Document:

Exhibit 10.16

 

PAYMENT
OF THIS NOTE SHALL, TO THE EXTENT SET FORTH IN ARTICLE IV OF THIS NOTE, BE
SUBORDINATE AND JUNIOR IN RIGHT OF PAYMENT TO THE PRIOR PAYMENT IN FULL OF ALL
SENIOR INDEBTEDNESS (AS DEFINED BELOW).

 

SUBORDINATED PROMISSORY NOTE

 

	
  $5,400,000.00

  	
   

  	
  December 10, 2008

  

 

FOR
VALUE RECEIVED, GLOBAL GEOPHYSICAL SERVICES, INC., a Delaware corporation (“Maker”),
having an address at 3535 Briarpark Drive, Suite 200, Houston, Texas
77042, hereby promises to pay to the order of WEINMAN GEOSCIENCE, INC., a Texas
corporation (together with its successors and assigns and any subsequent
holders of this Note, the “Payee”), as hereinafter provided, the
principal sum of FIVE MILLION FOUR HUNDRED THOUSAND DOLLARS AND NO/100  ($5,400,000.00), together with interest
thereon at the Interest Rate (as hereinafter defined), and otherwise in strict
accordance with the terms and provisions hereof.

 

ARTICLE
I — DEFINITIONS

 

Definitions.  As used in this Note, the following terms
shall have the following meanings:

 

Affiliate: with respect to any
Person, any other Person which directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such first Person or any of its Subsidiaries.  
The term “control” shall mean (a) the power to vote 10% or more of
the securities or other equity interests of a Person having ordinary voting
power, or (b) the possession, directly or indirectly, of any other power
to direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or otherwise.  For purposes of this definition, the terms
“Person” and “Subsidiaries” shall have the meanings ascribed to those terms in
the First Lien Loan Agreement.

 

Agreed
Bank Limit: means $240,000,000.

 

Agreement: that certain
Asset Purchase Agreement, dated as of June 5, 2008, by and among Maker,
Payee, WGI Sub, LLC, a Texas limited liability company, Barry L. Weinman, an
individual resident in Collin County, Texas, and Jane L. Weinman, an individual
resident in Collin County, Texas, as amended from time to time.

 

Applicable
Rate: a per annum interest rate equal to the greater of (i) five
percent (5.0%) and (ii) the one year London interbank offered rate or
“Libor” that is published in the “Money Rates” section of The Wall
Street Journal on each Reference Date (or if not published on such
day, the next publication date), which rate shall automatically change on such
day annually, provided that in the event such rate is not published in The Wall Street Journal, Payee shall reasonably determine an
equivalent rate of interest by reference to another publication.

 

1

 

Blockage
Default:  means (i) any
default by Maker in the payment of any amount owing with respect to any Senior
Indebtedness when due, whether at maturity, upon mandatory repayment,
acceleration or otherwise, (ii) any failure by Maker to comply with any
financial covenant contained in any Loan Agreement (as such financial covenants
exist on the date hereof, or as such financial covenants are amended or
modified after the date hereof in a manner that is no more restrictive to
Maker), or (iii) any failure by Maker to comply with any limitation in any
Loan Agreement on the amount of capital expenditures that may be made in a
given period (as such limitation exists on the date hereof, or as such
limitation is amended or modified after the date hereof in a manner that is no
more restrictive to Maker).

 

Business
Day: a weekday, Monday through Friday, except a legal holiday or a day on
which banking institutions in Houston, Texas are authorized or required by law
to close.  Unless otherwise provided, the
term “days” when used herein shall mean calendar days.

 

Change
of Control:  A “Change in Control” shall be deemed to
have occurred if (a) any “person” or “group” (within the meaning of Rule 13d
5 of the Securities Exchange Act of 1934 as in effect on the date hereof),
other than any of the Maker’s shareholders of record on the date of the Agreement
(i) shall own, directly or indirectly, beneficially or of record, shares
representing more than 30% of the aggregate ordinary voting power represented
by the issued and outstanding capital stock of the Maker and the percentage of
the aggregate ordinary voting power acquired by such person or group exceeds
the percentage of such voting power owned by Kelso Investment Associates VII,
L.P., KEP VI, LLC, and their respective Affiliates (other than any portfolio
company) or (ii) shall have obtained the power (whether or not exercised)
to elect a majority of the members of the board of directors (or similar
governing body) of the Maker, (b) a majority of the seats (other than
vacant seats) on the board of directors of the Maker shall at any time be
occupied by persons who were neither (i) members of the board of directors
of the Maker on the date of the Agreement, (ii) nominated by the board of
directors of the Maker nor (iii) appointed by directors so nominated, or (c) any
change in control (or similar event, however denominated) with respect to the
Maker or any Subsidiary of the Maker shall occur under and as defined in any
indenture or agreement governing Subordinated Debt to which the Maker or any
Subsidiary of the Maker is a party.  For
purposes of this definition, the terms “Subordinated Debt” and “Subsidiary”
shall have the meanings ascribed to those terms in the First Lien Loan
Agreement

 

Charges: as defined
under Section 6.3(c) hereof.

 

Debtor
Relief Laws: Title 11 of the United States Code, as now or hereafter
in effect, or any other applicable law, domestic or foreign, as now or
hereafter in effect, relating to bankruptcy, insolvency, liquidation,
receivership, reorganization, arrangement or composition, extension or
adjustment of debts, or similar laws affecting the rights of creditors.

 

2

 

Default
Interest Rate: a rate per annum equal to the Interest Rate plus
three percent (3.0%), but in no event in excess of the Maximum Lawful Rate.

 

Enforcement
Action: means, with respect to any indebtedness, any of the following actions
by or on behalf of the creditor to whom such indebtedness is owed:  (a) any acceleration of any or all of
such indebtedness, (b) any enforcement or foreclosure of liens granted by
Maker to secure any or all of such indebtedness, and (c) any other efforts
to collect any or all of such indebtedness from Maker or from Maker’s assets or
properties, including without limitation the commencement or the joining with
any other creditor of Maker in the commencement of any Proceeding against
Maker; provided, however, that none of the following shall constitute an
Enforcement Action: (i) acceleration of any of the indebtedness evidenced
by this Note following acceleration of all Senior Indebtedness, (ii) any
of the actions described in the foregoing clauses (a), (b), or (c) that
are taken during the existence of any Proceeding that is subject to the
jurisdiction of a court of competent authority, (iii) demands to enforce
this Note, and (iv) the exercise by Payee of Payee’s  rights to sublicense and transfer the
intellectual property licensed to Payee under that certain License Agreement
dated as of June 5, 2008 between Maker, as licensor, and Payee, as
licensee.

 

Event
of Default: any event or occurrence described under Section 3.1
hereof.

 

First
Lien Loan Agreement: means that certain First Lien Credit Agreement
dated as of January 16, 2008 by and among Maker, Credit Suisse, as
Administrative Agent and Collateral Agent, each of the lending institutions
party to such Credit  Agreement from time
to time  as Lenders, together with any
related documents (including any security documents and guarantee documents),
as such documents may be amended, modified, supplemented, extended, renewed,
refinanced or replaced or substituted from time to time.

 

Interest
Rate: with respect any day on which this Note is outstanding, a rate per
annum equal the sum of (i) the Applicable Rate, plus (ii) 300 basis
points, but in no event in excess of the Maximum Lawful Rate.

 

Loan
Agreements: means the First Lien Loan Agreement and the Second
Lien Loan Agreement.

 

Maker:    as identified in the introductory paragraph
of this Note.

 

Maturity
Date: December 1, 2010.

 

Maximum
Lawful Rate:  as defined
under Section 6.3(c) hereof.

 

Note:  this Promissory Note.

 

Obligations: means, with
respect to any Loan Agreement, all obligations (whether in existence on the
date hereof or arising afterwards, absolute or contingent, direct or 

 

3

 

indirect)
for or in respect of principal (when due, upon acceleration, upon redemption,
upon mandatory repayment or repurchase pursuant to a mandatory offer to
purchase, or otherwise), premium, interest, penalties, fees, indemnification,
reimbursement and other amounts payable and liabilities with respect to such
Loan Agreement, including all interest accrued or accruing after the
commencement of any bankruptcy, insolvency or reorganization or similar case or
proceeding at the contract rate (including, without limitation, any contract
rate applicable upon default) specified in the relevant documentation, whether
or not the claim for such interest is allowed as a claim in such case or
proceeding.

 

Payee:  as identified in the introductory paragraph
of this Note.

 

Payment
Date: each of June 5, 2009, December 1, 2009 and December 1,
2010.

 

Permitted
Junior Securities: means (a) any debt instruments, securities or
obligations of Maker that are subordinate and junior in right of payment to the
payment in full of all Senior Indebtedness at least to the extent provided in
this Note for the indebtedness evidenced hereby, (b) any equity interests
in Maker, including without limitation capital stock, partnership or membership
interests, and other ownership interests of any kind, and all options, warrants
and other rights to acquire any such equity interests, and (c) all
proceeds of any of the foregoing.

 

Proceeding: as defined
under Section 4.2 hereof.

 

Reference
Date: means January 2, 2008, or, if this Note is made or outstanding
after December 31, 2008, the first Business Day of the then-current
calendar year.

 

Second
Lien Loan Agreement: means that certain Second Lien Credit Agreement
dated as of January 16, 2008 by and among Maker, Credit Suisse, as
Administrative Agent and Collateral Agent, each of the lending institutions
party to such Credit  Agreement from time
to time  as Lenders, together with any
related documents (including any security documents and guarantee documents),
as such documents may be amended, modified, supplemented, extended, renewed,
refinanced or replaced or substituted from time to time.

 

Senior
Indebtedness: of Maker means all Obligations of Maker arising
under the Loan Agreements,  including
without limitation any renewals, modifications or increases thereof.  In determining the principal amount of Senior
Indebtedness owing under the Loan Agreements at any time when there are letters
of credit outstanding under a Loan Agreement, the face amount of such letters
of credit shall be deemed additional principal outstanding under such Loan
Agreement.

 

Senior
Indebtedness Acceleration: means with respect to the
Senior Indebtedness that the holder or holders of such Senior Indebtedness, or
an agent or representative on behalf of such holder or holders, have caused
such Senior Indebtedness to be accelerated pursuant to the terms of the
applicable Loan Agreement.

 

4

 

Standstill
Period:  means the period from and
including the date of receipt by Payee and Maker of  a notice from the administrative agent under
either Loan Agreement of (a) the occurrence of an event of default under a
Loan Agreement (other than a Blockage Default) (as the events of default under
the Loan Agreements exist on the date hereof, or as such events of default may
be amended or modified after the date hereof in a manner that is no more
restrictive to Maker), and (b) the designation of a Standstill Period
under this Note until the first to occur of (i) the Subordination
Termination Date, (ii) the date on which such event of default has been
waived in writing by the applicable holder or holders of the Senior
Indebtedness, cured, or ceased to exist, (iii) the date that is 180 days
after the commencement of such Standstill Period, or (iv) the day upon
which such administrative agent notifies Maker in writing of the termination of
such Standstill Period.

 

Subordination
Termination Date: means the date after the date hereof on which the
following shall have occurred: (a) payment in full in cash of the principal
of and interest (including interest accruing during the pendency of any
Proceeding, regardless of whether allowed or allowable in such Proceeding) and
premium, if any, on all debt outstanding under the Loan Agreements, (b) payment
in full in cash of all other Obligations that are due and payable or otherwise
accrued and owing at or prior to the time such principal and interest are paid,
(c) cancellation of or the entry into arrangements satisfactory to the
applicable administrative agent with respect to all letters of credit issued
and outstanding under any Loan Agreement and (d) termination or expiration
of all commitments to lend and all obligations to issue or extend letters of
credit under the Loan Agreements.

 

All
terms used herein, whether or not defined in Section 1.1 hereof, and
whether used in singular or plural form, shall be deemed to refer to the object
of such term whether such is singular in nature, as the context may suggest or
require.

 

ARTICLE
II — PAYMENT TERMS

 

2.1           Payment of Principal and
Interest.

 

(a)           Payment. Subject to
clauses (c) and (d) of this Section 2.1, the accrued interest on
this Note and one third (1/3) of the original principal amount of this Note
shall be due and payable on each Payment Date through and including the Maturity
Date.  No principal amount repaid may be
subsequently reborrowed.

 

(b)           Maturity
Date. Subject to clauses (c) and (d) of this Section 2.1, the
outstanding principal balance hereof and any and all accrued but unpaid
interest hereon shall be finally due and payable in full on the Maturity Date
or upon the earlier maturity hereof, whether by acceleration or otherwise.

 

(c)           Intentionally
Omitted.

 

5

 

(d)           Conversion.  Notwithstanding anything to the
contrary in this Note, if a Qualified Public Offering (as defined in the
Agreement) is consummated prior to the time all principal of this Note has been
paid, then on the date the Qualified Public Offering is consummated (i) interest
will cease to accrue on this Note, (ii) the Maker shall pay all accrued
but unpaid interest in cash within 10 Business Days after the date of such
consummation, and (iii) this Note shall be automatically converted (the “Automatic
Conversion”)  into the number of
shares of Common Stock (as defined in the Agreement) calculated by dividing the
outstanding principal of this Note at the time of the conversion by the price
per share offered in the Qualified Public Offering (the “Offering Price”)
..

 

(i)            Fractional Shares.  No fractional shares of Common Stock shall be
issued upon conversion of this Note.  In
lieu of any fractional shares to which the Payee would otherwise be entitled,
the Maker shall pay cash equal to such fraction multiplied by the Offering
Price of one (1) share of Common Stock. 
Whether or not fractional shares would be issuable upon such conversion
shall be determined on the basis of the outstanding principal of this Note
being converted into Common Stock and the aggregate number of shares of Common
Stock issuable upon such conversion.

 

(ii)           Mechanics of Conversion.  Upon an Automatic Conversion, the Payee shall
surrender this Note at the office of the transfer agent for the Common Stock
(or at the principal office of the Maker if the Maker serves as its own
transfer agent).  If required by the
Maker, this Note shall be endorsed, in form satisfactory to the Maker, duly
executed by the Payee or its attorney duly authorized in writing.  Immediately prior to the closing of the
Qualified Public Offering shall be the time of conversion (the “Conversion
Time”), and the shares of Common Stock issuable upon conversion of this
Note shall be deemed to be outstanding of record as of such date.  The Maker shall, as soon as practicable after
the Conversion Time, issue and deliver at such office to the Payee, or to its
nominees, a certificate or certificates for the number of shares of Common
Stock to which such holder shall be entitled, together with cash in lieu of any
fraction of a share.

 

(ii)           Taxes. The
Maker shall pay any and all issue or other similar taxes that may be payable in
respect of any issuance or delivery of shares of Common Stock upon conversion
of this Note pursuant to this Section. 
The Maker shall not, however, be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of
shares of Common Stock in a name other than that of the original Payee, and no
such issuance or delivery shall be made unless and until the person or entity
requesting such issuance has paid to the Maker the amount of any such tax or
has established, to the satisfaction of the Maker, that such tax has been paid.

 

2.2           Application.  Except as expressly provided herein to the
contrary, all payments on this Note shall be applied in the following order of
priority: (i) the payment or reimbursement of any expenses, costs or
obligations (other than the outstanding principal balance hereof and interest
hereon) for which either Maker shall be obligated or Payee shall be entitled
pursuant to the provisions of this Note, (ii) the payment of accrued but
unpaid interest hereon, (iii) the payment of all or any portion of the
principal balance hereof then outstanding hereunder, in the direct order of
maturity. If an Event of Default 

 

6

 

exists
under this Note, then Payee may, at the sole option of Payee, apply any such
payments, at any time and from time to time, to any of the items specified in
clauses (i), (ii) or (iii) above without regard to the order of
priority otherwise specified in this Section 2.2 and any application to
the outstanding principal balance hereof may be made in either direct or
inverse order of maturity.

 

2.3           Payments.  All payments under this Note made to Payee
shall be made in immediately available funds at the address set forth below the
signature of Payee (or at such other place as Payee, in Payee’s sole
discretion, may have established by delivery of written notice thereof to Maker
from time to time), without offset, in lawful money of the United States of
America, which shall at the time of payment be legal tender in payment of all
debts and dues, public and private. 
Payments by check or draft shall not constitute payment in immediately
available funds until the required amount is actually received by Payee in
full.  Payments in immediately available
funds received by Payee in the place designated for payment on a Business Day
prior to 5:00 p.m. Houston, Texas time at said place of payment shall be
credited prior to the close of business on the Business Day received, while
payments received by Payee on a day other than a Business Day or after 5:00 p.m.
Houston, Texas time on a Business Day shall not be credited until the next
succeeding Business Day.  If any payment
of principal or interest on this Note shall become due and payable on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day.  Any such extension of time
for payment shall be included in computing interest which has accrued and shall
be payable in connection with such payment.

 

2.4           Computation Period.  Interest on the indebtedness evidenced by
this Note shall be computed on the basis of a three hundred sixty (360) day
year and shall accrue on the actual number of days elapsed for any whole or
partial month in which interest is being calculated.  Interest shall accrue from and including the
date of this Note, and the day on which funds are repaid shall be included
unless repayment is credited prior to the close of business on the Business Day
received as provided in Section 2.3 hereof.

 

2.5           Prepayment.  Principal and interest may be prepaid at
anytime without penalty.

 

2.6           Unconditional Payment.  Subject to clauses (c) and (d) of Section 2.1,
Maker is and shall be obligated to pay all principal, interest and any and all
other amounts which become payable under this Note absolutely and
unconditionally and without any abatement, postponement, diminution or
deduction whatsoever and without any reduction for counterclaim or setoff
whatsoever.  If at any time any payment
received by Payee hereunder shall be deemed by a court of competent
jurisdiction to have been a voidable preference or fraudulent conveyance under
any Debtor Relief Law, then the obligation to make such payment shall survive
any cancellation or satisfaction of this Note or return thereof to Maker and
shall not be discharged or satisfied with any prior payment thereof or
cancellation of this Note, but shall remain a valid and binding obligation
enforceable in accordance with the terms and provisions hereof, and such
payment shall be immediately due and payable upon demand.

 

7

 

2.7           Partial or Incomplete
Payments. Remittances in payment of any part of this Note other than
immediately available funds at the place where this Note is payable shall not,
regardless of any receipt or credit issued therefor, constitute payment until
the required amount is actually received by Payee in full in accordance
herewith and shall be made and accepted subject to the condition that any check
or draft may be handled for collection in accordance with the practice of the
collecting bank or banks.  Acceptance by
Payee of any payment in an amount less than the full amount then due shall be
deemed an acceptance on account only, and the failure to pay the entire amount
then due shall be and continue to be an Event of Default in the payment of this
Note.

 

2.8           Late Charge; Default
Interest Rate.  If any payment
is not received in full by Payee on the date when due, then in addition to
interest accruing at the Default Interest Rate on such overdue payment from the
date due until paid, Maker shall also pay to Payee a late charge in an amount
equal to two percent (2.0%) of the amount of such overdue payment.  For so long as any Event of Default exists
under this Note, regardless of whether or not there has been an acceleration of
the indebtedness evidenced by this Note, and at all times after the maturity of
the indebtedness evidenced by this Note (whether by acceleration or otherwise),
and in addition to all other rights and remedies of Payee hereunder, interest
shall accrue on the outstanding principal balance hereof at the Default
Interest Rate, and such accrued interest shall be immediately due and payable.  Maker acknowledges that it would be extremely
difficult or impracticable to determine Payee’s actual damages resulting from
any late payment or Event of Default, and such late charges and accrued
interest are reasonable estimates of those damages and do not constitute a penalty.

 

ARTICLE
III - EVENT OF DEFAULT AND REMEDIES

 

3.1           Event of Default.
The occurrence or happening, at any time and from time to time, of any one or
more of the following shall immediately constitute an “Event of Default” under
this Note:

 

(a)           Maker shall fail, refuse or neglect
to pay and satisfy, in full and in the applicable method and manner required,
any required payment of principal or interest or any other portion of the
indebtedness evidenced by this Note as and when the same shall become due and payable,
whether at the stipulated due date thereof, at a date fixed for payment, or at
maturity, by acceleration or otherwise;

 

(b)           The occurrence of any other default,
breach or event of default under this Note other than those described under Section 3.1(a) above;

 

(c)           Maker (i) shall execute an
assignment for the benefit of creditors or an admission in writing by Maker of
Maker’s inability to pay, or Maker’s failure to pay, debts generally as the
debts become due; (ii) shall allow the appointment of a receiver, trustee
or custodian of Maker, which receiver, trustee or custodian is not discharged
within sixty (60) days after the appointment; (iv) files as a debtor a
petition, case, proceeding or other action pursuant to, or voluntarily seeks
the benefit or benefits of, any Debtor Relief Law,

 

8

 

or
takes any action in furtherance thereof; (v) files either a petition,
complaint, answer or other instrument which seeks to effect a suspension of, or
which has the effect of suspending any of, the rights or powers of Payee
granted in this Note; or (vi) allows the filing of a petition, case,
proceeding or other action against Maker as a debtor under any Debtor Relief
Law or seeks appointment of a receiver, trustee, custodian or liquidator of
Maker and (a) Maker admits, acquiesces in or fails to contest diligently
the material allegations thereof, (b) the petition, case, proceeding or
other action results in the entry of an order for relief or order granting the
relief sought against Maker, or (c) the petition, case, proceeding or
other action is not permanently dismissed or discharged on or before the
earlier of trial thereon or sixty (60) days next following the date of filing;

 

(d)           Any “default” or “event of default” occurs
and is continuing under (i) the Second Lien Loan Agreement, or (ii) solely
in the event that all Obligations arising under the Second Lien Loan Agreement
have been paid in full in cash, the First Lien Loan Agreement;

 

(e)           Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of Maker
herein shall be incorrect or misleading when made or deemed made; or

 

(f)            Any Change of Control occurs.

 

3.2           Remedies.  Upon the occurrence of an Event of Default,
Payee shall have the immediate right, at the sole discretion of Payee and
without notice, demand, presentment, notice of nonpayment or nonperformance,
protest, notice of protest, notice of intent to accelerate, notice of
acceleration, or any other notice or any other action (ALL OF WHICH
MAKER HEREBY EXPRESSLY WAIVES AND RELINQUISHES) (i) to declare
the entire unpaid balance of the indebtedness evidenced by this Note
(including, without limitation, the outstanding principal balance hereof,
including all sums advanced or accrued hereunder, and all accrued but unpaid
interest thereon) at once immediately due and payable (and upon such
declaration, the same shall be at once immediately due and payable) and may be
collected forthwith, whether or not there has been a prior demand for payment
and regardless of the stipulated date of maturity and (ii) to exercise any
of Payee’s other rights, powers, recourses and remedies under this Note or at
law or in equity, and the same (w) shall be cumulative and concurrent, (x) may
be pursued separately, singly, successively, or concurrently against Maker or
others obligated for the repayment of this Note or any part hereof, or against
any one or more of them, at the sole discretion of Payee, (y) may be
exercised as often as occasion therefor shall arise, it being agreed by Maker
that the exercise, discontinuance of the exercise of or failure to exercise any
of the same shall in no event be construed as a waiver or release thereof or of
any other right, remedy, or recourse, and (z) are intended to be, and
shall be, nonexclusive.  If this Note, or
any part hereof, is collected by or through an attorney-at-law, Maker agrees to
pay all reasonable costs and expenses of collection, including, but not limited
to, Payee’s reasonable attorneys’ fees, whether or not any legal action shall
be instituted to enforce this Note.

 

9

 

ARTICLE
IV — SUBORDINATION

 

4.1           Subordination.  Maker covenants and agrees, and Payee by
accepting this Note agrees, that notwithstanding any other provision of this
Note, the obligations hereunder are 
hereby subordinated in right of payment and claim, to the extent and in
the manner provided in this Article IV, to the prior payment in full in
cash of all Senior Indebtedness of Maker and that the subordination provisions
set forth in this Article IV (including, without limitation, Section 4.7)
are for the benefit of and enforceable by the holders of Senior Indebtedness of
Maker.

 

4.2           Bankruptcy Proceedings.  Upon any payment or distribution of the
assets of Maker upon a total or partial liquidation, dissolution or winding up
of Maker or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to Maker or its property (each such event, if any,
herein sometimes referred to as a “Proceeding”):

 

(a)           holders of Senior
Indebtedness of Maker shall be entitled to receive payment in full in cash of
all Obligations in respect of such Senior Indebtedness before Payee is entitled
to receive any payment of principal of, or premium, if any, or interest on this
Note; and

 

(b)           until the Senior
Indebtedness of Maker (and all debt securities issued in replacement of or
exchange for such Senior Indebtedness) is paid in full in cash, any
distribution made by or on behalf of Maker to which Payee would be entitled but
for this Section 4.2 shall be made to holders of Senior Indebtedness of
Maker as their interests may appear.

 

Notwithstanding
the preceding provisions of this Section 4.2 or any other provision of
this Note, nothing herein shall prevent or in any manner restrict Payee from
receiving Permitted Junior Securities of Maker in connection with any
Proceeding.  For purposes of this Section 4.2
“paid in full” or “payment in full”, as used with respect to Senior
Indebtedness of Maker, means the receipt of cash in payment of all Obligations
in respect of such Senior Indebtedness, including the principal amount of such
Senior Indebtedness and premium, if any, on and interest thereon (including,
without limitation, any interest thereon accruing during the pendency of any
Proceeding, regardless of whether allowed or allowable in such Proceeding) to the
date of such payment.

 

4.3           Payments.  Prior to the Subordination Termination Date,
the Payee shall not accept, receive or collect (by set-off or other manner) any
payment or distribution on account of, or ask for, demand or accelerate,
directly or indirectly, this Note, and the Maker shall not make any such
payment; except that so long as no Blockage Default or Senior Indebtedness
Acceleration has occurred and is continuing and no Standstill Period is in
effect and so long as Payee has not received notice of any such events from the
administrative agent for the holders of Senior Indebtedness, Maker shall make,
in accordance with the terms of this Note, scheduled payments of principal and
interest to 

 

10

 

Payee.  Notwithstanding the preceding provisions of
this Section 4.3 or any other provision of this Note, nothing herein shall
prevent or in any manner restrict Payee from receiving Permitted Junior
Securities of Maker at any time and from time to time in respect of amounts
outstanding under this Note.

 

4.4           Funds in Trust.  If a distribution is made to Payee that
because of this Article IV should not have been made to Payee, Payee shall
hold it in trust for holders of Senior Indebtedness of Maker and pay it over to
them as their interests may appear.

 

4.5           Enforcement Actions.  At any time that Payee is not permitted to
receive payment under this Note pursuant to Section 4.3, Payee will not
commence any Enforcement Action relative to Maker.  Upon termination of any Standstill Period,
and provided no Blockage Default or Senior Indebtedness Acceleration has
occurred and is continuing, or at any time on or after the Subordination
Termination Date,  Payee may exercise any
and all rights or remedies it may have in law or equity, including without
limitation the commencement of any Enforcement Action relative to Maker.  Notwithstanding the preceding provisions of
this Section 4.5 or any other provision of this Note, no Standstill Period
may be commenced while any other Standstill Period exists or within 180 days
following the termination of any prior Standstill Period.  During any Standstill Period, the applicable
statute of limitations with respect to the enforcement of the payment of
indebtedness under this Note shall be tolled.

 

4.6           Subrogation.  No payment or distribution to the holders of
Senior Indebtedness pursuant to the provisions of this Note shall entitle Payee
to exercise any rights of subrogation in respect thereof prior to the
Subordination Termination Date, and until such time Payee shall not have any
right of subrogation to such holders of Senior Indebtedness on account of this
Note.  After the Subordination
Termination Date, and provided that no payments received by the holders of
Senior Indebtedness are voidable or must otherwise be returned, Payee shall be
subrogated to the rights of such holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness to the extent that
distributions otherwise payable to such holders of Senior Indebtedness have
been applied to the payment of the Senior Indebtedness.

 

4.7           No Amendment.  Prior to the Subordination Termination Date,
unless the Administrative Agent under each Loan Agreement  otherwise consents in writing,  Maker and Payee shall not (a) amend or
modify any of the provisions of this Article IV, (b) increase the
outstanding principal balance of this Note, (c) shorten the Maturity Date
or any other date for the payment of principal or interest, or (d) increase
interest rate applicable to this Note (excluding fluctuations in the Interest
Rate in accordance with its terms).

 

4.8           Reliance by Holders of Senior Indebtedness on
Subordination Provisions; No Waiver.

 

(a)           Payee by accepting this Note
acknowledges and agrees that these subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of Senior
Indebtedness, whether created or acquired before or after the 

 

11

 

issuance of this Note, to acquire or to hold
such Senior Indebtedness, and each holder of Senior Indebtedness will be deemed
conclusively to have relied on these subordination provisions in acquiring and
holding such Senior Indebtedness.

 

(b)           The holders of Senior Indebtedness may, at any time
and from time to time, without the consent of or notice to Payee, without
incurring any liability or responsibility to Payee, and without impairing the
rights of holders of Senior Indebtedness under these subordination provisions,
do any of the following:

 

(1)        change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, Senior Indebtedness or any
instrument evidencing the same or any agreement under which Senior Indebtedness
is outstanding or secured;

 

(2)        sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Senior Indebtedness;

 

(3)        release any person liable in any manner for the
payment of Senior Indebtedness; or

 

(4)        exercise or refrain from exercising any rights
against the Maker and any other person.

 

ARTICLE
V — COVENANTS

 

5.1           Information. Maker shall
deliver to Payee:

 

(a)           as soon as available and in
any event within 90 days after the end of each fiscal year of Maker a
consolidated balance sheet of Maker and its Subsidiaries as of the end of such
fiscal year and the related consolidated statements of income, changes in
shareholders’ equity, and cash flows for such fiscal year, setting forth in
each case in comparative form the figures for the previous fiscal year, all
prepared in accordance with generally accepted accounting principles applied on
a consistent basis and certified by independent public accountants of
nationally recognized standing;

 

(b)           as soon as available and in
any event within 45 days after the end of each of the first three quarters of
each fiscal year of Maker a consolidated balance sheet of Maker and its
Subsidiaries as of the end of such quarter and the related consolidated
statement of income for such quarter and for the portion of Maker’s fiscal year
then ended, and the related consolidated statements of cash flows and changes
in shareholders’ equity for the portion of the fiscal year then ended, in each
case setting forth in comparative form, as applicable, the figures for the
corresponding quarter and the corresponding portion of Maker’s previous fiscal
year, all in reasonable detail and duly certified (subject to normal year-end
adjustments) by the chief financial officer of Maker as having been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis;

 

12

 

(c)           promptly upon Maker’s
obtaining knowledge of any default under this Note or any “default” or “event
of default” under the Loan Agreements, a certificate of the chief financial
officer of Maker setting forth the details thereof and any action that Maker is
taking or proposes to take with respect thereto; and

 

(d)           from time to time such
additional information regarding the financial condition or business of Maker
and its Subsidiaries as Payee may reasonably request.  

 

Financial
statements required to be delivered pursuant to clauses (i) and (ii) of
this Paragraph 4(a) (to the extent any such financial statements are
included in materials otherwise filed with the Securities and Exchange
Commission) may be delivered electronically and if so delivered, shall be
deemed to have been delivered on the date on which Maker posts such documents,
or provides a link thereto on Maker’s website on the Internet at the website
address listed beneath its signature hereto; provided that Maker shall notify
Payee of the posting of any such financial statements.

 

5.2           Negative Covenants.  Maker shall not, nor shall it permit any of
its Subsidiaries to:

 

(a)           liquidate, wind-up or
dissolve itself, or permit or suffer any liquidation or dissolution, or sell
all or substantially all of its assets; or

 

(b)           incur or permit the
aggregate principal amount of all Senior Indebtedness outstanding at any time
to exceed the Agreed Bank Limit.

 

5.3           Representations and Warranties.  Maker represents and warrants to Payee that:

 

(a)           Maker is not in default in
the performance of any of its covenants and agreements contained in any Loan
Agreement.

 

(b)           Maker is duly organized,
validly existing and, as applicable, in good standing under the laws of its
jurisdiction of organization, having all powers required to carry on its
business and enter into and carry out the transactions contemplated hereby.

 

(c)           Maker has duly taken all
action necessary to authorize the execution and delivery by it of this Note and
to authorize the consummation of the transactions contemplated hereby and the
performance of its obligations hereunder.

 

(d)           The execution and delivery
by Maker of this Note, the performance by Maker of its obligations hereunder,
and the consummation of the transactions contemplated hereby, do not and will
not (a) conflict with, violate or result in a breach of any provision of (i) any
law, (ii) the organizational documents of Maker, or (iii) any material
agreement, judgment, license, order or permit applicable to or binding upon
Maker, or (b) result in the acceleration of any indebtedness owed by
Maker.  Except for consents obtained
under the Loan Agreements, no consent, approval, authorization or order of, and
no notice to or filing with, any governmental authority or third party is
required in connection with the 

 

13

 

execution,
delivery or performance by Maker of this Note or to consummate any transactions
contemplated hereby.

 

(e)           This Note is the legal,
valid and binding obligation of Maker, enforceable in accordance with its terms
except as such enforcement may be limited by bankruptcy, insolvency or similar
laws of general application relating to the enforcement of creditors’ rights
and general equitable principles.

 

(f)            Upon giving effect to the
issuance of this Note and the consummation of the transactions contemplated
hereby, (i) Maker will not be insolvent (as such term is defined in the
United States Bankruptcy Code, Title 11 U.S.C., as amended (the “Code”),
and with all terms used in this subsection that are defined in the Code having
the meanings ascribed to those terms in the text and interpretive case law
applicable to the Code), (ii) the sum of Maker’s debts, including without
limitation absolute and contingent liabilities, or guarantees thereof, shall
not exceed the value of Maker’s assets, at a fair valuation, and (iii) Maker’s
capital is not unreasonably small for the business in which Maker is engaged
and intends to be engaged.  Maker has not
incurred, nor does Maker intend to incur or believe that it will incur, debts
which will be beyond its ability to pay as such debts mature.

 

ARTICLE
VI — GENERAL PROVISIONS

 

6.1           No Waiver; Amendment. No failure to
accelerate the indebtedness evidenced by this Note by reason of an Event of
Default hereunder, acceptance of a partial or past due payment, or indulgences
granted from time to time shall be construed (i) as a novation of this
Note or as a reinstatement of the indebtedness evidenced by this Note or as a
waiver of such right of acceleration or of the right of Payee thereafter to
insist upon strict compliance with the terms of this Note, or (ii) to
prevent the exercise of such right of acceleration or any other right granted
under this Note or by any applicable laws. 
Maker hereby expressly waives and relinquishes the benefit of any
statute or rule of law or equity now provided, or which may hereafter be
provided, which would produce a result contrary to or in conflict with the
foregoing.  The failure to exercise any
remedy available to Payee shall not be deemed to be a waiver of any rights or
remedies of Payee under this Note or at law or in equity.  No extension of the time for the payment of this
Note or any installment due hereunder, made by agreement with any person now or
hereafter liable for the payment of this Note, shall operate to release,
discharge, modify, change or affect the original liability of Maker under this
Note, either in whole or in part, unless Payee specifically, unequivocally and
expressly agrees otherwise in writing. This Note may not be changed orally, but
only by an agreement in writing signed by the party against whom enforcement of
any waiver, change, or modification is sought.

 

6.2           WAIVERS.  MAKER AND ANY ENDORSERS OR GUARANTORS HEREOF
SEVERALLY WAIVE AND RELINQUISH PRESENTMENT FOR PAYMENT, DEMAND, NOTICE OF
NONPAYMENT OR NONPERFORMANCE, PROTEST, NOTICE OF PROTEST, NOTICE OF INTENT TO
ACCELERATE, NOTICE OF ACCELERATION OR ANY OTHER 

 

14

 

NOTICES
OR ANY OTHER ACTION. MAKER AND ANY ENDORSERS OR GUARANTORS HEREOF SEVERALLY
WAIVE AND RELINQUISH, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO THE
BENEFITS OF ANY MORATORIUM, REINSTATEMENT, MARSHALING, FORBEARANCE, VALUATION,
STAY, EXTENSION, REDEMPTION, APPRAISEMENT, EXEMPTION AND HOMESTEAD NOW OR
HEREAFTER PROVIDED BY THE CONSTITUTION AND LAWS OF THE UNITED STATES OF AMERICA
AND OF EACH STATE THEREOF, BOTH AS TO ITSELF AND IN AND TO ALL OF ITS PROPERTY,
REAL AND PERSONAL, AGAINST THE ENFORCEMENT AND COLLECTION OF THE OBLIGATIONS
EVIDENCED BY THIS NOTE.

 

6.3           Interest Provisions.

 

(a)           Savings Clause.  It is expressly stipulated and agreed to be
the intent of Maker and Payee at all times to comply strictly with the
applicable Texas law governing the maximum rate or amount of interest payable
on the indebtedness evidenced by this Note (or applicable United States federal
law to the extent that it permits Payee to contract for, charge, take, reserve
or receive a greater amount of interest than under Texas law). If the
applicable law is ever judicially interpreted so as to render usurious any
amount (i) contracted for, charged, taken, reserved or received pursuant
to this Note, (ii) contracted for, charged, taken, reserved or received by
reason of Payee’s exercise of the option to accelerate the maturity of this
Note, or (iii) Maker will have paid or Payee will have received by reason
of any voluntary prepayment by Maker of this Note, then it is Maker’s and
Payee’s express intent that all amounts charged in excess of the Maximum Lawful
Rate shall be automatically canceled, ab initio, and
all amounts in excess of the Maximum Lawful Rate theretofore collected by Payee
shall be credited on the principal balance of this Note (or, if this Note has
been or would thereby be paid in full, refunded to Maker), and the provisions
of this Note shall immediately be deemed reformed and the amounts thereafter
collectible hereunder and thereunder reduced, without the necessity of the
execution of any new document, so as to comply with the applicable law, but so
as to permit the recovery of the fullest amount otherwise called for hereunder
and thereunder; provided, however, if this Note has been paid in full before
the end of the stated term of this Note, then Maker and Payee agree that Payee
shall, with reasonable promptness after Payee discovers or is advised by Maker
that interest was received in an amount in excess of the Maximum Lawful Rate,
either refund such excess interest to Maker and/or credit such excess interest
against this Note then owing by Maker to Payee. 
Maker hereby agrees that as a condition precedent to any claim seeking
usury penalties against Payee, Maker will provide written notice to Payee,
advising Payee in reasonable detail of the nature and amount of the violation,
and Payee shall have sixty (60) days after receipt of such notice in which to
correct such usury violation, if any, by either refunding such excess interest
to Maker or crediting such excess interest against this Note then owing by
Maker to Payee.  All sums contracted for,
charged, taken, reserved or received by Payee for the use, forbearance or
detention of any debt evidenced by this Note shall, to the extent permitted by
applicable law, be amortized or spread, using the actuarial method, throughout
the stated term of this Note (including any and all renewal and extension 

 

15

 

periods)
until payment in full so that the rate or amount of interest on account of this
Note does not exceed the Maximum Lawful Rate from time to time in effect and
applicable to this Note for so long as debt is outstanding.  In no event shall the provisions of Chapter
346 of the Texas Finance Code (which regulates certain revolving credit loan
accounts and revolving triparty accounts) apply to this Note.  Notwithstanding anything to the contrary
contained herein, it is not the intention of Payee to accelerate the maturity
of any interest that has not accrued at the time of such acceleration or to
collect unearned interest at the time of such acceleration.

 

(b)           Ceiling Election. To the extent
that Payee is relying on Chapter 303 of the Texas Finance Code to determine the
Maximum Lawful Rate payable on the Note, Payee will utilize the weekly ceiling
from time to time in effect as provided in such Chapter 303, as amended. To the
extent United States federal law permits Payee to contract for, charge, take,
receive or reserve a greater amount of interest than under Texas law, Payee
will rely on United States federal law instead of such Chapter 303 for the
purpose of determining the Maximum Lawful Rate. Additionally, to the extent
permitted by applicable law now or hereafter in effect, Payee may, at its option
and from time to time, utilize any other method of establishing the Maximum
Lawful Rate under such Chapter 303 or under other applicable law by giving
notice, if required, to Maker as provided by applicable law now or hereafter in
effect.

 

(c) Definitions.

 

(i)            As used hereunder, the term
“Maximum Lawful Rate” shall mean the maximum lawful rate of interest
which may be contracted for, charged, taken, received or reserved by Payee in
accordance with the applicable laws of the State of Texas (or applicable United
States federal law to the extent that such law permits Payee to contract for,
charge, take, receive or reserve a greater amount of interest than under Texas
law), taking into account all Charges made in connection with the transaction
evidenced by this Note.

 

(ii)           As used hereunder, the term
“Charges” shall mean all fees, charges and/or any other things of value,
if any, contracted for, charged, taken, received or reserved by Payee in
connection with the transactions relating to this Note, which are treated as
interest under applicable law.

 

6.4           Use of Funds.  Maker hereby warrants, represents and
covenants that (i) the debt evidenced by this Note has been incurred by
Maker solely for the purpose of acquiring or carrying on a business or commercial
enterprise, (ii) all proceeds of this Note shall be used only for business
and commercial purposes, and (iii) no funds disbursed hereunder shall be
used for personal, family, agricultural or household purposes.

 

6.5           WAIVER OF JURY TRIAL.  MAKER, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, HEREBY KNOWINGLY, INTENTIONALLY, IRREVOCABLY, UNCONDITIONALLY
AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES,
RELINQUISHES AND FOREVER FORGOES THE 

 

16

 

RIGHT
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR
IN ANY WAY RELATING TO THIS NOTE OR ANY CONDUCT, ACT OR OMISSION OF PAYEE OR
MAKER, OR ANY OF THEIR DIRECTORS, OFFICERS, PARTNERS, MEMBERS, EMPLOYEES,
AGENTS OR ATTORNEYS, OR ANY OTHER PERSONS AFFILIATED WITH PAYEE OR MAKER, IN
EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.

 

6.6           Governing Law; Submission to
Jurisdiction.  This Note
is executed and delivered as an incident to a transaction negotiated and
consummated in Harris County, Texas, and shall be governed by and construed in
accordance with the laws of the State of Texas. 
Maker, for itself and its successors and assigns, hereby irrevocably (i) submits
to the nonexclusive jurisdiction of the state and federal courts in Texas, (ii) waives,
to the fullest extent permitted by law, any objection that it may now or in the
future have to the laying of venue of any litigation arising out of or in
connection with this Note brought in the District Court of Harris County,
Texas, or in the United States District Court for the Southern District of
Texas, and (iii) waives any objection it may now or hereafter have as to
the venue of any such action or proceeding brought in such court or that such
court is an inconvenient forum.  Maker
hereby agrees that service of process upon Maker may be made by certified or
registered mail, return receipt requested, at its address specified herein.  Nothing herein shall affect the right of
Payee to serve process in any other manner permitted by law or shall limit the
right of Payee to bring any action or proceeding against Maker or with respect
to any of Maker’s property in courts in other jurisdictions. The scope of each
of the foregoing waivers is intended to be all encompassing of any and all
disputes that may be filed in any court and that relate to the subject matter
of this transaction, including, without limitation, contract claims, tort
claims, breach of duty claims, and all other common law and statutory claims.
Maker acknowledges that these waivers are a material inducement to Payee’s
agreement to enter into this Note, that Payee has already relied on these
waivers and will continue to rely on each of these waivers in related future
dealings. The waivers in this Section 6.6 are irrevocable, meaning that
they may not be modified either orally or in writing, and these waivers apply
to any future renewals, extensions, amendments, modifications, or replacements
of this Note.  In connection with any
litigation, this Note may be filed as a written consent to a trial by the
court.

 

6.7           Counting of Days.  If any time period referenced hereunder ends
on a day other than a Business Day, such time period shall be deemed to end on
the next succeeding Business Day.

 

6.8           Payee’s Discretion.  Whenever pursuant to this Note, Payee
exercises any right given to it to approve or disapprove, or any arrangement or
term is to be satisfactory to Payee, the decision of Payee to approve or
disapprove or to decide whether arrangements or terms are satisfactory or not
satisfactory shall be (except as is otherwise specifically and expressly
provided herein to the contrary) in the sole discretion of Payee and shall be
final and conclusive.

 

17

 

6.9           Successors and Assigns. The terms and
provisions hereof shall be binding upon and inure to the benefit of Maker and
Payee and their respective heirs, executors, legal representatives, successors,
successors-in-title and assigns, whether by voluntary action of the parties, by
operation of law or otherwise, and all other persons claiming by, through or
under them, except that Maker may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of
Payee.  The terms “Maker” and “Payee” as
used hereunder shall be deemed to include their respective heirs, executors,
legal representatives, successors, successors-in-title and assigns, whether by
voluntary action of the parties, by operation of law or otherwise, and all
other persons claiming by, through or under them.

 

6.10         Time is of the Essence.  Time is of the essence with respect to all
provisions of this Note.

 

6.11        Headings. The Article,
Section, and Subsection entitlements hereof are inserted for convenience of
reference only and shall in no way alter, modify, define, limit, amplify or be
used in construing the text, scope or intent of such Articles, Sections, or
Subsections or any provisions hereof.

 

6.12         Notices.  All notices or other communications required
or permitted to be given pursuant to this Note shall be in writing and shall be
considered as properly given if (i) mailed by first class United States
mail, postage prepaid, registered or certified with return receipt requested, (ii) by
delivering same in person to the intended addressee, (iii) by delivery to
a reputable independent third party commercial delivery service for same day or
next day delivery and providing for evidence of receipt at the office of the
intended addressee, or (iv) by prepaid telegram, telex, telecopier or
telefacsimile transmission to the addressee. 
Notice so mailed shall be effective upon its deposit with the United
States Postal Service or any successor thereto; notice sent by such a
commercial delivery service shall be effective upon delivery to such commercial
delivery service; notice given by personal delivery shall be effective only if
and when received by the addressee; and notice given by other means shall be
effective only if and when received at the office or designated place or
machine of the intended addressee. For purposes of notice, the addresses of the
parties shall be as set forth herein; provided, however, that either party
shall have the right to change its address for notice hereunder to any other location
within the continental United States by the giving of thirty (30) days’ prior
notice to the other party in the manner set forth herein.

 

6.13         Severability.  If any provision of this Note or the
application thereof to any person or circumstance shall, for any reason and to
any extent, be invalid or unenforceable, then neither the remainder of this
Note nor the application of such provision to other persons or circumstances
nor the other instruments referred to herein shall be affected thereby, but rather
shall be enforced to the greatest extent permitted by applicable law.

 

6.14         Right of Setoff.  This Note represents part of the
consideration for the purchase by Maker of the “Assets” (as defined in the
Agreement) pursuant to the terms of the Agreement.  Maker shall have and Payee hereby grants to
Maker the right to setoff any 

 

18

 

claims
by Maker for indemnity and/or for breach of warranty arising under the
Agreement against any amount of principal and interest due in respect of this
Note; provided that such right to setoff shall be available only with respect
to any such claims that have been adjudicated to be owing to Maker by a court
of competent jurisdiction by final and nonappealable judgment.  This right of setoff shall not be deemed to
have been waived by any act or conduct on the part of Maker, or by any neglect
to exercise such right of setoff or to enforce such lien, or by any delay in so
doing, and such right of setoff shall continue in full force and effect until
such right of setoff is specifically waived or released by an instrument in
writing executed by Maker.

 

6.15         Costs of Collection.  If any holder of this Note retains an
attorney-at-law in connection with any Event of Default or at maturity or to
collect, enforce, or defend this Note or any part hereof in any lawsuit or in
any probate, reorganization, bankruptcy or other proceeding, or if Maker sues
any holder in connection with this Note and does not prevail, then Maker agrees
to pay to each such holder, in addition to the principal balance hereof and all
interest hereon, all costs and expenses of collection or incurred by such
holder or in any such suit or proceeding, including, but not limited to,
reasonable attorneys’ fees.

 

6.16         Gender. All personal
pronouns used herein, whether used in the masculine, feminine or neuter gender,
shall include all other genders; the singular shall include the plural and vice
versa.

 

6.17         Statement of Unpaid Balance.  At any time and from time to time, Maker will
furnish promptly, upon the request of Payee, a written statement stating the
unpaid balance of the indebtedness evidenced by this Note.

 

6.18         ENTIRE AGREEMENT.  THIS NOTE CONTAINS THE FINAL, ENTIRE
AGREEMENT BETWEEN THE PARTIES HERETO RELATING TO THE SUBJECT MATTER HEREOF AND
THEREOF AND ALL PRIOR AGREEMENTS, WHETHER WRITTEN OR ORAL, RELATIVE HERETO AND
THERETO WHICH ARE NOT CONTAINED HEREIN OR THEREIN ARE SUPERSEDED AND TERMINATED
HEREBY, AND THIS NOTE MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE
PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES
HERETO.

 

[Signature page follows]

 

19

 

IN
WITNESS WHEREOF, Maker, intending to be legally bound hereby, has duly executed
this Note as of the day and year first written above.

 

	
   

  	
   

  	
  MAKER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GLOBAL
  GEOPHYSICAL SERVICES, INC.,

  
	
   

  	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address
  of Payee for purposes

  	
   

  	
   

  
	
  of
  notice hereunder:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Weinman
  GeoScience, Inc.

  	
   

  	
   

  
	
  17103
  Preston Road

  	
   

  	
   

  
	
  Suite 200

  	
   

  	
   

  
	
  Dallas,
  Texas 75248

  	
   

  	
   

  
	
  Telephone:
  (972) 818-2550

  	
   

  	
   

  
	
  Facsimile:
  (972) 818-2553

  	
   

  	
   

  

 

20Exhibit
10.17

 

WGI SUB, LLC

17103 PRESTON ROAD, SUITE
200

DALLAS, TEXAS 75248

 

May 5, 2009

 

Global Geophysical Services, Inc.

3535 Briarpark Drive, Suite 200

Houston, Texas 77042

 

Re:                             Subordinated
Promissory Note dated as of December 10, 2008 (as amended, supplemented or
otherwise modified, the “Note”), by and
among GLOBAL GEOPHYSICAL SERVICES, INC., a Delaware corporation (“Maker”), and WGI SUB, LLC, a Texas limited liability company
(“Payee”)

 

Gentlemen:

 

Reference is made to the Note.  Terms that are defined in the Note and not
otherwise defined herein are used herein with the meanings given them in the
Note.

 

Maker has requested that Payee extend the
required payments of principal and accrued interest that are due and payable on
June 5, 2009.  Accordingly, Maker
and Payee hereby agree that the payment in respect of the Notes due and payable
on June 5, 2009 is hereby extended to June 15, 2009.

 

In order to induce Payee to enter into this
Letter, Maker represents and warrants to Payee that as of the date of this
Letter, no Blockage Default or Senior Indebtedness Acceleration has occurred
and is continuing and no Standstill Period is in effect.

 

The Note is hereby ratified and confirmed in
all respects.  Except as expressly set
forth above, the execution, delivery and effectiveness of this Letter shall not
operate as a waiver of any right, power or remedy of Maker or Payee under the
Note, nor constitute a waiver of any provision of the Note.

 

THIS LETTER AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.

 

This Letter may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.

 

 

Please execute a counterpart of this Letter
in the place provided below to evidence your agreement to the foregoing and
your continuing ratification of the Note in consideration hereof, whereupon
this Letter shall become effective as of the date first written above.

 

	
   

  	
  Yours
  truly,

  
	
   

  	
   

  
	
   

  	
  WGI SUB, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Accepted
  and agreed to as of the date first written above:

  
	
   

  	
   

  
	
   

  	
  GLOBAL GEOPHYSICAL
  SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:
  P. Matthew Verghese

  
	
   

  	
   

  	
  Title:
  Senior Vice President & Chief Financial Officer

  

 

2

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