

Section Definitions.  Capitalized terms used in this Amendment, to the extent not otherwise defined herein, shall have the meanings given to such terms in the Agreement, as amended hereby.

 

ARTICLE 

Amendments

Section Amendment to Certain Definitions.    Effective as of date hereof, the definition of each of the following terms contained in Section 1.1 of the Agreement is amended to read in its respective entirety as follows:

"Guarantors" means GFC, General Partner, Limited Partner and Parent.

"Guaranty Agreements" means the Guaranty-GFC, the Guaranty-General Partner, the Guaranty-Limited Partner and the Guaranty-Parent.

"Security Agreements" means the Security Agreement-GFC, the Security Agreement-Concord, the Security Agreement-Engineering, the Security Agreement-Geospace, the Security Agreement-Instruments and the Security Agreement-Operations.

Effective as of the date hereof, the following definitions shall be added to Section 1.1 of the Agreement in proper alphabetical order:

"GFC" means Geospace Finance Corp., a Texas corporation, and its successors and assigns.

"Guaranty-GFC" means the Guaranty Agreement executed by GFC in favor of Lender in substantially the form of Exhibit "N" hereto, as the same may be amended, supplemented or modified.

"Security Agreement-GFC" means the Security Agreement executed by GFC in favor of Lender in substantially the form of Exhibit "O" hereto, as the same may be amended, supplemented or modified.

Section Amendment to Section 4.1.  Effective as of the date hereof, paragraph (c) shall be added to Section 4.1 of the Agreement and shall read in its entirety as follows:

(c)GFC shall grant to Lender a first priority security interest in (i) all of its accounts, accounts receivable, general intangibles (but excluding patents, trademarks, trade names and other intellectual property), inventory, chattel paper, documents, instruments, deposit accounts, equipment, machinery and furniture, and (ii) all of its investment property, cash and financial assets arising therefrom, whether now owned or hereafter acquired, and all products and proceeds thereof, pursuant to the Security Agreement-GFC executed by GFC.

Section Amendment to Section 6.14.  Effective as of the date hereof, Section 6.14 of the Agreement is amended to read in its entirety as follows:

Section 6.14.Subsidiaries.  Neither any Borrower nor any Guarantor has any Subsidiaries except as shown on the OYO Geospace Corporation Entity Structure As of December 31, 2007 (the "Corporate Chart") delivered by Borrowers to Lender.  Each Borrower and each Guarantor owns the percentage of ownership interests in its Subsidiaries shown on the Corporate Chart.

Section Amendment to Section 8.12.  Effective as of the date hereof, Section 8.12 of the Agreement is amended to read in its entirety as follows:

Section 8.12.Capital Expenditures.  No Borrower will permit the aggregate capital expenditures of Borrowers, Guarantors and their Subsidiaries (other than GFC) to exceed (a) $18,000,000.00 during the fiscal year ending September 30, 2008 and (b) $18,000.000.00 for the fiscal year ending September 30, 2009 and any fiscal year thereafter.

Section Amendment to Section 8.1.  Effective as of the date hereof, Section 8.1 of the Agreement is amended to read in its entirety as follows:

Section 8.1.Debt.  No Borrower will incur, create, assume or permit to exist, nor will it permit any Guarantor or any Subsidiary to incur, create, assume, or permit to exist, any Debt, except  Debt to Lender,  Debt described in Schedule 8.1(c),  Subordinated Debt,  accounts payable in the ordinary course of business,  Debt arising from the endorsement of instruments for collection in the ordinary course of business,  Debt to local Russian Bank (consisting of an overdraft line of credit) in an aggregate principal amount which does not exceed $500,000.00 at any time, and  in addition to Debt otherwise permitted by this Section 8.1, Debt of Borrowers, Guarantors and their Subsidiaries in an aggregate principal amount which does not exceed $3,000,000.00 outstanding at any time.

Section Amendment to Exhibits and Schedules.  Effective as of the date hereof, (a) Exhibit "N" shall be added to the Agreement (Guaranty-GFC) in substantially the form of Annex "A" to this Amendment, (b) Exhibit "O" shall be added to the Agreement (Security Agreement-GFC) in substantially the form of Annex "B" to this Amendment and (c) Schedule 8.1(c) is amended to read in its entirety as set forth in Annex "C" to this Amendment.

 

ARTICLE 

Conditions Precedent

Section Conditions.  The effectiveness of this Amendment is subject to the receipt by Lender of the following in form and substance satisfactory to Lender:

Certificate - Each Borrower.  For each Borrower, a certificate of an officer of such Borrower acceptable to Lender certifying (i) resolutions of the General Partner which authorize the execution, delivery and performance by such Borrower of this Amendment and the other Loan Documents executed or delivered or to be executed or delivered in connection therewith to which such Borrower is or is to be a party, and (ii) the names of the officers of such Borrower authorized to sign this Amendment and each of the other Loan Documents to which such Borrower is or is to be a party together with specimen signatures of such Persons.

Governmental Certificates - Each Borrower.  A certificate issued by the appropriate government official of the state of organization of each Borrower as to the existence of such Borrower.

Certificate-GFC.  A certificate of the Secretary or another officer of GFC acceptable to Lender certifying (i) resolutions of the board of directors of GFC which authorize the execution, delivery and performance by GFC of the Guaranty-GFC and the other Loan Documents to which GFC is or is to be a party and (ii) the names of the officers of GFC authorized to sign the Guaranty-GFC and each of the other Loan Documents to which GFC is or is to be party together with specimen signatures of such officers.

Organizational Documents-GFC.  The Certificate of Formation and the Bylaws of GFC certified by the Secretary or another officer of GFC acceptable to Lender. 

Governmental Certificates-GFC.  Certificates issued by the appropriate government officials of the state of incorporation of GFC as to the existence and good standing of GFC.

Security Agreement-GFC.  The Security Agreement-GFC executed by GFC.

Guaranty-GFC.  The Guaranty-GFC executed by GFC.

Financing Statements.  Uniform Commercial Code financing statements showing GFC as debtor.

UCC Search.  A Uniform Commercial Code search showing all financing statements and other documents or instruments on file against GFC in the office of the Secretary of State of Texas.

Additional Information.  Such additional documents, instruments and information as Lender may reasonably request.

Section Additional Conditions.  The effectiveness of this Amendment is also subject to the satisfaction of the additional conditions precedent that  the representations and warranties contained herein and in all other Loan Documents, as amended hereby, shall be true and correct as of the date hereof as if made on the date hereof,  all proceedings, corporate or otherwise, taken in connection with the transactions contemplated by this Amendment and all documents, instruments and other legal matters incident thereto shall be satisfactory to Lender, and  no Event of Default or Unmatured Event of Default shall have occurred and be continuing.

 

ARTICLE 

Ratifications, Representations, and Warranties

Section Ratifications.  The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions set forth in the Agreement and except as expressly modified and superseded by this Amendment, the terms and provisions of the Agreement are ratified and confirmed and shall continue in full force and effect.  Borrowers and Lender agree that the Agreement as amended hereby shall continue to be the legal, valid and binding obligation of such Persons enforceable against such Persons in accordance with its terms.

Section Representations, Warranties and Agreements.  Each Borrower hereby represents and warrants to Lender that  the execution, delivery, and performance of this Amendment and any and all other Loan Documents executed or delivered in connection herewith have been authorized by all requisite action on the part of such Borrower and will not violate the Organizational Documents of such Borrower,  the representations and warranties contained in the Agreement as amended hereby, and all other Loan Documents are true and correct on and as of the date hereof as though made on and as of the date hereof,  no Event of Default or Unmatured Event of Default has occurred and is continuing,  such Borrower is in full compliance with all covenants and agreements contained in the Agreement as amended hereby,  such Borrower is indebted to Lender pursuant to the terms of the Note, as the same may have been renewed, modified, extended and rearranged, including, without limitation, renewals, modifications and extensions made pursuant to this Amendment,  the liens, security interests, encumbrances and assignments created and evidenced by the Loan Documents are, respectively, valid and subsisting liens, security interests, encumbrances and assignments and secure the Note as the same may have been renewed, modified or rearranged, including, without limitation, renewals, modifications and extensions made pursuant to this Amendment, and  such Borrower has no claims, credits, offsets, defenses or counterclaims arising from the Loan Documents or Lender's performance under the Loan Documents.

Section Corporate Entity Structure.  Borrower agrees that attached hereto as Annex "D" is a true and correct copy of the OYO Geospace Corporation Entity Structure As of December 31, 2007.

 

ARTICLE 

Miscellaneous

Section Survival of Representations and Warranties.  All representations and warranties made in this Amendment or any other Loan Documents including any Loan Document furnished in connection with this Amendment shall fully survive the execution and delivery of this Amendment and the other Loan Documents, and no investigation by Lender or any closing shall affect the representations and warranties or the right of Lender to rely on them.

Section Reference to Agreement.  Each of the Loan Documents, including the Agreement and any and all other agreements, documents, or instruments now or hereafter executed and delivered pursuant to the terms hereof or pursuant to the terms of the Agreement, as amended hereby, are hereby amended so that any reference in such Loan Documents to the Agreement shall mean a reference to the Agreement, as amended hereby.

Section Expenses of Lender.  As provided in the Agreement, Borrowers agree to pay on demand all reasonable costs and expenses incurred by Lender in connection with the preparation, negotiation and execution of this Amendment and the other documents and instruments executed pursuant hereto and any and all amendments, modifications and supplements thereto, including, without limitation, the costs and fees of Lender's legal counsel, and all reasonable costs and expenses incurred by Lender in connection with the enforcement or preservation of any rights under the Agreement, as amended hereby, or any other Loan Document, including, without limitation, the costs and fees of Lender's legal counsel.

Section Severability.  Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable.

Section APPLICABLE LAW.  THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN HOUSTON, HARRIS COUNTY, TEXAS AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

Section Successors and Assigns.  This Amendment is binding upon and shall inure to the benefit of Lender and Borrower and their respective successors and assigns, except Borrower may not assign or transfer any of its rights or obligations hereunder without the prior written consent of Lender.

Section Counterparts.  This Amendment may be executed in one or more counterparts, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same instrument.

Section Effect of Waiver.  No consent or waiver, express or implied, by Lender to or for any breach of or deviation from any covenant, condition or duty by any Borrower under this Amendment shall be deemed a consent or waiver to or of any other breach of the same or any other covenant, condition or duty.

Section Headings.  The headings, captions, and arrangements used in this Amendment are for convenience only and shall not affect the interpretation of this Amendment.

Section ENTIRE AGREEMENT.  THIS AMENDMENT AND ALL OTHER INSTRUMENTS, DOCUMENTS, AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT AND THE OTHER INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT, AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO.  THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.

[[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]]

Executed as of the date first written above.

BORROWERS:

CONCORD TECHNOLOGIES, LP

By:OYOG, LLC,

its general partner

 

By:

Thomas T. McEntire

Vice President and

Chief Financial Officer

 

GEOSPACE ENGINEERING RESOURCES

INTERNATIONAL, LP

By:OYOG, LLC,

its general partner

 

By:

Thomas T. McEntire

Vice President and 

Chief Financial Officer

 

GEOSPACE TECHNOLOGIES, LP

By:OYOG, LLC,

its general partner

 

By:

Thomas T. McEntire

Vice President and

Chief Financial Officer

 

OYO INSTRUMENTS, LP

By:OYOG, LLC,

its general partner

 

By:

Thomas T. McEntire

Vice President and

Chief Financial Officer

 

OYOG OPERATIONS, LP

By:OYOG, LLC,

its general partner

By:

Thomas T. McEntire

Vice President and

Chief Financial Officer

 

LENDER:

REGIONS BANK

 

By:
Keith S. Page

Senior Vice President

Each of the undersigned Guarantors hereby consents and agrees to this Amendment and agrees that the Guaranty Agreement executed by such Person shall remain in full force and effect and shall continue to be the legal, valid and binding obligations of such Guarantor, enforceable against such Guarantor in accordance with its terms and shall evidence such Guarantor's guaranty of the Note as renewed and extended from time to time.

 

OYOG, LLC

 

By:

Thomas T. McEntire

Vice President and Chief Financial Officer

 

OYOG LIMITED PARTNER, LLC

 

By:

Thomas T. McEntire

Manager

 

OYO GEOSPACE CORPORATION

 

By:

Thomas T. McEntire

Vice President and Chief Financial Officer

LIST OF ANNEXES 

 

   AnnexDocument

AGuaranty-GFC

BSecurity Agreement-GFC

CSchedule 8.1(c)

DOYO Geospace Corporation Entity Structure As of December 31, 2007

Annex "A"

Guaranty-GFC

Annex "B"

Security Agreement-GFC

Annex "C"

Schedule 8.1(c)

Annex "D"

OYO Geospace Corporation Entity Structure As of December 31, 2007

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