Prepared By R.R. Donnelley Financial -- Form 8-K

Exhibit No.		Description
EX-10.1		First Amendment to Loan Agreement dated September 19, 2005, between the Borrowers and Regions Bank (f/k/a Union Planters Bank, N.A.).
EX-10.2		Promissory Note dated September 19, 2005, made by the Borrowers for the benefit of Regions Bank (f/k/a Union Planters Bank, N.A.).
EX-10.3		Guaranty Agreement dated September 19, 2005, made by and between the Company and Regions Bank (f/k/a Union Planters Bank, N.A.).
EX-10.4		Security Agreement dated September 19, 2005, between Concord Technologies, LP and Regions Bank (f/k/a Union Planters Bank, N.A.).

EX-10.1 2 rrd92322_8059.htm FIRST AMENDMENT TO LOAN AGREEMENT DATED SEPTEMBER 19, 2005, BETWEEN THE BORROWERS AND REGIONS BANK (F/K/A UNION PLANTERS BANK, N.A.). Fulbright & Jaworski Document

FIRST AMENDMENT TO LOAN AGREEMENT

THIS FIRST AMENDMENT TO LOAN AGREEMENT (this "Amendment"), dated as of September 19, 2005, is between CONCORD TECHNOLOGIES, L.P., a Texas limited partnership ("Concord"), GEOSPACE ENGINEERING RESOURCES INTERNATIONAL, LP, a Texas limited partnership ("Engineering"), GEOSPACE TECHNOLOGIES, LP, a Texas limited partnership ("Geospace"), OYO INSTRUMENTS, LP, a Texas limited partnership ("Instruments"), and OYOG OPERATIONS, LP, a Texas limited partnership ("Operations", and together with Concord, Engineering, Geospace and Instruments, the "Borrowers"), jointly and severally, and REGIONS BANK (F/K/A UNION PLANTERS BANK, N.A.) ("Lender").

RECITALS:

A. Borrowers and Lender entered into that certain Loan Agreement dated as of November 22, 2004 (the "Agreement").

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

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

ARTICLE I.

Definitions

Section 1.1. Definitions. Capitalized terms used in this Amendment, to the extent not otherwise defined herein, shall have the meanings given to such terms in the Agreement, as amended hereby.

ARTICLE II.

Amendments

Section 2.1. Amendment to Certain Definitions. (a) Effective as of date hereof, the definition of each of the following terms contained in Section 1.1 of the Agreement is amended to read in its respective entirety as follows:

"Applicable Margin" means, for the Levels described below, the percentage amounts set forth below.

Level I

Level II

Level III

LIBOR Margin

2.00%

1.75%

1.50%

Prime Rate Margin

-0.50%

-0.85%

-1.35%

Level I applies when the Debt Service Coverage Ratio is less than or equal to 1.50 to 1.00.

Level II applies when the Debt Service Coverage Ratio is greater than 1.50 to 1.00 but less than or equal to 1.75 to 1.00.

Level III applies when the Debt Service Coverage Ratio is greater than 1.75 to 1.00.

The applicable Level shall be adjusted, to the extent applicable, effective sixty (60) days after the end of each quarter (or, in the case of any change reflected by the audited financial statements delivered pursuant to Section 7.1(a), one hundred twenty (120) days after the end of any fiscal year) based on the Debt Service Coverage Ratio tested for the period ending on the last day of such quarter or such fiscal year, as applicable; provided that if Borrowers fail to deliver the financial statements required by Section 7.1(a) or (b), as applicable, or the related No Default Certificate required by Section 7.1(c) by the sixtieth (60th) day after the end of any quarter (or, if applicable, the one hundred twentieth (120^th) day after the end of any fiscal year) Level I shall apply until such financial statements and No Default Certificate are delivered.

"Commitment" means the obligation of Lender to make Advances and issue Letters of Credit hereunder in an aggregate principal amount at any time outstanding up to but not exceeding $20,000,000.00.

"Debt Service Coverage Ratio" means for Parent and its Subsidiaries, on a consolidated basis, as of any date (a) EBITDA for the relevant period ended as of such date, divided by the sum of (b) Current Maturities of Long Term Debt as of such date, plus (c) Interest Expense for the relevant period ended as of such date, plus (d) Distributions for the relevant period ended as of such date. The Debt Service Coverage Ratio will be calculated and tested as of the last day of each fiscal quarter of Borrower on a cumulative basis for the four quarters ended as of such date (a "rolling four quarter" basis).

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

"Accounts" means the aggregate of all accounts receivable of Parent and its Subsidiaries in accordance with GAAP.

"Asset Coverage Ratio" means, at any time, for Parent and its Subsidiaries, on a consolidated basis, (a) the sum of (i) eighty percent (80%) of the value of the Accounts, plus (ii) eighty percent (80%) of the value of the Notes Receivable, plus (iii) fifty percent (50%) of the value of Inventory, plus (iii) fifty percent (50%) of the value of Net Fixed Assets, divided by (b) Funded Debt.

"Distribution" means (a) any distribution, dividend or any other payment or distribution (in cash, property or obligations) made by Parent on account of its capital stock, (b) any redemption, purchase, retirement or other acquisition by Parent of any of its capital stock, or (c) the establishment of any fund for any such distribution, dividend, payment or acquisition.

"Funded Debt" means, at any time, for Parent and its Subsidiaries, on a consolidated basis (and without duplication), the sum of (a) all indebtedness for borrowed money, whether or not evidenced by bonds, debentures, notes or similar instruments, including the Note (b) all Capital Lease Obligations, (c) all obligations to pay the deferred purchase price of property or services (but excluding trade accounts payable or trade notes in the ordinary course of business that are not past due by more than 120 days), (d) all indebtedness secured by a Lien on the property of Parent or its Subsidiaries and (e) the Letter of Credit Liabilities.

"Inventory" means all inventory of raw materials, work-in-process and finished goods of Parent and its Subsidiaries in accordance with GAAP.

"Net Fixed Assets" means the value of fixed assets of Parent and its Subsidiaries as shown on the financial statements of Parent and its Subsidiaries delivered pursuant to Sections 7.1(a) and (b).

"Notes Receivable" mean all notes receivable of Parent and its Subsidiaries in accordance with GAAP.

(c) Effective as of the date hereof, the definition of the following terms shall be deleted from Section 1.1 of the Agreement:

Borrowing Base

Borrowing Base Certificate

Current Assets

Current Liabilities

Current Ratio

Domestic Receivables

Eligible Accounts

Eligible Inventory

Field Audits

Foreign Person

Foreign Receivables

SWBT

Section 2.2. Amendment to Section 2.1. Effective as of the date hereof, the first sentence contained in Section 2.1 of the Agreement is amended to read in its entirety as follows:

Subject to the terms and conditions of this Agreement, Lender agrees to make one or more Advances to Borrowers from time to time from the date hereof to and including the Termination Date in an aggregate principal amount at any time outstanding up to but not exceeding the Commitment; provided that the aggregate amount of all Advances at any time outstanding shall not exceed the Commitment minus the outstanding Letter of Credit Liabilities.

Section 2.3. Amendment to Section 2.3. Effective as of the date hereof, clause (i) contained in paragraph (a) of Section 2.3 of the Agreement is amended to read in its entirety as follows:

(i) in the case of each Advance which is a Prime Rate Advance, on the first day of each month;

Section 2.4. Amendment to Section 2.5(b). Effective as of the date hereof, the last sentence contained in Section 2.5(b) of the Agreement is deleted in its entirety.

Section 2.5. Amendment to Section 2.7. Effective as of the date hereof, Section 2.7 of the Agreement is amended to read in its entirety as follows:

Section 2.7. Intentionally Deleted.

Section 2.6. Amendment to Section 2.7. Effective as of the date hereof, the reference to "Borrowing Base" contained in Section 2.7 of the Agreement is amended to read "Commitment".

Section 2.7. Amendment to Section 2.8. Effective as of the date hereof, the first sentence contained in Section 2.8 of the Agreement is amended to read in its entirety as follows:

Subject to the terms and conditions of this Agreement, Lender agrees to issue one or more Letters of Credit for the account of Borrowers from time to time from the date hereof to and including the Termination Date; provided, however, that the outstanding Letter of Credit Liabilities shall not at any time exceed the Commitment minus the outstanding Advances.

Section 2.8. Amendments to Section 2.9. (a) Effective as of the date hereof, the penultimate sentence contained in Section 2.9 of the Agreement is amended to read in its entirety as follows:

Each request for a Letter of Credit shall constitute a representation by Borrowers to Lender that (a) the sum of (i) the outstanding Advances plus (ii) the Letter of Credit Liabilities plus (iii) the face amount of the requested Letter of Credit does not exceed the Commitment, and (b) no Event of Default exists.

(b) Effective as of the date hereof, the last sentence contained in Section 2.9 of the Agreement is deleted in its entirety.

Section 2.9. Amendment to Section 4.1(a). Effective as of the date hereof, Section 4.1(a) of the Agreement is amended to read in its entirety as follows:

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

Section 2.10. Amendment to Section 7.1. (a) Effective as of the date hereof, paragraphs (d) and (e) contained in Section 7.1 of the Agreement are amended to read in their entirety as follows:

(d) Intentionally Deleted.

(e) Intentionally Deleted.

(b) Effective as of the date hereof, paragraph (f) contained in Section 7.1 of the Agreement is amended to read in its entirety as follows:

(f) Upon request from Lender, which request will not be made more than once each calendar quarter unless an Event of Default is continuing, Borrower shall deliver to Lender:

(i) Accounts Receivable Reports. Aged accounts receivable reports for Borrowers certified by an officer of each Borrower acceptable to Lender.

(ii) Inventory Report. An inventory report certified by an officer of each Borrower acceptable to Lender.

(iii) Fixed Assets Report. A fixed assets report certified by an officer of each Borrower acceptable to Lender.

Section 2.11. Amendment to Section 7.6. Effective as of the date hereof, Section 7.6 of the Agreement is amended to read in its entirety as follows:

Section 7.6. Inspection. (a) At any reasonable time and from time to time and upon reasonable prior notice from Lender, each Borrower will permit, and will cause each Guarantor and each Subsidiary to permit, representatives of Lender to examine and make copies of the books and records of, and visit and inspect the properties or assets of Borrowers, Guarantors and any Subsidiary and to discuss the business, operations, and financial condition of any such Persons with their respective officers and employees and with their independent certified public accountants.

Section 2.12. Amendment to Section 8.2. Effective as of the date hereof, clause (b) contained in Section 8.2 of the Agreement is amended to read in its entirety as follows:

(b) purchase money Liens securing Debt permitted by Section 8.1(b), which Liens cover only the assets financed with the Debt permitted by Section 8.1(b), but not the Collateral or the machinery, equipment, furniture or fixtures of any Guarantor or any Subsidiary,

Section 2.13. Amendment to Section 8.3. Effective as of the date hereof, Section 8.3 of the Agreement is amended to read in its entirety as follows:

Section 8.3. Intentionally Deleted.

Section 2.14. Amendment to Section 8.4. Effective as of the date hereof, clause (c) contained in Section 8.4 of the Agreement is amended to read in its entirety as follows:

(c) sell, lease, assign, transfer or otherwise dispose of substantially all of its assets, except dispositions of inventory in the ordinary course of business; provided that Borrowers will and will cause each Guarantor and each Subsidiary to, notify Lender of any sale, liquidation or other disposition of assets ("Disposition") the proceeds of which are in excess of $750,000.00 during any month within five (5) Business Days following any such Disposition, except that Borrowers shall not be required to notify Lender of Dispositions of rental equipment in the ordinary course of business,

Section 2.15. Addition of Section 8.12. Effective as of the date hereof, Section 8.12 shall be added to the Agreement, and shall read in its entirety as follows:

Section 8.12. Capital Expenditures. No Borrower will permit the aggregate capital expenditures of Borrowers, Guarantors and their Subsidiaries to exceed $8,000,000.00 during any fiscal year.

Section 2.16. Amendment to Article IX. Effective as of the date hereof, Article IX of the Agreement is amended to read in its entirety as follows:

ARTICLE IX.

Financial Covenants

Borrowers covenant and agree that, as long as the Obligations or any part thereof are outstanding or Lender has any Commitment hereunder, Borrowers will observe and perform, and will cause Parent and its Subsidiaries to observe and perform, the financial covenants set forth below, unless Lender shall otherwise consent in writing.

Section 9.1. Tangible Net Worth. During (a) the period from August 31, 2005 through September 30, 2006, Parent will maintain Tangible Net Worth in an amount not less than $50,000,000.00, and (b) each twelve month period from October 1 through the next September 30, commencing with the twelve month period beginning on October 1, 2006 and ending on September 30, 2007, Parent will maintain Tangible Net Worth in an amount not less than the sum of (i) $50,000,000.00 plus (ii) fifty percent (50%) of Net Income for each fiscal year of Parent which has been completed as of the date of such calculation, commencing with the fiscal year ending on September 30, 2006; provided, however that for any fiscal year for which Net Income was less than zero, Net Income for such fiscal year shall be assumed to be zero ( and shall be calculated as zero for such fiscal year). Tangible Net Worth shall be calculated and tested quarterly as of the last day of each fiscal quarter of Parent.

Section 9.2. Asset Coverage Ratio. Parent will at all times maintain an Asset Coverage Ratio of not less than 1.50 to 1.00. The Asset Coverage Ratio shall be calculated and tested quarterly as of the last day of each fiscal quarter of Parent.

Section 9.3. Ratio of Total Liabilities to Tangible Net Worth. Parent will at all times maintain a Ratio of Total Liabilities to Tangible Net Worth of not greater than 0.65 to 1.00. The Ratio of Total Liabilities to Tangible Net Worth shall be calculated and tested quarterly as of the last day of each fiscal quarter of Parent.

Section 9.4. Debt Service Coverage Ratio. Borrower will at all times maintain a Debt Service Coverage Ratio of not less than 1.25 to 1.00.

Section 2.17. Amendment to Exhibits. Effective as of the date hereof, (a) Exhibit "A" to the Agreement (Note) is amended to conform in its entirety to Annex "A" to this Amendment, (b) Exhibit "B" to the Agreement (Security Agreement-Concord) is amended to conform in its entirety to Annex "B" to this Amendment, (c) Exhibit "C" to the Agreement (Security Agreement-Engineering) is amended to conform in its entirety to Annex "C" to this Amendment, (d) Exhibit "D" to the Agreement (Security Agreement-Geospace) is amended to conform in its entirety to Annex "D" to this Amendment, (e) Exhibit "E" to the Agreement (Security Agreement-Instruments) is amended to conform in its entirety to Annex "E" to this Amendment, (f) Exhibit "F" to the Agreement (Security Agreement-Operations) is amended to conform in its entirety to Annex "F" to this Amendment, (g) Exhibit "G" to the Agreement (Guaranty-General Partner) is amended to conform in its entirety to Annex "G" to this Amendment, (h) Exh ibit "H" to the Agreement (Guaranty-Limited Partner) is amended to conform in its entirety to Annex "H" to this Amendment, (i) Exhibit "I" to the Agreement (Guaranty-Parent) is amended to conform in its entirety to Annex "I" to this Amendment, (j) Exhibit "K" to the Agreement (Advance Request Form) is amended to conform in its entirety to Annex "J" to this Amendment, (k) Exhibit "L" to the Agreement (Borrowing Base Certificate) is hereby deleted in its entirety, (l) Exhibit "M" to the Agreement (No Default Certificate) is amended to conform in its entirety to Annex "L" to this Amendment.

ARTICLE III

Conditions Precedent

Section 3.1. Conditions. The effectiveness of this Amendment is subject to the receipt by Lender of the following in form and substance satisfactory to Lender:

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

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

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

(d) Governmental Certificates - Parent. Certificates issued by the appropriate government officials of (i) the state of incorporation of Parent as to the existence and good standing of Parent and (ii) the state of Texas as to the existence and good standing of Parent as a foreign corporation in such state.

(e) Certificate - Each Partner. A certificate of a Manager or another officer of each Partner acceptable to Lender certifying (i) resolutions of the Members of such Partner which authorize the execution, delivery and performance by such Partner of the Guaranty Agreement to which such Partner is a party and the other Loan Documents to which such Partner is or is to be a party, and (ii) the names of the Managers or other officers of such Partner authorized to sign the Guaranty Agreement to which such Partner is a party and the other Loan Documents to which such Partner is or is to be a party together with specimen signatures of such Persons.

(f) Governmental Certificates - Each Partner. Certificates issued by the appropriate government officials of (i) the state of Delaware as to the existence and good standing of General Partner and (ii) the state of Nevada as to the existence and good standing of Limited Partner.

(g) Note. The Note executed by Borrowers.

(h) Security Agreements. The Security Agreements executed by each Borrower, respectively.

(i) Guaranty Agreements. The Guaranty Agreements executed by each Guarantor, respectively.

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

Section 3.2. Additional Conditions. The effectiveness of this Amendment is also subject to the satisfaction of the additional conditions precedent that the representations and warranties contained herein and in all other Loan Documents, as amended hereby, shall be true and correct as of the date hereof as if made on the date hereof, all proceedings, corporate or otherwise, taken in connection with the transactions contemplated by this Amendment and all documents, instruments and other legal matters incident thereto shall be satisfactory to Lender, and no Event of Default or Unmatured Event of Default shall have occurred and be continuing.

ARTICLE IV.

Ratifications, Representations, and Warranties

Section 4.1. Ratifications. The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions set forth in the Agreement and except as expressly modified and superseded by this Amendment, the terms and provisions of the Agreement are ratified and confirmed and shall continue in full force and effect. Borrowers and Lender agree that the Agreement as amended hereby shall continue to be the legal, valid and binding obligation of such Persons enforceable against such Persons in accordance with its terms.

Section 4.2. Representations, Warranties and Agreements. Each Borrower hereby represents and warrants to Lender that the execution, delivery, and performance of this Amendment and any and all other Loan Documents executed or delivered in connection herewith have been authorized by all requisite action on the part of such Borrower and will not violate the Organizational Documents of such Borrower, the representations and warranties contained in the Agreement as amended hereby, and all other Loan Documents are true and correct on and as of the date hereof as though made on and as of the date hereof, no Event of Default or Unmatured Event of Default has occurred and is continuing, such Borrower is in full compliance with all covenants and agreements contained in the Agreement as amended hereby, such Borrower is indebted to Lender pursuant to the terms of the Note, as the same may have been renewed, modified, extended and rearranged, including, without limitation, renewals, modifications and extensions made pursuant to this Amendment, the liens, security interests, encumbrances and assignments created and evidenced by the Loan Documents are, respectively, valid and subsisting liens, security interests, encumbrances and assignments and secure the Note as the same may have been renewed, modified or rearranged, including, without limitation, renewals, modifications and extensions made pursuant to this Amendment, and such Borrower has no claims, credits, offsets, defenses or counterclaims arising from the Loan Documents or Lender's performance under the Loan Documents.

ARTICLE V.

Miscellaneous

Section 5.1. Survival of Representations and Warranties. All representations and warranties made in this Amendment or any other Loan Documents including any Loan Document furnished in connection with this Amendment shall fully survive the execution and delivery of this Amendment and the other Loan Documents, and no investigation by Lender or any closing shall affect the representations and warranties or the right of Lender to rely on them.

Section 5.2. Reference to Agreement. Each of the Loan Documents, including the Agreement and any and all other agreements, documents, or instruments now or hereafter executed and delivered pursuant to the terms hereof or pursuant to the terms of the Agreement, as amended hereby, are hereby amended so that any reference in such Loan Documents to the Agreement shall mean a reference to the Agreement, as amended hereby.

Section 5.3. Expenses of Lender. As provided in the Agreement, Borrowers agree to pay on demand all reasonable costs and expenses incurred by Lender in connection with the preparation, negotiation and execution of this Amendment and the other documents and instruments executed pursuant hereto and any and all amendments, modifications and supplements thereto, including, without limitation, the costs and fees of Lender's legal counsel, and all reasonable costs and expenses incurred by Lender in connection with the enforcement or preservation of any rights under the Agreement, as amended hereby, or any other Loan Document, including, without limitation, the costs and fees of Lender's legal counsel.

Section 5.4. Severability. Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable.

Section 5.5. APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN HOUSTON, HARRIS COUNTY, TEXAS AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

Section 5.6. Successors and Assigns. This Amendment is binding upon and shall inure to the benefit of Lender and Borrower and their respective successors and assigns, except Borrower may not assign or transfer any of its rights or obligations hereunder without the prior written consent of Lender.

Section 5.7. Counterparts. This Amendment may be executed in one or more counterparts, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same instrument.

Section 5.8. Effect of Waiver. No consent or waiver, express or implied, by Lender to or for any breach of or deviation from any covenant, condition or duty by any Borrower under this Amendment shall be deemed a consent or waiver to or of any other breach of the same or any other covenant, condition or duty.

Section 5.9. Headings. The headings, captions, and arrangements used in this Amendment are for convenience only and shall not affect the interpretation of this Amendment.

Section 5.10. ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER INSTRUMENTS, DOCUMENTS, AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT AND THE OTHER INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT, AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.

Executed as of the date first written above.

BORROWERS:

CONCORD TECHNOLOGIES, LP

By: OYOG, LLC,

its general partner

By:

Thomas T. McEntire

Vice President and

Chief Financial Officer

GEOSPACE ENGINEERING RESOURCES

INTERNATIONAL, LP

By: OYOG, LLC,

its general partner

By:

Thomas T. McEntire

Vice President and

Chief Financial Officer

GEOSPACE TECHNOLOGIES, LP

By: OYOG, LLC,

its general partner

By:

Thomas T. McEntire

Vice President and

Chief Financial Officer

OYO INSTRUMENTS, LP

By: OYOG, LLC,

its general partner

By:

Thomas T. McEntire

Vice President and

Chief Financial Officer

OYOG OPERATIONS, LP

By: OYOG, LLC,

its general partner

By:

Thomas T. McEntire

Vice President and

Chief Financial Officer

LENDER:

REGIONS BANK

By:

B. Forrest Taylor

Senior Vice President

LIST OF ANNEXES

Annex Document

A Note

B Security Agreement-Concord

C Security Agreement-Engineering

D Security Agreement-Geospace

E Security Agreement-Instruments

F Security Agreement-Operations

G Guaranty-General Partner

H Guaranty-Limited Partner

I Guaranty-Parent

J Advance Request Form

K No Default Certificate

EX-10.2 3 rrd92322_8069.htm PROMISSORY NOTE DATED SEPTEMBER 19, 2005, MADE BY THE BORROWERS FOR THE BENEFIT OF REGIONS BANK (F/K/A UNION PLANTERS BANK, N.A.). Fulbright & Jaworski Document

PROMISSORY NOTE

$20,000,000.00 Houston, Texas September 19, 2005

FOR VALUE RECEIVED, the undersigned, CONCORD TECHNOLOGIES, LP, a Texas limited partnership, GEOSPACE ENGINEERING RESOURCES INTERNATIONAL, LP, a Texas limited partnership, GEOSPACE TECHNOLOGIES, LP, a Texas limited partnership, OYO INSTRUMENTS, LP, a Texas limited partnership and OYOG OPERATIONS, LP, a Texas limited partnership, jointly and severally ("Maker"), hereby promise to pay to the order of REGIONS BANK (F/K/A UNION PLANTERS BANK, N.A.) ("Payee"), at its offices at 5005 Woodway Drive, Houston, Texas 77056, Harris County, Texas, or such other address as may be designated by Payee, in lawful money of the United States of America, the principal sum of TWENTY MILLION AND NO/100 DOLLARS ($20,000,000.00). Maker promises to pay interest on the outstanding principal balance of this note (this "Note") from day to day remaining, at a varying rate per annum which shall from day to day be equal to the lesser of (a) the Maximum Rate as defined in the Loan Agreement (hereinafter defined), or (b) the Applicable Rate as defined in the Loan Agreement. The principal balance hereof and all accrued and unpaid interest thereon shall be due and payable as provided for in the Loan Agreement.

This Note is the Note provided for in the Loan Agreement dated as of November 22, 2004, between Maker and Payee (such Loan Agreement, as amended by First Amendment to Loan Agreement dated as of September 19, 2005, and as it may be further amended is referred to herein as the "Loan Agreement").

This Note evidences Maker's obligations pursuant to the Loan Agreement to repay to Payee all Advances made by Payee to Maker pursuant to the Loan Agreement. Maker may borrow, repay and reborrow hereunder upon the terms and conditions specified in the Loan Agreement.

This Note is secured as provided in the Loan Agreement. Reference is made to the Loan Agreement for provisions for the payment and prepayment hereof, the acceleration of the maturity hereof, and definitions of terms used and not otherwise defined in this Note.

Notwithstanding anything to the contrary contained herein, no provisions of this Note shall require the payment or permit the collection of interest in excess of the Maximum Rate. If any excess of interest in such respect is herein provided for, or shall be adjudicated to be so provided, in this Note or otherwise in connection with this loan transaction, the provisions of this paragraph shall govern and prevail, and neither Maker nor the sureties, guarantors, successors or assigns of Maker shall be obligated to pay the excess amount of such interest, or any other excess sum paid for the use, forbearance or detention of sums loaned pursuant hereto. If for any reason interest in excess of the Maximum Rate shall be deemed charged, required or permitted by any court of competent jurisdiction, any such excess shall be applied as a payment and reduction of the principal of indebtedness evidenced by this Note; and, if the principal amount hereof has been paid in full, any remaining excess s hall forthwith be paid to Maker. In determining whether or not the interest paid or payable exceeds the Maximum Rate, Maker and Payee shall, to the extent permitted by applicable law, (a) characterize any non-principal payment as an expense, fee, or premium rather than as interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the entire contemplated term of the indebtedness evidenced by this Note so that the interest for the entire term does not exceed the Maximum Rate.

If default occurs in the payment of principal or interest under this Note and the applicable period for cure provided in the Loan Agreement has expired, or upon the occurrence of any other Event of Default, as such term is defined in the Loan Agreement, the holder hereof may during the continuation of such Event of Default, at its option, (a) declare the entire unpaid principal of and accrued interest on this Note immediately due and payable without notice, demand or presentment, all of which are hereby waived, and upon such declaration, the same shall become and shall be immediately due and payable, (b) foreclose or otherwise enforce all liens or security interests securing payment hereof, or any part hereof, (c) offset against this Note any sum or sums owed by the holder hereof to Maker and (d) take any and all other actions available to Payee under this Note, the Loan Agreement, the other Loan Documents (as such term is defined in the Loan Agreement) at law, in equity or otherwise. Failure of the holder hereof to exercise any of the foregoing options shall not constitute a waiver of the right to exercise the same upon the occurrence of a subsequent Event of Default.

If the holder hereof expends any effort in any attempt to enforce payment of all or any part or installment of any sum due the holder hereunder, or if this Note is placed in the hands of an attorney for collection, or if it is collected through any legal proceedings, Maker agrees to pay all costs, expenses, and fees incurred by the holder, including all reasonable attorneys' fees.

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. THIS NOTE IS PERFORMABLE IN HARRIS COUNTY, TEXAS.

Maker and each surety, guarantor, endorser, and other party ever liable for payment of any sums of money payable on this Note jointly and severally waive notice, presentment, demand for payment, protest, notice of protest and non-payment or dishonor, notice of acceleration, notice of intent to accelerate, notice of intent to demand, diligence in collecting, grace, and all other formalities of any kind, and consent to all extensions without notice for any period or periods of time and partial payments, before or after maturity, and any impairment of any collateral securing this Note, all without prejudice to the holder. The holder shall similarly have the right to deal in any way, at any time, with one or more of the foregoing parties without notice to any other party, and to grant any such party any extensions of time for payment of any of said indebtedness, or to release or substitute part or all of the collateral securing this Note, or to grant any other indulgences or forbearances whatsoever, without notice to any other party and without in any way affecting the personal liability of any party hereunder.

This Note is in renewal and extension of, but not in discharge or novation of, that certain promissory note in the original principal amount of $15,000,000.00, dated November 22, 2004, executed, jointly and severally, by Borrowers and payable to the order of Lender.

CONCORD TECHNOLOGIES, LP

By: OYOG, LLC, its general partner

By:

Thomas T. McEntire

Vice President and

Chief Financial Officer

GEOSPACE ENGINEERING RESOURCES

INTERNATIONAL, LP

By: OYOG, LLC, its general partner

By:

Thomas T. McEntire

Vice President and

Chief Financial Officer

GEOSPACE TECHNOLOGIES, LP

By: OYOG, LLC, its general partner

By:

Thomas T. McEntire

Vice President and

Chief Financial Officer

OYO INSTRUMENTS, LP

By: OYOG, LLC, its general partner

By:

Thomas T. McEntire

Vice President and

Chief Financial Officer

OYOG OPERATIONS, LP

By: OYOG, LLC, its general partner

By:

Thomas T. McEntire

Vice President and

Chief Financial Officer

EX-10.3 4 rrd92322_8070.htm GUARANTY AGREEMENT DATED SEPTEMBER 19, 2005, MADE BY AND BETWEEN THE COMPANY AND REGIONS BANK (F/K/A UNION PLANTERS BANK, N.A.). Fulbright & Jaworski Document

GUARANTY AGREEMENT

WHEREAS, the execution of this Guaranty Agreement is a condition to REGIONS BANK (F/K/A UNION BANK PLANTERS, N.A.) ("Lender") making certain loans to GEOSPACE TECHNOLOGIES, LP, a Texas limited partnership ("Geospace"), OYO INSTRUMENTS, LP, a Texas limited partnership ("Instruments"), GEOSPACE ENGINEERING RESOURCES INTERNATIONAL, LP, a Texas limited partnership ("Engineering"), CONCORD TECHNOLOGIES, LP, a Texas limited partnership ("Concord"), and OYOG OPERATIONS, LP, a Texas limited partnership ("Operations" and together with Geospace, Instruments, Engineering and Concord, collectively hereinafter referred to as the "Borrowers"), pursuant to that certain Loan Agreement dated as of November 22, 2004, between Borrowers and Lender, as amended by First Amendment to Loan Agreement dated as of September 19, 2005 (such Loan Agreement as amended and as it may hereafter be further amended or modified from time to time, is hereinafter referred to as the "Loan Agreement");

NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which are hereby acknowledged, the undersigned, OYO GEOSPACE CORPORATION, a Delaware corporation (the "Guarantor"), hereby irrevocably and unconditionally guarantees to Lender the full and prompt payment and performance of the Guaranteed Indebtedness (hereinafter defined). This Guaranty Agreement shall be upon the following terms:

1. The term "Guaranteed Indebtedness", as used herein means all of the "Obligations", as defined in the Loan Agreement. The term "Guaranteed Indebtedness" shall include any and all post-petition interest and expenses (including attorneys' fees) whether or not allowed under any bankruptcy, insolvency, or other similar law. As of the date of this Guaranty Agreement, the Obligations include, but are not limited to the indebtedness evidenced by (a) that certain promissory note in the original principal amount of $20,000,000.00, dated as of September 19, 2005, executed by Borrowers and payable to the order of Lender, and (b) all renewals, extensions, amendments, increases, decreases or other modifications of any of the foregoing and all promissory notes given in renewal, extension, amendment, increase, decrease or other modification thereof.

2. This instrument shall be an absolute, continuing, irrevocable, and unconditional guaranty of payment and performance, and not a guaranty of collection, and Guarantor shall remain liable on its obligations hereunder until the payment and performance in full of the Guaranteed Indebtedness. No set-off, counterclaim, recoupment, reduction, or diminution of any obligation, or any defense of any kind or nature (other than actual payment) which any Borrower may have against Lender or any other party, or which Guarantor may have against any Borrower, Lender, or any other party, shall be available to, or shall be asserted by, Guarantor against Lender or any subsequent holder of the Guaranteed Indebtedness or any part thereof or against payment of the Guaranteed Indebtedness or any part thereof.

3. If Guarantor becomes liable for any indebtedness owing by Borrowers to Lender by endorsement or otherwise, other than under this Guaranty Agreement, such liability shall not be in any manner impaired or affected hereby, and the rights of Lender hereunder shall be cumulative of any and all other rights that Lender may ever have against Guarantor. The exercise by Lender of any right or remedy hereunder or under any other instrument, or at law or in equity, shall not preclude the concurrent or subsequent exercise of any other right or remedy.

4. In the event of default by any Borrower in payment or performance of the Guaranteed Indebtedness, or any part thereof, when such Guaranteed Indebtedness becomes due, whether by its terms, by acceleration, or otherwise, Guarantor shall promptly pay the amount due thereon to Lender without notice or demand in lawful currency of the United States of America and it shall not be necessary for Lender, in order to enforce such payment by Guarantor, first to institute suit or exhaust its remedies against any Borrower or others liable on such Guaranteed Indebtedness, or to enforce any rights against any collateral which shall ever have been given to secure such Guaranteed Indebtedness. Until the Guaranteed Indebtedness is paid in full and a period of ninety (90) days has passed following such payment, Guarantor waives any and all rights it may now or hereafter have under any agreement or at law or in equity (including, without limitation, any law subrogating the Guarantor to the rights o f Lender) to assert any claim against or seek contribution, indemnification or any other form of reimbursement from any Borrower or any other party liable for payment of any or all of the Guaranteed Indebtedness for any payment made by Guarantor under or in connection with this Guaranty Agreement or otherwise.

5. If acceleration of the time for payment of any amount payable by any Borrower under the Guaranteed Indebtedness is stayed upon the insolvency, bankruptcy, or reorganization of any Borrower, all such amounts otherwise subject to acceleration under the terms of the Guaranteed Indebtedness shall nonetheless be payable by Guarantor hereunder forthwith on demand by Lender.

6. Guarantor hereby agrees that its obligations under this Guaranty Agreement shall not be released, discharged, diminished, impaired, reduced, or affected for any reason or by the occurrence of any event, including, without limitation, one or more of the following events, whether or not with notice to or the consent of Guarantor: (a) the taking or accepting of collateral as security for any or all of the Guaranteed Indebtedness or the release, surrender, exchange, or subordination of any collateral now or hereafter securing any or all of the Guaranteed Indebtedness; (b) any partial release of the liability of Guarantor hereunder, or the full or partial release of any other guarantor from liability for any or all of the Guaranteed Indebtedness; (c) any disability of any Borrower, or the dissolution, insolvency, or bankruptcy of any Borrower, Guarantor, or any other party at any time liable for the payment of any or all of the Guaranteed Indebtedness; (d) any renewal, extension, modi fication, waiver, amendment, or rearrangement of any or all of the Guaranteed Indebtedness or any instrument, document, or agreement evidencing, securing, or otherwise relating to any or all of the Guaranteed Indebtedness; (e) any adjustment, indulgence, forbearance, waiver, or compromise that may be granted or given by Lender to any Borrower, Guarantor, or any other party ever liable for any or all of the Guaranteed Indebtedness; (f) any neglect, delay, omission, failure, or refusal of Lender to take or prosecute any action for the collection of any of the Guaranteed Indebtedness or to foreclose or take or prosecute any action in connection with any instrument, document, or agreement evidencing, securing, or otherwise relating to any or all of the Guaranteed Indebtedness; (g) the unenforceability or invalidity of any or all of the Guaranteed Indebtedness or of any instrument, document, or agreement evidencing, securing, or otherwise relating to any or all of the Guaranteed Indebtedness; (h) any payment by a ny Borrower or any other party to Lender is held to constitute a preference under applicable bankruptcy or insolvency law or if for any other reason Lender is required to refund any payment or pay the amount thereof to someone else; (i) the settlement or compromise of any of the Guaranteed Indebtedness; (j) the non-perfection of any security interest or lien securing any or all of the Guaranteed Indebtedness; (k) any impairment of any collateral securing any or all of the Guaranteed Indebtedness; (l) the failure of Lender to sell any collateral securing any or all of the Guaranteed Indebtedness in a commercially reasonable manner or as otherwise required by law; (m) any change in the existence, structure, or ownership of any Borrower; or (n) any other circumstance (other than actual payment) which might otherwise constitute a defense available to, or discharge of, any Borrower or Guarantor.

7. Guarantor represents and warrants to Lender as follows:

1. Guarantor is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation, is qualified to do business in all jurisdictions in which the nature of the business conducted by it makes such qualification necessary and where failure to so qualify might reasonably be expected to have a material adverse effect on its business, financial condition, or operations.

2. Guarantor has the corporate power, authority and legal right to execute, deliver, and perform its obligations under this Guaranty Agreement and this Guaranty Agreement constitutes the legal, valid, and binding obligation of Guarantor, enforceable against Guarantor in accordance with its respective terms, except as limited by (i) bankruptcy, insolvency, or other laws of general application relating to the enforcement of creditor's rights and (ii) by general principles of equity.

3. The execution, delivery, and performance by Guarantor of this Guaranty Agreement have been duly authorized by all requisite action on the part of Guarantor and do not and will not violate or conflict with the certificate of incorporation or bylaws of Guarantor or any law, rule, or regulation or any order, writ, injunction or decree of any court, governmental authority or agency, or arbitrator and do not and will not conflict with, result in a breach of, or constitute a default under, or result in the imposition of any lien upon any assets of Guarantor pursuant to the provisions of any indenture, mortgage, deed of trust, security agreement, franchise, permit, license, or other instrument or agreement to which Guarantor or its properties is bound.

4. No authorization, approval, or consent of, and no filing or registration with, any court, governmental authority, or third party is necessary for the execution, delivery or performance by Guarantor of this Guaranty Agreement or the validity or enforceability thereof.

5. The value of the consideration received and to be received by Guarantor as a result of Borrowers and Lender entering into the Loan Agreement and Guarantor executing and delivering this Guaranty Agreement is reasonably worth at least as much as the liability and obligation of Guarantor hereunder, and such liability and obligation and the Loan Agreement have benefitted and may reasonably be expected to benefit Guarantor directly or indirectly.

6. Guarantor is not insolvent, Guarantor's assets exceed its liabilities, and Guarantor will not be rendered insolvent by the execution and performance of this Agreement and the Loan Documents.

8. Guarantor covenants and agrees that, as long as the Guaranteed Indebtedness or any part thereof is outstanding or Lender has any commitment under the Loan Agreement:

1. Guarantor will comply with all of the covenants contained in the Loan Agreement with which Borrowers agree in the Loan Agreement to cause Guarantor to comply as if Guarantor were a party to the Loan Agreement, and all of such covenants are incorporated herein by reference as if set forth herein in full.

2. Guarantor will furnish promptly to Lender written notice of the occurrence of any default under this Guaranty Agreement or an Event of Default under the Loan Agreement of which Guarantor has knowledge.

3. Guarantor will furnish promptly to Lender such additional information concerning Guarantor as Lender may reasonably request.

9. Upon the occurrence of an Event of Default (as defined in the Loan Agreement) Lender shall have the right to set off and apply against this Guaranty Agreement or the Guaranteed Indebtedness or both, at any time and without notice to Guarantor, any and all deposits (general or special, time or demand, provisional or final) or other sums at any time credited by or owing from Lender to Guarantor whether or not the Guaranteed Indebtedness is then due and irrespective of whether or not Lender shall have made any demand under this Guaranty Agreement. In addition to Lender's right of setoff and as further security for this Guaranty Agreement and the Guaranteed Indebtedness, Guarantor hereby grants Lender a security interest in all deposits (general or special, time or demand, provisional or final) and all other accounts of Guarantor now or hereafter on deposit with or held by Lender and all other sums at any time credited by or owing from Lender to Guarantor. The rights and remedies o f Lender hereunder are in addition to other rights and remedies (including, without limitation, other rights of setoff) which Lender may have.

10. Guarantor hereby agrees that the Subordinated Indebtedness (as hereinafter defined) shall be subordinate and junior in right of payment to the prior payment in full of all Guaranteed Indebtedness, and Guarantor hereby assigns the Subordinated Indebtedness to Lender as security for the Guaranteed Indebtedness. If any sums shall be paid to Guarantor by any Borrower or any other person or entity on account of the Subordinated Indebtedness, such sums shall be held in trust by Guarantor for the benefit of Lender and shall forthwith be paid to Lender without affecting the liability of Guarantor under this Guaranty Agreement. For purposes of this Guaranty Agreement, the term "Subordinated Indebtedness" means all indebtedness, liabilities, and obligations of any Borrower to Guarantor, whether such indebtedness, liabilities, and obligations now exist or are hereafter incurred or arise, or whether the obligations of any Borrower thereon are direct, indirect, contingent, primary, seconda ry, several, joint and several, or otherwise, and irrespective of the person or persons in whose favor such indebtedness, obligations, or liabilities may, at their inception, have been, or may hereafter be created, or the manner in which they have been or may hereafter be acquired by Guarantor.

11. No amendment or waiver of any provision of this Guaranty Agreement or consent to any departure by the Guarantor therefrom shall in any event be effective unless the same shall be in writing and signed by Lender. No failure on the part of Lender to exercise, and no delay in exercising, any right, power, or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

12. This Guaranty Agreement is for the benefit of Lender and its successors and assigns, and in the event of an assignment of the Guaranteed Indebtedness, or any part thereof, the rights and benefits hereunder, to the extent applicable to the indebtedness so assigned, may be transferred with such indebtedness. This Guaranty Agreement is binding not only on Guarantor, but on Guarantor's successors and assigns.

13. Guarantor recognizes that Lender is relying upon this Guaranty Agreement and the undertakings of Guarantor hereunder in making extensions of credit to Borrowers under the Loan Agreement and further recognizes that the execution and delivery of this Guaranty Agreement is a material inducement to Lender in entering into the Loan Agreement. Guarantor hereby acknowledges that there are no conditions to the full effectiveness of this Guaranty Agreement.

14. This Guaranty Agreement is executed and delivered as an incident to a lending transaction negotiated, consummated, and performable in Harris County, Texas, and shall be governed by and construed in accordance with the laws of the State of Texas. Any action or proceeding against Guarantor under or in connection with this Guaranty Agreement may be brought in any state or federal court in Harris County, Texas, and Guarantor hereby irrevocably submits to the nonexclusive jurisdiction of such courts, and waives any objection it may now or hereafter have as to the venue of any such action or proceeding brought in such court. Guarantor agrees that service of process upon it may be made by certified or registered mail, return receipt requested, at its address specified in the Loan Agreement. Nothing herein shall affect the right of Lender to serve process in any other matter permitted by law or shall limit the right of Lender to bring any action or proceeding against Guarantor or wit h respect to any of Guarantor's property in courts in other jurisdictions. Any action or proceeding by Guarantor against Lender shall be brought only in a court located in Harris County, Texas.

15. Guarantor shall pay on demand all reasonable attorneys' fees and all other costs and expenses reasonably incurred by Lender in connection with the preparation, administration, enforcement, or collection of this Guaranty Agreement.

16. Guarantor hereby waives promptness, diligence, notice of any default under the Guaranteed Indebtedness, demand of payment, notice of acceptance of this Guaranty Agreement, presentment, notice of protest, notice of dishonor, notice of the incurring by any Borrower of additional indebtedness, and all other notices and demands with respect to the Guaranteed Indebtedness and this Guaranty Agreement.

17. The Loan Agreement, and all of the terms thereof, are incorporated herein by reference, the same as if stated verbatim herein, and Guarantor agrees that Lender may exercise any and all rights granted to it under the Loan Agreement and the other Loan Documents (as defined in the Loan Agreement) without affecting the validity or enforceability of this Guaranty Agreement. Any notices given hereunder shall be given in the manner provided by and to the addresses set forth in the Loan Agreement.

18. Guarantor hereby represents and warrants to Lender that Guarantor has adequate means to obtain from Borrowers on a continuing basis information concerning the financial condition and assets of Borrowers and that Guarantor is not relying upon Lender to provide (and Lender shall have no duty to provide) any such information to Guarantor either now or in the future.

19. THIS GUARANTY AGREEMENT REPRESENTS THE FINAL, ENTIRE AGREEMENT OF GUARANTOR AND LENDER WITH RESPECT TO GUARANTOR'S GUARANTY OF THE GUARANTEED INDEBTEDNESS AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN GUARANTOR AND LENDER. THIS GUARANTY AGREEMENT MAY NOT BE AMENDED EXCEPT IN WRITING BY GUARANTOR AND LENDER.

DATED AND EXECUTED as of September 19, 2005.

GUARANTOR:

OYO GEOSPACE CORPORATION

By:

Thomas T. McEntire

Vice President and

Chief Financial Officer

EX-10.4 5 rrd92322_8071.htm SECURITY AGREEMENT DATED SEPTEMBER 19, 2005, BETWEEN CONCORD TECHNOLOGIES, LP AND REGIONS BANK (F/K/A UNION PLANTERS BANK, N.A.). Fulbright & Jaworski Document

SECURITY AGREEMENT

THIS SECURITY AGREEMENT dated as of September 19, 2005 (this "Agreement"), is by and between CONCORD TECHNOLOGIES, LP, a Texas limited partnership (the "Debtor"), and REGIONS BANK (F/K/A UNION PLANTERS BANK, N.A.) ("Secured Party").

R E C I T A L S:

A. Debtor, Geospace Technologies, LP, a Texas limited partnership ("Geospace"), OYO Instruments, LP, a Texas limited partnership ("Instruments"), Geospace Engineering Resources International, LP, a Texas limited partnership ("Engineering"), OYOG Operations, LP, a Texas limited partnership ("Operations"), and Secured Party have entered into that certain Loan Agreement dated as of November 22, 2004, as amended by First Amendment to Loan Agreement dated as of September 14, 2005 (such Loan Agreement, as amended and as the same may be further amended or modified from time to time, is referred to herein as the "Loan Agreement").

B. Secured Party has conditioned its obligations under the Loan Agreement upon, among other things, the execution and delivery of this Agreement by Debtor.

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

ARTICLE I.

Security Interest

Section 1.1. Security Interest. Debtor hereby grants to Secured Party a security interest in the following property, whether now owned or existing or hereafter arising or acquired and wherever arising or located (such property being hereinafter sometimes called the "Collateral"):

(a) all of its accounts, accounts receivable, contract rights and general intangibles (but excluding patents, trademarks, trade names and other intellectual property), whether now owned or hereafter acquired and all investment property, financial assets, instruments, documents, chattel paper, deposit accounts and funds on deposit with Secured Party arising therefrom and including, without limitation, all lease receivables and all cash, notes, drafts and acceptances arising therefrom, all returned and repossessed goods arising from or relating to any such accounts, or other proceeds of any sale, lease or other disposition of inventory, and all proceeds (including insurance proceeds) and products thereof;

(b) all of its inventory, whether now owned or hereafter acquired, including, without limitation, all raw materials, goods in process, finished goods and other tangible personal property held for sale or lease or furnished or to be furnished under contracts for service or used or consumed in Debtor's trade or business and all additions, accessions, substitutions, attachments and replacements thereto and all contracts with respect thereto and all documents of title evidencing or representing any part thereof and all products and proceeds (including insurance proceeds) thereof; and

(c) all of its machinery, equipment and furniture, whether now owned or hereafter acquired, and all appurtenances, accessions and additions thereto and substitutions and replacements therefor, wheresoever located, including all tools, parts and accessories used in connection therewith, and all products and proceeds thereof (including insurance proceeds).

All terms used in this Agreement that are defined in the Uniform Commercial Code as adopted in the state of Texas shall have the meanings specified in the Uniform Commercial Code as adopted by the State of Texas.

Section 1.2. Obligations. The Collateral shall secure the following obligations, indebtedness, and liabilities (all such obligations, indebtedness, and liabilities being hereinafter sometimes called the "Obligations"):

(a) the obligations and indebtedness of Debtor to Secured Party evidenced by that certain promissory note in the original principal amount of $20,000,000.00 dated September 19, 2005, executed, jointly and severally, by Debtor, Geospace, Instruments, Engineering and Operations and payable to the order of Secured Party, which was executed in renewal, increase and modification of that certain promissory note in the original principal amount of $15,000,000.00 dated November 22, 2004, executed, jointly and severally, by Debtor, Geospace, Instruments, Engineering and Operations and payable to the order of Secured Party (the "Note");

(b) the Obligations as defined in the Loan Agreement;

(c) all costs and expenses, including, without limitation, all attorneys' fees and legal expenses, incurred by Secured Party to preserve and maintain the Collateral, collect the obligations herein described, and enforce this Agreement; and

(d) all extensions, renewals, and modifications of any of the foregoing and all promissory notes given in renewal, extension or modification of any of the foregoing.

Section 1.3. Renewal and Extension of Prior Security Agreement. In connection with the indebtedness evidenced by the Note, Debtor and Secured Party have entered into that certain Security Agreement dated as of November 22, 2004 (the "Prior Security Agreement"). The security interests created by this Agreement are in renewal and extension of, and not in discharge or novation of, the security interests created by the Prior Security Agreement.

ARTICLE II.

Representations and Warranties

To induce Secured Party to enter into this Agreement and the Loan Agreement, Debtor represents and warrants to Secured Party that:

Section 2.1. Title. Except for the security interest granted herein, Debtor owns, and with respect to Collateral acquired after the date hereof Debtor will own, the Collateral free and clear of any lien, security interest, or other encumbrance.

Section 2.2. Accounts. Unless Debtor has given Secured Party written notice to the contrary, whenever the security interest granted hereunder attaches to an account, Debtor shall be deemed to have represented and warranted to Secured Party as to each and all of its accounts that (a) each account is genuine and is in all respects what it purports to be, (b) each account represents the legal, valid, and binding obligation of the account debtor evidencing indebtedness unpaid and owed by such account debtor arising out of the performance of labor or services by Debtor or the sale or lease of goods by Debtor, and (c) the amount of each account represented as owing is the correct amount actually and unconditionally owing except for normal trade discounts and other normal credits (such as allowances for warranty claims) granted in the ordinary course of business.

Section 2.3. Financing Statements. No financing statement, security agreement, or other lien instrument covering all or any part of the Collateral is on file in any public office, except as may have been filed in favor of Secured Party.

Section 2.4. Jurisdiction of Organization; Legal Name. Debtor is a Texas limited partnership. Debtor's legal name set forth in its Certificate of Limited Partnership filed with the Texas Secretary of State, as amended to date is: Concord Technologies, LP. Debtor's organizational ID is 139644-10.

Section 2.5. Principal Place of Business. The principal place of business and chief executive office of Debtor, and the office where Debtor keeps its books and records, is located at the address of Debtor listed in the Loan Agreement.

Section 2.6. Location of Collateral. All inventory of Debtor is located at 7007 Pinemont Drive, Houston, Texas 77040 and at 7334 N. Gessner Road, Houston, Texas 77040.

Section 2.7. Business Purpose. The Collateral is used, acquired and held exclusively for business purposes and no portion of the Collateral is consumer goods. The Obligations were incurred solely for business purposes and not as a consumer-goods transaction or a consumer transaction.

ARTICLE III.

Covenants

Debtor covenants and agrees with Secured Party that until the Obligations are paid and performed in full:

Section 3.1. Maintenance. Debtor shall maintain the Collateral in good operating condition and repair and shall not permit any waste or destruction of the Collateral or any part thereof. Debtor shall not use or permit the Collateral to be used in violation of any law or inconsistently with the terms of any policy of insurance. Debtor shall not use or permit the Collateral to be used in any manner or for any purpose that would impair the value of the Collateral or expose the Collateral to unusual risk.

Section 3.2. Encumbrances. Except for Liens (as defined in the Loan Agreement) described in clauses (a), (d), (e) and (f) of Section 8.2 of the Loan Agreement, Debtor shall not create, permit, or suffer to exist, and shall defend the Collateral against any lien, security interest, or other encumbrance on the Collateral except the security interest of Secured Party hereunder, and shall defend Debtor's rights in the Collateral and Secured Party's security interest in the Collateral against the claims of all persons and entities.

Section 3.3. Disposition of Collateral. Debtor shall not sell, lease, or otherwise dispose of the Collateral or any part thereof except as provided in the Loan Agreement, and Collateral sold or otherwise disposed of in accordance with the Loan Agreement shall be sold or disposed of free of Lender's security interest granted in Section 1.1.

Section 3.4. Further Assurances. At any time and from time to time, upon the request of Secured Party, and at the sole expense of Debtor, Debtor shall promptly execute and deliver all such further instruments and documents and take such further action as Secured Party reasonably may deem necessary or desirable to preserve and perfect its security interest in the Collateral and carry out the provisions and purposes of this Agreement, including, without limitation, the execution (if necessary or applicable) and filing of such financing statements as Secured Party may require. A carbon, photographic, or other reproduction of this Agreement or of any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement and may be filed as a financing statement.

Section 3.5. Risk of Loss; Insurance. Debtor shall be responsible for any loss of or damage to the Collateral. Debtor shall maintain insurance on the Collateral as provided in the Loan Agreement.

Section 3.6. Inspection Rights. Upon reasonable prior notice, during Debtor's normal business hours, Debtor shall permit Secured Party and its representatives to examine or inspect the Collateral wherever located and to examine, inspect, and copy Debtor's books and records at any reasonable time and as often as Secured Party may desire.

Section 3.7. Notification. Debtor shall promptly notify Secured Party of (a) any lien, security interest, encumbrance, or claim made or threatened against the Collateral other than liens, security interests, encumbrances and claims permitted in the Loan Agreement, and (b) any material change in the Collateral, including, without limitation, any material damage to or loss of the Collateral.

Section 3.8. Partnership Changes. Debtor shall give Secured Party at least thirty (30) days prior written notice of any change of its name, identity, or partnership structure in any manner that might make any financing statement filed in connection with this Agreement misleading and shall have taken all action deemed necessary or desirable by Secured Party to cause its security interest in the Collateral to be perfected with the priority required by this Agreement. Debtor shall not change its principal place of business, chief executive office, or the place where it keeps its books and records unless it shall have given Secured Party thirty (30) days prior written notice thereof and shall have taken all action deemed necessary or desirable by Secured Party to cause its security interest in the Collateral to be perfected with the priority required by this Agreement.

Section 3.9. Books and Records; Information. Debtor shall from time to time at the request of Secured Party deliver to Secured Party such information regarding the Collateral and Debtor as Secured Party may request, including, without limitation, lists and descriptions of the Collateral and evidence of the identity and existence of the Collateral.

Section 3.10. Location of Collateral. Other than pursuant to lease and rental agreements, Debtor shall not move any of its equipment, machinery, or inventory from the locations described in Section 2.6 without the prior written consent of Secured Party other than in the ordinary course of business.

ARTICLE IV.

Rights of Secured Party

Section 4.1. Power of Attorney. Debtor hereby irrevocably constitutes and appoints Secured Party 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 name of Debtor or in its own name, upon the occurrence of an Event of Default, to take any and all action and to execute any and all documents and instruments which Secured Party at any time and from time to time deems necessary or desirable to accomplish the purposes of this Agreement and, without limiting the generality of the foregoing, Debtor hereby gives Secured Party the power and right on behalf of Debtor and in its own name to do any of the following, without notice to or the consent of Debtor:

(a) to demand, sue for, collect, or receive in the name of Debtor or in its own name, any money or property at any time payable or receivable on account of or in exchange for any of the Collateral and, in connection therewith, endorse checks, notes, drafts, acceptances, money orders, documents of title, or any other instruments for the payment of money under the Collateral or any policy of insurance;

(b) to pay or discharge taxes, liens, security interests, or other encumbrances levied or placed on or threatened against the Collateral;

(d) (i) to direct account debtors and any other parties liable for any payment under any of the Collateral to make payment of any and all monies due and to become due thereunder directly to Secured Party or as Secured Party shall direct; (ii) to receive payment of and receipt for any and all monies, claims, and other amounts due and to become due at any time in respect of or arising out of any Collateral; (iii) to sign and endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, proxies, stock powers, verifications, and notices in connection with accounts and other documents relating to the Collateral; (iv) to exchange any of the Collateral for other property upon any merger, consolidation, reorganization, recapitalization, or other readjustment of the issuer thereof and, in connection therewith, deposit any of the Collateral with any committee, depositary, transfer agent, registrar, or other designated agency upon such terms as Secured Party may determine; (v) to insure, and to make, settle, compromise, or adjust claims under any insurance policy covering any of the Collateral; and (vi) to sell, transfer, pledge, make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though Secured Party were the absolute owner thereof for all purposes, and to do, at Secured Party's option and Debtor's expense, at any time, or from time to time, all acts and things which Secured Party deems necessary to protect, preserve, or realize upon the Collateral and Secured Party's security interest therein.

This power of attorney is a power coupled with an interest and shall be irrevocable. Secured Party shall be under no duty to exercise or withhold the exercise of any of the rights, powers, privileges, and options expressly or implicitly granted to Secured Party in this Agreement, and shall not be liable for any failure to do so or any delay in doing so. Secured Party shall not be liable for any act or omission or for any error of judgment or any mistake of fact or law in its individual capacity or in its capacity as attorney-in-fact except acts or omissions resulting from its gross negligence or willful misconduct. This power of attorney is conferred on Secured Party solely to protect, preserve, and realize upon its security interest in the Collateral. Secured Party shall not be responsible for any decline in the value of the Collateral and shall not be required to take any steps to preserve rights against prior parties or to protect, preserve, or maintain any security interest or lien given to secure the Collateral.

Section 4.2. Performance by Secured Party. If Debtor fails to perform or comply with any of its agreements contained herein, Secured Party itself may, at its sole discretion, cause or attempt to cause performance or compliance with such agreement and the reasonable expenses of Secured Party, together with interest thereon at the Default Rate (as defined in the Loan Agreement), shall be payable by Debtor to Secured Party on demand and shall constitute Obligations secured by this Agreement. Notwithstanding the foregoing, it is expressly agreed that Secured Party shall not have any liability or responsibility for the performance of any obligation of Debtor under this Agreement.

Section 4.3. Assignment by Secured Party. Subject to applicable provisions of the Loan Agreement, Secured Party may from time to time assign or grant participations in the Obligations and any portion thereof or the Collateral and any portion thereof, and the assignee or Purchaser (as defined in the Loan Agreement) shall be entitled to all of the rights and remedies of Secured Party under this Agreement in relation thereto.

Section 4.4. Financing Statements. Debtor expressly authorizes Secured Party to file financing statements showing Debtor as debtor covering all or any portion of the Collateral in such filing locations as selected by Secured Party and authorizes, ratifies and confirms any financing statement filed prior to the date hereof by Secured Party in any jurisdiction showing Debtor as debtor covering all or any portion of the Collateral. Secured Party agrees to authorize and file, at Debtor's expense any termination statements or other similar statements needed to release Collateral from the Secured Party's lien pursuant to Section 3.3.

ARTICLE V.

Default

Section 5.1. Events of Default. The term "Event of Default" shall mean an Event of Default as defined in the Loan Agreement.

Section 5.2. Rights and Remedies. Upon the occurrence of an Event of Default, Secured Party shall have the following rights and remedies:

(a) Secured Party may declare the Obligations or any part thereof immediately due and payable, without notice, demand, presentment, notice of dishonor, notice of acceleration, notice of intent to accelerate, notice of intent to demand, protest, or other formalities of any kind, all of which are hereby expressly waived by Debtor; provided, however, that upon the occurrence of an Event of Default under Section 10.1(d) or Section 10.1(e) of the Loan Agreement, the Obligations shall become immediately due and payable without notice, demand, presentment, notice of dishonor, notice of acceleration, notice of intent to accelerate, notice of intent to demand, protest, or other formalities of any kind, all of which are hereby expressly waived by Debtor.

(b) In addition to all other rights and remedies granted to Secured Party in this Agreement and in any other instrument or agreement securing, evidencing, or relating to the Obligations or any part thereof, Secured Party shall have all of the rights and remedies of a secured party under the Uniform Commercial Code as adopted by the State of Texas. Without limiting the generality of the foregoing, Secured Party may (i) without demand or notice to Debtor, collect, receive, or take possession of the Collateral or any part thereof and for that purpose Secured Party may enter upon any premises on which the Collateral is located and remove the Collateral therefrom or render it inoperable, and/or (ii) sell, lease, or otherwise dispose of the Collateral, or any part thereof, in one or more parcels at public or private sale or sales, at Secured Party's offices or elsewhere, for cash, on credit, or for future delivery. Upon the request of Secured Party, Debtor shall assemble the Collate ral and make it available to Secured Party at any place designated by Secured Party that is reasonably convenient to Debtor and Secured Party. Debtor agrees that Secured Party shall not be obligated to give more than five (5) Business Days (as defined in the Loan Agreement) written notice of the time and place of any public sale or of the time after which any private sale may take place and that such notice shall constitute reasonable notice of such matters. Debtor shall be liable for all reasonable expenses of retaking, holding, preparing for sale, or the like, and all reasonable attorneys' fees, legal expenses, and all other costs and expenses incurred by Secured Party in connection with the collection of the Obligations and the enforcement of Secured Party's rights under this Agreement. Subject to mandatory provisions of applicable law, Secured Party may apply the Collateral against the Obligations in such order and manner as Secured Party may elect in its sole discretion. Debtor shall remain liable f or any deficiency if the proceeds of any sale or disposition of the Collateral are insufficient to pay the Obligations in full. Debtor waives all rights of marshalling in respect of the Collateral.

(c) Secured Party may cause any or all of the Collateral held by it to be transferred into the name of Secured Party or the name or names of Secured Party's nominee or nominees.

ARTICLE VI.

Miscellaneous

Section 6.1. No Waiver; Cumulative Remedies. No failure on the part of Secured Party to exercise and no delay in exercising, and no course of dealing with respect to, any right, power, or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power, or privilege under this Agreement preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. The rights and remedies provided for in this Agreement are cumulative and not exclusive of any rights and remedies provided by law.

Section 6.2. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of Debtor and Secured Party and their respective heirs, successors, and assigns, except that Debtor may not assign any of its rights or obligations under this Agreement without the prior written consent of Secured Party.

Section 6.3. Amendment. The provisions of this Agreement may be amended or waived only by an instrument in writing signed by the parties hereto.

Section 6.4. Notices. All notices and other communications provided for in this Agreement shall be given as provided in the Loan Agreement.

Section 6.5. Applicable Law; Venue; Service of Process. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas and the applicable laws of the United States of America. This Agreement has been entered into in Harris County, Texas, and it shall be performable for all purposes in Harris County, Texas. The venue of, and provisions regarding service of process in connection with any action or proceeding hereunder shall be determined as provided in the Loan Agreement.

Section 6.6. Headings. The headings, captions, and arrangements used in this Agreement are for convenience only and shall not affect the interpretation of this Agreement.

Section 6.7. Survival of Representations and Warranties. All representations and warranties made in this Agreement or in any certificate delivered pursuant hereto shall survive the execution and delivery of this Agreement, and no investigation by Secured Party shall affect the representations and warranties or the right of Secured Party to rely upon them.

Section 6.8. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

Section 6.9. Waiver of Bond. In the event Secured Party seeks to take possession of any or all of the Collateral by judicial process, Debtor hereby irrevocably waives any bonds and any surety or security relating thereto that may be required by applicable law as an incident to such possession, and waives any demand for possession prior to the commencement of any such suit or action.

Section 6.10. Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

Section 6.11. ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (AS DEFINED IN THE LOAN AGREEMENT) REPRESENT THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first written above.

DEBTOR:

CONCORD TECHNOLOGIES, LP

By: OYOG, LLC,

its general partner

By:

Thomas T. McEntire

Vice President and

Chief Financial Officer

SECURED PARTY:

REGIONS BANK (F/K/A UNION PLANTERS BANK, N.A.)

By:

B. Forrest Taylor

Senior Vice President

-----END PRIVACY-ENHANCED MESSAGE-----

DE		76-0447780
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

		OYO GEOSPACE CORPORATION


Date: September 19, 2005.	By:	/s/ Thomas T. McEntire
		Thomas T. McEntire
		Chief Financial Officer

	Level I	Level II	Level III
LIBOR Margin	2.00%	1.75%	1.50%
Prime Rate Margin	-0.50%	-0.85%	-1.35%