Document:

Exhibit 10.13

 

Executed Version

 

 

SECOND
LIEN COLLATERAL AGREEMENT

 

dated as of January 16, 2008

 

by and among

 

GLOBAL
GEOPHYSICAL SERVICES, INC.

 

and

 

CERTAIN SUBSIDIARIES OF

GLOBAL GEOPHYSICAL SERVICES, INC.

as Grantors

 

in favor of

 

CREDIT
SUISSE,

as Collateral Agent

 

THIS IS THE SECOND LIEN COLLATERAL AGREEMENT REFERRED TO IN (A) THE
INTERCREDITOR AGREEMENT OF EVEN DATE HEREWITH AMONG GLOBAL GEOPHYSICAL
SERVICES, INC., CERTAIN SUBSIDIARIES OF GLOBAL GEOPHYSICAL SERVICES, INC. AND
CREDIT SUISSE AND (B) THE OTHER SECURITY DOCUMENTS REFERRED TO IN THE
CREDIT AGREEMENT REFERRED TO HEREIN.

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  PAGE

  
	
  ARTICLE 1

  
	
  DEFINED TERMS

  
	
   

  
	
  Section 1.01.

  	
  Terms Defined in the Uniform Commercial Code

  	
  1

  
	
  Section 1.02.

  	
  Definitions

  	
  2

  
	
  Section 1.03.

  	
  Other Definitional Provisions

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  
	
  SECURITY INTEREST

  
	
   

  
	
  Section 2.01.

  	
  Grant of Security Interest

  	
  7

  
	
  Section 2.02.

  	
  Grantors Remain Liable

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  
	
  REPRESENTATIONS AND WARRANTIES

  
	
   

  
	
  Section 3.01.

  	
  Existence

  	
  8

  
	
  Section 3.02.

  	
  Authorization of Agreement; No Conflict

  	
  9

  
	
  Section 3.03.

  	
  Consents

  	
  9

  
	
  Section 3.04.

  	
  Perfected Liens

  	
  9

  
	
  Section 3.05.

  	
  Title; No Other Liens

  	
  9

  
	
  Section 3.06.

  	
  State of Organization; Location of Inventory; Equipment and Fixtures;
  Other Information

  	
  10

  
	
  Section 3.07.

  	
  Accounts

  	
  11

  
	
  Section 3.08.

  	
  Chattel Paper

  	
  11

  
	
  Section 3.09.

  	
  Commercial Tort Claims

  	
  11

  
	
  Section 3.10.

  	
  Deposit Accounts

  	
  11

  
	
  Section 3.11.

  	
  Intellectual Property

  	
  11

  
	
  Section 3.12.

  	
  Inventory

  	
  11

  
	
  Section 3.13.

  	
  Investment Property; Partnership/LLC Interests

  	
  12

  
	
  Section 3.14.

  	
  Instruments

  	
  12

  
	
  Section 3.15.

  	
  Representations in Credit Agreement

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  
	
  COVENANTS

  	
   

  
	
   

  	
   

  
	
  Section 4.01.

  	
  Maintenance of Perfected Security Interest; Further Information

  	
  12

  
	
  Section 4.02.

  	
  Maintenance of Insurance

  	
  13

  
	
  Section 4.03.

  	
  Changes in Locations; Changes in Name or Structure

  	
  13

  

 

i

 

	
  Section 4.04.

  	
  Required Notifications

  	
  13

  
	
  Section 4.05.

  	
  Delivery Covenants

  	
  14

  
	
  Section 4.06.

  	
  Control Covenants

  	
  14

  
	
  Section 4.07.

  	
  Filing Covenants

  	
  15

  
	
  Section 4.08.

  	
  Accounts

  	
  16

  
	
  Section 4.09.

  	
  Intellectual Property

  	
  16

  
	
  Section 4.10.

  	
  Investment Property; Partnership/LLC Interests

  	
  18

  
	
  Section 4.11.

  	
  Equipment

  	
  18

  
	
  Section 4.12.

  	
  Vehicles

  	
  18

  
	
  Section 4.13.

  	
  Further Assurances

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  
	
  REMEDIAL PROVISIONS

  	
   

  
	
   

  	
   

  
	
  Section 5.01.

  	
  General Remedies

  	
  19

  
	
  Section 5.02.

  	
  Specific Remedies

  	
  20

  
	
  Section 5.03.

  	
  Private Sale

  	
  22

  
	
  Section 5.04.

  	
  Application of Proceeds

  	
  23

  
	
  Section 5.05.

  	
  Waiver; Deficiency

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  
	
  THE COLLATERAL AGENT

  
	
   

  
	
  Section 6.01.

  	
  Collateral Agent’s Appointment as Attorney-in-fact

  	
  24

  
	
  Section 6.02.

  	
  Duty of Collateral Agent

  	
  26

  
	
  Section 6.03.

  	
  Authority of Collateral Agent

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7

  
	
  MISCELLANEOUS

  
	
   

  
	
  Section 7.01.

  	
  Amendments in Writing

  	
  27

  
	
  Section 7.02.

  	
  Notices

  	
  27

  
	
  Section 7.03.

  	
  No Waiver by Course of Conduct; Cumulative Remedies

  	
  27

  
	
  Section 7.04.

  	
  Enforcement Expenses; Indemnification

  	
  27

  
	
  Section 7.05.

  	
  Waiver of Jury Trial; Preservation of Remedies

  	
  28

  
	
  Section 7.06.

  	
  Successors and Assigns

  	
  29

  
	
  Section 7.07.

  	
  Setoff

  	
  29

  
	
  Section 7.08.

  	
  Counterparts

  	
  29

  
	
  Section 7.09.

  	
  Severability

  	
  29

  
	
  Section 7.10.

  	
  Section Headings

  	
  30

  
	
  Section 7.11.

  	
  Integration

  	
  30

  
	
  Section 7.12.

  	
  Governing Law

  	
  30

  
	
  Section 7.13.

  	
  Jurisdiction; Consent to Service of Process

  	
  30

  
	
  Section 7.14.

  	
  Acknowledgements

  	
  31

  
	
  Section 7.15.

  	
  Additional Grantors

  	
  31

  
	
  Section 7.16.

  	
  Releases

  	
  31

  
	
  Section 7.17.

  	
  Intercreditor Agreement

  	
  32

  

 

ii

 

	
  Section 7.18.

  	
  Delivery of Collateral

  	
  32

  

 

	
  EXHIBITS:

  	
   

  
	
   

  	
   

  
	
  Exhibit A

  	
  Form of Perfection Certificate

  
	
   

  	
   

  
	
  SCHEDULES:

  	
   

  
	
   

  	
   

  
	
  Schedule 3.6

  	
  Exact Legal Name; Jurisdiction of Organization; Taxpayer
  Identification Number; Registered Organization Number; Mailing Address; Chief
  Executive Office and other Locations

  
	
  Schedule 3.9

  	
  Commercial Tort Claims

  
	
  Schedule 3.10

  	
  Deposit Accounts

  
	
  Schedule 3.11

  	
  Intellectual Property

  
	
  Schedule 3.13

  	
  Investment Property and Partnership/LLC Interests

  
	
  Schedule 3.14

  	
  Notes

  

 

iii

 

SECOND LIEN COLLATERAL
AGREEMENT (this “Agreement”), dated as of January 16,
2008, by and among GLOBAL GEOPHYSICAL SERVICES, INC., a Delaware corporation
(the “Borrower”), GGS INTERNATIONAL HOLDINGS,
INC., a Texas corporation (“GGS International”),
AUTOSEIS, INC., a Texas corporation (“Autoseis”) and
any Additional Grantor (as defined below) who may become party to this
Agreement (Autoseis, GGS International and such Additional Grantors,
collectively, with the Borrower, the “Grantors” and
each, a “Grantor”), in favor of CREDIT SUISSE,
as second lien Collateral Agent (in such capacity, the “Collateral
Agent”) for the ratable benefit of the Secured Parties (such term
and each other capitalized term used but not defined herein having the meaning
assigned thereto in the Credit Agreement), including the banks and other
financial institutions (the “Lenders”) from
time to time parties to the Second Lien Credit Agreement, dated of even date
herewith (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), by and among
the Borrower, the Lenders from time to time party thereto and Credit Suisse, as
Administrative Agent (in such capacity, the “Administrative
Agent”).

 

STATEMENT
OF PURPOSE

 

Pursuant to the Credit
Agreement, the Lenders have agreed to make Loans to the Borrower upon the terms
and subject to the conditions set forth therein.

 

Pursuant to the terms of the
Second Lien Guaranty Agreement of even date herewith (as amended, restated,
supplemented or otherwise modified from time to time, the “Guaranty
Agreement”), by certain Subsidiaries of the Borrower in favor of the
Administrative Agent, certain Subsidiaries of the Borrower who are parties
thereto have guaranteed payment and performance of the Obligations of the
Borrower.

 

It is a condition precedent
to the obligations of the Lenders to make their respective Loans to the
Borrower under the Credit Agreement that the Grantors shall have executed and
delivered this Agreement to the Collateral Agent, for the ratable benefit of
itself and the other Secured Parties.

 

NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, and to induce the Administrative Agent and
the Lenders to enter into the Credit Agreement and to induce the Lenders to
make their respective Loans to the Borrower, each Grantor hereby agrees with
the Collateral Agent, for the ratable benefit of itself and the other Secured
Parties, as follows:

 

1

 

ARTICLE 1

DEFINED TERMS

 

Section 1.01. Terms Defined in the
Uniform Commercial Code.

 

(a)           The
following terms when used in this Agreement shall have the meanings assigned to
them in the UCC (as defined in Section 1.02 below) as in effect from time
to time:  “Account”, “Account Debtor”, “Authenticate”,
“Certificated Security”, “Chattel Paper”, “Commercial Tort Claim”, “Deposit
Account”, “Documents”, “Electronic Chattel Paper”, “Equipment”, “Farm Products”,
“Fixture”, “General Intangible”, “Instrument”, “Inventory”, “Investment Company
Security”, “Investment Property”, “Issuer”, “Letter of Credit Rights”, “Proceeds”,
“Record”, “Registered Organization”, “Security”, “Security Entitlement”, “Securities
Intermediary”, “Securities Account”, “Supporting Obligation”, “Tangible Chattel
Paper” and “Uncertificated Security”.

 

(b)           Terms
defined in the UCC and not otherwise defined herein or in the Credit Agreement
shall have the meaning assigned in the UCC as in effect from time to time.

 

Section 1.02. Definitions. The
following terms when used in this Agreement shall have the meanings assigned to
them below:

 

“Additional
Grantor” means each Subsidiary of the Borrower which hereafter
becomes a Grantor pursuant to Section 7.15 hereof and Section 5.14 of
the Credit Agreement.

 

“Agreement”
means this Collateral Agreement, as amended, restated, supplemented or
otherwise modified from time to time.

 

“Applicable
Insolvency Laws” means all Applicable Laws governing bankruptcy,
reorganization, arrangement, adjustment of debts, relief of debtors,
dissolution, insolvency, fraudulent transfers or conveyances or other similar
laws (including, without limitation, 11 U.S.C. Sections 544, 547, 548 and 550
and other “avoidance” provisions of Title 11 of the United States Code, as
amended or supplemented).

 

“Assignment
of Claims Act” means the Assignment of Claims Act of 1940 (41 U.S.C.
Section 15, 31 U.S.C. Section 3737, and 31 U.S.C. Section 3727),
including all amendments thereto and regulations promulgated thereunder.

 

“Cash
Management Obligations” means overdrafts, returned items and related
liabilities and all indemnification obligations now or hereafter owing by any
Grantor to Credit Suisse, any Affiliate thereof or the Administrative Agent
arising from or in connection with treasury, depositary or cash management
services or in connection with any automated clearinghouse transfer of funds
for the benefit of such Grantor.

 

“Collateral”
has the meaning assigned thereto in Section 2.01.

 

“Collateral
Account” means any collateral account established by the Collateral
Agent as provided in Section 5.02.

 

2

 

“Control”
means the manner in which “control” is achieved under the UCC with respect to
any Collateral for which the UCC specifies a method of achieving “control”.

 

“Controlled
Depository” has the meaning assigned thereto in Section 4.06(a).

 

“Copyrights”
means collectively, all of the following of any Grantor: (a) all
copyrights, rights and interests in copyrights, works protectable by copyright,
copyright registrations and copyright applications anywhere in the world, including,
without limitation, those listed on Schedule 3.11 hereto, (b) all
reissues, extensions, continuations (in whole or in part) and renewals of any
of the foregoing, (c) all income, royalties, damages and payments now or
hereafter due and/or payable under any of the foregoing or with respect to any
of the foregoing, including, without limitation, damages or payments for past
or future infringements of any of the foregoing, (d) the right to sue for
past, present and future infringements of any of the foregoing and (e) all
rights corresponding to any of the foregoing throughout the world.

 

“Copyright
Licenses” means any written agreement naming any Grantor as licensor
or licensee, including, without limitation, those listed in Schedule 3.11,
granting any right under any Copyright, including, without limitation, the
grant of rights to manufacture, distribute, exploit and sell materials derived
from any Copyright.

 

“Discharge of
First Lien Obligations” has the meaning assigned thereto in the
Intercreditor Agreement.

 

“Dispute”
means any action, suit or proceeding pending against or in any other way
relating adversely to or affecting any party hereto or any of their respective
properties in any court or before any arbitrator of any kind or before or by
any Governmental Authority.

 

“Effective
Endorsement and Assignment” 
means, with respect to any specific type of Collateral, all such
endorsements, assignments and other instruments of transfer requested by the
Collateral Agent with respect to the Security Interest granted in such
Collateral, and in each case, in form and substance satisfactory to the
Collateral Agent.

 

“First Lien
Administrative Agent” has the meaning assigned thereto in the
Intercreditor Agreement.

 

“Government
Contract” means a contract between any Grantor and an agency,
department or instrumentality of the United States or any state, municipal or
local Governmental Authority located in the United States or all obligations of
any such Governmental Authority arising under any Account now or hereafter
owing by any such Governmental Authority, as account debtor, to any Grantor.

 

3

 

“Grantors”
has the meaning set forth in the introductory paragraph of this Agreement.

 

“Guarantors”
means the collective reference to each Person executing the Guaranty Agreement.

 

“Guaranty
Agreement” has the meaning set forth in the Statement of Purpose of
this Agreement.

 

“Intellectual
Property” means collectively, all of the following of any Grantor: (a) all
systems software, applications software and internet rights, including, without
limitation, screen displays and formats, internet domain names, web sites
(including web links), program structures, sequence and organization, all
documentation for such software, including, without limitation, user manuals,
flowcharts, programmer’s notes, functional specifications, and operations
manuals, all formulas, processes, ideas and know-how embodied in any of the
foregoing, and all program materials, flowcharts, notes and outlines created in
connection with any of the foregoing, whether or not patentable or
copyrightable, (b) concepts, discoveries, improvements and ideas, (c) any
useful information relating to the items described in clause (a) or (b),
including know-how, technology, engineering drawings, reports, design
information, trade secrets, practices, laboratory notebooks, specifications,
test procedures, maintenance manuals, research, development, manufacturing,
marketing, merchandising, selling, purchasing and accounting, (d) Patents
and Patent Licenses, Copyrights and Copyright Licenses, Trademarks and
Trademark Licenses, and (e) other licenses to use any of the items
described in the foregoing clauses (a), (b), (c) and (d) or any other
similar items of such Grantor necessary for the conduct of its business.

 

“Intercreditor
Agreement” has the meaning assigned thereto in the Credit Agreement.

 

“Issuer”
means any issuer of any Investment Property or Partnership/LLC Interests
(including, without limitation, any Issuer as defined in the UCC).

 

“Material
Contracts” has the meaning assigned thereto in the Credit Agreement.

 

“Obligations”
means with respect to the Borrower, the meaning assigned thereto in the Credit
Agreement, and with respect to each Guarantor, the obligations of such Guarantor
under the Guaranty Agreement executed by such Guarantor and with respect to all
Grantors, all liabilities and obligations of the Grantors hereunder and all
liabilities and obligations of the Grantors with respect to any Cash Management
Obligations.

 

“Partnership/LLC
Interests” means, with respect to any Grantor, the entire
partnership, membership interest or limited liability company interest, as
applicable, of such Grantor in each partnership, limited partnership or limited

 

4

 

liability company owned
thereby, including, without limitation, such Grantor’s capital account, its
interest as a partner or member, as applicable, in the net cash flow, net
profit and net loss, and items of income, gain, loss, deduction and credit of
any such partnership, limited partnership or limited liability company, as
applicable, such Grantor’s interest in all distributions made or to be made by
any such partnership, limited partnership or limited liability company, as applicable,
to such Grantor and all of the other economic rights, titles and interests of
such Grantor as a partner or member, as applicable, of any such partnership,
limited partnership or limited liability company, as applicable, whether set
forth in the partnership agreement or membership agreement, as applicable, of
such partnership, limited partnership or limited liability company, as
applicable, by separate agreement or otherwise.

 

“Patents”
means collectively, all of the following of any Grantor: (a) all patents,
rights and interests in patents, patentable inventions and patent applications
anywhere in the world, including, without limitation, those listed on Schedule
3.11 hereto, (b) all reissues, extensions, continuations (in whole or in
part) and renewals of any of the foregoing, (c) all income, royalties,
damages or payments now or hereafter due and/or payable under any of the
foregoing or with respect to any of the foregoing, including, without
limitation, damages or payments for past or future infringements of any of the
foregoing, (d) the right to sue for past, present and future infringements
of any of the foregoing and (e) all rights corresponding to any of the
foregoing throughout the world.

 

“Patent
License” means all agreements now or hereafter in existence, whether
written or oral, providing for the grant by or to any Grantor of any right to
manufacture, use or sell any invention covered in whole or in part by a Patent,
including, without limitation, any of the foregoing referred to in Schedule
3.11 hereto.

 

“Perfection
Certificate” means the perfection certificate dated as of even date
herewith, substantially in the form of Exhibit A attached hereto, and
otherwise in form and substance satisfactory to the Collateral Agent, and duly
certified by an officer, partner or member, as applicable, of each Grantor.

 

“Permitted
Liens” means Liens permitted pursuant to Section 6.02 of the
Credit Agreement.

 

“Securities
Act” means the Securities Act of 1933, including all amendments
thereto and regulations promulgated thereunder.

 

“Security Interests” means the security interests granted
pursuant to Article 2, as well as all other security interests created or
assigned as additional security for the Obligations pursuant to the provisions
of the Credit Agreement.

 

5

 

“Subsidiary Issuer”
means any Issuer of Investment Property or any Partnership/LLC Interests, which
is (i) a direct or indirect Domestic Subsidiary of the Borrower or (ii) a
direct first tier Foreign Subsidiary of any Grantor.

 

“Trademarks”
means collectively, all of the following of any Grantor: (a) all trademarks,
rights and interests in trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service marks,
logos, other business identifiers, prints and labels on which any of the
foregoing have appeared or appear, all registrations and recordings thereof,
and all applications in connection therewith anywhere in the world, including,
without limitation, those listed on Schedule 3.11 hereto, (b) all reissues,
extensions, continuations (in whole or in part) and renewals of any of the
foregoing, (c) all income, royalties, damages and payments now or hereafter due
and/or payable under any of the foregoing or with respect to any of the
foregoing, including, without limitation, damages or payments for past or
future infringements of any of the foregoing, (d) the right to sue for past,
present and future infringements of any of the foregoing and (e) all rights
corresponding to any of the foregoing throughout the world.

 

“Trademark License”
means any agreement now or hereafter in existence, whether written or oral,
providing for the grant by or to any Grantor of any right to use any Trademark,
including, without limitation, any of the foregoing referred to in Schedule
3.11.

 

“UCC” means the
Uniform Commercial Code as in effect in the State of New York, as amended or
modified from time to time; provided that
if perfection or the effect of perfection or non-perfection or the priority of
any Lien created hereunder on any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than New York, “UCC” means
the Uniform Commercial Code as in effect from time to time in such other
jurisdiction for purposes of the provisions hereof relating to such perfection,
effect of perfection or non-perfection or priority.

 

“Vehicles” means
all cars, trucks, trailers, construction and earth moving equipment and other
vehicles covered by a certificate of title under the laws of any state, all
tires and all other appurtenances to any of the foregoing.

 

Section
1.03. Other Definitional Provisions. Terms
defined in the Credit Agreement and not otherwise defined herein shall have the
meaning assigned thereto in the Credit Agreement. The words “hereof”, “herein”,
“hereto” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section and Schedule references are to this
Agreement unless otherwise specified. The meanings given to terms defined
herein shall be equally applicable to both the singular and plural forms of
such terms. Where the context requires, terms relating to the Collateral or any
part thereof, when used in relation to a Grantor, shall refer to such Grantor’s
Collateral or the relevant part thereof.

 

6

 

ARTICLE 2

SECURITY INTEREST

 

Section
2.01. Grant of Security Interest.

 

(a)           Each Grantor hereby grants,
pledges and collaterally assigns to the Collateral Agent, for the ratable
benefit of itself and the other Secured Parties, a security interest in all of
such Grantor’s right, title and interest in the following property now owned or
at any time hereafter acquired by such Grantor or in which such Grantor now has
or at any time in the future may acquire any right, title or interest, and
wherever located or deemed located (collectively, the “Collateral”),
as collateral security for the prompt and complete payment and performance when
due (whether at the stated maturity, by acceleration or otherwise) of the
Obligations:

 

	 
	
  (i)

  	
   

  	
  all
  Accounts;

  	 

	 
	
   

  	
   

  	
   

  	 

	 
	
  (ii)

  	
   

  	
  all cash and
  currency;

  	 

	 
	
   

  	
   

  	
   

  	 

	 
	
  (iii)

  	
   

  	
  all Chattel
  Paper;

  	 

	 
	
   

  	
   

  	
   

  	 

	 
	
  (iv)

  	
   

  	
  all
  Commercial Tort Claims identified on Schedule 3.9;

  	 

	 
	
   

  	
   

  	
   

  	 

	 
	
  (v)

  	
   

  	
  all Deposit
  Accounts;

  	 

	 
	
   

  	
   

  	
   

  	 

	 
	
  (vi)

  	
   

  	
  all
  Documents;

  	 

	 
	
   

  	
   

  	
   

  	 

	 
	
  (vii)

  	
   

  	
  all
  Equipment;

  	 

	 
	
   

  	
   

  	
   

  	 

	 
	
  (viii)

  	
   

  	
  all
  Fixtures;

  	 

	 
	
   

  	
   

  	
   

  	 

	 
	
  (ix)

  	
   

  	
  all General
  Intangibles;

  	 

	 
	
   

  	
   

  	
   

  	 

	
  (x)

  	
   

  	
  all
  Instruments;

  
	
   

  	
   

  	
   

  
	
  (xi)

  	
   

  	
  all
  Intellectual Property;

  
	
   

  	
   

  	
   

  
	
  (xii)

  	
   

  	
  all
  Inventory;

  
	
   

  	
   

  	
   

  
	
  (xiii)

  	
   

  	
  all
  Investment Property;

  
	
   

  	
   

  	
   

  
	
  (xiv)

  	
   

  	
  all Letter
  of Credit Rights;

  
	
   

  	
   

  	
   

  
	
  (xv)

  	
   

  	
  all
  Vehicles;

  
	
   

  	
   

  	
   

  
	
  (xvi)

  	
   

  	
  all other
  personal property not otherwise described above;

  
					

 

7

 

	
  (xvii)

  	
   

  	
  all books
  and records pertaining to the Collateral; and

  
	
   

  	
   

  	
   

  
	
  (xviii)

  	
   

  	
   to the extent not otherwise included, all
  Proceeds and products of any and all of the foregoing and all 

  
	
  collateral security and Supporting Obligations (as now or hereafter
  defined in the UCC) given by any Person with respect to any of the foregoing;
  

  

 

provided, however, that this
Agreement shall not constitute a grant of security interest in (and the term “Collateral”
shall be deemed not to include) (A) any United States intent-to-use trademark
applications to the extent that, and solely during the period in which, the
grant of a security interest therein would impair the validity or
enforceability of such intent-to-use trademark applications under applicable
federal law and (B) more than 66% of the issued and outstanding voting Equity
Interests (within the meaning of Section 956 of the Code), if any, of any
Foreign Subsidiary.

 

(b)           Notwithstanding clause (a)
of this Section 2.01, the payment and performance of the Obligations shall not
be secured by any Financial Hedging Agreement between any Grantor and an
Arranger or a Lender or any Affiliate of an Arranger or a Lender.

 

Section
2.02. Grantors Remain Liable. Anything
herein to the contrary notwithstanding: (a) each Grantor shall remain liable
under the contracts and agreements included in the Collateral to the extent set
forth therein to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (b) the exercise by the
Collateral Agent of any of the rights hereunder shall not release any Grantor
from any of its duties or obligations under the contracts and agreements
included in the Collateral, (c) no Secured Party shall have any obligation or
liability under the contracts and agreements included in the Collateral by
reason of this Agreement, nor shall any Secured Party be obligated to perform
any of the obligations or duties of any Grantor thereunder or to take any
action to collect or enforce any claim for payment assigned hereunder, and (d)
no Secured Party shall have any liability in contract or tort for any Grantor’s
acts or omissions.

 

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

 

To induce the Administrative Agent, the Collateral
Agent and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective Loans to the Borrower, each Grantor hereby
represents and warrants to the Collateral Agent and each other Secured Party
that:

 

Section
3.01. Existence. Each Grantor is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation, has the requisite power and
authority to own, lease and operate its 

 

8

 

properties
and to carry on its business as now being and hereafter proposed to be
conducted and is duly qualified and authorized to do business in each
jurisdiction in which the character of its properties or the nature of its
business requires such qualification and authorization other than in such
jurisdiction where failure to so qualify could not reasonably be expected to
have a Material Adverse Effect.

 

Section
3.02. Authorization of Agreement; No Conflict. Each
Grantor has the right, power and authority and has taken all necessary
corporate and other action to authorize the execution, delivery and performance
of this Agreement. This Agreement has been duly executed and delivered by the
duly authorized officers of each Grantor and this Agreement constitutes the
legal, valid and binding obligation of the Grantors enforceable in accordance
with its terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar state or federal debtor
relief laws from time to time in effect which affect the enforcement of
creditors’ rights in general and the availability of equitable remedies. The
execution, delivery and performance by the Grantors of this Agreement will not,
by the passage of time, the giving of notice or otherwise, violate any material
provision of any Applicable Law or Material Contract and will not result in the
creation or imposition of any Lien, other than the Security Interests, upon or
with respect to any property or revenues of any Grantor.

 

Section
3.03. Consents. No approval, consent,
exemption, authorization or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by or enforcement
against any Grantor or any Subsidiary Issuer of this Agreement, except (i) as
may be required by laws affecting the offering and sale of securities
generally, (ii) filings with the United States Copyright Office and/or the
United States Patent and Trademark Office and (iii) filings under the UCC
and/or the Assignment of Claims Act.

 

Section
3.04. Perfected Liens. Each financing
statement naming any Grantor as a debtor is in appropriate form for filing in
the appropriate filing offices of the states specified on Schedule 3.6. The
Security Interests granted pursuant to this Agreement (a) constitute valid
perfected security interests in all of the Collateral in favor of the
Collateral Agent, for the ratable benefit of itself and the other Secured
Parties, as collateral security for the Obligations, enforceable in accordance
with the terms hereof against all creditors of such Grantor and any Persons
purporting to purchase any Collateral from such Grantor and (b) are prior to
all other Liens on the Collateral in existence on the date hereof except for
Permitted Liens.

 

Section
3.05. Title; No Other Liens. Except for the
Security Interests, each Grantor owns each item of the Collateral free and
clear of any and all Liens or claims other than Permitted Liens. No financing
statement under the UCC of any state which names a Grantor as debtor or other
public notice with respect to all or any part of the Collateral is on file or
of record in any public office, except 

 

9

 

such
as have been filed in favor of the Collateral Agent, for the ratable benefit of
itself and the other Secured Parties, pursuant to this Agreement or in
connection with Permitted Liens. No Collateral is in the possession or Control
of any Person asserting any claim thereto or security interest therein, except
that (a) the Collateral Agent or its designee (or, prior to the Discharge of
First Lien Obligations, the First Lien Administrative Agent, acting as
gratuitous bailee of the Collateral Agent) may have possession or Control of
Collateral as contemplated hereby, (b) a depositary bank may have Control of a
Deposit Account owned by a Grantor at such depositary bank and a Securities
Intermediary may have Control over a Securities Account owned by a Grantor at
such Securities Intermediary, in each case subject to the terms of any Deposit
Account control agreement or Securities Account control agreement, as
applicable and to the extent required by Section 4, in favor of the Collateral
Agent, and (c) a bailee, consignee or other Person may have possession of the
Collateral as contemplated by, and so long as, the applicable Grantors have
complied to the satisfaction of the Collateral Agent with the applicable
provisions of Section 4.

 

Section
3.06. State of Organization; Location of Inventory;
Equipment and Fixtures; Other Information.

 

(a)           The exact legal name of each
Grantor is set forth on Schedule 3.6.

 

(b)           Each Grantor is a Registered
Organization organized under the laws of the state identified on Schedule 3.6
under such Grantor’s name. The taxpayer identification number and Registered
Organization number of each Grantor is set forth on Schedule 3.6 under such
Grantor’s name.

 

(c)           All Collateral consisting of
Inventory or Equipment (other than Inventory and Equipment held on marine
vessels or leased in the ordinary course of business, in transit, or Equipment
temporarily moved to another location for repair or refurbishment) and Fixtures
(whether now owned or hereafter acquired) is (or will be) located at the
locations specified on Schedule 3.6, except as otherwise permitted hereunder or
under the Credit Agreement.

 

(d)           The mailing address, chief
place of business, chief executive office and office where each Grantor keeps
its books and records relating to the Accounts, Documents, General Intangibles,
Instruments and Investment Property in which it has any interest is located at
the locations specified on Schedule 3.6 under such Grantor’s name. No Grantor
has any other places of business except those separately set forth on Schedule
3.6 under such Grantor’s name. No Grantor does business nor has done business
during the past five years under any trade name or fictitious business name
except as disclosed on Schedule 3.6 under such Grantor’s name. Except as
disclosed on Schedule 3.6 under such Grantor’s name, no Grantor has acquired
assets from any Person, other than assets acquired in the ordinary course of
such Grantor’s business, during the past five years.

 

10

 

Section
3.07. Accounts. Each existing Account
constitutes, and each hereafter arising Account will constitute, the legally
valid and binding obligation of the applicable Account Debtor. The amount
represented by each Grantor to the Collateral Agent as owing by each Account
Debtor is, or will be, the correct amount actually and unconditionally owing,
except for normal cash discounts and allowances where applicable. No Account
Debtor has any defense, setoff, claim or counterclaim against any Grantor that
can be asserted against the Collateral Agent, whether in any proceeding to
enforce the Collateral Agent’s rights in the Collateral or otherwise except
defenses, setoffs, claims or counterclaims that are not, in the aggregate,
material to the value of the Accounts. None of the Accounts is, nor will any
hereafter arising Account be, evidenced by a promissory note or other
Instrument, other than a check, that has not been pledged to the Collateral
Agent in accordance with the terms hereof.

 

Section
3.08. Chattel Paper. As of the date hereof,
no Grantor holds any Chattel Paper in the ordinary course of its business.

 

Section
3.09. Commercial Tort Claims. As of the date
hereof, all Commercial Tort Claims owned by any Grantor and where the
reasonably expected amount to be recovered from such claim exceeds $500,000 are
listed on Schedule 3.9.

 

Section
3.10. Deposit Accounts. As of the date
hereof, all Deposit Accounts (including, without limitation, cash management
accounts that are Deposit Accounts) owned by any Grantor are listed on Schedule
3.10.

 

Section
3.11. Intellectual Property.

 

(a)           All United States Copyright
registrations, Copyright applications, issued Patents, Trademark registrations,
Trademark applications and domain names owned by any Grantor in its own name on
the date hereof is listed on Schedule 3.11.

 

(b)           Except as set forth in
Schedule 3.11 on the date hereof, none of the Intellectual Property owned by
any Grantor is the subject of any written licensing or franchise agreement
pursuant to which such Grantor is the licensor or franchisor, except as could
not reasonably be expected to have a Material Adverse Effect.

 

Section
3.12. Inventory. Collateral consisting of
Inventory is of good and merchantable quality, free from any material defects. To
the knowledge of each Grantor, none of such Inventory is subject to any
licensing, Patent, Trademark, trade name or Copyright with any Person that
restricts any Grantor’s ability to manufacture and/or sell such Inventory. The
completion of the manufacturing process of such Inventory by a Person other
than the applicable Grantor would be permitted under any contract to which such
Grantor is a party or to which the Inventory is subject.

 

11

 

Section
3.13. Investment Property; Partnership/LLC Interests.

 

(a)           As of the date hereof, all
Investment Property (including, without limitation, Securities Accounts and
cash management accounts that are Investment Property) and all Partnership/LLC
Interests owned by any Grantor is listed on Schedule 3.13.

 

(b)           All Investment Property and
all Partnership/LLC Interests issued by any Subsidiary Issuer to any Grantor
(i) have been duly and validly issued and, if applicable, are fully paid and
nonassessable, (ii) are beneficially owned as of record by such Grantor and
(ii) constitute all the issued and outstanding shares of all classes of the
capital stock or equity interest of such Subsidiary Issuer issued to such
Grantor.

 

(c)           None of the Partnership/LLC
Interests (i) are traded on a Securities exchange or in Securities markets,
(ii) by their terms expressly provide that they are Securities governed by
Article 8 of the UCC or (iii) are Investment Company Securities.

 

Section
3.14. Instruments. As of the date hereof, no
Grantor holds any Instruments or is named a payee of any promissory note or
other evidence of indebtedness, other than the notes listed on Schedule 3.14.

 

Section
3.15. Representations in Credit Agreement. In
the case of each Grantor (other than the Borrower), the representations and
warranties set forth in Article 3 of the Credit Agreement as they relate to
such Grantor or to any Loan Document to which such Grantor is a party are true
and correct on and as of the date hereof (or, in the case of any Additional
Grantor, on and as of the date such Person becomes a party hereto), except to
the extent such representations and warranties expressly relate to an earlier
date.

 

ARTICLE 4

COVENANTS

 

Until the Obligations shall have been paid in full
and the Commitments terminated, unless consent has been obtained in the manner
provided for in Section 7.01, each Grantor covenants and agrees that:

 

Section
4.01. Maintenance of Perfected Security Interest;
Further Information.

 

(a)           Each Grantor shall maintain
the Security Interest created by this Agreement as a perfected Security
Interest having at least the priority described in Section 3.04 and shall
defend such Security Interest against the claims and demands of all Persons
whomsoever.

 

12

 

(b)           Each Grantor will furnish to the Collateral
Agent and the other Secured Parties from time to time statements and schedules
further identifying and describing the assets and property of such Grantor and
such other reports in connection therewith as the Collateral Agent may
reasonably request, all in reasonable detail.

 

Section 4.02.
Maintenance of Insurance. Each Grantor will maintain, with
financially sound and reputable companies, insurance policies in accordance
with Section 5.06 of the Credit Agreement.

 

Section 4.03. Changes in
Locations; Changes in Name or Structure. No Grantor will, except
upon 15 days’ prior written notice to the Collateral Agent and delivery to the
Collateral Agent of (a) all additional financing statements (executed if
necessary for any particular filing jurisdiction) and other instruments and
documents reasonably requested by the Collateral Agent to maintain the
validity, perfection and priority of the Security Interests and (b) if
applicable, a written supplement to the Schedules of this Agreement:

 

(i)    permit
any Deposit Account to be held by or at a depositary bank other than the
depositary bank that held such Deposit Account as of the date hereof as set
forth on Schedule 3.10;

 

(ii)   permit
any of the Inventory or Equipment (other than Inventory and Equipment held on
marine vessels or leased in the ordinary course of business, in transit, or
Equipment temporarily moved to another location for repair or refurbishment)
and Fixtures (whether now owned or hereafter acquired) to be kept at a location
other than those listed on Schedule 3.6, except as otherwise permitted
hereunder or under the Credit Agreement;

 

(iii)  permit
any Investment Property (other than Certificated Securities delivered to the
Collateral Agent pursuant to Section 4.05) to be held by a Securities
Intermediary other than the Securities Intermediary that held such Investment
Property as of the date hereof as set forth on Schedule 3.13;

 

(iv)  change
its jurisdiction of organization or the location of its chief executive office
from that identified on Schedule 3.6; or

 

(v)   change
its name, identity or corporate or organizational structure to such an extent
that any financing statement filed by the Collateral Agent in connection with
this Agreement would become misleading.

 

Section 4.04. Required
Notifications. Each Grantor shall promptly notify the Collateral
Agent, in writing, of: (a) any Lien (other than the Security Interests or
Permitted Liens) on any of the Collateral which would adversely affect the

 

13

 

ability of the Collateral Agent to exercise
any of its remedies hereunder, (b) the occurrence of any other event which
could reasonably be expected to have a Material Adverse Effect on the aggregate
value of the Collateral or on the Security Interests, (c) any Collateral
which, to the knowledge of such Grantor, constitutes a Government Contract, and
(d) the acquisition or ownership by such Grantor of any
(i) Commercial Tort Claim where the reasonably expected amount to be
recovered from such claim exceeds $500,000, (ii) Deposit Account, or
(iii) Investment Property after the date hereof.

 

Section 4.05. Delivery
Covenants. Each Grantor will deliver and pledge to the Collateral
Agent (or, prior to the Discharge of First Lien Obligations, to the First Lien
Administrative Agent, acting as gratuitous bailee of the Collateral Agent), for
the ratable benefit of itself and the other Secured Parties, to the extent such
items constitute Collateral, all Certificated Securities, Partnership/LLC
Interests evidenced by a certificate, negotiable Documents with respect to any
Collateral which exceeds $500,000 in value, Instruments, and Tangible Chattel
Paper owned or held by such Grantor, in each case, together with an Effective Endorsement
and Assignment and all Supporting Obligations, as applicable, unless such
delivery and pledge has been waived in writing by the Collateral Agent.

 

Section 4.06. Control
Covenants.

 

(a)           Each Grantor shall instruct (and otherwise
use its reasonable efforts to cause) (i) each depositary bank (other than
the Collateral Agent) holding a Deposit Account owned by such Grantor and
(ii) each Securities Intermediary holding any Investment Property owned by
such Grantor, to execute and deliver a control agreement, sufficient to provide
the Collateral Agent (or, prior to the Discharge of First Lien Obligations, the
First Lien Administrative Agent, acting as gratuitous bailee of the Collateral
Agent) with Control of such Deposit Account or Investment Property, and
otherwise in form and substance satisfactory to the Collateral Agent (any such
depositary bank executing and delivering any such control agreement, a “Controlled Depositary”, and any such Securities Intermediary
executing and delivering any such control agreement, a “Controlled
Intermediary”). In the event any such depositary bank or Securities
Intermediary refuses to execute and deliver such control agreement, the
Collateral Agent, in its sole discretion, may require the applicable Deposit
Account and Investment Property to be transferred to the Collateral Agent (or,
prior to the Discharge of First Lien Obligations, to the First Lien
Administrative Agent, acting as gratuitous bailee of the Collateral Agent) or a
Controlled Depositary or Controlled Intermediary, as applicable.

 

(b)           Each Grantor will take such actions and
deliver all such agreements as are requested by the Collateral Agent to provide
the Collateral Agent (or, prior to the Discharge of First Lien Obligations, to
the First Lien Administrative Agent, acting as gratuitous bailee of the
Collateral Agent) with Control of all Letter of Credit Rights and Electronic
Chattel Paper owned or held by such Grantor,

 

14

 

including, without limitation, with respect to any such Electronic
Chattel Paper, by having the Collateral Agent (or, prior to the Discharge of
First Lien Obligations, the First Lien Administrative Agent, acting as
gratuitous bailee of the Collateral Agent) identified as the assignee of the Record(s) pertaining
to the single authoritative copy thereof.

 

(c)           If any Collateral (other than Collateral
specifically subject to the provisions of Section 4.06(a) and
Section 4.06(b)) exceeding in value $500,000 in the aggregate (such
Collateral exceeding such amount, the “Excess Collateral”)
is at any time in the possession or control of any consignee, warehouseman,
bailee (other than a carrier transporting Inventory to a purchaser in the
ordinary course of business), processor, or any other third party, such Grantor
shall promptly notify the Collateral Agent thereof and, upon request of the
Collateral Agent, notify in writing such Person of the Security Interests
created hereby, shall use its reasonable efforts to obtain such Person’s
agreement in writing to hold all such Collateral for the Collateral Agent’s
account (or, prior to the Discharge of First Lien Obligations, for the account
of the First Lien Administrative Agent, acting as gratuitous bailee of the
Collateral Agent) subject to the Collateral Agent’s instructions (or, prior to
the Discharge of First Lien Obligations, subject to the instructions of the
First Lien Administrative Agent, acting as gratuitous bailee of the Collateral
Agent), and shall use its reasonable efforts to cause such Person to issue and
deliver to the Collateral Agent warehouse receipts, bills of lading or any
similar documents relating to such Collateral together with an Effective
Endorsement and Assignment; provided that
if such Grantor is not able to obtain such agreement and cause the delivery of
such items, the Collateral Agent, in its sole discretion, may require such
Excess Collateral to be moved to another location specified thereby. Further,
each Grantor shall perfect and protect such Grantor’s ownership interests in all
Inventory stored with a consignee against creditors of the consignee by filing
and maintaining financing statements against the consignee reflecting the
consignment arrangement filed in all appropriate filing offices, providing any
written notices required to notify any prior creditors of the consignee of the
consignment arrangement, and taking such other actions as may be appropriate to
perfect and protect such Grantor’s interests in such inventory under
Section 2-326, Section 9-103, Section 9-324 and Section 9-505
of the UCC or otherwise. All such financing statements filed pursuant to this
Section 4.06(c) shall be assigned, on the face thereof, to the
Collateral Agent, for the ratable benefit of itself and the other Secured
Parties.

 

Section 4.07. Filing
Covenants. Pursuant to Section 9-509 of the UCC and any other
Applicable Law, each Grantor authorizes the Collateral Agent to file or record
financing statements and other filing or recording documents or instruments
with respect to the Collateral without the signature of such Grantor in such
form and in such offices as the Collateral Agent determines appropriate to
perfect the Security Interests of the Collateral Agent under this Agreement.
Such financing statements may describe the Collateral in the same manner as
described herein or may contain an indication or description of Collateral that
describes

 

15

 

such property in any other manner as the
Collateral Agent may determine, in its sole discretion, is necessary, advisable
or prudent to ensure the perfection of the Security Interest in the Collateral
granted herein, including, without limitation, describing such property as “all
assets” or “all personal property”. Further, a photographic or other reproduction
of this Agreement shall be sufficient as a financing statement or other filing
or recording document or instrument for filing or recording in any
jurisdiction. Grantor hereby authorizes, ratifies and confirms all financing
statements and other filing or recording documents or instruments filed by
Collateral Agent prior to the date of this Agreement.

 

Section 4.08. Accounts.

 

(a)           Other than in the ordinary course of
business consistent with prudent business practice, no Grantor will
(i) grant any extension of the time of payment of any Account,
(ii) compromise or settle any Account for less than the full amount
thereof, (iii) release, wholly or partially, any Account Debtor,
(iv) allow any credit or discount whatsoever on any Account or
(v) amend, supplement or modify any Account, in each case with respect to
the foregoing clauses (i) through (v) in any manner that could
reasonably be expected to adversely affect the value thereof.

 

(b)           Each Grantor will deliver to the Collateral
Agent a copy of each material demand, notice or document received by it that
questions or calls into doubt the validity or enforceability of any material
Account.

 

(c)           The Collateral Agent shall have the right to
make test verifications of the Accounts in any manner and through any medium
that it reasonably considers advisable, and each Grantor shall furnish all such
assistance and information as the Collateral Agent may require in connection
with such test verifications. At any time and from time to time, upon the
Collateral Agent’s reasonable request and at the expense of the relevant
Grantor, such Grantor shall cause independent public accountants or others
satisfactory to the Collateral Agent to furnish to the Collateral Agent reports
showing reconciliations, aging and test verifications of, and trial balances
for, the Accounts.

 

Section 4.09.
Intellectual Property.

 

(a)           Except as could not reasonably be expected
to have a Material Adverse Effect, each Grantor (either itself or through
licensees) (i) will continue to use each registered Trademark (owned by
such Grantor) and Trademark for which an application (owned by such Grantor) is
pending, to the extent reasonably necessary to maintain such Trademark in full
force free from any claim of abandonment for non-use, (ii) will maintain
products and services offered under such Trademark at a level substantially
consistent with the quality of such products and services as of the date
hereof, (iii) will not (and will not permit any licensee or sublicensee
thereof to) do any act or knowingly omit to do any act whereby such Trademark
could reasonably be expected to become

 

16

 

invalidated or impaired in any way, (iv) will not do any act, or
knowingly omit to do any act, whereby any issued Patent owned by such Grantor
would reasonably be expected to become forfeited, abandoned or dedicated to the
public, (v) will not (and will not permit any licensee or sublicensee
thereof to) do any act or knowingly omit to do any act whereby any registered Copyright
owned by such Grantor or Copyright for which an application is pending (owned
by such Grantor) could reasonably be expected to become invalidated or
otherwise impaired and (vi) will not (either itself or through licensees)
do any act whereby any material portion of the Copyrights may fall into the
public domain.

 

(b)           Each Grantor will notify the Collateral
Agent promptly if it knows, or has reason to know, that any application or
registration relating to any material Intellectual Property owned by such
Grantor may become forfeited, abandoned or dedicated to the public, or of any
adverse determination or development (including, without limitation, the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, the United States Copyright
Office or any court or tribunal in any country) regarding such Grantor’s
ownership of, or the validity of, any material Intellectual Property owned by
such Grantor or such Grantor’s right to register the same or to own and
maintain the same.

 

(c)           Whenever such Grantor, either by itself or
through any agent, employee, licensee or designee, shall file an application
for the registration of any Intellectual Property with the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof, such
Grantor shall report such filing to the Collateral Agent within five
(5) Business Days after the last day of the fiscal quarter in which such
filing occurs. Upon request of the Collateral Agent, such Grantor shall execute
and deliver, and have recorded, any and all agreements, instruments, documents,
and papers as the Collateral Agent may reasonably request to evidence the
Secured Parties’ security interest in any material Copyright, Patent or
Trademark and the goodwill and General Intangibles of such Grantor relating
thereto or represented thereby.

 

(d)           Each Grantor will take all reasonable and
necessary steps, at such Grantor’s sole cost and expense, including, without
limitation, in any proceeding before the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or agency in
any other country or any political subdivision thereof, to maintain and pursue
each application (and to obtain the relevant registration) and to maintain each
registration of the material Intellectual Property, including, without
limitation, filing of applications for renewal, affidavits of use and affidavits
of incontestability.

 

(e)           In the event that any material Intellectual
Property owned by a Grantor is infringed, misappropriated or diluted by a third
party, the applicable Grantor shall (i) at such Grantor’s sole cost and
expense, take such actions as such Grantor shall reasonably deem appropriate
under the circumstances to protect

 

17

 

such Intellectual Property and (ii) if such Intellectual Property
is of material economic value, promptly notify the Collateral Agent after it
learns of such infringement, misappropriation or dilution.

 

Section 4.10. Investment
Property; Partnership/LLC Interests.

 

(a)           Without the prior written consent of the
Collateral Agent, no Grantor will (i) vote to enable, or take any other
action to permit, any Subsidiary Issuer to issue any Investment Property or
Partnership/LLC Interests, except for such additional Investment Property or
Partnership/LLC Interests that will be subject to the Security Interest granted
herein in favor of the Collateral Agent to the extent required herein, or
(ii) enter into any agreement or undertaking restricting the right or
ability of such Grantor or the Collateral Agent to sell, assign or transfer any
Investment Property or Partnership/LLC Interests or Proceeds thereof. The
Grantors will defend the right, title and interest of the Collateral Agent in
and to any Investment Property and Partnership/LLC Interests against the claims
and demands of all Persons whomsoever (other than, prior to the Discharge of
First Lien Obligations, the First Lien Administrative Agent, acting as
gratuitous bailee of the Collateral Agent).

 

(b)           If any Grantor shall become entitled to
receive or shall receive (i) any Certificated Securities (including,
without limitation, any certificate representing a stock dividend or a
distribution in connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any reorganization),
option or rights in respect of the ownership interests of any Issuer, whether
in addition to, in substitution of, as a conversion of, or in exchange for, any
Investment Property, or otherwise in respect thereof, or (ii) any sums
paid upon or in respect of any Investment Property upon the liquidation or dissolution
of any Issuer, such Grantor shall accept the same as the agent of the Secured
Parties, hold the same in trust for the Secured Parties, segregated from other
funds of such Grantor, and promptly deliver the same to the Collateral Agent in
accordance with the terms hereof.

 

Section 4.11. Equipment.
Each Grantor will maintain each material item of Equipment in good
working order and condition (reasonable wear and tear and obsolescence
excepted), and in accordance in all material respects with any manufacturer’s
manual, and will timely provide all maintenance, service and repairs reasonably
necessary for such purpose and will promptly furnish to the Collateral Agent a
statement respecting any material loss or damage to any of the Equipment.

 

Section 4.12. Vehicles. Upon
the request of the Collateral Agent upon the occurrence and during the
continuance of an Event of Default, all applications for certificates of title
or ownership indicating the Collateral Agent’s Lien on the Vehicle covered by
such certificate, and any other necessary documentation, shall be filed in each
office in each jurisdiction which the Collateral Agent shall deem reasonably
advisable to perfect its Liens on the Vehicles. Prior thereto, each

 

18

 

certificate of title or ownership relating to
each Vehicle shall be maintained by the applicable Grantor in accordance with
Applicable Law to reflect the ownership interest of such Grantor.

 

Section 4.13. Further
Assurances. Upon the request of the Collateral Agent and at the sole
expense of the Grantors, each Grantor will promptly and duly execute and
deliver, and have recorded, such further instruments and documents and take
such further actions as the Collateral Agent may reasonably request for the
purpose of obtaining or preserving the full benefits of this Agreement and of
the rights and powers herein granted, including, without limitation,
(i) the collateral assignment of any Material Contract, (ii) with
respect to Government Contracts, collateral assignment agreements and notices
of collateral assignment, in form and substance satisfactory to the Collateral
Agent, duly executed by any Grantors party to such Government Contract in
compliance with the Assignment of Claims Act (or analogous state Applicable
Law), and (iii) all applications, certificates, instruments, registration
statements, and all other documents and papers the Collateral Agent may
reasonably request and as may be required by law in connection with the
obtaining of any consent, approval, registration, qualification, or
authorization of any Person deemed necessary or appropriate for the effective
exercise of any rights under this Agreement.

 

ARTICLE 5

REMEDIAL PROVISIONS

 

Section 5.01. General
Remedies. If an Event of Default shall occur and be continuing, the
Collateral Agent, on behalf of the Secured Parties, may exercise, in addition
to all other rights and remedies granted to them in this Agreement and in any
other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the UCC or any
other Applicable Law. Without limiting the generality of the foregoing, the
Collateral Agent, without demand of performance or other demand, presentment,
protest, advertisement or notice of any kind (except any notice required by law
referred to below) to or upon any Grantor or any other Person (all and each of
which demands, defenses, advertisements and notices are hereby waived), may in
such circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker’s
board or office of the Collateral Agent or any other Secured Party or elsewhere
upon such terms and conditions as it may deem advisable and at such prices as
it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Collateral Agent may disclaim any warranties
of title, possession and quiet enjoyment. The Collateral Agent or any other
Secured Party shall have the right upon any such public sale or sales, and, to
the extent permitted by law, upon

 

19

 

any such private sale or sales, to purchase
the whole or any part of the Collateral so sold, free of any right or equity of
redemption in any Grantor, which right or equity is hereby waived and released.
Each Grantor further agrees, at the Collateral Agent’s request, to assemble the
Collateral and make it available to the Collateral Agent at places which the
Collateral Agent shall reasonably select, whether at such Grantor’s premises or
elsewhere. To the extent permitted by Applicable Law, each Grantor waives all
claims, damages and demands it may acquire against the Collateral Agent or any
other Secured Party arising out of the exercise by them of any rights hereunder
except to the extent any such claims, damages, or demands result solely from
the gross negligence or willful misconduct of the Collateral Agent or any other
Secured Party, in each case against whom such claim is asserted. If any notice
of a proposed sale or other disposition of Collateral shall be required by law,
such notice shall be deemed reasonable and proper if given at least ten
(10) days before such sale or other disposition.

 

Section 5.02. Specific
Remedies.

 

(a)           Reserved.

 

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

 

(i)    the
Collateral Agent may communicate with Account Debtors of any Account subject to
a Security Interest and upon the request of the Collateral Agent, each Grantor
shall notify (such notice to be in form and substance satisfactory to the
Collateral Agent) its Account Debtors and parties to the Material Contracts
subject to a Security Interest that such Accounts and the Material Contracts
have been assigned to the Collateral Agent, for the ratable benefit of itself
and the other Secured Parties;

 

(ii)   each
Grantor shall forward to the Collateral Agent, on the last Business Day of each
week, deposit slips related to all cash, money, checks or any other similar
items of payment received by the Grantor during such week, and, if requested by
the Collateral Agent, copies of such checks or any other similar items of
payment, together with a statement showing the application of all payments on
the Collateral during such week and a collection report with regard thereto, in
form and substance satisfactory to the Collateral Agent.

 

(iii)  whenever
any Grantor shall receive any cash, money, checks or any other similar items of
payment relating to any Collateral (including any Proceeds of any Collateral),
such Grantor agrees that it will, within one (1) Business Day of such
receipt, deposit all such items of payment into the Collateral Account or in a
Deposit Account at a Controlled Depositary and until such Grantor shall deposit
such cash,

 

20

 

money, checks
or any other similar items of payment in the Collateral Account or in a Deposit
Account at a Controlled Depositary, such Grantor shall hold such cash, money,
checks or any other similar items of payment in trust for the Collateral Agent
and the other Secured Parties and as property of the Collateral Agent and the
other Secured Parties, separate from the other funds of such Grantor, and the
Collateral Agent shall have the right to transfer or direct the transfer of the
balance of each Deposit Account to the Collateral Account. All such Collateral
and Proceeds of Collateral received by the Collateral Agent hereunder shall be
held by the Collateral Agent in the Collateral Account as collateral security
for all the Obligations and shall not constitute payment thereof until applied
as provided in Section 5.04.

 

(iv)  the
Collateral Agent (or, prior to the Discharge of First Lien Obligations, the
First Lien Administrative Agent, acting as gratuitous bailee of the Collateral
Agent) shall have the right to receive any and all cash dividends, payments or
distributions made in respect of any Investment Property or Partnership/LLC
Interests or other Proceeds paid in respect of any Investment Property or
Partnership/LLC Interests, and any or all of any Investment Property or
Partnership/LLC Interests shall be registered in the name of the Collateral
Agent or its nominee, and the Collateral Agent or its nominee may thereafter
exercise (A) all voting, corporate and other rights pertaining to such
Investment Property or Partnership/LLC Interests at any meeting of
shareholders, partners or members of the relevant Issuers and (B) any and
all rights of conversion, exchange and subscription and any other rights,
privileges or options pertaining to such Investment Property or Partnership/LLC
Interests as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the
Investment Property or Partnership/LLC Interests upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in
the corporate, partnership or company structure of any Issuer or upon the
exercise by any Grantor or the Collateral Agent (or, prior to the Discharge of
First Lien Obligations, by the First Lien Administrative Agent, acting as
gratuitous bailee of the Collateral Agent) of any right, privilege or option
pertaining to such Investment Property or Partnership/LLC Interests, and in
connection therewith, the right to deposit and deliver any and all of the
Investment Property or Partnership/LLC Interests with any committee,
depositary, transfer agent, registrar or other designated agency upon such
terms and conditions as the Collateral Agent may determine), all without
liability except to account for property actually received by it; but the
Collateral Agent shall have no duty to any Grantor to exercise any such right,
privilege or option and the Collateral Agent and the other Secured Parties shall
not be responsible for any failure to do so or delay in so doing. In
furtherance thereof, each Grantor hereby authorizes and instructs each Issuer
with respect to any Collateral consisting of Investment Property and

 

21

 

Partnership/LLC
Interests to (i) comply with any instruction received by it from the
Collateral Agent (or, prior to the Discharge of First Lien Obligations, from
the First Lien Administrative Agent, acting as gratuitous bailee of the
Collateral Agent) in writing that (A) states that an Event of Default has
occurred and is continuing and (B) is otherwise in accordance with the
terms of this Agreement, without any other or further instructions from such
Grantor, and each Grantor agrees that each Issuer shall be fully protected in
so complying, and (ii) except as otherwise expressly permitted hereby, pay
any dividends, distributions or other payments with respect to any Investment
Property or Partnership/LLC Interests directly to the Collateral Agent (or,
prior to the Discharge of First Lien Obligations, to the First Lien
Administrative Agent, acting as gratuitous bailee of the Collateral Agent); and

 

(v)   the
Collateral Agent (or, prior to the Discharge of First Lien Obligations, the
First Lien Administrative Agent, acting as gratuitous bailee of the Collateral
Agent), shall be entitled to (but shall not be required to):  (A) proceed to perform any and all
obligations of the applicable Grantor under any Material Contract and exercise
all rights of such Grantor thereunder as fully as such Grantor itself could,
(B) do all other acts which the Collateral Agent may deem necessary or
proper to protect its Security Interest granted hereunder, provided
such acts are not inconsistent with or in violation of the terms of any of the
Credit Agreement, of the other Loan Documents or Applicable Law, and
(C) sell, assign or otherwise transfer any Material Contract in accordance
with the Credit Agreement, the other Loan Documents and Applicable Law,
subject, however, to the prior approval of each other party to such Material
Contract, to the extent required under such Material Contract.

 

(c)           Unless an Event of Default shall have
occurred and be continuing and the Collateral Agent shall have given notice to
the relevant Grantor of the Collateral Agent’s intent to exercise its
corresponding rights pursuant to Section 5.02(b), each Grantor shall be
permitted to receive all cash dividends, payments or other distributions made
in respect of any Investment Property and Partnership/LLC Interests, in each
case paid in the normal course of business of the relevant Issuer and
consistent with past practice, to the extent permitted in the Credit Agreement,
and to exercise all voting and other corporate, company and partnership rights
with respect to any Investment Property and Partnership/LLC Interests; provided that, no vote shall be cast or other corporate,
company and partnership right exercised or other action taken which, in the
Collateral Agent’s reasonable judgment, would impair the Collateral or which
would result in a Default or Event of Default under any provision of the Credit
Agreement, this Agreement or any other Loan Document.

 

Section 5.03. Private
Sale. Each Grantor recognizes that the Collateral Agent may be
unable to effect a public sale of Collateral constituting Securities, by reason
of certain prohibitions contained in the Securities Act and applicable

 

22

 

state securities laws or otherwise, and may
be compelled to resort to one or more private sales thereof to a restricted
group of purchasers which will be obliged to 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. Each Grantor acknowledges and
agrees that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been made
in a commercially reasonable manner. The Collateral Agent shall be under no
obligation to delay a sale of any such Securities for the period of time
necessary to permit the Issuer thereof to register such securities for public
sale under the Securities Act, or under applicable state securities laws, even
if such Issuer would agree to do so. Each Grantor agrees to use its best
efforts to do or cause to be done all such other acts as may be necessary to
make such sale or sales of all or any portion of such Securities valid and
binding and in compliance with any and all other Applicable Laws.

 

Section 5.04.
Application of Proceeds. Subject to the payment-over provisions set
forth in the Intercreditor Agreement, at such intervals as may be agreed upon
by the Borrower and the Collateral Agent, or, if an Event of Default shall have
occurred and be continuing, at any time at the Collateral Agent’s election, the
Collateral Agent shall apply all or any part of the Collateral or any Proceeds
of the Collateral in payment in whole or in part of the Obligations (after
deducting all reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Collateral Agent and the other Secured Parties hereunder) as follows:

 

first,           to
pay the expenses of any sale or other disposition, including reasonable
compensation to agents of and counsel for the Administrative Agent and the
Collateral Agent, and all expenses, liabilities and advances incurred or made
by the Administrative Agent and the Collateral Agent in connection with the
Security Documents, and any other amounts then due and payable to the
Administrative Agent and the Collateral Agent pursuant to Section 7.04 or
pursuant to Section 9.05 of the Credit Agreement;

 

second,      to
pay ratably all interest (including interest accruing after the filing of any
bankruptcy or similar petition (or that would accrue but for the operation of
applicable bankruptcy or insolvency laws), regardless of whether allowed or
allowable in such proceeding) and fees on the Obligations, until payment in
full of all such interest and fees shall have been made;

 

third,         to
pay the unpaid principal of the Obligations ratably, until payment in full of
the principal of all Obligations shall have been made;

 

23

 

fourth,           to pay all other Obligations and Cash
Management Obligations ratably, until payment in full of all such other
Obligations and Cash Management Obligations shall have been made; and

 

finally,          to pay to the relevant Grantor, or as
a court of competent jurisdiction may direct, any surplus then remaining from
the proceeds of the Collateral owned by it.

 

Only after (i) the
payment by the Collateral Agent of any other amount required by any provision
of law, including, without limitation, Section 9-610 and Section 9-615
of the UCC and (ii) the payment in full of the Obligations and the
termination of the Commitments, shall the Collateral Agent account for the
surplus, if any, to any Grantor, or to whomever may be lawfully entitled to
receive the same (if such Person is not a Grantor).

 

Section 5.05.  Waiver; Deficiency.  Each Grantor hereby waives, to the
extent permitted by Applicable Law, all rights of redemption, appraisement,
valuation, stay, extension or moratorium now or hereafter in force under any Applicable
Law in order to prevent or delay the enforcement of this Agreement or the
absolute sale of the Collateral or any portion thereof.  Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay its Obligations and the fees and disbursements of any
attorneys employed by the Collateral Agent or any other Secured Party to
collect such deficiency.

 

ARTICLE
6

THE COLLATERAL AGENT

 

Section 6.01.  Collateral Agent’s Appointment
as Attorney-in-fact.

 

(a)           Each
Grantor hereby irrevocably constitutes and appoints the Collateral Agent and
any officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of such Grantor and in the name of such Grantor or in its own name,
for the purpose of carrying out the terms of this Agreement, to take any and
all appropriate action and to execute any and all documents and instruments
which may be necessary or desirable to accomplish the purposes of this
Agreement, and, without limiting the generality of the foregoing, each Grantor
hereby gives the Collateral Agent the power and right, on behalf of such
Grantor, without notice to or assent by such Grantor, to do any or all of the
following upon the occurrence and continuation of an Event of Default:

 

(i)    in the name of such Grantor
or its own name, or otherwise, take possession of and indorse and collect any
checks, drafts, notes, acceptances or other instruments for the payment of
moneys due under any Account or Material Contract subject to a Security
Interest or with

 

24

 

respect to any
other Collateral and file any claim or take any other action or proceeding in
any court of law or equity or otherwise deemed appropriate by the Collateral
Agent for the purpose of collecting any and all such moneys due under any
Account or Material Contract subject to a Security Interest or with respect to
any other Collateral whenever payable;

 

(ii)   in the case of any
Intellectual Property, execute and deliver, and have recorded, any and all
agreements, instruments, documents and papers as the Collateral Agent may
request to evidence the Secured Parties’ Security Interest in such Intellectual
Property and the goodwill and General Intangibles of such Grantor relating
thereto or represented thereby;

 

(iii)  pay or discharge taxes and
Liens levied or placed on or threatened against the Collateral, effect any
repairs or any insurance called for by the terms of this Agreement and pay all
or any part of the premiums therefor and the costs thereof;

 

(iv)  execute, in connection with
any sale provided for in this Agreement, any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral; and

 

(v)   (A) direct any party
liable for any payment under any of the Collateral to make payment of any and
all moneys due or to become due thereunder directly to the Collateral Agent or
as the Collateral Agent shall direct; (B) ask or demand for, collect, and
receive payment of and receipt for, any and all moneys, claims and other
amounts due or to become due at any time in respect of or arising out of any
Collateral; (C) sign and indorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents in connection with any
of the Collateral; (D) commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any portion thereof and to enforce any other right in
respect of any Collateral; (E) defend any suit, action or proceeding
brought against such Grantor with respect to any Collateral; (F) settle,
compromise or adjust any such suit, action or proceeding and, in connection
therewith, give such discharges or releases as the Collateral Agent may deem
appropriate; (G) assign any Copyright, Patent or Trademark (along with the
goodwill of the business to which any such Copyright, Patent or Trademark
pertains), for such term or terms, on such conditions, and in such manner, as
the Collateral Agent shall in its sole discretion determine; and (H) generally,
sell, transfer, pledge and make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the Collateral
Agent were the absolute owner thereof for all purposes, and do, at the
Collateral Agent’s option and such Grantor’s expense, at any time, or from time
to time, all acts and things which the Collateral Agent deems necessary to

 

25

 

protect,
preserve or realize upon the Collateral and the Secured Parties’ Security
Interests therein and to effect the intent of this Agreement, all as fully and
effectively as such Grantor might do.

 

(b)           If
any Grantor fails to perform or comply with any of its agreements contained
herein, the Collateral Agent, at its option, but without any obligation so to
do, may perform or comply, or otherwise cause performance or compliance, with
such agreement in accordance with the provisions of Section 6.01(a).

 

(c)           The
expenses of the Collateral Agent incurred in connection with actions taken
pursuant to the terms of this Agreement, together with interest thereon at a
rate per annum equal to the highest rate per annum at which interest would then
be payable on any category of past due ABR Loans under the Credit Agreement,
from the date of payment by the Collateral Agent to the date reimbursed by the
relevant Grantor, shall be payable by such Grantor to the Collateral Agent on
demand.

 

(d)           Each
Grantor hereby ratifies all that said attorneys shall lawfully do or cause to
be done by virtue hereof in accordance with Section 6.01(a).  All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the Security Interests created hereby
are released.

 

Section 6.02.  Duty of Collateral Agent.  The Collateral Agent’s sole duty
with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the UCC or otherwise,
shall be to deal with it in the same manner as the Collateral Agent deals with
similar property for its own account. 
Neither the Collateral Agent, any other Secured Party nor any of their
respective officers, directors, employees or agents shall be liable for failure
to demand, collect or realize upon any of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of any Grantor or any other Person or to take any
other action whatsoever with regard to the Collateral or any part thereof.  The powers conferred on the Collateral Agent
and the other Secured Parties hereunder are solely to protect the Secured
Parties’ interests in the Collateral and shall not impose any duty upon the
Collateral Agent or any other Secured Party to exercise any such powers.  The Collateral Agent and the other Secured
Parties shall be accountable only for amounts that they actually receive as a
result of the exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to any Grantor for any act
or failure to act hereunder, except for their own gross negligence or willful
misconduct.

 

Section 6.03.  Authority of Collateral
Agent.  Each Grantor
acknowledges that the rights and responsibilities of the Collateral Agent under
this Agreement with respect to any action taken by the Collateral Agent or the
exercise or non exercise by the Collateral Agent of any option, voting right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this

 

26

 

Agreement shall, as between the Collateral
Agent and the other Secured Parties, be governed by the Credit Agreement and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Collateral Agent and the Grantors, the Collateral
Agent shall be conclusively presumed to be acting as agent for the Secured
Parties with full and valid authority so to act or refrain from acting, and no
Grantor shall be under any obligation, or entitlement to make any inquiry
respecting such authority.

 

ARTICLE 7

MISCELLANEOUS

 

Section 7.01.  Amendments in Writing.  None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified
except in accordance with Section 9.08 of the Credit Agreement.

 

Section 7.02.  Notices.  All notices, requests and demands
to or upon the Collateral Agent or any Grantor hereunder shall be effected in
the manner provided for in Section 9.01 of the Credit Agreement.

 

Section 7.03.  No Waiver by Course of
Conduct; Cumulative Remedies.  Neither
the Collateral Agent nor any other Secured Party shall by any act (except by a
written instrument pursuant to Section 7.01), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default. 
No failure to exercise, nor any delay in exercising on the part of the
Collateral Agent or any other Secured Party, any right, power or privilege
hereunder shall operate as a waiver thereof. 
No single or partial exercise of any right, power or privilege hereunder
shall preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.  A
waiver by the Collateral Agent or any other Secured Party of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Collateral Agent or such other Secured Party would
otherwise have on any future occasion. 
The rights and remedies herein provided are cumulative, may be exercised
singly or concurrently and are not exclusive of any other rights or remedies
provided by law.

 

Section 7.04.  Enforcement Expenses;
Indemnification.

 

(a)           Each
Grantor agrees to pay or reimburse the Collateral Agent and each other Secured
Party for all its costs and expenses incurred in connection with enforcing or
preserving any rights under this Agreement and the other Loan Documents to
which such Grantor is a party (including, without limitation, in connection
with any workout, restructuring, bankruptcy or other similar proceeding),
including, without limitation, the reasonable fees and disbursements of counsel
(including the allocated fees and expenses of in-house counsel) to the Collateral
Agent and of counsel to each other Secured Party.

 

27

 

(b)           Each
Grantor agrees to pay, and to save the Collateral Agent and the other Secured
Parties harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all stamp, excise, sales or other taxes which
may be payable or determined to be payable with respect to any of the
Collateral or in connection with any of the transactions contemplated by this
Agreement.

 

(c)           Each
Grantor agrees to pay, and to save the Collateral Agent and the other Secured
Parties harmless from any and all liabilities, obligations, losses, damages,
penalties, costs and expenses in connection with actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement to the extent the Borrower would be required to do so pursuant to Section 9.05
of the Credit Agreement.

 

(d)           The
agreements in this Section 7.04 shall survive termination of the
Commitments and repayment of the Obligations and all other amounts payable
under the Credit Agreement and the other Loan Documents.

 

Section 7.05.  Waiver of Jury Trial; Preservation
of Remedies.

 

(a)           Waiver of Jury Trial. 
TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
COLLATERAL AGENT, EACH LENDER, EACH OTHER SECURED PARTY (BY VIRTUE OF ACCEPTING
THE BENEFITS OF THIS AGREEMENT) AND EACH GRANTOR HEREBY IRREVOCABLY WAIVES
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR
OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT,
THE OTHER LOAN DOCUMENTS, ANY NOTES ISSUED PURSUANT TO THE CREDIT AGREEMENT,
ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH
RIGHTS AND OBLIGATIONS.

 

(b)           Preservation of Certain Remedies. The parties hereto and to
the other Loan Documents preserve, without diminution, certain remedies that
such Persons may employ or exercise freely, either alone, in conjunction with
or during a Dispute.  Each such Person
shall have and hereby reserves the right to proceed in any court of proper
jurisdiction or by self help to exercise or prosecute the following remedies,
as applicable:  (i) all rights to
foreclose against any real or personal property or other security by exercising
a power of sale granted in the Loan Documents or under Applicable Law or by
judicial foreclosure and sale, including a proceeding to confirm the sale, (ii) all
rights of self help including peaceful occupation of property and collection of
rents, set off, and peaceful possession of property, (iii) obtaining
provisional or ancillary remedies including injunctive relief, sequestration,
garnishment, attachment, appointment of receiver and in filing an involuntary
bankruptcy proceeding, and (iv) when applicable, a judgment by confession
of judgment.  Preservation of these
remedies does not

 

28

 

limit the power of an arbitrator to grant similar remedies that may be
requested by a party in a Dispute.

 

Section 7.06.  Successors and Assigns.  This Agreement shall be binding
upon the successors and assigns of each Grantor and shall inure to the benefit
of each Grantor (and shall bind all Persons who become bound as a Grantor to
this Collateral Agreement), the Collateral Agent and the other Secured Parties
and their successors and assigns; provided that
no Grantor may assign, transfer or delegate any of its rights or obligations
under this Agreement without the prior written consent of the Collateral Agent
(given in accordance with Section 7.01).

 

Section 7.07.  Setoff.  Each Grantor hereby irrevocably
authorizes the Collateral Agent and each Lender and each of their respective
Affiliates at any time and from time to time pursuant to Section 9.06 of
the Credit Agreement, without notice to such Grantor or any other Grantor, any
such notice being expressly waived by each Grantor, to set off and appropriate
and apply any and all deposits (general or special, time or demand, provisional
or final), in any currency, and any other credits, indebtedness or claims, in
any currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by the Collateral Agent, such
Lender or any such Affiliate to or for the credit or the account of such
Grantor, or any part thereof in such amounts as the Collateral Agent, such
Lender or any such Affiliate may elect, against and on account of the
obligations and liabilities of such Grantor to the Collateral Agent or such
Lender hereunder and claims of every nature and description of the Collateral
Agent or such Lender against such Grantor, in any currency, whether arising
hereunder, under the Credit Agreement, any other Loan Document or otherwise, as
the Collateral Agent or such Lender may elect, whether or not the Collateral
Agent or any Lender has made any demand for payment and although such
obligations, liabilities and claims may be contingent or unmatured.  The Collateral Agent, each Lender and the
relevant Affiliate shall notify such Grantor promptly of any such set off and
the application made by the Collateral Agent, such Lender or such Affiliate of
the proceeds thereof; provided that
the failure to give such notice shall not affect the validity of such setoff
and application.  The rights of the
Collateral Agent, each Lender and their respective Affiliates under this Section 7.07
are in addition to other rights and remedies (including, without limitation, other
rights of set off) which the Collateral Agent, such Lender or any such
Affiliate may have.

 

Section 7.08.  Counterparts.  This Agreement may be executed by
one or more of the parties to this Agreement on any number of separate
counterparts (including by telecopy), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.

 

Section 7.09.  Severability.  Any provision of this Agreement or
any other Loan Agreement which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective only to the extent of such
prohibition or unenforceability without invalidating the remainder of such
provision or the

 

29

 

remaining provisions hereof or thereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.

 

Section 7.10.  Section Headings.  The Section headings used in
this Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof.

 

Section 7.11.  Integration.  This Agreement and the other Loan
Documents represent the agreement of the Grantors, the Collateral Agent and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Collateral Agent
or any Lender relative to subject matter hereof and thereof not expressly set
forth or referred to herein or in the other Loan Documents.

 

Section 7.12.  Governing Law.  This Agreement shall be governed
by, construed, interpreted and enforced in accordance with, the laws of the
State of New York.

 

Section 7.13.  Jurisdiction; Consent to
Service of Process.  (a) Each
Grantor hereby irrevocably and unconditionally submits, for itself and its
property, to the exclusive jurisdiction of any New York State court or Federal
court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or proceeding
may be heard and determined in such New York State or, to the extent permitted
by law, in such Federal court.  Each of
the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.  Nothing in this Agreement shall affect any
right that the Collateral Agent or any other Secured Party may otherwise have
to bring any action or proceeding relating to this Agreement or the other Loan
Documents against any Grantor or its properties in the courts of any
jurisdiction.

 

(b)           Each
Grantor hereby irrevocably and unconditionally waives, to the fullest extent it
may legally and effectively do so, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or the other Loan Documents in any New York State or
Federal court.  Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

 

(c)           Each
party to this Agreement irrevocably consents to service of process in the
manner provided for notices in Section 9.01 of the Credit Agreement.  Nothing in this Agreement will affect the
right of any party to this Agreement to serve process in any other manner
permitted by law.

 

30

 

Section 7.14.  Acknowledgements.

 

(a)           Each
Grantor hereby acknowledges that:  (i) it
has been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Loan Documents to which it is a party, (ii) neither
the Collateral Agent nor any other Secured Party has any fiduciary relationship
with or duty to any Grantor arising out of or in connection with this Agreement
or any of the other Loan Documents, and the relationship between the Grantors,
on the one hand, and the Collateral Agent and other Secured Parties, on the
other hand, in connection herewith or therewith is solely that of debtor and
creditor, (iii) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
or thereby among the other Secured Parties or among the Grantors and the other
Secured Parties and (iv) it has the sole responsibility for, and has
adequate means of, obtaining from the Borrower and any other Grantor such
information concerning the financial condition, business and operations of the
Borrower and any such other Grantor as the Grantor requires, and that the
Secured Parties have no duty, and the Grantor is not relying on any Secured
Party at any time, to disclose to the Grantor any information relating to the
business, operations or financial condition of the Borrower or any other
Grantor (the Grantor waiving any duty on the part of any Secured Party to
disclose such information and any defense relating to the failure to provide
the same).

 

(b)           Each
Issuer party to this Agreement acknowledges receipt of a copy of this Agreement
and agrees to be bound thereby and to comply with the terms thereof insofar as
such terms are applicable to it.  Each
Issuer agrees to provide such notices to the Collateral Agent as may be
necessary to give full effect to the provisions of this Agreement.

 

Section 7.15.  Additional Grantors.  Each Subsidiary of the Borrower
that is required to become a party to this Agreement pursuant to Section 5.14
of the Credit Agreement shall become a Grantor for all purposes of this
Agreement upon execution and delivery by such Subsidiary of a joinder agreement
in form and substance satisfactory to the Collateral Agent.

 

Section 7.16.  Releases.

 

(a)           At
such time as the Obligations shall have been paid in full and the Commitments
have been terminated, the Collateral shall be released from the Liens created
hereby, and this Agreement and all obligations (other than those expressly
stated to survive such termination) of the Collateral Agent and each Grantor
hereunder shall terminate, all without delivery of any instrument or
performance of any act by any party, and all rights to the Collateral shall
revert to the Grantors.  At the request
and sole expense of any Grantor following any such termination, the Collateral
Agent shall deliver to such Grantor any Collateral held by the Collateral Agent
hereunder, and execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence such termination.

 

31

 

(b)           Subject
to Section 3.04(b) of the Intercreditor Agreement, if any of the
Collateral shall be sold, transferred or otherwise disposed of by any Grantor
(other than to another Grantor) in a transaction permitted by the Credit Agreement,
then the Collateral Agent, at the request and sole expense of such Grantor,
shall execute and deliver to such Grantor all releases or other documents
reasonably necessary or desirable for the release of the Liens created hereby
on such Collateral.  Subject to Section 3.04(b) of
the Intercreditor Agreement, in the event that all the capital stock of any
Grantor shall be sold, transferred or otherwise disposed of (other than to
another Grantor) in a transaction permitted by the Credit Agreement, then, at
the request of the Borrower and at the expense of the Grantors, such Grantor
shall be released from its obligations hereunder and under the Guaranty
Agreement; provided that the Borrower shall have
delivered to the Collateral Agent, at least ten (10) Business Days prior
to the date of the proposed release, a written request for release identifying
the relevant Grantor and the terms of the sale or other disposition in
reasonable detail, including the price thereof and any expenses in connection
therewith, together with a certification by the Borrower stating that such
transaction is in compliance with the Credit Agreement and the other Loan
Documents.

 

Section 7.17.  INTERCREDITOR AGREEMENT.

 

REFERENCE IS MADE TO THE INTERCREDITOR AGREEMENT.  NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, THE LIEN AND SECURITY INTEREST GRANTED TO THE COLLATERAL AGENT, FOR
THE BENEFIT OF THE SECURED PARTIES, PURSUANT TO THIS AGREEMENT AND THE EXERCISE
OF ANY RIGHT OR REMEDY BY THE COLLATERAL AGENT AND THE OTHER SECURED PARTIES
HEREUNDER ARE SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT.  IN THE EVENT OF CONFLICT OR INCONSISTENCY
BETWEEN THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND THIS AGREEMENT, THE
PROVISIONS OF THE INTERCREDITOR AGREEMENT SHALL CONTROL.

 

Section 7.18.  Delivery of Collateral.

 

Notwithstanding anything herein
to the contrary, prior to the Discharge of First Lien Obligations, to the
extent any Grantor is required hereunder to deliver Collateral to the
Collateral Agent for purposes of possession and control and is unable to do so
as a result of having previously delivered such Collateral to the First Lien
Administrative Agent in accordance with the terms of the First Lien Collateral
Agreement, such Grantor’s obligations hereunder with respect to such delivery
shall be deemed satisfied by the delivery to the First Lien Administrative
Agent, acting as a gratuitous bailee of the Administrative Agent.

 

32

 

IN WITNESS WHEREOF, the parties hereto have caused this Collateral
Agreement to be executed by their duly authorized officers, all as of the day
and year first written above.

 

 

	
   

  	
  GLOBAL
  GEOPHYSICAL SERVICES, INC., as

  Grantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:

  

 

 

	
   

  	
  GGS
  INTERNATIONAL HOLDINGS, INC.,

  as Grantor and Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:

  

 

 

	
   

  	
  AUTOSEIS,
  INC., as Grantor and Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:

  

 

 

	
   

  	
  CREDIT SUISSE, CAYMAN ISLANDS

  BRANCH, as Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:

  

 

 

	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:Exhibit 10.14

 

FIRST LIEN PREFERRED FLEET MORTGAGE

 

	
   

  	
   

  	
  ·

  	
   

  	
  UNITED
  STATES OF AMERICA

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GLOBAL
  GEOPHYSICAL SERVICES, INC.

  	
   

  	
  ·

  	
   

  	
  STATE OF
  TEXAS

  
	
  3535
  Briarpark, Suite 200

  	
   

  	
   

  	
   

  	
   

  
	
  Houston, Texas 77042

  	
   

  	
  ·

  	
   

  	
  COUNTY OF HARRIS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TO

  	
   

  	
  ·

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CREDIT
  SUISSE, CAYMAN ISLANDS

  	
   

  	
  ·

  	
   

  	
   

  
	
  BRANCH

  	
   

  	
   

  	
   

  	
   

  
	
  as
  Administrative Agent

  	
   

  	
  ·

  	
   

  	
   

  
	
  and
  Collateral Agent

  	
   

  	
   

  	
   

  	
   

  
	
  Eleven
  Madison Avenue

  	
   

  	
  ·

  	
   

  	
   

  
	
  New York, NY
  10010

  	
   

  	
   

  	
   

  	
   

  

 

THIS FIRST
LIEN PREFERRED FLEET MORTGAGE, on the Vessels hereinafter named and described,
which is dated effective as of January 16, 2008 (“Mortgage”) in the
amount of $150,000,000, plus interest and other charges, costs and fees and the
other Obligations (“Secured Amount”) under the First Lien Credit
Agreement dated the date hereof (“Credit Agreement”), among GLOBAL GEOPHYSICAL
SERVICES, INC., a Delaware corporation (“Mortgagor”), the lenders from
time to time party thereto (“Lenders”) and CREDIT SUISSE, CAYMAN ISLANDS
BRANCH, as Administrative Agent and Collateral Agent for such Lenders (“Mortgagee”).
Capitalized terms used but not defined herein are used as defined in the Credit
Agreement.

 

W I T N E S S E T H:

 

WHEREAS,
Mortgagor is the sole owner of the whole of the Vessels hereinafter named and
described and is justly and truly indebted to Mortgagee for the Secured Amount
which is due and payable in the amounts and upon the terms and conditions set
forth in the Credit Agreement and the other Loan Documents (“Documents”)
and has agreed to give this Mortgage in order to secure the Secured Amount and
the Documents evidencing the same and has authorized and directed the execution
and delivery hereof.

 

WHEREAS, the
Mortgagor, the Lenders and the Mortgagee have entered into an Intercreditor
Agreement dated the date hereof (“Intercreditor Agreement”) which
governs the rights and remedies of the Mortgagee and Lenders under this
Mortgage and the other Documents in relation to, among other things, the Second
Lien Preferred Fleet Mortgage granted by Mortgager in favor of Credit Suisse,
Cayman Islands Branch, as Administrative Agent and Collateral Agent for the
lenders from time to time party to the Credit Agreement.

 

 

NOW,
THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt of which is hereby acknowledged, and to secure the
Secured Amount and the Documents hereinabove referred to and the performance of
all covenants therein and herein contained, Mortgagor, by these presents,
mortgages and conveys unto Mortgagee, its heirs, executors, administrators,
successors, or assigns, the whole of the Vessels named below and further
described in its last marine document issued and identified as follows:

 

	
  Type

  	
   

  	
  Name

  	
   

  	
  Official Number

  	
   

  	
  Tonnage Gross

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  M/V

  	
   

  	
  MS. CORDELIA

  	
   

  	
  1196009

  	
   

  	
  245

  	
   

  
	
  M/V

  	
   

  	
  LORI B

  	
   

  	
  1111303

  	
   

  	
  33

  	
   

  
	
  M/V

  	
   

  	
  JAMES H. SCOTT

  	
   

  	
  1172960

  	
   

  	
  73

  	
   

  
	
  M/V

  	
   

  	
  GLOBAL
  VISION

  	
   

  	
  1058458

  	
   

  	
  38

  	
   

  
	
  M/V

  	
   

  	
  GLOBAL QUEST

  	
   

  	
  1050795

  	
   

  	
  47

  	
   

  
	
  M/V

  	
   

  	
  GLOBAL SCOUT

  	
   

  	
  1071699

  	
   

  	
  91

  	
   

  

 

(each a “Vessel” and
collectively, the “Vessels”) together with all auxiliaries, tackle,
apparel, accessories and appurtenances, and additional renewals, improvements
and replacements now or hereafter belonging thereto, whether or not removed
therefrom, all bunkers, lube oil or other supplies and all freights,
sub-freights or charter hire, all of which shall be deemed to be included in
the term “Vessel” herein; provided that the foregoing shall not include
any property other than each Vessel, including its earned freights, within the
meaning of 46 U.S.C. §31322(a).

 

TO HAVE AND TO
HOLD all and singular the above described Vessels unto Mortgagee, its heirs,
executors, administrators, successors or assigns forever.

 

Provided,
however, that if Mortgagor, its heirs, executors, administrators, successors or
assigns, shall pay the aforesaid indebtedness and the Documents evidencing the same
and shall perform and observe all and singular the terms, covenants and
agreements contained in said Documents and in this Mortgage, then this Mortgage
shall cease; otherwise it shall remain in full force and effect. Mortgagor
agrees to perform and to observe the terms, covenants and agreements contained
in said Documents, and in this Mortgage and to hold the Vessels subject
thereto.

 

Nothing herein
shall be deemed or construed subject to the lien hereof other than a Vessel
eligible for registration under the laws of United States.

 

The terms and
conditions of this Mortgage are as follows:

 

2

 

ARTICLE I.

 

Particular Covenants
of Mortgagor.

 

1.                                       Mortgagor
shall pay the Secured Amount evidenced by the Documents secured by the Mortgage
and will observe, perform and comply with all the covenants, terms and
conditions herein and in the said Documents, expressed, or implied, on its part
to be observed, performed, or complied with.

 

2.                                       Mortgagor
is and shall continue to be a citizen of the United States entitled to own and
operate the Vessels under its marine documents, which Mortgagor shall maintain
in full force and effect; and all action necessary for the execution, delivery
and validity hereof and of said Documents has been duly taken.  Mortgagor shall not remove any Vessel from
United States of America waters during the term of this Mortgage.

 

3.                                       Mortgagor
lawfully owns and possesses the whole of the Vessels free of all prior or
competing liens and encumbrances whatsoever, and shall warrant and defend title
to and possession of all and every part thereof for the benefit of Mortgagee
against all persons whomsoever except as permitted by the Documents.

 

4.                                       Mortgagor
shall comply with and not permit the Vessels to be operated contrary to any
provision of the laws, treaties, conventions, rules, regulations or orders of
the United States of America and/or any other jurisdiction wherein operated,
and/or of any department or agency thereof, and shall not remove the Vessels
from the limits of the United States without the prior written consent of
Mortgagee.  Mortgagor shall do everything
necessary to establish and maintain this Mortgage as a First Lien Preferred
Fleet Mortgage on each Vessel and shall maintain in the documentation of each
Vessel as a Vessel of the United States of America or the port of documentation
without the prior written consent of Mortgagee.

 

5.                                       Neither
the Mortgagor nor the master or operator of the Vessels, or any one acting on
their behalf, has or shall have any right, power, or authority to create, incur
or permit to be placed or imposed or continued upon the Vessels any lien
whatsoever which would or might be prior to or on a parity with or which might
impair the lien of this Mortgage, other than to secure the Mortgagee, its
heirs, executors, administrators, successors or assigns, and liens for damages
arising out of tort, stevedores’ and crews’ wages, salvage and general average
except as permitted by the Documents.

 

6.                                       Mortgagor
shall pay and discharge when due and payable from time to time, all taxes,
assessments, governmental charges, fines and penalties lawfully imposed upon
the Vessels, and upon any income therefrom except as permitted by the
Documents.  However, the right of
Mortgagor to contest the validity of any claim contemplated by this Section 6
or the Documents shall in no event be construed as permitting any libel,
attachment, or other seizure of the Vessels under process or color

 

3

 

of legal authority to remain
undissolved or undischarged, or in any respect modify or alter any obligation
of Mortgagor under Section 8 of this Article I.

 

7.                                       Mortgagor
will place, and until this Mortgage has been discharged of record will retain,
a properly certified copy of this Mortgage on board each Vessel with its papers
and will cause such certified copy and such papers to be exhibited to any and
all persons having business with the Vessel which might give rise to any lien
thereon other than liens for damages arising out of tort, stevedores’ and crews’
wages, salvage and general average.

 

8.                                       If,
notwithstanding the limitation against creating liens against any Vessel, it is
libeled, attached, detained, seized or levied upon or taken into custody under process
or under color of any authority (“Order”), Mortgagor shall immediately
notify Mortgagee by fax and email, confirmed by letter, and promptly discharge
or release the Vessel therefrom, and in any event within fifteen (15) days
after such Order; provided, however, if Mortgagor or any charterer of the
Vessel invokes the benefits of any applicable limitation of liability statutes
providing for the limitation of the liability of ship owners in compliance with
such Order, then the release and discharge of the Vessel shall be completed
within twenty (20) days from the date of the required payment into the Registry
of the Court or for the giving of a stipulation for the payment into the
Registry of the Court of the amount of the value of petitioner’s interest in
the Vessel and her pending freight, if any; and provided further that in any
such proceeding to limit liability, the Vessel shall not be surrendered or
offered to be surrendered to a trustee without the prior written consent of
Mortgagee.

 

9.                                       Mortgagor
shall at all times afford Mortgagee complete opportunity to inspect each Vessel
and its cargoes and papers; and shall certify upon Mortgagee’s request, but not
more frequently than monthly, that all wages and all other claims whatsoever,
which might have given rise to a lien upon the Vessel, have been paid.

 

10.                                 Except
as otherwise provided herein or in the Documents, Mortgagor shall not, without
the prior written consent of Mortgagee, which consent shall not be unreasonably
withheld, sell or mortgage any Vessel or any interest therein to any persons
whomsoever, or charter any Vessel except to persons entitled by law to operate
same for uses lawful for a United States Vessel and then only provided the
insurance thereon as required by Section 12 of this Article I be
unaffected thereby or adequately replaced.

 

11.                                 From
time to time Mortgagor shall execute and deliver such other and further
instruments and assurances as in the opinion of Mortgagee’s counsel may be
required to subject the Vessels more effectually to the lien hereof; to
maintain and effectuate this mortgage as a First Lien Preferred Fleet Mortgage
on the Vessels; and for operation of the Vessels by Mortgagee, as herein
provided, and to effectuate sales as provided in Paragraph (b) of Section 5
of Article II hereinafter.

 

4

 

12.                                 (a)                                  So
long as the Documents secured hereby remain outstanding or there remains any
amount due, payment whereof is secured by the lien or security interest of this
Mortgage, Mortgagor, at its own expense or at the expense of any charterer,
shall keep each Vessel insured for an amount not less than its full insurable
value, provided however, that the aggregate amount of such insurance in respect
of each Vessel shall never be less than the aggregate outstanding principal
amount of the Documents secured hereby, against the risks of fire, explosion
and marine perils (including without limitation a collision or Four-Fourths
Running Down Clause and Inchmaree Clause and against all other risks
customarily insured on a Vessel of this type and size, including but not
limited to strikes, riots and civil commotion coverage, and in the amount of
$5,000,000.00, including excess P. & I. coverage against the P. &
I. risks customarily covered. Mortgagor may eliminate from the Hull and P. &
I. insurance any risks ordinarily covered thereunder, provided that it insures
such risks under a separate or different form of policy; and the P. &
I. insurance as to coverage of Mortgagor’s employees, if any, may be excess
insurance over any Employer’s Liability and/or Voluntary Workmen’s Compensation
Insurance if provided by Mortgagee. 
Where the valuation of any Vessel in any policy of insurance required
hereunder may be pertinent, such valuation shall not exceed the amount insured
thereby, and policy franchises or deductible averages shall not exceed the sum
of $100,000.00 as to each loss covered by hull insurance and $100,000.00 as to
each loss covered by P. & I. insurance.  Excess liability, increased value,
disbursements and other forms of total loss insurance, in such amounts as
marine underwriters may allow, may be carried as part of the total amount of
the hull insurance required hereunder.

 

(b)                                 Mortgagor
may select its own insurance brokers (unless such brokers are unsatisfactory to
Mortgagee) and all such policies must be through such brokers on policy forms
approved by Mortgagee and from companies in good standing and satisfactory to
Mortgagee.  Certificates for all
insurance herein provided for and receipts for the payment of the premiums
thereon shall be delivered to Mortgagee.

 

(c)                                  All
insurance policies must be issued in the joint names of Mortgagor and Mortgagee
and be payable to them as their respective interests may appear.  The interest of Mortgagee is hereby declared
to be the unpaid balance of the principal and interest of the Documents
outstanding and any unpaid amounts secured by the lien of this Mortgage, and in
the event of a total loss of a Vessel, actual or constructive, as constructive
total loss is defined in the policies of insurance procured hereunder,
Mortgagee shall be paid first the amount of its interest in such insurance with
preference to and priority over Mortgagor and any person claiming under or from
Mortgagor, and any balance shall be paid to Mortgagor.  If such a total loss of a Vessel shall occur,
Mortgagor and Mortgagee shall join in a payment order directing the interested
underwriter to pay the proceeds of the insurance applicable to such total loss
in the manner herein provided.  The
proceeds of all other insurance shall be paid to Mortgagor and Mortgagee
jointly, but in any event and whether or not Mortgagor be in default under this
Mortgage, Mortgagee shall make available to Mortgagor by an appropriate payment
order directed to the interested underwriter the proceeds of all insurance to

 

5

 

pay any outstanding bill for
repairing the Vessel and/or outstanding third party claim, provided that
Mortgagor must pay the amount of the deductible; or to reimburse Mortgagor in
whole or in part for any expenditures Mortgagor may have made for repairing the
Vessel and/or to pay any third party claim, but Mortgagee, as a condition
precedent to such reimbursement of Mortgagor, may require Mortgagor to furnish
Mortgagee with receipted bills or waivers of liens against the Vessel for
repairing the Vessel and/or waivers of liens or appropriate releases for the
third party claims, or in either event to furnish or pay the applicable
deductible average.  If Mortgagor does
not complete repairs to the Vessel or pay third party claims, or in either
event furnish and/or pay the deductible, then Mortgagee shall be entitled to
receive the proceeds of any insurance applicable to such loss and upon payment
shall credit the net proceeds of any insurance as provided in Section 7 of
Article II hereinafter.

 

(d)                                 Mortgagor
will maintain all such insurance in full force and effect and it will not take
or allow any act of omission or commission which will in any way invalidate,
void or suspend any insurance herein provided to be maintained.  Each policy of insurance required to be
maintained by Mortgagor hereunder shall be endorsed with the undertaking of the
insurance company or underwriters issuing such policy to the effect that such
policy shall not lapse, expire, terminate or be canceled for any reason
whatsoever without at least ten (10) days prior written notice to
Mortgagee.  Mortgagor shall, within a
reasonable period of time, pay for any material loss of or damage to any Vessel
by any cause whatsoever, and shall discharge or obtain the release of any third
party claims whatsoever which would constitute a material prior or competing
lien against any Vessel, not covered by insurance or for which no reimbursement
or incomplete reimbursement is secured from the insurance.

 

13.                                 Mortgagor
shall, except as permitted by the Documents, at its own expense, insofar as is
practicable and material, perform all ordinary maintenance on the Vessels and
make all proper renewals and replacements necessitated by wear, tear, normal
depreciation and casualty.  In the event
of material damage to any Vessel less than a total loss, actual or
constructive, as constructive total loss is defined in the policy or policies
of hull insurance procured hereunder, Mortgagor shall make and pay for the
repairs necessitated thereby, and in that event Mortgagor shall pay the amount
of the deductible average provided in the insurance, and whether or not
Mortgagor be in default under the terms of this Mortgage, Mortgagor shall be
entitled to receive the proceeds of insurance applicable to the repaired damage
in the manner provided in Section 12(c) hereinabove; and if Mortgagor
does not make such repairs, Mortgagor nevertheless shall remain bound for the
amount of the deductible average provided in such insurance.  Mortgagor will not make or permit to be made
any substantial change in the structure or type of any Vessel or change in the
rig of the Vessel.

 

14.                                 The
Mortgagor shall place, and at all times and places will retain, a properly
certified copy of this Mortgage on board each Vessel and will cause such
certified copy and the Vessel’s marine documents to be exhibited to any and all
persons having business therewith which might give rise to any lien thereon,
and to any

 

6

 

representatives of the
Mortgagee; and will place and keep prominently displayed in the chart room and
in the Master’s cabin of said Vessel a framed printed notice reading as follows:

 

NOTICE OF MORTGAGE

 

THIS VESSEL IS
COVERED BY A FIRST LIEN PREFERRED FLEET MORTGAGE IN FAVOR OF CREDIT SUISSE,
CAYMAN ISLANDS BRANCH, AS COLLATERAL AGENT (THE “MORTGAGEE”), UNDER AUTHORITY
OF CHAPTER 313, TITLE 46 OF THE UNITED STATES CODE.  UNDER THE TERMS OF SAID MORTGAGE, NEITHER THE
OWNER, ANY CHARTERER, THE MASTER OF THIS VESSEL NOR ANY OTHER PERSON HAS ANY
RIGHT, POWER OR AUTHORITY TO CREATE, INCUR OR PERMIT TO BE PLACED OR IMPOSED
UPON THIS VESSEL ANY LIEN WHATSOEVER OTHER THAN THE LIENS OF THE AFORESAID
MORTGAGE AND LIENS FOR CREW WAGES, GENERAL AVERAGE AND SALVAGE.

 

ARTICLE II.

 

Events of Default and
Remedies of Mortgagee.

 

l.                                          In
the event that Mortgagor fails to procure and/or maintain insurance, as
provided in Section 12 of Article I hereinabove, Mortgagee may, at
its option, without any obligation so to do, and without waiver of any of its
rights hereunder, procure such insurance as it deems necessary to protect its
security and the cost of the same shall be charged against Mortgagor and be promptly
repaid to Mortgagee with interest thereon at the same rate as is provided upon
the principal amount of this Mortgage, and such insurance costs and the
interest thereon shall constitute a debt secured by the lien of this Mortgage.  Within fifteen (15) days after any
procurement of insurance by Mortgagee under this section, Mortgagee shall give
Mortgagor written notice thereof.

 

2.                                       In
the event that any Vessel is arrested or detained by a Marshal or other officer
of any court of law, equity, or admiralty jurisdiction, or by governmental or
other authority, on a claim for which Mortgagor is alleged to be liable, and
shall not be released from arrest or detention as and within the time
prescribed by the provisions of Section 8 of Article I hereinabove,
Mortgagor hereby authorizes and empowers Mortgagee, by its duly appointed
representative, in the name of Mortgagor, or its heirs, executors,
administrators, successors, or assigns, to apply for, claim and receive, or
take possession of the Vessel with all rights and powers Mortgagor, its heirs,
executors, administrators, successors or assigns, might have, possess, and
exercise in any such event. The power hereby granted shall be irrevocable and
may be exercised not only by said representatives of Mortgagee, but also by an
appointee or appointees of such

 

7

 

representatives, with full
power of substitution, to the same extent as if such appointee or appointees
had been named as one of the attorneys above named by express designation.  Mortgagor also authorizes and empowers any
person duly acting under the provisions of this Section 2 of Article II
to appear in the name of Mortgagor, its heirs, executors, administrators,
successors or assigns, in any court where a suit may be pending against
Mortgagor, or against any Vessel because of or on account of any alleged lien
against the Vessel and from which it has not been released, and to take such
proceedings as such person may deem proper for the defense of such suit and for
the release of the Vessel therefrom.  All
expenditures or liabilities made or incurred by them, or any of them, in the
premises, in good faith, shall be debts due from Mortgagor to Mortgagee, and
shall be promptly repaid by Mortgagor to Mortgagee with interest thereon at the
same rate as is provided upon the principal amount of this Mortgage, and shall
be secured by the lien of this Mortgage.

 

3.                                       In
the event Mortgagor fails to properly maintain any Vessel and make proper
repairs, renewals and replacements, as required by the provisions of Section 13
of Article I hereinabove, and such failure shall continue for a period of
thirty (30) days after written notice by Mortgagee, Mortgagee may, at its
option, without any obligation to do so and without waiver of any of its rights
hereunder, perform such maintenance and make such repairs, renewals and
replacements and the cost of the same shall be charged against Mortgagor and be
promptly repaid to Mortgagee with interest thereon at the same rate as is provided
upon the principal amount of this Mortgage, and all such expenditures and the
interest thereon shall constitute a debt from Mortgagor to Mortgagee secured by
the lien of this Mortgage.

 

4.                                       An
“Event of Default” means and includes the following:

 

(a)                                  Failure
to pay any installment of principal or interest on the Documents secured hereby
when due;

 

(b)                                 Failure
by Mortgagor in the observance of any covenants contained in this Mortgage or
the Documents, if such failure shall continue for a period of fifteen (15) days
after written notice by Mortgagee; and

 

(c)                                  The
Mortgagor shall remove or attempt to remove any Vessel beyond the trading
limits as set forth in the policies of insurance referenced in Section 12
of Article 1 hereof; or shall abandon the Vessel in a foreign port.

 

5.                                       After
the occurrence and during the continuance of an event of default specified in Section 4
of this Article II, Mortgagee, without limitation to the remedies set
forth in the Documents:

 

(a)                                  May take
any Vessel with or without legal process wherever it is and Mortgagor, or other
person in possession, shall forthwith surrender possession of the Vessel to
Mortgagee, upon demand; Mortgagee then shall take or may hold, lay up,

 

8

 

lease, operate, manage and
control or otherwise use the Vessel in any service and trade for which the
Vessel is suited by virtue of the Vessel’s design and construction as Mortgagee
may elect, provided that such service and trade is in accordance with the laws
and regulations applicable, and may insure the Vessel and make all necessary or
proper repairs and useful alterations, additions, betterments and improvements
thereto as to it may seem judicious, and shall be entitled to collect and
receive all tolls, earnings, income, rents, issues and profits of, or arising
out of the operation or management of the Vessel and after deducting all
expenses of operation and/or repairs, maintenance, alterations, additions,
betterments and improvements and all payments for taxes, insurance, as well as
just and reasonable compensation for its own services, and for all its agents,
attorneys and employees, Mortgagee shall apply the net money arising, as
aforesaid, as provided by Section 6 of this Article II;

 

(b)                                 May take
any Vessel with or without legal process wherever it may be and Mortgagor or
other person in possession shall forthwith surrender possession of the Vessel
upon demand of Mortgagee and Mortgagee may sell the Vessel at public sale, free
from any and all claims of or by Mortgagor in law, in equity, in admiralty or
by statute, which sale shall be made at a time and place and upon such notice
as may be required by law; if not governed by any applicable provisions of law,
such sale shall be made at such time and place as Mortgagee may fix, after
notice of the time, place and terms of said sale, together with a description
of the property to be sold, has been published, after notice has been mailed to
Mortgagor, for six (6) consecutive days (except Sunday) preceding the date
for such sale, in a newspaper printed in the English language and customarily
published on each business day and of general circulation in Harris County,
Texas, and in a newspaper published in the county or parish in which the place
of sale is located if other than the said county; Mortgagee and its heirs,
executors, administrators, successors or assigns hereby are appointed the true
and lawful attorneys irrevocable of Mortgagor in its name and stead to make all
necessary transfers of property thus sold, and for the purpose it or they will
execute all necessary instruments of assignment and transfer, Mortgagor hereby
ratifying and confirming all that its said attorneys shall lawfully do by
virtue hereof;

 

(c)                                  May proceed
to protect and enforce its rights under this Mortgage, including all rights and
remedies arising by reason of the applicable law of the forum, by suit or suits
in equity or actions at law, or by suit in admiralty in rem or in personam,
whether for specific performance or for the enforcement of any covenant or
agreement contained herein or for any foreclosure hereunder or for the
enforcement of any proper legal or equitable remedy or remedy in admiralty as
Mortgagee, being advised by counsel, shall deem most effectual to protect and
enforce the rights aforesaid; in connection with any such proceeding Mortgagee
shall be entitled, as a matter of right, to the appointment of a receiver of
the mortgaged property and tolls, rents, income, revenues, profits and earnings
thereof;

 

(d)                                 Mortgagee
as a condition precedent to exercising the power of sale hereby granted or
seeking to sell the mortgaged property, pursuant to judicial

 

9

 

proceedings, shall, except as
otherwise provided herein, be required to give Mortgagor any notice declaring
the principal of the Documents secured by the lien of this Mortgage to be due
and payable immediately;

 

(e)                                  May proceed
personally against Mortgagor in any court of competent jurisdiction to recover,
with interest thereon at the same rate as is provided upon the principal amount
of this Mortgage, and damages which Mortgagee may sustain by reason of any
infraction by Mortgagor of any obligations contained in Sections l to 13
inclusive of Article I hereinabove.

 

                                                Each
and every power or remedy herein conferred on Mortgagee shall be cumulative and
in addition to all other powers or remedies now or hereafter existing in
admiralty, in equity, in law or by statute and may be exercised as often as may
be deemed expedient by Mortgagee.  No
delay or omission by Mortgagee shall impair any right, power or remedy and no
waiver of any default shall waive any other default.

 

6.                                       If
at any time after one or more events of default enumerated in Section 4 of
this Article II shall have occurred and before the Vessel shall have been
sold pursuant to any provision of this Article II (whether or not
proceedings for foreclosure shall have been commenced and/or prosecuted in any
court) Mortgagor shall make good such default or defaults, including without
limitation, payment of any past due installment of principal and interest on
the Documents secured by the lien of this Mortgage, and reimbursement of any
advances and expenditures made by Mortgagee in accordance with the provisions
of Sections l, 2 and 3 of this Article II, with interest thereon, then and
in every such case Mortgagee shall waive such default or defaults and its or
their consequences and shall rescind any action theretofore taken by it,
including without limitation, the acceleration of payment of the Documents
secured by this Mortgage; but no such waiver shall extend to or affect any
subsequent default or impair any right consequent thereon.

 

7.                                       The
net proceeds of any judicial or other sale, of any charter, managements or
other use of any Vessel by Mortgagee, of any claim for damages to the Vessel
and of any insurance received by Mortgagee (except to the extent that such
insurance proceeds are to be paid to Mortgagor in accordance with any
provisions of this Mortgage) shall be applied as follows:

 

First:  To the payment of all attorney’s fees, court
costs, and other expenses due or incurred or which may have been paid by
Mortgagee for the collection of any unpaid principal of the Documents and the
accrued interest thereon secured by the lien of this Mortgage;

 

Second:  To the payment of the whole amount then owing
and unpaid upon the Documents for principal and accrued interest thereon and,
in case such proceeds shall be insufficient to pay the whole amount so due and
unpaid, then to the payment of such principal and interest without preference
or priority of principal over interest or of interest

 

10

 

over principal or of any
installment of interest or principal over any other installment of interest or
principal, ratably to the aggregate of such unpaid principal and the accrued
and unpaid interest;

 

Third:  To the payment of any claim or the balance of
any claim which Mortgagee may have for reimbursement for advances or
expenditures, with interest thereon at the same rate as is provided upon the
principal amount of this Mortgage, which Mortgagee has made under the
provisions of Sections l, 2 and 3 of this Article II, and for any
infraction by Mortgagor of Sections l to 13 inclusive of Article I hereinabove.

 

Fourth:  To the payment of any surplus thereafter
remaining to Mortgagor or to whomsoever may be entitled thereto.

 

Should there
not be any funds or insufficient funds to liquidate all valid claims of
Mortgagee, then Mortgagor shall remain bound to Mortgagee for any unpaid amount
or balance due and shall be liable to pay said amount to Mortgagee with
interest thereon as provided upon the principal amount of this Mortgage but, if
after payment in full, any amount remains, it shall be paid to Mortgagor.

 

8.                                       Mortgagor
shall not at any time insist upon or plead or in any manner whatever claim or
take the benefit or advantages of any stay or extension, valuation or
appraisement law for the purpose of preventing or hindering the enforcement or
foreclosure of this Mortgage, and it covenants that it will not hinder, delay
or impede the execution of any power herein granted and delegated to Mortgagee,
but that it will suffer and permit the execution of every such power as though
no such law or laws had been made or enacted, nor after any sale or sales will
it claim or exercise any right under any statute or otherwise to redeem the
property so sold or any part thereof.

 

9.                                       Notwithstanding
any other provision herein to the contrary, no sale, charter, transfer or other
disposition of any Vessel or any interest therein may be made to any entity not
a citizen of the United States within the meaning of Section 2 of the
Shipping Act, 1916, as amended, without the approval of the Secretary of
Transportation of the United States.

 

ARTICLE III.

 

Possession until
Default.

 

Until an Event
of Default shall have happened and shall have continued for the time, if any,
specified with reference thereto in Article II hereinabove, Mortgagee
shall permit Mortgagor and Mortgagor shall have the right to possess, use,
manage, operate and enjoy the Vessels and to take, collect and receive, and use
the freights, issues, rents, income and profits thereof and apply the same to
all legitimate uses.

 

11

 

ARTICLE IV.

 

Information for
Endorsement of Mortgage.

 

For purposes
of this Mortgage and the recordation and endorsement of this Mortgage on the
documents of the Vessels as required by the Ship Mortgage Act, the total amount
of the Mortgage is One Hundred Fifty Million Dollars ($150,000,000), plus
interest and performance of mortgage covenants.

 

The Mortgagor
holds an interest of 100% of each Vessel and 100% of such interest is subject
to this Mortgage.

 

The addresses
of the parties are:

 

Mortgagor:

 

Global Geophysical Services, Inc.

3535 Briarpark, Suite 200

Houston, Texas 77042

Fax No. (713) 979-1560

 

Mortgagee:

 

Credit Suisse, Cayman Islands Branch

Eleven Madison Avenue

New York, NY 10010

Attention of Agency Group

Fax No. (212) 325-8304

 

Although it is
not intended that this Mortgage include any property other than the Vessels, if
any determination is made at any time for any reason that this Mortgage does
include any property other than a “Vessel”, then such property may be
separately discharged by the payment of .01% of the said total amount.

 

ARTICLE V.

 

Intercreditor
Agreement.

 

This Mortgage is subject to the terms and
conditions of the Intercreditor Agreement. 
If any provision of the Intercreditor Agreement conflict with this
Mortgage, the Intercreditor Agreement shall govern.

 

12

 

ARTICLE VI.

 

Sundry Provisions.

 

l.                                          All
covenants and agreements of Mortgagor herein contained shall bind Mortgagor,
its heirs, executors, successors or administrators or assigns forever, and
shall inure to the benefit or Mortgagee and its heirs, executors,
administrators, successors or assigns forever. 
Following any assignment of this Mortgage, and reference herein to Mortgagee
shall be deemed to refer to the “assignee”.

 

2.                                       Notwithstanding
any contrary statement contained herein regarding the maturity of this
Mortgage, it shall remain in full force and effect until, but only until, the
payment in full of the principal and all interest which will become due on the
Documents secured by the lien of this Mortgage and the payment of any other sum
or debt which may become due pursuant to the provisions of this Mortgage and
which is secured by the lien hereof and until, but only until, the full and
final performance of all covenants contained in this Mortgage.

 

3.                                       Any
notice or demand which by any provision of this Mortgage is required or
permitted to be given, delivered or served on Mortgagor may be given, delivered
or served by being deposited, postage prepaid, in a post office letter box
addressed (until another address is filed by Mortgagor in writing with
Mortgagee for the purpose of this section), as follows: Global Geophysical
Services, Inc., 3535 Briarpark, Suite 200, Houston, Texas 77042, (Fax
No. (713) 979-1560).  Any notice or
demand which by any provision of this Mortgage is required or permitted to be
given, delivered or served on Mortgagee may be given, delivered or served by
being deposited, postage prepaid, in a post office letter box addressed (until
another address is filed by Mortgagee in writing with Mortgagor for the purpose
of this Section 3) as follows: Credit Suisse, Cayman Islands Branch,
Eleven Madison Avenue, New York, NY 10010, Attention of Agency Group (Fax No. (212)
325-8304).

 

4.                                       If
any provision of this Mortgage, or any obligation, right or remedy created by
this Mortgage be declared invalid in any legal proceedings, no other valid
obligation, right or remedy created by this Mortgage shall be affected thereby.

 

5.                                       This
instrument may, for convenience, be executed in any number of original
counterparts, each of which shall be deemed an original and all of which taken
together shall be and constitute one instrument.

 

13

 

IN WITNESS
WHEREOF, the Mortgagor has caused this instrument to be executed all as of the
day and year first above written.

 

	
  WITNESSES:

  	
   

  	
  GLOBAL  GEOPHYSICAL SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Craig M.
  Murrin

  
	
   

  	
   

  	
   

  	
  Vice
  President, Secretary and General

  
	
   

  	
   

  	
   

  	
  Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Sworn to and
  Subscribed before me

  this 16th day of January 2008

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

ACKNOWLEDGMENT

 

STATE OF TEXAS

 

COUNTY OF HARRIS

 

BE IT KNOWN
that on this 4th day of January 2008, before me personally appeared:

 

Craig Murrin

 

to me known, who, after being
by me duly sworn, did depose and say:

 

That he is
Vice President, Secretary and General Counsel of Global Geophysical Services, Inc.
which is described in and who executed the within instrument, and that he
signed his name to the said instrument and acknowledged the within instrument
at the direction of the Board of Directors of said corporation.

 

IN TESTIMONY
WHEREOF, I have hereto set my hand and seal on this day and year first above
written.

 

 

	
   

  	
   

  
	
   

  	
  NOTARY PUBLIC

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00145-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00145-of-00352.parquet"}]]