EXHIBIT 10.1

EXECUTION VERSION

CREDIT AGREEMENT

Dated as of December 22, 2009

among

SEITEL, INC.,

as Borrower,

VALUEACT CAPITAL MANAGEMENT, L.P.,

as Administrative Agent,

and

The Lenders Party Hereto

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Table of Contents

 

          Page ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

1.01    Defined Terms    1 1.02    Other Interpretive Provisions    15 1.03   
Accounting Terms    16 1.04    Times of Day    17 ARTICLE II

THE COMMITMENTS AND BORROWINGS

2.01    The Loans    17 2.02    Borrowings    17 2.03    Prepayments    17 2.04
   Termination or Reduction of Commitments    19 2.05    Repayment of Loans   
19 2.06    Interest    20 2.07    Fees    20 2.08    Computation of Interest and
Fees    20 2.09    Evidence of Debt    20 2.10    Payments Generally;
Administrative Agent’s Clawback    21 2.11    Sharing of Payments by Lenders   
23 ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

3.01    Taxes    24 3.02    Increased Costs    26 3.03    Mitigation
Obligations; Replacement of Lenders    27 3.04    Survival    27 ARTICLE IV

CONDITIONS PRECEDENT TO BORROWINGS

4.01    Conditions of Initial Borrowing    27 4.02    Conditions to all
Borrowings    29

 

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ARTICLE V

REPRESENTATIONS AND WARRANTIES

5.01    Existence, Qualification and Power    30 5.02    Authorization; No
Contravention    30 5.03    Governmental Authorization; Other Consents    30
5.04    Binding Effect    31 5.05    Financial Statements    31 5.06   
Litigation    31 5.07    No Default    32 5.08    Ownership of Property; Liens
   32 5.09    Environmental Compliance    32 5.10    Insurance    32 5.11   
Taxes    32 5.12    Employee Benefit Plans    32 5.13    Subsidiaries; Equity
Interests; Loan Parties    33 5.14    Intellectual Property; Licenses, Etc.   
33 5.15    Perfection of Security Interests in the Collateral    33 5.16   
Compliance with Laws    33 5.17    Casualty, Etc.    33 5.18    Labor Matters   
34 5.19    Anti-Terrorism Law    34 ARTICLE VI

AFFIRMATIVE COVENANTS

6.01    Financial Statements    35 6.02    Certificates; Other Information    36
6.03    Notices    37 6.04    Payment of Obligations    38 6.05    Preservation
of Existence, Etc.    38 6.06    Maintenance of Properties    38 6.07   
Maintenance of Insurance    39 6.08    Compliance with Laws    39 6.09    Books
and Records    39 6.10    Inspection Rights    39

 

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6.11    Use of Proceeds    39 6.12    Covenant in respect of Collateral    39
6.13    Compliance with Environmental Laws    41 6.14    Further Assurances   
41 6.15    Employee Benefit Plan Compliance    41 6.16    Payment of Taxes    41
6.17    Maintenance of Licenses, Permits, Approvals, Etc.    41 ARTICLE VII

NEGATIVE COVENANTS

7.01    Liens    42 7.02    Indebtedness    43 7.03    Formation of Subsidiaries
   44 7.04    Sale and Leaseback Transactions    44 7.05    Fundamental Changes
   44 7.06    Dispositions    45 7.07    Burdensome Agreements    45 7.08    Use
of Proceeds    46 7.09    Minimum Consolidated Cash EBITDA    46 7.10   
Accounting Changes    46 7.11    Prepayments, Etc. of Indebtedness    46 7.12   
Amendment, Etc. of Indebtedness    46 7.13    Ownership of Subsidiaries    46
7.14    Compliance with Indenture    46 7.15    Negative Pledge    46 ARTICLE
VIII

EVENTS OF DEFAULT AND REMEDIES

8.01    Events of Default    47 8.02    Remedies upon Event of Default    49
8.03    Application of Funds    49 ARTICLE IX

ADMINISTRATIVE AGENT

9.01    Appointment and Authority    50 9.02    Rights as a Lender    50

 

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9.03    Exculpatory Provisions    50 9.04    Reliance by Administrative Agent   
51 9.05    Delegation of Duties    52 9.06    Resignation of Administrative
Agent    52 9.07    Non-Reliance on Administrative Agent and Other Lenders    53
9.08    Administrative Agent May File Proofs of Claim    53 9.09    Collateral
and Guaranty Matters    53 ARTICLE X

CONTINUING GUARANTY

10.01    Guaranty    54 10.02    Rights of Lenders    55 10.03    Certain
Waivers    55 10.04    Obligations Independent    55 10.05    Subrogation    55
10.06    Termination; Reinstatement    56 10.07    Subordination    56 10.08   
Stay of Acceleration    56 10.09    Condition of the Borrower    56 ARTICLE XI

MISCELLANEOUS

11.01    Amendments, Etc.    56 11.02    Notices; Effectiveness; Electronic
Communications    58 11.03    No Waiver; Cumulative Remedies    59 11.04   
Expenses; Indemnity; Damage Waiver    59 11.05    Payments Set Aside    61 11.06
   Successors and Assigns    61 11.07    Treatment of Certain Information;
Confidentiality    65 11.08    Right of Setoff    65 11.09    Interest Rate
Limitation    66 11.10    Counterparts; Integration; Effectiveness    66 11.11
   Survival of Representations and Warranties    66 11.12    Severability    67
11.13    Replacement of Lenders    67

 

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11.14    Governing Law; Jurisdiction; Etc.    67 11.15    Waiver of Jury Trial
   68 11.16    USA PATRIOT Act Notice    69

SIGNATURES

   S-1

 

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SCHEDULES

 

1.01 Guarantors

 

2.01 Commitments and Applicable Percentages

 

5.05 Material Indebtedness

 

5.08(b) Existing Liens

 

7.02 Existing Indebtedness

 

7.07 Burdensome Agreements

 

11.02 Administrative Agent’s Office, Certain Addresses for Notices

EXHIBITS

Form of

 

A Committed Loan Notice

 

B Form of Note

 

C Compliance Certificate

 

D Assignment and Assumption

 

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CREDIT AGREEMENT

This CREDIT AGREEMENT is entered into as of December 22, 2009, among SEITEL,
INC., a Delaware corporation (the “Borrower”), each Lender (as such term is
defined below) from time to time party hereto, and VALUEACT CAPITAL MANAGEMENT,
L.P., as Administrative Agent.

PRELIMINARY STATEMENTS:

WHEREAS, the Borrower has requested and the Lenders have agreed to establish a
$9,900,000 credit facility on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

1.01 Defined Terms. As used in this Agreement, the following terms shall have
the meanings set forth below:

“Administrative Agent” means ValueAct Capital Management, L.P. in its capacity
as administrative agent under any of the Loan Documents, or any successor
administrative agent.

“Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 11.02, or such other address or
account as the Administrative Agent may from time to time notify to the Borrower
and the Lenders.

“Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.

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

“Anti-Terrorism Law” has the meaning specified in Section 5.19.

“Applicable Percentage” means with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of the Facility represented
by (i) at any time during the Availability Period, such Lender’s Commitment at
such time and (ii) thereafter, the principal amount of such Lender’s Loans at
such time. The initial Applicable Percentage of each Lender in respect of the
Facility is set forth opposite the name of such Lender on Schedule 2.01 or in
the Assignment and Assumption pursuant to which such Lender becomes a party
hereto, as applicable.

“Appropriate Lender” means, at any time, a Lender that has a Commitment or holds
a Loan at such time.

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“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

“Assignee Group” means two or more Eligible Assignees that are Affiliates of one
another or two or more Approved Funds managed by the same investment advisor.

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 11.06(b)), and accepted by the Administrative Agent, in
substantially the form of Exhibit D or any other form approved by the
Administrative Agent.

“Attributable Indebtedness” means, on any date, (a) in respect of any
Capitalized Lease of any Person, the capitalized amount thereof that would
appear on a balance sheet of such Person prepared as of such date in accordance
with GAAP, (b) in respect of any Synthetic Lease Obligation, the capitalized
amount of the remaining lease or similar payments under the relevant lease or
other applicable agreement or instrument that would appear on a balance sheet of
such Person prepared as of such date in accordance with GAAP if such lease or
other agreement or instrument were accounted for as a Capitalized Lease and
(c) all Synthetic Debt of such Person.

“Audited Financial Statements” means the audited consolidated balance sheet of
the Borrower and its Subsidiaries for the fiscal year ended December 31, 2008,
and the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal year of the Borrower and its Subsidiaries,
including the notes thereto.

“Availability Period” means the period from and including the Closing Date to
the earlier of (i) December 31, 2010 and (ii) the date of termination of the
Commitments pursuant to Section 8.02.

“Base Rate” means, for any day, a rate per annum equal to the greatest of
(a) the rate of interest per annum quoted by First Republic Bank, NA as its
“prime rate” in effect from time to time (or if such rate is at any time not
available, the prime rate so quoted by any banking institution selected by
Agent), which rate is not intended to be the lowest rate charged by any such
banking institution to its borrowers, (b) the Federal Funds Effective Rate in
effect on such day, plus  1/2 of 1% and (c) 7.00%. Any change in the Base Rate
due to a change in the prime rate or the Federal Funds Effective Rate shall be
effective from and including the effective date of such change in the prime rate
or the Federal Funds Effective Rate, respectively.

“Borrower” has the meaning specified in the introductory paragraph hereto.

“Borrower Materials” has the meaning specified in Section 6.02.

“Borrowing” means a borrowing consisting of simultaneous Loans.

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent’s Office is located.

 

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“Canadian Subsidiary” means any Subsidiary that is organized under the laws of
any political subdivision of Canada.

“Capital Expenditures” means, with respect to any Person for any period, any
expenditure in respect of the purchase or other acquisition of any fixed or
capital asset (excluding normal replacements and maintenance which are properly
charged to current operations).

“Capitalized Leases” means all leases that have been or should be, in accordance
with GAAP, recorded as capitalized leases.

“Cash Equivalents” means any of the following types of Investments, to the
extent owned by the Borrower or any of its Subsidiaries free and clear of all
Liens (other than Liens created under the Collateral Documents):

(a) readily marketable obligations issued or directly and fully guaranteed or
insured by the United States of America or any agency or instrumentality thereof
having maturities of not more than 360 days from the date of acquisition
thereof; provided, that the full faith and credit of the United States of
America is pledged in support thereof;

(b) time deposits with, or insured certificates of deposit or bankers’
acceptances of, any commercial bank that (i) (A) is a Lender or (B) is organized
under the laws of the United States of America, any state thereof or the
District of Columbia or is the principal banking subsidiary of a bank holding
company organized under the laws of the United States of America, any state
thereof or the District of Columbia, and is a member of the Federal Reserve
System, (ii) issues (or the parent of which issues) commercial paper rated as
described in clause (c) of this definition and (iii) has combined capital and
surplus of at least $1,000,000,000, in each case with maturities of not more
than 180 days from the date of acquisition thereof;

(c) commercial paper issued by any Person organized under the laws of any state
of the United States of America and rated at least “Prime-1” (or the then
equivalent grade) by Moody’s or at least “A-1” (or the then equivalent grade) by
S&P, in each case with maturities of not more than 180 days from the date of
acquisition thereof; and

(d) Investments, classified in accordance with GAAP as current assets of the
Borrower or any of its Subsidiaries, in money market investment programs
registered under the Investment Company Act of 1940, which are administered by
financial institutions that have the highest rating obtainable from either
Moody’s or S&P, and the portfolios of which are limited solely to Investments of
the character, quality and maturity described in clauses (a), (b) and (c) of
this definition.

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any Law, (b) any change
in any Law or in the administration, interpretation or application thereof by
any Governmental Authority or (c) the making or issuance of any request,
guideline or directive (whether or not having the force of law) by any
Governmental Authority.

 

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“Change of Control” means an event or series of events by which:

(a) Holdings at any time ceases to be the beneficial owner (as defined in Rules
13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended) and the
direct record owner of 100% of the Equity Interests in the Borrower; or

(b) during any period of twelve consecutive months, a majority of the members of
the board of directors or other equivalent governing body of Holdings cease to
be composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and
(ii) above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body (excluding, in the case of
both clause (ii) and clause (iii), any individual whose initial nomination for,
or assumption of office as, a member of that board or equivalent governing body
occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or
group other than a solicitation for the election of one or more directors by or
on behalf of the board of directors); or

(c) any Person or two or more Persons acting in concert shall have acquired by
contract or otherwise, or shall have entered into a contract or arrangement
that, upon consummation thereof, will result in its or their acquisition of the
power to exercise, directly or indirectly, a controlling influence over the
management or policies of Holdings, or control over the equity securities of
Holdings entitled to vote for members of the board of directors or equivalent
governing body of Holdings on a fully-diluted basis (and taking into account all
such securities that such Person or Persons have the right to acquire pursuant
to any option right) representing 49% or more of the combined voting power of
such securities; or

(d) a “Change of Control” under, and as defined in, the Indenture shall have
occurred.

“Closing Date” means the first date all the conditions precedent in Section 4.01
are satisfied or waived in accordance with Section 11.01.

“Code” means the Internal Revenue Code of 1986.

“Collateral” means all of the “Collateral” referred to in the Collateral
Documents and all of the other property that is or is intended under the terms
of the Collateral Documents to be subject to Liens in favor of the
Administrative Agent for the benefit of the Secured Parties.

“Collateral Documents” means, collectively, the Security Agreement, the
Intellectual Property Security Agreement, each of the collateral assignments,
Security Agreement Supplements, IP Security Agreement Supplements, security
agreements, pledge agreements or other similar agreements delivered to the
Administrative Agent pursuant to Section 6.12, and each of the other agreements,
instruments or documents that creates or purports to create a Lien in favor of
the Administrative Agent for the benefit of the Secured Parties.

 

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“Commitment” ” means as to each Lender, its obligation to make Loans to the
Borrower pursuant to Section 2.01 in an aggregate principal amount at any one
time outstanding not to exceed the amount set forth opposite such Lender’s name
on Schedule 2.01 under the caption “Commitment” or opposite such caption in the
Assignment and Assumption pursuant to which such Lender becomes a party hereto,
as applicable, as such amount may be adjusted from time to time in accordance
with this Agreement. The aggregate amount of the initial Commitments on the
Closing Date is $9,900,000.

“Committed Loan Notice” means a notice of a Borrowing, which, if in writing,
shall be substantially in the form of Exhibit A.

“Compliance Certificate” means a certificate substantially in the form of
Exhibit D.

“Consolidated Cash EBITDA” means, for the Borrower and its Subsidiaries on a
consolidated basis at any date of determination, an amount equal to all cash
resales, plus all other cash revenues other than from data acquisitions, less
cash selling, general and administrative expenses (excluding non-recurring
corporate expenses such as merger and acquisition transaction costs and
severance costs) and cost of goods sold.

“Consolidated Interest Charges” means, for any Measurement Period, the sum of
(a) all interest, premium payments, debt discount, fees, charges and related
expenses in connection with borrowed money (including capitalized interest) or
in connection with the deferred purchase price of assets, in each case to the
extent treated as interest in accordance with GAAP, (b) all interest paid or
payable with respect to discontinued operations and (c) the portion of rent
expense under Capitalized Leases that is treated as interest in accordance with
GAAP, in each case, of or by the Borrower and its Subsidiaries on a consolidated
basis for the most recently completed Measurement Period.

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

 

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“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

“Default Rate” means an interest rate equal to (a) the Base Rate plus
(b) 6.00% per annum.

“Defaulting Lender” means any Lender that (a) has failed to fund any portion of
the Loans required to be funded by it hereunder within one Business Day of the
date required to be funded by it hereunder, (b) has otherwise failed to pay over
to the Administrative Agent or any other Lender any other amount required to be
paid by it hereunder within one Business Day of the date when due, unless the
subject of a good faith dispute, or (c) has been deemed insolvent or become the
subject of a bankruptcy or insolvency proceeding.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any property by
any Person (or the granting of any option or other right to do any of the
foregoing), including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.

“Dollar” and “$” mean lawful money of the United States.

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of
any political subdivision of the United States.

“Eligible Assignee” means any Person that meets the requirements to be an
assignee under Section 11.06(b)(iii), (v) and (vi) (subject to such consents, if
any, as may be required under Section 11.06(b)(iii)).

“Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon
(a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials,
(c) exposure to any Hazardous Materials, (d) the release or threatened release
of any Hazardous Materials into the environment or (e) any contract, agreement
or other consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.

“Environmental Permit” means any permit, approval, identification number,
license or other authorization required under any Environmental Law.

 

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“Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Borrower within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d) the
filing of a notice of intent to terminate, the treatment of a Plan amendment as
a termination under Section 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan;
(e) an event or condition which constitutes grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

“Event of Default” has the meaning specified in Section 8.01.

“Excess Cash Flow” means, for any fiscal year of the Borrower, the excess (if
any) of (a) Consolidated Cash EBITDA for such fiscal year over (b) the sum (for
such fiscal year) of (i) Consolidated Interest Charges actually paid in cash by
the Borrower and its Subsidiaries, (ii) all income taxes actually paid in cash
by the Borrower and its Subsidiaries, and (iii) Net Cash Capital Expenditures
actually made by the Borrower and its Subsidiaries in such fiscal year.

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender, or
any other recipient of any payment to be made by or on account of any obligation
of Borrower hereunder, (a) taxes imposed on or measured by its overall net
income (however denominated), and franchise taxes imposed on it (in lieu of net
income taxes), by the jurisdiction (or any political subdivision thereof) under
the Laws of which such recipient is organized or in which its principal office
is located or, in the case of any Lender, in which its applicable Lending Office
is

 

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located and (b) in the case of a Lender, any U.S. Federal withholding tax
imposed on payments from the Borrower that is imposed on amounts payable to such
Lender at the time such Lender becomes a party hereto (or designates a new
Lending Office) or is attributable to such Lender’s failure or inability (other
than as a result of a Change in Law) to comply with Section 3.01(e), except to
the extent that such Lender (or its assignor, if any) was entitled, at the time
of designation of a new Lending Office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to
Section 3.01(a).

“Executive Order” has the meaning specified in Section 5.19.

“Extraordinary Receipt” means any cash received by or paid to or for the account
of any Person, not in the ordinary course of business, including from proceeds
of insurance (other than proceeds of business interruption insurance to the
extent such proceeds constitute compensation for lost earnings), condemnation
awards (and payments in lieu thereof), indemnity payments and any litigation
settlements or awards (other than any cash received from that certain
(x) Settlement Agreement between Echo Geophysical Corp. and Seitel Data Ltd.,
which became effective on October 12, 2009 and (y) Settlement Agreement among
Otto J. Welper, Viking International Petroleum and Seitel Data, Ltd., which
became effective on November 9, 2009).

“Facility” means (a) at any time during the Availability Period, the sum of
(i) the aggregate amount of the Commitments at such time and (ii) the aggregate
principal amount of the Loans of all Lenders outstanding at such time and
(b) thereafter, the aggregate principal amount of the Loans of all Lenders
outstanding at such time.

“Federal Funds Effective Rate” means, for any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided, that (a) if such day is not a Business Day,
the Federal Funds Effective Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (b) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Effective Rate for such day shall be
the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of
1%) charged to the Administrative Agent on such day on such transactions as
determined by the Administrative Agent in its sole discretion.

“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than the United States. For purposes of this definition, the
United States, each State thereof and the District of Columbia shall be deemed
to constitute a single jurisdiction.

“FRB” means the Board of Governors of the Federal Reserve System of the United
States.

“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its activities.

 

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“GAAP” means generally accepted accounting principles in the United States set
forth in the “Financial Accounting Standards Board (FASB) Accounting Standards
Codification (Codification)” or such other principles as may be approved by a
significant segment of the accounting profession in the United States, that are
applicable to the circumstances as of the date of determination, consistently
applied.

“Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).

“Guarantee” means, as to any Person, any (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term “Guarantee” as a verb has a
corresponding meaning.

“Guarantors” means each Subsidiary of the Borrower listed on Schedule 1.01(a)
(each of which is organized under the laws of the United States or any political
subdivision thereof).

“Guaranty” means, collectively, the guarantees issued pursuant to Article X by
the Guarantors, together with each other guaranty and guaranty supplement
delivered pursuant to Section 6.12.

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

 

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“Holdings” means Seitel Holdings, Inc., a Delaware corporation.

“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

(a) all obligations of such Person for borrowed money and all obligations of
such Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments;

(b) the maximum amount of all direct or contingent obligations of such Person
arising under letters of credit (including standby and commercial), bankers’
acceptances, bank guaranties, surety bonds and similar instruments;

(c) all obligations of such Person to pay the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business and not past due for more than 60 days after the date on which such
trade account was created) exclusive of any contingent rights dependent on
performance or revenue;

(d) indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse;

(e) all Attributable Indebtedness in respect of Capitalized Leases and Synthetic
Lease Obligations of such Person and all Synthetic Debt of such Person;

(f) all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Equity Interest in such Person or
any other Person or any warrant, right or option to acquire such Equity
Interest, valued, in the case of a redeemable preferred interest, at the greater
of its voluntary or involuntary liquidation preference plus accrued and unpaid
dividends; and

(g) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Indemnitees” has the meaning specified in Section 11.04(b).

 

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“Indenture” means that certain Indenture dated as of February 14, 2007 (the
“Indenture”) among the Borrower, the guarantors named therein, and Deutsche Bank
Trust Company Americas, as successor to LaSalle Bank National Association, as
trustee, in respect of the Borrower’s 9.75% Senior Notes due 2014.

“Information” has the meaning specified in Section 11.07.

“Interest Payment Date” means, (a) March 31, June 30, September 30 and
December 31 of each year and (b) the Maturity Date of each Loan made hereunder.

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of Equity Interests of another Person, (b) a loan, advance or
capital contribution to, Guarantee or assumption of debt of, or purchase or
other acquisition of any other debt or interest in, another Person, or (c) the
purchase or other acquisition (in one transaction or a series of transactions)
of assets of another Person that constitute a business unit or all or a
substantial part of the business of, such Person. For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.

“IP Rights” has the meaning specified in Section 5.14.

“IP Security Agreement Supplement” has the meaning specified in Section 11(g) of
the Security Agreement.

“IRS” means the United States Internal Revenue Service.

“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

“Lender” means (a) the institutions that are party hereto on the Closing Date
and (b) any financial institution that has become a party hereto pursuant to an
Assignment and Assumption, other than, in each case, any such institution that
has ceased to be a party hereto pursuant to an Assignment and Assumption.

“Lending Office” means, as to any Lender, the office or offices of such Lender
as such Lender may from time to time notify the Borrower and the Administrative
Agent.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).

 

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“Loan” means an extension of credit by a Lender to the Borrower under Article
II.

“Loan Documents” means, collectively, (a) this Agreement, (b) the Notes, (c) the
Guaranty and (d) the Collateral Documents, in each case as amended.

“Loan Parties” means, collectively, the Borrower and the Guarantors.

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, liabilities (actual
or contingent), condition (financial or otherwise) or prospects of the Loan
Parties and their Subsidiaries taken as a whole; (b) a material impairment of
the rights and remedies of the Administrative Agent or any Lender under any Loan
Document, or of the ability of any Loan Party to perform its obligations under
any Loan Document to which it is a party; or (c) a material adverse effect upon
the legality, validity, binding effect or enforceability against any Loan Party
of any Loan Document to which it is a party.

“Maturity Date” means with respect to each Loan, the fifth anniversary of the
date hereof.

“Measurement Period” means, at any date of determination, the most recently
completed period of twelve consecutive months of the Borrower.

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes
or is obligated to make contributions, or during the preceding five plan years,
has made or been obligated to make contributions.

“Net Cash Capital Expenditures” means, for any period, Capital Expenditures,
less all non-cash Capital Expenditures, less the portion of Capital Expenditures
attributable to customer cash underwriting consistent with the financial
statements of the Borrower.

“Net Cash Proceeds” means:

(a) with respect to any Disposition by any Loan Party or any of its
Subsidiaries, or any Extraordinary Receipt received or paid to the account of
any Loan Party or any of its Subsidiaries, the excess, if any, of (i) the sum of
cash and Cash Equivalents received in connection with such transaction
(including any cash or Cash Equivalents received by way of deferred payment
pursuant to, or by monetization of, a note receivable or otherwise, but only as
and when so received) over (ii) the sum of (A) the principal amount of any
Indebtedness that is secured by the applicable asset and that is required to be
repaid in connection with such transaction (other than Indebtedness under the
Loan Documents), (B) the reasonable and customary out-of-pocket expenses
incurred by such Loan Party or such Subsidiary in connection with such
transaction and (C) income taxes reasonably estimated to be actually payable
within two years of the date

 

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of the relevant transaction as a result of any gain recognized in connection
therewith; provided, that if the amount of any estimated taxes pursuant to
subclause (C) exceeds the amount of taxes actually required to be paid in cash
in respect of such Disposition, the aggregate amount of such excess shall
constitute Net Cash Proceeds; and

(b) with respect to the sale or issuance of any Equity Interest by (w) Holdings
or (x) any Loan Party or any of its Subsidiaries, or the incurrence or issuance
of any Indebtedness by (y) Holdings or (z) any Loan Party or any of its
Subsidiaries, the excess of (i) the sum of the cash and Cash Equivalents
received in connection with such transaction over (ii) the underwriting
discounts and commissions, and other reasonable and customary out-of-pocket
expenses, incurred by Holdings, such Loan Party or such Subsidiary in connection
therewith.

“Note” means a promissory note made by the Borrower in favor of a Lender
evidencing the Loans made by such Lender, substantially in the form of
Exhibit B.

“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan, whether direct or indirect (including those
acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising and including interest and fees that accrue after
the commencement by or against any Loan Party or any Affiliate thereof of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding.

“OFAC” has the meaning specified in Section 5.19.

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

“Other Taxes” means all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.

“Participant” has the meaning specified in Section 11.06(d).

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of

 

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ERISA and is sponsored or maintained by the Borrower or any ERISA Affiliate or
to which the Borrower or any ERISA Affiliate contributes or has an obligation to
contribute, or in the case of a multiple employer or other plan described in
Section 4064(a) of ERISA, has made contributions at any time during the
immediately preceding five plan years.

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

“Plan” means any “employee benefit plan” (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.

“Pledged Debt” has the meaning specified in the applicable Security Agreement.

“Pledged Equity” has the meaning specified in the applicable Security Agreement.

“Register” has the meaning specified in Section 11.06(c).

“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents and advisors of such
Person and of such Person’s Affiliates.

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

“Required Lenders” means, as of any date of determination, Lenders holding more
than 50% of the Facility on such date; provided, that the portion of the
Facility held by any Defaulting Lender shall be excluded for purposes of making
a determination of Required Lenders.

“Responsible Officer” means the chief executive officer, president, chief
financial officer, treasurer, assistant treasurer or controller of a Loan Party.
Any document delivered hereunder that is signed by a Responsible Officer of a
Loan Party shall be conclusively presumed to have been authorized by all
necessary corporate, partnership and/or other action on the part of such Loan
Party and such Responsible Officer shall be conclusively presumed to have acted
on behalf of such Loan Party.

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

“Secured Parties” means, collectively, the Administrative Agent, the Lenders,
each co-agent or sub-agent appointed by the Administrative Agent from time to
time pursuant to Section 9.05, and the other Persons the Obligations owing to
which are or are purported to be secured by the Collateral under the terms of
the Collateral Documents.

“Security Agreements” means that certain Security Agreement dated as of the date
hereof made by the Loan Parties in favor of the Administrative Agent for the
benefit of the

 

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Secured Parties, in form and substance reasonably acceptable to the
Administrative Agent, together with each security agreement supplement delivered
pursuant to Section 6.12, as amended.

“Security Agreement Supplement” has the meaning specified in the Security
Agreement.

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of
the Borrower.

“Synthetic Debt” means, with respect to any Person as of any date of
determination thereof, all obligations of such Person in respect of transactions
entered into by such Person that are intended to function primarily as a
borrowing of funds but are not otherwise included in the definition of
“Indebtedness” or as a liability on the consolidated balance sheet of such
Person and its Subsidiaries in accordance with GAAP.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto.

“Texon” means Texon Petroleum Ltd, a corporation organized under the laws of
Australia.

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

“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan’s assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.

“United States” and “U.S.” mean the United States of America.

1.02 Other Interpretive Provisions. With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:

(a) The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall

 

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include the corresponding masculine, feminine and neuter forms. The words
“include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation.” The word “will” shall be construed to have the same
meaning and effect as the word “shall.” Unless the context requires otherwise,
(i) any definition of or reference to any agreement, instrument or other
document (including any Organization Document) shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to include
such Person’s successors and assigns, (iii) the words “herein,” “hereof” and
“hereunder,” and words of similar import when used in any Loan Document, shall
be construed to refer to such Loan Document in its entirety and not to any
particular provision thereof, (iv) all references in a Loan Document to
Articles, Sections, Preliminary Statements, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Preliminary Statements,
Exhibits and Schedules to, the Loan Document in which such references appear,
(v) any reference to any law shall include all statutory and regulatory
provisions consolidating, amending, replacing or interpreting such law and any
reference to any law or regulation shall, unless otherwise specified, refer to
such law or regulation as amended, modified or supplemented from time to time
and (vi) the words “asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights.

(b) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including;” the words “to” and
“until” each mean “to but excluding;” and the word “through” means “to and
including.”

(c) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

1.03 Accounting Terms. (a) Generally. All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed herein.

(b) Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either the Borrower or the Required Lenders shall so request, the
Administrative Agent, the Lenders and the Borrower shall negotiate in good faith
to amend such ratio or requirement to preserve the original intent thereof in
light of such change in GAAP (subject to the approval of the Required Lenders);
provided, that until so amended, (i) such ratio or requirement shall continue to
be computed in accordance with GAAP prior to such change therein and (ii) the
Borrower shall provide to the Administrative Agent and the Lenders financial
statements and other documents required under this Agreement or as reasonably
requested hereunder setting forth a reconciliation between calculations of such
ratio or requirement made before and after giving effect to such change in GAAP.

 

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1.04 Times of Day. Unless otherwise specified, all references herein to times of
day shall be references to Eastern time (daylight or standard, as applicable).

ARTICLE II

THE COMMITMENTS AND BORROWINGS

2.01 The Loans. Borrowings. Subject to the terms and conditions set forth
herein, each Lender severally agrees to make loans to the Borrower from time to
time, on any Business Day during the Availability Period, in an aggregate amount
not to exceed such Lender’s Commitment. Each Borrowing shall consist of Loans
made simultaneously by the Lenders in accordance with their respective
Applicable Percentage of the Facility. Amounts borrowed under this Section 2.01
and repaid or prepaid may not be reborrowed.

2.02 Borrowings. (a) Each Borrowing shall be made upon the Borrower’s
irrevocable notice to the Administrative Agent, which may be given by telephone.
Each such notice must be received by the Administrative Agent not later than
11:00 a.m. on the requested date of such Borrowing. Each telephonic notice by
the Borrower pursuant to this Section 2.02(a) must be confirmed promptly by
delivery to the Administrative Agent of a written Committed Loan Notice,
appropriately completed and signed by a Responsible Officer of the Borrower.
Each Borrowing shall be in a principal amount of $1,000,000 or a whole multiple
of $1,000,000 in excess thereof; provided, that if the principal amount of the
Facility available to be borrowed thereunder is less than $1,000,000, the
Borrower may request a Borrowing in an amount not less than such remaining
amount. Each Committed Loan Notice (whether telephonic or written) shall specify
(i) the requested date of the Borrowing (which shall be a Business Day) and
(ii) the principal amount of Loans to be borrowed.

(b) Following receipt of a Committed Loan Notice, the Administrative Agent shall
promptly notify each Lender of the amount of its Applicable Percentage under the
Facility. Each Appropriate Lender shall make the amount of its Loan available to
the Administrative Agent in immediately available funds at the Administrative
Agent’s Office not later than 1:00 p.m. on the Business Day specified in the
applicable Committed Loan Notice. Upon satisfaction of the applicable conditions
set forth in Section 4.02 (and, if such Borrowing is the initial Borrowing,
Section 4.01), the Administrative Agent shall make all funds so received
available to the Borrower in like funds as received by the Administrative Agent
by wire transfer of such funds, in each case in accordance with instructions
provided to (and reasonably acceptable to) the Administrative Agent by the
Borrower.

2.03 Prepayments. (a) Optional. Subject to the last sentence of this
Section 2.03(a), the Borrower may, upon notice to the Administrative Agent, at
any time or from time to time voluntarily prepay the Loans in whole or in part
without premium or penalty; provided, that (A) such notice must be received by
the Administrative Agent not later than 11:00 a.m. on the date of prepayment of
such Loans; and (B) any such prepayment shall be in a principal amount of
$100,000 or a whole multiple of $100,000 in excess thereof or, in each case,

 

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if less, the entire principal amount thereof then outstanding. Each such notice
shall specify the date and amount of such prepayment. The Administrative Agent
will promptly notify each Lender of its receipt of each such notice, and of the
amount of such Lender’s ratable portion of such prepayment (based on such
Lender’s Applicable Percentage of the Facility). If such notice is given by the
Borrower, the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein.
Each prepayment of the outstanding Loans pursuant to this Section 2.03(a) shall
be applied to the principal repayment installments thereof on a pro-rata basis,
and each such prepayment shall be paid to the Lenders in accordance with their
respective Applicable Percentages of the Facility.

(b) Mandatory. (i) Within five Business Days after financial statements have
been delivered pursuant to Section 6.01(a) for any fiscal year after the fiscal
year ending December 31, 2010, the Borrower shall prepay an aggregate principal
amount of Loans equal to 50% of Excess Cash Flow for the fiscal year covered by
such financial statements.

 

  (ii) If the Borrower or any Domestic or Canadian Subsidiary Disposes of any
property (other than any Disposition of any property permitted by
Section 7.06(a), (b), (d) or (e)) which results in the realization by such
Person of Net Cash Proceeds, the Borrower shall prepay an aggregate principal
amount of Loans equal to 100% of such Net Cash Proceeds immediately upon receipt
thereof by such Person; provided, however, that with respect to any Net Cash
Proceeds realized under a Disposition described in this Section 2.03(b)(ii), at
the election of the Borrower (as notified by the Borrower to the Administrative
Agent on or prior to the date of such Disposition), and so long as no Default
shall have occurred and be continuing, the Borrower or such Subsidiary may
reinvest all or any portion of such Net Cash Proceeds in operating assets so
long as within 180 days after the receipt of such Net Cash Proceeds, such
purchase shall have been consummated (as certified by the Borrower in writing to
the Administrative Agent); and provided further, however, that any Net Cash
Proceeds not subject to such definitive agreement or so reinvested shall be
immediately applied to the prepayment of the applicable Loans as set forth in
this Section 2.03(b)(ii).

 

  (iii) Upon the sale or issuance by (A) Holdings of any of its Equity
Interests, the Borrower shall prepay an aggregate principal amount of Loans
equal to 100% of all Net Cash Proceeds received therefrom immediately upon
receipt thereof by Holdings and (B) (x) the Borrower or any Domestic or Canadian
Subsidiary of any of its Equity Interests, the Borrower shall prepay an
aggregate principal amount of Loans equal to 100% of all Net Cash Proceeds
received therefrom immediately upon receipt thereof by the Borrower or such
Subsidiary.

 

  (iv)

Upon the incurrence or issuance by (A) Holdings of any Indebtedness, the
Borrower shall prepay an aggregate principal amount of Loans equal to 100% of
all Net Cash Proceeds received therefrom immediately upon

 

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receipt thereof by Holdings and (B) (x) the Borrower or any Domestic or Canadian
Subsidiary of any Indebtedness (other than Indebtedness expressly permitted to
be incurred or issued pursuant to Section 7.02), the Borrower shall prepay an
aggregate principal amount of Loans equal to 100% of all Net Cash Proceeds
received therefrom immediately upon receipt thereof by the Borrower or such
Subsidiary.

 

  (v) Upon any Extraordinary Receipt received by or paid to or for the account
of the Borrower or any Domestic or Canadian Subsidiary and not otherwise
included in clause (ii), (iii) or (iv) of this Section 2.03(b), the Borrower
shall prepay an aggregate principal amount of Loans equal to 100% of all Net
Cash Proceeds received therefrom immediately upon receipt thereof by the
Borrower or such Subsidiary; provided, however, that with respect to any
proceeds of insurance, condemnation awards (or payments in lieu thereof) or
indemnity payments, at the election of the Borrower (as notified by the Borrower
to the Administrative Agent on or prior to the date of receipt of such insurance
proceeds, condemnation awards or indemnity payments), and so long as no Default
shall have occurred and be continuing, the Borrower or such Subsidiary may apply
within 180 days after the receipt of such cash proceeds to replace or repair the
equipment, fixed assets or real property in respect of which such cash proceeds
were received; and provided further, however, that any cash proceeds not so
applied shall be immediately applied to the prepayment of Loans as set forth in
this Section 2.03(b)(v).

2.04 Termination or Reduction of Commitments. (a) Optional. The Borrower may,
upon notice to the Administrative Agent, terminate the Commitments or from time
to time permanently reduce the Commitments; provided, that (i) any such notice
shall be received by the Administrative Agent not later than 11:00 a.m. two
Business Days prior to the date of termination or reduction, (ii) any such
partial reduction shall be in an aggregate amount of $100,000 or any whole
multiple of $100,000 in excess thereof and (iii) any reduction of the aggregate
Commitments shall be applied to ratably reduce the Commitments of the Lenders.

(b) The aggregate Commitments shall be automatically and permanently reduced to
zero on the last day of the Availability Period. The Administrative Agent will
promptly notify the Lenders of any termination of the unused portion of the
aggregate Commitments under this Section 2.04(b).

(c) The aggregate Commitments shall be automatically and permanently reduced by
an amount equal to any Borrowing made under this Article II, and each Lender’s
Commitment shall be automatically and permanently reduced in amount equal to its
ratable portion of such reduced amount.

2.05 Repayment of Loans. On the Maturity Date, the Borrower shall repay to the
Lenders the aggregate principal amount of all outstanding Loans.

 

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2.06 Interest. (a) Subject to the provisions of Section 2.06(b) and the proviso
in the first sentence of clause (c) below, each Loan shall bear interest on the
outstanding principal amount thereof at a rate per annum equal to the Base Rate
plus 4.00%.

(b) (i) If any amount of principal of any Loan is not paid when due (without
regard to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, such amount shall thereafter bear interest at a rate
equal to the Default Rate.

 

  (ii) If any amount (other than principal of any Loan) payable by the Borrower
under any Loan Document is not paid when due (without regard to any applicable
grace periods), whether at stated maturity, by acceleration or otherwise, then
upon the request of the Required Lenders such amount shall thereafter bear
interest at a fluctuating interest rate at all times equal to the Default Rate
to the fullest extent permitted by applicable Law.

 

  (iii) Upon the request of the Required Lenders while any Event of Default
exists, the Borrower shall pay interest on the principal amount of all
outstanding Obligations hereunder at a rate at all times equal to the Default
Rate to the fullest extent permitted by applicable Law.

 

  (iv) Accrued and unpaid interest on past due amounts (including interest on
past due interest) shall be due and payable upon demand.

(c) Interest on each Loan shall be due and payable in arrears on each Interest
Payment Date applicable thereto and at such other times as may be specified
herein. Interest hereunder shall be due and payable in accordance with the terms
hereof before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law.

2.07 Fees. The Borrower shall pay to the Administrative Agent for the account of
each Lender in accordance with its Applicable Percentage, an unused line fee
equal to 0.50% times the actual daily amount by which the Commitment exceeds the
outstanding amount of Loans. The unused line shall accrue at all times during
the Availability Period, and shall be due and payable quarterly in arrears on
the last Business Day of each March, June, September and December, commencing
with the first such date to occur after the Closing Date and on the last day of
the Availability Period. The commitment fee shall be calculated quarterly in
arrears.

2.08 Computation of Interest and Fees. All computations of fees and interest
shall be made on the basis of a year of 365 days and actual days elapsed.
Interest shall accrue on each Loan for the day on which the Loan is made, and
shall not accrue on a Loan, or any portion thereof, for the day on which the
Loan or such portion is paid in accordance with the terms hereof. Each
determination by the Administrative Agent of an interest rate or fee hereunder
shall be conclusive and binding for all purposes, absent manifest error.

2.09 Evidence of Debt. The Loans made by each Lender shall be evidenced by one
or more accounts or records maintained by such Lender and by the Administrative
Agent in the ordinary course of business. The accounts or records maintained by
the Administrative

 

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Agent and each Lender shall be conclusive absent manifest error of the amount of
the Loans made by the Lenders to the Borrower and the interest and payments
thereon. Any failure to so record or any error in doing so shall not, however,
limit or otherwise affect the obligation of the Borrower hereunder to pay any
amount owing with respect to the Obligations. In the event of any conflict
between the accounts and records maintained by any Lender and the accounts and
records of the Administrative Agent in respect of such matters, the accounts and
records of the Administrative Agent shall control in the absence of manifest
error. Upon the request of any Lender made through the Administrative Agent, the
Borrower shall execute and deliver to such Lender (through the Administrative
Agent) a Note, which shall evidence such Lender’s Loans in addition to such
accounts or records. Each Lender may attach schedules to its Note and endorse
thereon the date, amount and maturity of its Loans and payments with respect
thereto.

2.10 Payments Generally; Administrative Agent’s Clawback. (a) General. All
payments to be made by the Borrower shall be made without condition or deduction
for any counterclaim, defense, recoupment or setoff. Except as otherwise
expressly provided herein, all payments by the Borrower hereunder shall be made
to the Administrative Agent, for the account of the Lenders to which such
payment is owed, at the Administrative Agent’s Office in Dollars and in
immediately available funds not later than 2:00 p.m. on the date specified
herein. The Administrative Agent will promptly distribute to each Lender its
Applicable Percentage in respect of the Facility (or other applicable share as
provided herein) of such payment in like funds as received by wire transfer to
such Lender’s Lending Office. All payments received by the Administrative Agent
after 2:00 p.m. shall be deemed received on the next succeeding Business Day and
any applicable interest or fee shall continue to accrue. If any payment to be
made by the Borrower shall come due on a day other than a Business Day, payment
shall be made on the next following Business Day, and such extension of time
shall be reflected on computing interest or fees, as the case may be.

(b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to 12:00
noon on the date of such Borrowing that such Lender will not make available to
the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with Section 2.02 and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Borrowing
available to the Administrative Agent, then the applicable Lender and the
Borrower severally agree to pay to the Administrative Agent forthwith on demand
such corresponding amount in immediately available funds with interest thereon,
for each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(A) in the case of a payment to be made by such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation, plus any
administrative, processing or similar fees customarily charged by the
Administrative Agent in connection with the foregoing, and (B) in the case of a
payment to be made by the Borrower, the Interest Rate. If the Borrower and such
Lender shall pay such interest to the Administrative Agent for the same or an
overlapping period, the Administrative Agent shall promptly remit to the
Borrower the amount of such interest paid by the Borrower for such period.

 

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If such Lender pays its share of the Borrowing to the Administrative Agent, then
the amount so paid shall constitute such Lender’s Loan included in such
Borrowing. Any payment by the Borrower shall be without prejudice to any claim
the Borrower may have against a Lender that shall have failed to make such
payment to the Administrative Agent.

 

  (ii) Payments by the Borrower; Presumptions by Administrative Agent. Unless
the Administrative Agent shall have received notice from the Borrower prior to
the time at which any payment is due to the Administrative Agent for the account
of the Lenders hereunder that the Borrower will not make such payment, the
Administrative Agent may assume that the Borrower has made such payment on such
date in accordance herewith and may, in reliance upon such assumption,
distribute to the Appropriate Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Appropriate Lenders
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender in immediately available funds with
interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Administrative
Agent, at the greater of the Federal Funds Effective Rate and a rate determined
by the Administrative Agent in accordance with banking industry rules on
interbank compensation.

A notice of the Administrative Agent to any Lender or the Borrower with respect
to any amount owing under this subsection (b) shall be conclusive, absent
manifest error.

(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to
the Administrative Agent funds for any Loan to be made by such Lender as
provided in the foregoing provisions of this Article II, and such funds are not
made available to the Borrower by the Administrative Agent because the
conditions to the applicable Borrowing set forth in Article IV are not satisfied
or waived in accordance with the terms hereof, the Administrative Agent shall
return such funds (in like funds as received from such Lender) to such Lender,
without interest.

(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to
make Loans and to make payments pursuant to Section 11.04(c) are several and not
joint. The failure of any Lender to make any Loan, to fund any such
participation or to make any payment under Section 11.04(c) on any date required
hereunder shall not relieve any other Lender of its corresponding obligation to
do so on such date, and no Lender shall be responsible for the failure of any
other Lender to so make its Loan, to purchase its participation or to make its
payment under Section 11.04(c).

(e) Funding Source. Nothing herein shall be deemed to obligate any Lender to
obtain the funds for any Loan in any particular place or manner or to constitute
a representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

 

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(f) Insufficient Funds. If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
interest and fees then due hereunder, such funds shall be applied (i) first,
toward payment of interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, toward payment of principal then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal then due to such parties.

2.11 Sharing of Payments by Lenders. If any Lender shall, by exercising any
right of setoff or counterclaim or otherwise, obtain payment in respect of
(a) Obligations due and payable to such Lender hereunder and under the other
Loan Documents at such time in excess of its ratable share (according to the
proportion of (i) the amount of such Obligations due and payable to such Lender
at such time to (ii) the aggregate amount of the Obligations due and payable to
all Lenders hereunder and under the other Loan Documents at such time) of
payments on account of the Obligations due and payable to all Lenders hereunder
and under the other Loan Documents at such time obtained by all the Lenders at
such time or (b) Obligations owing (but not due and payable) to such Lender
hereunder and under the other Loan Documents at such time in excess of its
ratable share (according to the proportion of (i) the amount of such Obligations
owing (but not due and payable) to such Lender at such time to (ii) the
aggregate amount of the Obligations owing (but not due and payable) to all
Lenders hereunder and under the other Loan Parties at such time) of payment on
account of the Obligations owing (but not due and payable) to all Lenders
hereunder and under the other Loan Documents at such time obtained by all of the
Lenders at such time then the Lender receiving such greater proportion shall
(a) notify the Administrative Agent of such fact, and (b) purchase (for cash at
face value) participations in the Loans of the other Lenders, or make such other
adjustments as shall be equitable, so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of Obligations then due and payable to the Lenders or owing (but not due and
payable) to the Lenders, as the case may be; provided, that:

 

  (i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, without
interest; and

 

  (ii) the provisions of this Section shall not be construed to apply to (A) any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or (B) any payment obtained by a Lender as consideration
for the assignment of or sale of a participation in any of its Loans to any
assignee or participant, other than to the Borrower or any Subsidiary thereof
(as to which the provisions of this Section shall apply).

Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under applicable Law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Loan Party rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Loan Party in the
amount of such participation.

 

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ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

3.01 Taxes. (a) Payments Free of Taxes. Any and all payments by or on account of
any obligation of the Loan Parties hereunder or under any other Loan Document
shall be made free and clear of and without reduction or withholding for any
Indemnified Taxes or Other Taxes, provided, that if any Loan Party shall be
required by applicable Law to deduct any Indemnified Taxes (including any Other
Taxes) from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent or any Lender, as the case may be, receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the applicable Loan
Party shall make such deductions and (iii) the applicable Loan Party shall
timely pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable Law.

(b) Payment of Other Taxes by the Loan Parties. Without limiting the provisions
of subsection (a) above, each Loan Party shall timely pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable Law.

(c) Indemnification by the Loan Parties. Each Loan Party shall indemnify the
Administrative Agent and each Lender, within 10 days after demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section) paid by the Administrative Agent or such Lender, as the case
may be, and any penalties, interest and reasonable expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
applicable Loan Party by a Lender (with a copy to the Administrative Agent), or
by the Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by any Loan Party to a Governmental Authority,
the relevant Loan Party shall deliver to the Administrative Agent the original
or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Administrative Agent.

(e) Status of Lenders. Any Lender that is entitled to an exemption from or
reduction of withholding tax under the law of United States, or any treaty to
which such jurisdiction is a party, with respect to payments hereunder or under
any other Loan Document shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable Law or
reasonably requested by the Borrower or the Administrative Agent, such properly
completed and executed documentation prescribed by applicable Law as will permit
such payments to be made without withholding or at a reduced rate of
withholding. In addition, any Lender, if requested by the Borrower or the
Administrative Agent, shall deliver such other documentation

 

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prescribed by applicable Law or reasonably requested by the Borrower or the
Administrative Agent as will enable the Borrower or the Administrative Agent to
determine whether or not such Lender is subject to backup withholding or
information reporting requirements.

Without limiting the generality of the foregoing, any Foreign Lender shall
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of the Borrower or the Administrative Agent, but
only if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable:

 

  (i) duly completed copies of Internal Revenue Service Form W-8BEN claiming
eligibility for benefits of an income tax treaty to which the United States is a
party,

 

  (ii) duly completed copies of Internal Revenue Service Form W-8ECI,

 

  (iii) duly completed copies of Internal Revenue Service Form W-8IMY,

 

  (iv) in the case of a Foreign Lender claiming the benefits of the exemption
for portfolio interest under Section 881(c) of the Code, (A) a certificate to
the effect that such Foreign Lender is not (1) a “bank” within the meaning of
Section 881(c)(3)(A) of the Code, (2) a “10 percent shareholder” of the Borrower
within the meaning of Section 881(c)(3)(B) of the Code, or (3) a “controlled
foreign corporation” described in Section 881(c)(3)(C) of the Code and (B) duly
completed copies of Internal Revenue Service Form W-8BEN, or

 

  (v) any other form prescribed by applicable Law as a basis for claiming
exemption from or a reduction in United States Federal withholding tax duly
completed together with such supplementary documentation as may be prescribed by
applicable law to permit the Borrower to determine the withholding or deduction
required to be made.

(f) Treatment of Certain Refunds. If the Administrative Agent or any Lender
determines, in its sole discretion, that it has received a refund of any Taxes
or Other Taxes as to which it has been indemnified by the Loan Parties or with
respect to which any Loan Party has paid additional amounts pursuant to this
Section, it shall pay such Loan Party an amount equal to such refund (but only
to the extent of indemnity payments made, or additional amounts paid, by such
Loan Party under this Section with respect to the Taxes or Other Taxes giving
rise to such refund), net of all out-of-pocket expenses of the Administrative
Agent or such Lender, as the case may be, and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund); provided, that each Loan Party, upon the request of the Administrative
Agent or such Lender, agrees to repay the amount paid over to such Loan Party
(plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the

 

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Administrative Agent or such Lender if the Administrative Agent or such Lender
is required to repay such refund to such Governmental Authority. This
subsection shall not be construed to require the Administrative Agent or any
Lender to make available its tax returns (or any other information relating to
its taxes that it deems confidential) to any Loan Party or any other Person.

3.02 Increased Costs. (a) Increased Costs Generally. If any Change in Law shall:

 

  (i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender
(except any reserve requirement);

 

  (ii) subject any Lender to any tax of any kind whatsoever with respect to this
Agreement or change the basis of taxation of payments to such Lender in respect
thereof (except for Indemnified Taxes or Other Taxes covered by Section 3.01 and
the imposition of, or any change in the rate of, any Excluded Tax payable by
such Lender); or

 

  (iii) impose on any Lender any other condition, cost or expense affecting this
Agreement made by such Lender;

and the result of any of the foregoing shall be to reduce the amount of any sum
received or receivable by such Lender (whether of principal, interest or any
other amount) then, upon request of such Lender, the Borrower will pay to such
Lender such additional amount or amounts as will compensate such Lender for such
additional costs incurred or reduction suffered.

(b) Capital Requirements. If any Lender determines that any Change in Law
affecting such Lender or any Lending Office of such Lender or such Lender’s
holding company, if any, regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender’s capital or on the capital
of such Lender’s holding company, if any, as a consequence of this Agreement,
the Commitments of such Lender or the Loans made by such Lender, to a level
below that which such Lender or such Lender’s holding company could have
achieved but for such Change in Law (taking into consideration such Lender’s
policies and the policies of such Lender’s holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender’s holding company for any such reduction suffered.

(c) Certificates for Reimbursement. A certificate of a Lender setting forth the
amount or amounts necessary to compensate such Lender or its holding company, as
the case may be, as specified in subsection (a) or (b) of this Section and
delivered to the Borrower shall be conclusive absent manifest error. The
Borrower shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.

(d) Delay in Requests. Failure or delay on the part of any Lender to demand
compensation pursuant to the foregoing provisions of this Section shall not
constitute a

 

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waiver of such Lender’s right to demand such compensation; provided, that the
Borrower shall not be required to compensate a Lender pursuant to the foregoing
provisions of this Section for any increased costs incurred or reductions
suffered more than nine months prior to the date that such Lender notifies the
Borrower of the Change in Law giving rise to such increased costs or reductions
and of such Lender’s intention to claim compensation therefor (except that, if
the Change in Law giving rise to such increased costs or reductions is
retroactive, then the nine-month period referred to above shall be extended to
include the period of retroactive effect thereof).

3.03 Mitigation Obligations; Replacement of Lenders. (a) Designation of a
Different Lending Office. If any Lender requests compensation under
Section 3.02, or the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01, then such Lender shall use reasonable efforts to designate a
different Lending Office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.02,
as the case may be, in the future, and (ii) in each case, would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.

(b) Replacement of Lenders. If any Lender requests compensation under
Section 3.02, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01, the Borrower may replace such Lender in accordance with
Section 11.13.

3.04 Survival. All of the Borrower’s obligations under this Article III shall
survive termination of the Aggregate Commitments and repayment of all other
Obligations hereunder.

ARTICLE IV

CONDITIONS PRECEDENT TO BORROWINGS

4.01 Conditions of Initial Borrowing. The obligation of each Lender to make its
initial Loan hereunder is subject to satisfaction of the following conditions
precedent:

(a) The Administrative Agent’s receipt of the following, each of which shall be
originals or electronic versions (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
signing Loan Party, each dated the Closing Date (or, in the case of certificates
of governmental officials, a recent date before the Closing Date) and each in
form and substance satisfactory to the Administrative Agent and the Lenders:

 

  (i) executed counterparts of this Agreement, sufficient in number for
distribution to the Administrative Agent, each Lender and the Borrower;

 

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  (ii) a Committed Loan Notice with respect to such initial Borrowing delivered
in accordance with Section 2.02.

 

  (iii) a Note executed by the Borrower in favor of each Lender requesting a
Note;

 

  (iv) the Security Agreement duly executed by each Loan Party, together with:

(A) certificates representing the Pledged Equity referred to therein accompanied
by undated stock powers executed in blank and instruments evidencing the Pledged
Debt referred to therein indorsed in blank; provided, however, in no event shall
any such Pledged Equity represent more than 66% of a Loan Party’s Equity
Interests in a Person organized under the laws of a jurisdiction other than that
of the United States or any political subdivision thereof,

(B) proper financing statements in form appropriate for filing under the Uniform
Commercial Code in all jurisdictions that the Administrative Agent may deem
necessary or desirable in order to perfect the Liens created under the Security
Agreement, covering the Collateral described in the Security Agreement, and

(C) evidence that all other action that the Administrative Agent may deem
necessary or desirable in order to perfect the Liens created under the Security
Agreement has been taken;

 

  (v) an Intellectual Property Security Agreement duly executed by each Loan
Party party thereto, together with evidence that all action that the
Administrative Agent may deem necessary or desirable in order to perfect the
Liens created under the Intellectual Property Security Agreement has been taken;

 

  (vi) certified copies of the resolutions adopted by the disinterested members
of the Board of Directors (or equivalent or comparably body) of each Loan Party
approving the transactions contemplated by the Loan Documents for the purposes
of the Indenture;

 

  (vii) such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of each Loan
Party as the Administrative Agent may require evidencing the identity, authority
and capacity of each Responsible Officer thereof authorized to act as a
Responsible Officer in connection with this Agreement and the other Loan
Documents to which such Loan Party is a party or is to be a party;

 

  (viii)

such documents and certifications as the Administrative Agent may reasonably
require to evidence that each Loan Party is duly organized or formed, and that
each Loan Party is validly existing, in good standing and qualified to engage in
business in each jurisdiction where its ownership,

 

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lease or operation of properties or the conduct of its business requires such
qualification, except to the extent that failure to do so could not reasonably
be expected to have a Material Adverse Effect, in each case as certified by a
Responsible Officer of the respective Loan Party, as the case may be;

 

  (ix) a certificate signed by a Responsible Officer of the Borrower certifying
that the conditions specified in Sections 4.02(a) and (b) have been satisfied,
and a certificate signed by a Responsible Officer of the Borrower certifying
(A) that there has been no event or circumstance since the date of the Audited
Financial Statements that has had or could be reasonably expected to have,
either individually or in the aggregate, a Material Adverse Effect and
(B) (1) that attached to such certificate are copies of all consents, licenses
and approvals required in connection with the execution, delivery and
performance by each Loan Party and the validity against each Loan Party of the
Loan Documents to which it is a party, and such consents, licenses and approvals
shall be in full force and effect, or (2) that no such consents, licenses or
approvals are so required;

 

  (x) all documentation and other information that may be required by the
Lenders in order to enable compliance with applicable “know your customer” and
anti-money laundering rules and regulations, including the United States Patriot
Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) including,
without limitation, the information described in Section 12.17; and

 

  (xi) such other assurances, certificates, documents, consents or opinions as
the Administrative Agent or any Lender reasonably may require.

(b) Unless waived by the Administrative Agent, the Borrower shall have paid all
fees, charges and disbursements of counsel to the Administrative Agent (directly
to such counsel if requested by the Administrative Agent) to the extent invoiced
prior to or on the Closing Date, plus such additional amounts of such fees,
charges and disbursements as shall constitute its reasonable estimate of such
fees, charges and disbursements incurred or to be incurred by it through the
closing proceedings (provided, that such estimate shall not thereafter preclude
a final settling of accounts between the Borrower and the Administrative Agent).

4.02 Conditions to all Borrowings. The obligation of each Lender to honor any
Committed Loan Notice is subject to the following conditions precedent:

(a) The representations and warranties of the applicable Loan Parties contained
in Article V or any other Loan Document, or which are contained in any document
furnished at any time under or in connection herewith or therewith, shall be
true and correct on and as of the date of such Borrowing, except to the extent
that such representations and warranties specifically refer to an earlier date,
in which case they shall be true and correct as of such earlier date, and except
that for purposes of this Section 4.02, the representations and warranties
contained in Sections 5.05(a) and (b) shall be deemed to refer to the most
recent statements furnished pursuant to Sections 6.01(a) and (b), respectively.

 

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(b) No Default shall exist, or would result from such proposed Borrowing or from
the application of the proceeds thereof.

(c) The Administrative Agent shall have received a Committed Loan Notice in
accordance with the requirements hereof.

(d) The Board of Directors of the Borrower has approved the Loans requested by
such Committed Loan Notice.

Each Committed Loan Notice submitted by the Borrower shall be deemed to be a
representation and warranty that the conditions specified in Sections 4.02(a)
and (b) have been satisfied on and as of the date of the applicable Borrowing.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

Each Loan Party represents and warrants to the Administrative Agent and the
Lenders that:

5.01 Existence, Qualification and Power. Such Loan Party and each of its
Subsidiaries (a) is duly organized or formed, validly existing and, as
applicable, in good standing under the Laws of the jurisdiction of its
incorporation or organization, (b) has all requisite power and authority and all
requisite governmental licenses, authorizations, consents and approvals to
(i) own or lease its assets and carry on its business and (ii) execute, deliver
and perform its obligations under the Loan Documents to which it is a party and
to consummate the transactions contemplated under the Loan Documents, and (c) is
duly qualified and is licensed and, as applicable, in good standing under the
Laws of each jurisdiction where its ownership, lease or operation of properties
or the conduct of its business requires such qualification or license; except in
each case referred to in clause (b)(i) or (c), to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect.

5.02 Authorization; No Contravention. The execution, delivery and performance by
such Loan Party of each Loan Document to which such Loan Party is or is to be a
party have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of such Loan Party’s Organization Documents; (b) conflict with or result in any
breach or contravention of, or the creation of any Lien under, or require any
payment to be made under (i) any Contractual Obligation to which such Loan Party
is a party or affecting such Loan Party or the properties of such Person or any
of its Subsidiaries or (ii) any order, injunction, writ or decree of any
Governmental Authority or any arbitral award to which such Loan Party or its
property is subject; or (c) violate any Law.

5.03 Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with (a) the execution, delivery or performance by, or enforcement
against, such Loan Party of this Agreement or any

 

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other Loan Document, or for the consummation of the transactions contemplated
under the Loan Documents, (b) the grant by such Loan Party of the Liens granted
by it pursuant to the Collateral Documents, (c) the perfection or maintenance of
the Liens created under the Collateral Documents (including the first priority
nature thereof) or (d) the exercise by the Administrative Agent or any Lender of
its rights under the Loan Documents or the remedies in respect of the Collateral
pursuant to the Collateral Documents. All applicable waiting periods in
connection with the transactions contemplated under the Loan Documents have
expired without any action having been taken by any Governmental Authority
restraining, preventing or imposing materially adverse conditions upon such
transactions or the rights of such Loan Party or its Subsidiaries freely to
transfer or otherwise dispose of, or to create any Lien on, any properties now
owned or hereafter acquired by any of them.

5.04 Binding Effect. This Agreement has been, and each other Loan Document, when
delivered hereunder, will have been, duly executed and delivered by such Loan
Party that is party thereto. This Agreement constitutes, and each other Loan
Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against such Loan Party in accordance
with its terms.

5.05 Financial Statements. (a) The Audited Financial Statements (i) were
prepared in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein; (ii) fairly
present the financial condition of the Borrower and its Subsidiaries as of the
date thereof and their results of operations for the period covered thereby in
accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein; and (iii) show all material
Indebtedness and other liabilities, direct or contingent, of the Borrower and
its Subsidiaries as of the date thereof, including liabilities for taxes,
material commitments and Indebtedness.

(b) The unaudited consolidated balance sheets of the Borrower and its
Subsidiaries dated September 30, 2009, and the related consolidated statements
of income or operations, shareholders’ equity and cash flows for the fiscal
quarter ended on that date (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein, and (ii) fairly present the financial condition of the
Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby, subject, in the case of clauses
(i) and (ii), to the absence of footnotes and to normal year-end audit
adjustments. Schedule 5.05 sets forth all material Indebtedness and other
liabilities, direct or contingent, of the Borrower and its consolidated
Subsidiaries as of the date of such financial statements, including liabilities
for taxes, material commitments and Indebtedness.

5.06 Litigation. There are no actions, suits, proceedings, claims or disputes
pending or, to the knowledge of such Loan Party after due and diligent
investigation, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, by or against such Loan Party or any of its
Subsidiaries or against any of its properties or revenues that (a) purport to
affect or pertain to this Agreement, any other Loan Document or the consummation
of the transactions contemplated by the Loan Documents, or (b) either
individually or in the aggregate, if determined adversely, could reasonably be
expected to have a Material Adverse Effect.

 

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5.07 No Default. Such Loan Party nor any Subsidiary thereof is in default under
or with respect to, or a party to, any Contractual Obligation that could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. No Default has occurred and is continuing or would result from
the consummation of the transactions contemplated by this Agreement or any other
Loan Document.

5.08 Ownership of Property; Liens. (a) Such Loan Party and each of its
Subsidiaries has valid leasehold interests in all real property necessary or
used in the ordinary conduct of its business, except for such defects in title
as could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Neither such Loan Party nor any of its Subsidiaries
holds title in fee simple to any real property.

(b) Schedule 5.08(b) sets forth a complete and accurate list of all Liens on the
property or assets of such Loan Party and each of its Subsidiaries, showing as
of the date hereof the lienholder thereof, the principal amount of the
obligations secured thereby and the property or assets of such Loan Party or
such Subsidiary subject thereto. The property of such Loan Party and each of its
Subsidiaries is subject to no Liens, other than Liens set forth on
Schedule 5.08(b), and as otherwise permitted by Section 7.01.

5.09 Environmental Compliance. Such Loan Party and its Subsidiaries conduct in
the ordinary course of business a review of the effect of existing Environmental
Laws and claims alleging potential liability or responsibility for violation of
any Environmental Law on their respective businesses, operations and properties,
and as a result thereof such Loan Party has reasonably concluded that such
Environmental Laws and claims could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

5.10 Insurance. The properties of such Loan Party and its Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of any Loan Party, in such amounts, with such deductibles and covering such
risks as are customarily carried by companies engaged in similar businesses and
owning similar properties in localities where such Loan Party or the applicable
Subsidiary operates.

5.11 Taxes. Such Loan Party and its Subsidiaries have filed all Federal, state
and other material tax returns and reports required to be filed, and have paid
all Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings diligently conducted and for which adequate
reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against such Loan Party or any of its Subsidiaries that would, if
made, have a Material Adverse Effect. Neither such Loan Party nor any Subsidiary
thereof is party to any tax sharing agreement.

5.12 Employee Benefit Plans. Such Loan Party and its ERISA Affiliates is in
compliance in all material respects with the applicable provisions of ERISA and
the Code and

 

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the regulations and published interpretations thereunder, except for such
non-compliance that in the aggregate would not have a Material Adverse Effect.
No ERISA Event has occurred or is reasonably expected to occur that, when taken
together with all other such ERISA Events, would reasonably be expected to
result in a Material Adverse Effect or the imposition of a Lien on any of the
Property of any Loan Party. The present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed the fair
market value of the Property of all such underfunded Plans in an amount which
would reasonably be expected to have a Material Adverse Effect. To the knowledge
of such Loan Party, the aggregate liabilities of such Loan Party or its ERISA
Affiliates to all Multiemployer Plans in the event of a complete withdrawal
therefrom, as of the close of the most recent fiscal year of each such
Multiemployer Plan, would not reasonably be expected to result in a Material
Adverse Effect.

5.13 Subsidiaries; Equity Interests; Loan Parties. All of the outstanding Equity
Interests in the Subsidiaries of such Loan Party have been validly issued, are
fully paid and non-assessable and are owned by such Loan Party in the amounts
set forth on Schedule I to the Security Agreement free and clear of all Liens
except those created under the Collateral Documents. The copy of the charter of
such Loan Party and each amendment thereto provided pursuant to
Section 4.01(a)(viii) is a true and correct copy of each such document, each of
which is valid and in full force and effect.

5.14 Intellectual Property; Licenses, Etc. Such Loan Party and its Subsidiaries
own, or possess the legal right to use, all of the material trademarks, service
marks, trade names, copyrights, patents, patent rights, franchises, licenses and
other intellectual property rights (collectively, “IP Rights”) that are
necessary for the operation of their respective businesses without conflict with
the rights of any other Person.

5.15 Perfection of Security Interests in the Collateral. The Collateral
Documents create valid security interests in, and Liens on, the Collateral
pledged by such Loan Party and purported to be covered thereby, which security
interests and Liens are currently perfected security interests and Liens, prior
to all other Liens, and such Collateral is not subject to any other Liens other
than Liens permitted under Section 7.01; provided, that all filings and
registrations necessary to perfect the security interests and Liens have been
made and remain in full force and effect and, where necessary for perfection,
possession has been maintained by Administrative Agent.

5.16 Compliance with Laws. Such Loan Party and each Subsidiary thereof is in
compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.

5.17 Casualty, Etc. Neither the businesses nor the properties of such Loan Party
or any of its Subsidiaries are affected by any fire, explosion, accident,
strike, lockout or

 

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other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of
the public enemy or other casualty (whether or not covered by insurance) that,
either individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

5.18 Labor Matters. There are no collective bargaining agreements or
Multiemployer Plans covering the employees of such Loan Party or any of its
Subsidiaries as of the Closing Date and neither such Loan Party nor any
Subsidiary thereof has suffered any strikes, walkouts, work stoppages or other
material labor difficulty within the last five years.

5.19 Anti-Terrorism Law. Neither such Loan Party nor, to the knowledge of such
Loan Party, any of its Affiliates is in violation of any Law relating to
terrorism or money laundering (“Anti-Terrorism Laws”), including Executive Order
No. 13224 on Terrorist Financing, effective September 24, 2001 (the “Executive
Order”), and the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law
107-56.

Neither such Loan Party nor, to the knowledge of such Loan Party, any of its
Affiliates or broker or other agent of such Loan Party acting or benefiting in
any capacity in connection with the Loans is any of the following:

 

  (i) a Person that is listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order;

 

  (ii) a Person owned or controlled by, or acting for or on behalf of, any
Person that is listed in the annex to, or is otherwise subject to the provisions
of, the Executive Order;

 

  (iii) a Person with which any Lender is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law;

 

  (iv) a Person that commits, threatens or conspires to commit or supports
“terrorism” as defined in the Executive Order; or

 

  (v) a Person that is named as a “specially designated national and blocked
person” on the most current list published by the U.S. Treasury Department
Office of Foreign Assets Control (“OFAC”) at its official website or any
replacement website or other replacement official publication of such list.

Neither such Loan Party nor, to the knowledge of such Loan Party, any broker or
other agent of such Loan Party acting in any capacity in connection with the
Loans (x) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any person
described in clauses (i) through (v) above, (y) deals in, or otherwise engages
in any transaction relating to, any Property or interests in property blocked
pursuant to the Executive Order, or (z) engages in or conspires to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in any Anti-Terrorism
Law.

 

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ARTICLE VI

AFFIRMATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder or any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, the Borrower shall, and
shall (except in the case of the covenants set forth in Sections 6.01, 6.02,
6.03 and 6.11) cause each Subsidiary to:

6.01 Financial Statements. Deliver to the Administrative Agent and each Lender,
in form and detail satisfactory to the Administrative Agent and the Required
Lenders:

(a) as soon as available, but in any event within 90 days after the end of each
fiscal year of the Borrower (commencing with the fiscal year ended December 31,
2009), a consolidated balance sheet of the Borrower and its Subsidiaries as at
the end of such fiscal year, and the related consolidated statements of income
or operations, 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 in reasonable detail and prepared in accordance with GAAP, such consolidated
statements to be audited and accompanied by a report and opinion of an
independent certified public accountant of nationally recognized standing
reasonably acceptable to the Required Lenders which report and opinion shall be
prepared in accordance with generally accepted auditing standards and shall not
be subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit, and such consolidating
statements to be certified by the chief financial officer of the Borrower to the
effect that such statements are fairly stated in all material respects when
considered in relation to the consolidated financial statements of the Borrower
and its Subsidiaries;

(b) as soon as available, but in any event within 45 days after the end of each
of the first three fiscal quarters of each fiscal year of the Borrower
(commencing with the fiscal quarter ended March 31, 2010), a consolidated
balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal
quarter, and the related consolidated statements of income or operations,
shareholders’ equity and cash flows for such fiscal quarter and for the portion
of the Borrower’s fiscal year then ended, setting forth in each case in
comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year and the corresponding portion of the previous fiscal year,
all in reasonable detail, such consolidated statements to be certified by the
chief financial officer of the Borrower as fairly presenting the financial
condition, results of operations, shareholders’ equity and cash flows of the
Borrower and its Subsidiaries in accordance with GAAP, subject only to normal
year-end audit adjustments and the absence of footnotes and such consolidating
statements to be certified by the chief financial officer of the Borrower to the
effect that such statements are fairly stated in all material respects when
considered in relation to the consolidated financial statements of the Borrower
and its Subsidiaries;

(c) as soon as available, but in any event within 30 days after the end of each
month of each fiscal year of the Borrower (commencing with the fiscal month
ended January 31, 2010), a consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such month, and the related consolidated
statements of income or operations,

 

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shareholders’ equity and cash flows for such month and for the portion of the
Borrower’s fiscal year than ended setting forth in each case in comparative form
for the corresponding month of the previous fiscal year and the corresponding
portion of the previous fiscal year, all in reasonable detail and duly certified
by the chief financial officer of the Borrower; and

(d) as soon as available, but in any event no later than January 31 of each
fiscal year, an annual business plan and budget of the Borrower and its
Subsidiaries on a consolidated basis for such fiscal year, including forecasts
prepared by management of the Borrower, in form satisfactory to the
Administrative Agent and the Required Lenders, of consolidated balance sheets
and statements of income or operations and cash flows of the Borrower and its
Subsidiaries on a monthly basis for the immediately following fiscal year.

6.02 Certificates; Other Information. Deliver to the Administrative Agent and
each Lender, in form and detail satisfactory to the Administrative Agent and the
Required Lenders:

(a) concurrently with the delivery of the financial statements referred to in
Section 6.01(a), a certificate of its independent certified public accountants
certifying such financial statements and stating that in making the examination
necessary therefor no knowledge was obtained of any Default or, if any such
Default shall exist, stating the nature and status of such event;

(b) concurrently with the delivery of the financial statements referred to in
Sections 6.01(a) and (b) (i) a duly completed Compliance Certificate signed by
the chief financial officer of the Borrower, and in the event of any change in
generally accepted accounting principles used in the preparation of such
financial statements, the Borrower shall also provide, if necessary for the
determination of compliance with Section 7.08, a statement of reconciliation
conforming such financial statements to GAAP and (ii) a copy of management’s
discussion and analysis with respect to such financial statements;

(c) promptly after any request by the Administrative Agent or any Lender, copies
of any detailed audit reports, management letters or recommendations submitted
to the board of directors (or the audit committee of the board of directors) of
any Loan Party by independent accountants in connection with the accounts or
books of any Loan Party or any of its Subsidiaries, or any audit of any of them;

(d) promptly, and in any event within five Business Days after receipt thereof
by any Loan Party or any Subsidiary thereof, copies of each notice or other
correspondence received from the SEC (or comparable agency in any applicable
non-U.S. jurisdiction) concerning any investigation or possible investigation or
other inquiry by such agency regarding financial or other operational results of
any Loan Party or any Subsidiary thereof;

(e) not later than five Business Days after receipt thereof by any Loan Party or
any Subsidiary thereof, copies of all notices, requests and other documents
(including

 

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amendments, waivers and other modifications) so received under or pursuant to
any instrument, indenture, loan or credit or similar agreement and, from time to
time upon request by the Administrative Agent, such information and reports
regarding such instruments, indentures and loan and credit and similar
agreements as the Administrative Agent may reasonably request;

(f) promptly after the assertion or occurrence thereof, notice of any action or
proceeding against or of any noncompliance by any Loan Party or any of its
Subsidiaries with any Environmental Law or Environmental Permit that could
reasonably be expected to have a Material Adverse; and

(g) promptly, such additional information regarding the business, financial,
legal or corporate affairs of any Loan Party or any Subsidiary thereof, or
compliance with the terms of the Loan Documents, as the Administrative Agent or
any applicable Lender may from time to time reasonably request.

Documents required to be delivered pursuant to Section 6.01(a) or (b) (to the
extent any such documents are included in materials otherwise filed with the
SEC) may be delivered electronically and if so delivered, shall be deemed to
have been delivered on the date (i) on which the Borrower posts such documents,
or provides a link thereto on the Borrower’s website on the Internet at the
website address listed on Schedule 11.02; or (ii) on which such documents are
posted on the Borrower’s behalf on an Internet or intranet website, if any, to
which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative
Agent); provided, that: (i) the Borrower shall deliver paper copies of such
documents to the Administrative Agent or any Lender that requests the Borrower
to deliver such paper copies until a written request to cease delivering paper
copies is given by the Administrative Agent or such Lender and (ii) the Borrower
shall notify the Administrative Agent and each applicable Lender (by facsimile
or electronic mail) of the posting of any such documents and provide to the
Administrative Agent by electronic mail electronic versions (i.e., soft copies)
of such documents. Notwithstanding anything contained herein, in every instance
the Borrower shall be required to provide paper copies of the Compliance
Certificates required by Section 6.02(b) to the Administrative Agent. Except for
such Compliance Certificates, the Administrative Agent shall have no obligation
to request the delivery or to maintain copies of the documents referred to
above, and in any event shall have no responsibility to monitor compliance by
the Borrower with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.

6.03 Notices. Promptly notify the Administrative Agent and each Lender:

(a) of the occurrence of any Default;

(b) of any matter that has resulted or could reasonably be expected to result in
a Material Adverse Effect, including (i) breach or non-performance of, or any
default under, a Contractual Obligation of the Borrower or any Subsidiary
thereof; (ii) any dispute, litigation, investigation, proceeding or suspension
between the Borrower or any Subsidiary thereof and any Governmental Authority;
or (iii) the commencement of, or any material development in, any litigation or
proceeding affecting the Borrower or any Subsidiary thereof, including pursuant
to any applicable Environmental Laws;

 

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(c) of the occurrence of any ERISA Event;

(d) of any material change in accounting policies or financial reporting
practices by any applicable Loan Party or any Subsidiary thereof; and

(e) of the (i) occurrence of any Disposition of property or assets for which the
Borrower is required to make a mandatory prepayment pursuant to
Section 2.03(b)(ii), (ii) occurrence of any sale of capital stock or other
Equity Interests for which the Borrower is required to make a mandatory
prepayment pursuant to Section 2.03(b)(iii), (iii) incurrence or issuance of any
Indebtedness for which the Borrower is required to make a mandatory prepayment
pursuant to Section 2.03(b)(iv), and (iv) receipt of any Extraordinary Receipt
for which the Borrower is required to make a mandatory prepayment pursuant to
Section 2.03(b)(v).

Each notice pursuant to this Section 6.03 (other than Section 6.03(e)) shall be
accompanied by a statement of a Responsible Officer of the Borrower setting
forth details of the occurrence referred to therein and stating what action the
Borrower has taken and proposes to take with respect thereto. Each notice
pursuant to Section 6.03(a) shall describe with particularity any and all
provisions of this Agreement and any other Loan Document that have been
breached.

6.04 Payment of Obligations. Pay and discharge as the same shall become due and
payable, all its obligations and liabilities, including (a) all tax liabilities,
assessments and governmental charges or levies upon it or its properties or
assets, unless the same are being contested in good faith by appropriate
proceedings diligently conducted and adequate reserves in accordance with GAAP
are being maintained by the Borrower or such Subsidiary thereof; (b) all lawful
claims which, if unpaid, would by law become a Lien upon its property; and
(c) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.

6.05 Preservation of Existence, Etc. (a) Preserve, renew and maintain in full
force and effect its legal existence and good standing under the Laws of the
jurisdiction of its organization except in a transaction permitted by
Section 7.04 or 7.05; (b) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable in the
normal conduct of its business, except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect; and (c) preserve
or renew all of its registered patents, trademarks, trade names and service
marks, the non-preservation of which could reasonably be expected to have a
Material Adverse Effect.

6.06 Maintenance of Properties. (a) Maintain, preserve and protect all of its
material properties and equipment necessary in the operation of its business in
good working order and condition, ordinary wear and tear excepted; (b) make all
necessary repairs thereto and renewals and replacements thereof except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (c) use the standard of care typical in the industry in the
operation and maintenance of its facilities.

 

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6.07 Maintenance of Insurance. Maintain with financially sound and reputable
insurance companies not Affiliates of the Borrower, insurance with respect to
its properties and business (including, without limitation, hazard and business
interruption insurance) against loss or damage of the kinds customarily insured
against by Persons engaged in the same or similar business, of such types and in
such amounts as are customarily carried under similar circumstances by such
other Persons.

6.08 Compliance with Laws. Comply in all material respects with the requirements
of all Laws and all orders, writs, injunctions and decrees applicable to it or
to its business or property, except in such instances in which (a) such
requirement of Law or order, writ, injunction or decree is being contested in
good faith by appropriate proceedings diligently conducted; or (b) the failure
to comply therewith could not reasonably be expected to have a Material Adverse
Effect.

6.09 Books and Records. Maintain proper books of record and account, in which
full, true and correct entries in conformity with GAAP consistently applied
shall be made of all financial transactions and matters involving the assets and
business of the Borrower or such Subsidiary thereof, as the case may be.

6.10 Inspection Rights. Permit representatives and independent contractors of
the Administrative Agent and each Lender to visit and inspect any of its
properties, to examine its corporate, financial and operating records, and make
copies thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its directors, officers, and independent public accountants, all
at the expense of the Borrower and at such reasonable times during normal
business hours and as often as may be reasonably desired, upon reasonable
advance notice to the Borrower; provided, however, that when an Event of Default
exists the Administrative Agent or any Lender (or any of their respective
representatives or independent contractors) may do any of the foregoing at the
expense of the Borrower at any time during normal business hours and without
advance notice.

6.11 Use of Proceeds. Use the proceeds of each Borrowing to fund ongoing working
capital requirements of the Borrower not in contravention of any Law or of any
Loan Document.

6.12 Covenant in respect of Collateral. (a) Upon the request of the
Administrative Agent following the occurrence and during the continuance of a
Default, the Borrower shall, at the Borrower’s expense:

 

  (i) within ten days after such request, furnish to the Administrative Agent a
description of the real and personal properties of the Loan Parties and their
respective Subsidiaries in detail satisfactory to the Administrative Agent,

 

  (ii)

within 15 days after such request, duly execute and deliver, and cause each Loan
Party (if it has not already done so) to duly execute and deliver, to the
Administrative Agent deeds of trust, trust deeds, deeds to secure debt,
mortgages, leasehold mortgages, leasehold deeds of trust, Security Agreement
Supplements, IP Security Agreement Supplements and other

 

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security and pledge agreements, as specified by and in form and substance
satisfactory to the Administrative Agent (including delivery of all Pledged
Equity and Pledged Debt in and of such Subsidiary, and other instruments of the
type specified in Section 4.01(a)(iv)), securing payment of all the Obligations
of such Loan Party under the Loan Documents and constituting Liens on all such
properties,

 

  (iii) within 30 days after such request, take, and cause each applicable Loan
Party to take, whatever action (including the recording of mortgages, the filing
of UCC financing statements the giving of notices and the endorsement of notices
on title documents) may be necessary or advisable in the opinion of the
Administrative Agent to vest in the Administrative Agent (or in any
representative of the Administrative Agent designated by it) valid and
subsisting Liens on the properties purported to be subject to the deeds of
trust, trust deeds, deeds to secure debt, mortgages, leasehold mortgages,
leasehold deeds of trust, Security Agreement Supplements, IP Security Agreement
Supplements and security and pledge agreements delivered pursuant to this
Section 6.12, enforceable against all third parties in accordance with their
terms,

 

  (iv) within 60 days after such request, deliver to the Administrative Agent,
upon the request of the Administrative Agent in its sole discretion, a signed
copy of a favorable opinion, addressed to the Administrative Agent and the other
Secured Parties, of counsel for the applicable Loan Parties acceptable to the
Administrative Agent as to the matters contained in clauses (ii) and
(iii) above, and as to such other matters as the Administrative Agent may
reasonably request, and

 

  (v) as promptly as practicable after such request, deliver, upon the request
of the Administrative Agent in its sole discretion, to the Administrative Agent
with respect to each parcel of real property owned or held by the Borrower and
the applicable Loan Parties, title reports, surveys and engineering, soils and
other reports, and environmental assessment reports, each in scope, form and
substance satisfactory to the Administrative Agent, provided, however, that to
the extent that any such Loan Party or any of its Subsidiaries shall have
otherwise received any of the foregoing items with respect to such real
property, such items shall, promptly after the receipt thereof, be delivered to
the Administrative Agent.

(b) At any time upon request of the Administrative Agent, promptly execute and
deliver any and all further instruments and documents and take all such other
action as the Administrative Agent may deem necessary or desirable in obtaining
the full benefits of, or (as applicable) in perfecting and preserving the Liens
of, such guaranties, deeds of trust, trust deeds, deeds to secure debt,
mortgages, leasehold mortgages, leasehold deeds of trust, Security Agreement
Supplements, IP Security Agreement Supplements and other security and pledge
agreements.

 

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6.13 Compliance with Environmental Laws. Comply, and cause all lessees and other
Persons operating or occupying its properties to comply, in all material
respects, with all applicable Environmental Laws and Environmental Permits;
obtain and renew all Environmental Permits necessary for its operations and
properties; and conduct any investigation, study, sampling and testing, and
undertake any cleanup, removal, remedial or other action necessary to remove and
clean up all Hazardous Materials from any of its properties, in accordance with
the requirements of all Environmental Laws; provided, however, that none of the
Borrower nor any of its Subsidiaries shall be required to undertake any such
cleanup, removal, remedial or other action to the extent that its obligation to
do so is being contested in good faith and by proper proceedings and appropriate
reserves are being maintained with respect to such circumstances in accordance
with GAAP.

6.14 Further Assurances. Promptly upon request by the Administrative Agent, or
any Lender through the Administrative Agent, (a) correct any material defect or
error that may be discovered in any Loan Document or in the execution,
acknowledgment, filing or recordation thereof, and (b) do, execute, acknowledge,
deliver, record, re-record, file, re-file, register and re-register any and all
such further acts, deeds, certificates, assurances and other instruments as the
Administrative Agent, or any Lender through the Administrative Agent, may
reasonably require from time to time in order to (i) carry out more effectively
the purposes of the Loan Documents, (ii) to the fullest extent permitted by
applicable law, subject any Loan Party’s or any of its Subsidiaries’ properties,
assets, rights or interests to the Liens now or hereafter intended to be covered
by any of the Collateral Documents, (iii) perfect and maintain the validity,
effectiveness and priority of any of the Collateral Documents and any of the
Liens intended to be created thereunder and (iv) assure, convey, grant, assign,
transfer, preserve, protect and confirm more effectively unto the Secured
Parties the rights granted or now or hereafter intended to be granted to the
Secured Parties under any Loan Document or under any other instrument executed
in connection with any Loan Document to which any Loan Party or any of its
Subsidiaries is or is to be a party, and cause each of its Subsidiaries to do
so.

6.15 Employee Benefit Plan Compliance. Do, and cause each of its ERISA
Affiliates to do, each of the following: (i) maintain each Plan in compliance in
all material respects with the applicable provisions of ERISA, the Internal
Revenue Code and other federal or state Law; (ii) cause each Plan that is
qualified under Section 401(a) of the Code to maintain such qualification; and
(iii) make all required contributions to any Plan subject to Section 412 of the
, except, in each case, to the extent failure to comply would not reasonably be
expected to result in a Material Adverse Effect.

6.16 Payment of Taxes. Pay, and cause its Subsidiaries to pay, or cause to be
paid, before the same shall become delinquent and before penalties have accrued
thereon, all taxes, assessments and governmental charges or levies imposed on
the income, profits, franchises, property or businesses of the Borrower and its
Subsidiaries, except to the extent and so long as (a) the same are being
contested in good faith by appropriate proceedings and (b) adequate reserves
with respect thereto in conformity with GAAP have been provided on the books of
the Borrower or any such Subsidiary, as appropriate.

6.17 Maintenance of Licenses, Permits, Approvals, Etc. Preserve and maintain,
and cause its Subsidiaries to preserve and maintain, all licenses, permits,
approvals, registrations,

 

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contracts, consents, franchises, qualifications, certificates of need,
accreditations and other authorizations required under applicable state or local
laws and regulations in connection with the ownership or operation of their
businesses, except to the extent that a failure to preserve and maintain any of
same will not have a Material Adverse Effect.

ARTICLE VII

NEGATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder or any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, the Borrower shall not,
nor shall it permit any of its Subsidiaries to, directly or indirectly:

7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, or sign
or file or suffer to exist under the UCC of any jurisdiction a financing
statement that names the Borrower or any of its Subsidiaries as debtor, or
assign any accounts or other right to receive income, other than the following:

(a) Liens pursuant to any Loan Document;

(b) Liens existing on the date hereof and listed on Schedule 5.08(b) and any
renewals or extensions thereof; provided, that (i) the property covered thereby
is not changed, (ii) the amount secured or benefited thereby is not increased
except as contemplated by Section 7.02(c), (iii) the direct or any contingent
obligor with respect thereto is not changed, and (iv) any renewal or extension
of the obligations secured or benefited thereby is permitted by Section 7.02(c);

(c) Liens for taxes not yet due or which are being contested in good faith and
by appropriate proceedings diligently conducted, if adequate reserves with
respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;

(d) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business which are not overdue for
a period of more than 30 days or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person;

(e) pledges or deposits in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;

(f) deposits to secure the performance of bids, trade contracts and leases
(other than Indebtedness), statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;

(g) easements, rights-of-way, restrictions and other similar encumbrances
affecting real property which, in the aggregate, are not substantial in amount,
and which do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of the applicable Person;

 

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(h) Liens securing judgments for the payment of money not constituting an Event
of Default under Section 8.01(h); and

(i) Liens securing Indebtedness permitted under Section 7.02(e); provided, that
(i) such Liens do not at any time encumber any property other than the property
financed by such Indebtedness and (ii) the Indebtedness secured thereby does not
exceed the cost or fair market value, whichever is lower, of the property being
acquired on the date of acquisition.

7.02 Indebtedness. Create, incur, assume or suffer to exist any Indebtedness,
except:

(a) Indebtedness (x) of a Subsidiary owed to the Borrower or another Loan Party,
which Indebtedness shall (i) in the case of Indebtedness owed to a Loan Party,
constitute “Pledged Debt” under the applicable Security Agreement and (ii) be on
terms (including subordination terms) acceptable to the Administrative Agent and
(y) of the Borrower or another Loan Party owed to a Subsidiary in respect of any
intercompany balances related to licenses or royalties consistent with past
practices;

(b) Indebtedness under the Loan Documents;

(c) Indebtedness outstanding on the date hereof and listed on Schedule 7.02 and
any refinancings, refundings, renewals or extensions thereof; provided, that the
amount of such Indebtedness is not increased at the time of such refinancing,
refunding, renewal or extension except by an amount equal to a reasonable
premium or other reasonable amount paid, and fees and expenses reasonably
incurred, in connection with such refinancing and by an amount equal to any
existing commitments unutilized thereunder and the direct or any contingent
obligor with respect thereto is not changed, as a result of or in connection
with such refinancing, refunding, renewal or extension; and provided, further,
that the terms relating to principal amount, amortization, maturity, collateral
(if any) and subordination (if any), and other material terms taken as a whole,
of any such refinancing, refunding, renewing or extending Indebtedness, and of
any agreement entered into and of any instrument issued in connection therewith,
are no less favorable in any material respect to the Loan Parties or the Lenders
than the terms of any agreement or instrument governing the Indebtedness being
refinanced, refunded, renewed or extended and the interest rate applicable to
any such refinancing, refunding, renewing or extending Indebtedness does not
exceed the then applicable market interest rate;

(d) Guarantees of any Guarantor in respect of Indebtedness otherwise permitted
hereunder of the Borrower or any other Guarantor;

(e) Indebtedness in respect of Capitalized Leases and purchase money obligations
for fixed or capital assets within the limitations set forth in Section 7.01(i);
provided, however, that the aggregate amount of all such Indebtedness at any one
time outstanding shall not exceed $10,000,000; and

 

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(f) unsecured Indebtedness in an aggregate principal amount not to exceed
$3,000,000 at any time outstanding.

7.03 Formation of Subsidiaries. Form any Subsidiaries without the prior written
consent of the Administrative Agent

7.04 Sale and Leaseback Transactions. Enter into any arrangement, directly or
indirectly, with any Person whereby it shall sell or transfer any property, real
or personal, used or useful in its business, whether now owned or hereafter
acquired, and thereafter rent or lease such property or other property which it
intends to use for substantially the same purpose or purposes as the property
being sold or transferred unless (i) the sale of such property is permitted by
Section 7.06, (ii) any Liens arising in connection with its use of such Property
are permitted by Section 7.01 and (iii) after giving effect to such transaction,
the aggregate fair market value of all properties covered by all sale and
leaseback transactions entered into by all such Persons would not exceed
$1,000,000.

7.05 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into
another Person, or Dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except that, so long as no
Default exists or would result therefrom:

(a) any Loan Party may merge with (i) the Borrower; provided, that the Borrower
shall be the continuing or surviving Person, or (ii) any one or more other
Subsidiaries; provided, that when any Loan Party is merging with another
Subsidiary, such Loan Party shall be the continuing or surviving Person;
provided, further, that the Lien on and security interest in such property
granted or to be granted in favor of the Administrative Agent under the
applicable Collateral Document shall be maintained in full force and effect and
perfected and enforceable (to at least the same extent as in effect immediately
prior to such transfer) or created in accordance with the provisions of
Section 6.12.

(b) any Loan Party may Dispose of all or substantially all of its assets (upon
voluntary liquidation or otherwise) to another Loan Party organized under the
laws of the United States (or any State thereof) as such Disposing Loan Party;
provided, that the Lien on and security interest in such assets granted or to be
granted in favor of the Administrative Agent under the applicable Collateral
Document shall be maintained in full force and effect and perfected and
enforceable (to at least the same extent as in effect immediately prior to such
transfer) or created in accordance with the provisions of Section 6.12.

(c) any Subsidiary that is not a Loan Party may dispose of all or substantially
all its assets (including any Disposition that is in the nature of a
liquidation) to (i) another Subsidiary that is not a Loan Party or (ii) to a
Loan Party;

(d) the Borrower and any of its Subsidiaries may merge into or consolidate with
any other Person or permit any other Person to merge into or consolidate with
it; provided, however, that in each case, immediately after giving effect
thereto (i) in the

 

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case of any such merger to which the Borrower is a party, the Borrower is the
surviving corporation, (ii) in the case of any such merger to which any Loan
Party (other than the Borrower) is a party, such Loan Party is the surviving
corporation and (iii) that the Lien on and security interest in such assets
granted by the Borrower or such Subsidiary or to be granted in favor of the
Administrative Agent under the applicable Collateral Document shall be
maintained in full force and effect and perfected and enforceable (to at least
the same extent as in effect immediately prior to such transfer).

7.06 Dispositions. Make any Disposition or enter into any agreement to make any
Disposition, except:

(a) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business;

(b) Dispositions of inventory, services or revenues in the ordinary course of
business and consistent with past practices;

(c) Dispositions of equipment or real property to the extent that (i) such
property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;

(d) Dispositions of property by any Subsidiary to the Borrower or to a
wholly-owned Subsidiary thereof; provided that if the transferor of such
property is a Guarantor, the transferee thereof must be a Loan Party organized
under the laws of the United States (or any State thereof) as such Guarantor;

(e) The Disposition by the Borrower of all of its Equity Interests in Texon;

(f) Dispositions permitted by Section 7.05; and

(g) Dispositions of property by the Borrower or any other Loan Party to any
Canadian Subsidiary in an aggregate amount not to exceed $7,500,000.

provided, however, that any Disposition shall be for fair market value.

7.07 Burdensome Agreements. Enter into or permit to exist any Contractual
Obligation (other than this Agreement or any other Loan Document) that
(a) limits the ability (i) of any Subsidiary to make dividend payments or other
distributions (whether in cash, securities or other property) to the Borrower or
any Guarantor or to otherwise transfer property to or invest in the Borrower or
any Guarantor, except for any agreement in effect (A) on the date hereof and set
forth on Schedule 7.07 or (B) at the time any Subsidiary becomes a Subsidiary of
the Borrower, so long as such agreement was not entered into solely in
contemplation of such Person becoming a Subsidiary of the Borrower or (ii) of
any Subsidiary to Guarantee the Indebtedness of the Borrower; or (b) requires
the grant of a Lien to secure an obligation of such Person if a Lien is granted
to secure another obligation of such Person.

 

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7.08 Use of Proceeds. Use the proceeds of any Borrowing, whether directly or
indirectly, and whether immediately, incidentally or ultimately, to purchase or
carry margin stock (within the meaning of Regulation U of the FRB) or to extend
credit to others for the purpose of purchasing or carrying margin stock or to
refund indebtedness originally incurred for such purpose.

7.09 Minimum Consolidated Cash EBITDA. Permit Consolidated Cash EBITDA for the
twelve-month period ending on the last day of each fiscal quarter of the
Borrower to be less than $22,000,000.

7.10 Accounting Changes. Make any change in (a) accounting policies or reporting
practices, except as required by GAAP, or (b) fiscal year.

7.11 Prepayments, Etc. of Indebtedness. Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner, or make
any payment in violation of any subordination terms of, any Indebtedness, except
(a) the prepayment of the Borrowings in accordance with the terms of this
Agreement and (b) regularly scheduled or required repayments or redemptions of
Indebtedness set forth in Schedule 7.02 and refinancings and refundings of such
Indebtedness in compliance with Section 7.02(c).

7.12 Amendment, Etc. of Indebtedness. Amend, modify or change in any manner any
term or condition of any Indebtedness set forth in Schedule 7.02, except for any
refinancing, refunding, renewal or extension thereof permitted by
Section 7.02(c).

7.13 Ownership of Subsidiaries. Notwithstanding any other provisions of this
Agreement to the contrary, (i) permit any Person (other than the Borrower or any
wholly-owned Subsidiary of the Borrower) to own any Equity Interests of any Loan
Party, except to qualify directors where required by applicable Law, (ii) permit
any Subsidiary to issue or have outstanding any shares of preferred Equity
Interests, or (iii) create, incur, assume or suffer to exist any Lien on any
Equity Interests of any Subsidiary, except for under the Collateral Documents.

7.14 Compliance with Indenture. Fail to comply with any of the provisions of the
Indenture.

7.15 Negative Pledge. Enter into or suffer to exist, or permit any of its
Subsidiaries to enter into or suffer to exist, any agreement prohibiting or
conditioning the creation or assumption of any Lien upon any of its property or
assets except (i) agreements in favor of the Secured Parties or
(ii) prohibitions or conditions under (A) any purchase money Indebtedness
permitted by Section 7.02(e) solely to the extent that the agreement or
instrument governing such Indebtedness prohibits a Lien on the property acquired
with the proceeds of such Debt or (B) any Capitalized Lease permitted by
Section 7.02(e) solely to the extent that such Capitalized Lease prohibits a
Lien on the property subject thereto.

 

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ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

8.01 Events of Default. With respect to either Facility, any of the following
shall constitute an Event of Default:

(a) Non-Payment. The Borrower or any other applicable Loan Party fails to
(i) pay when and as required to be paid herein, any amount of principal of any
Loan, or (ii) pay within three days after the same becomes due, any interest on
any Loan, or (iii) pay within five days after the same becomes due, any other
amount payable hereunder or under any other Loan Document; or

(b) Specific Covenants. The Borrower fails to perform or observe any term,
covenant or agreement contained in any of Section 6.01, 6.02, 6.03, 6.05, 6.10,
6.11, 6.12, or Article VII or (ii) any of the applicable Guarantors fails to
perform or observe any term, covenant or agreement contained in Article X; or

(c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in Section 8.01(a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days; or

(d) Representations and Warranties. Any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of the Borrower or any
other applicable Loan Party herein, in any other Loan Document, or in any
document delivered in connection herewith or therewith shall be incorrect or
misleading when made or deemed made; or

(e) Cross-Default. Any Loan Party or any Subsidiary thereof (A) fails to make
any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
having an aggregate principal amount (including undrawn committed or available
amounts and including amounts owing to all creditors under any combined or
syndicated credit arrangement) of more than $10,000,000, or (B) fails to observe
or perform any other agreement or condition relating to any such Indebtedness or
Guarantee or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event occurs, the effect of which default or
other event is to cause, or to permit the holder or holders of such Indebtedness
or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to be demanded or to become
due or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity, or such Guarantee to
become payable or cash collateral in respect thereof to be demanded; or

(f) Insolvency Proceedings, Etc. Any Loan Party or any Subsidiary thereof
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or

 

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makes an assignment for the benefit of creditors; or applies for or consents to
the appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of its
property; or any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed without the application or consent
of such Person and the appointment continues undischarged or unstayed for 60
calendar days; or any proceeding under any Debtor Relief Law relating to any
such Person or to all or any material part of its property is instituted without
the consent of such Person and continues undismissed or unstayed for 60 calendar
days, or an order for relief is entered in any such proceeding; or

(g) Inability to Pay Debts; Attachment. (i) Any Loan Party or any Subsidiary
thereof becomes unable or admits in writing its inability or fails generally to
pay its debts as they become due, or (ii) any writ or warrant of attachment or
execution or similar process is issued or levied against all or any material
part of the property of any such Person and is not released, vacated or fully
bonded within 30 days after its issue or levy; or

(h) Judgments. There is entered against any Loan Party or any Subsidiary thereof
(i) one or more final judgments or orders for the payment of money in an
aggregate amount (as to all such judgments and orders) exceeding $10,000,000 (to
the extent not covered by independent third-party insurance as to which the
insurer is rated at least “A” by A.M. Best Company, has been notified of the
potential claim and does not dispute coverage), or (ii) any one or more
non-monetary final judgments that have, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect and, in either case,
(A) enforcement proceedings are commenced by any creditor upon such judgment or
order, or (B) there is a period of ten consecutive days during which a stay of
enforcement of such judgment, by reason of a pending appeal or otherwise, is not
in effect; or

(i) Employee Benefit Plans. An ERISA Event shall have occurred, in either case
with respect to a Loan Party or any of its ERISA Affiliates, that, when taken
together with all other such ERISA Events that have occurred, with respect to
any Loan Party or any of its ERISA Affiliates, would reasonably be expected to
result in a Material Adverse Effect; or

(j) Invalidity of Loan Documents. Any provision of any Loan Document, at any
time after its execution and delivery and for any reason other than as expressly
permitted hereunder or thereunder or satisfaction in full of all the
Obligations, ceases to be in full force and effect; or any Loan Party or any
other Person contests in any manner the validity or enforceability of any
provision of any Loan Document; or any Loan Party denies that it has any or
further liability or obligation under any provision of any Loan Document, or
purports to revoke, terminate or rescind any provision of any Loan Document; or

(k) Change of Control. There occurs any Change of Control; or

 

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(l) Collateral Documents. Any Collateral Document after delivery thereof
pursuant to Section 4.01 or Section 6.12 shall for any reason (other than
pursuant to the terms thereof) cease to create a valid and perfected first
priority Lien (subject to Liens permitted by Section 7.01) on the Collateral
purported to be covered thereby.

8.02 Remedies upon Event of Default. If any Event of Default occurs and is
continuing, the Administrative Agent shall, at the request of, or may, with the
consent of, the Required Lenders take any or all of the following actions:

(a) declare the commitment of each applicable Lender to make Loans to be
terminated, whereupon such commitments shall be terminated; and

(b) declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower;

provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under any Debtor Relief Law, the
obligation of each Lender to make Loans shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, in each case
without further act of the Administrative Agent or any Lender.

8.03 Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable), any amounts received on account of the Obligations shall be applied by
the Administrative Agent in the following order:

First, to payment of that portion of such Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Administrative Agent and amounts payable under
Article III) payable to the Administrative Agent in its capacity as such;

Second, to payment of that portion of such Obligations constituting fees,
indemnities and other amounts payable to the applicable Lenders and amounts
payable under Article III, ratably among them in proportion to the respective
amounts described in this clause Second payable to them;

Third, to payment of that portion of such Obligations constituting accrued and
unpaid interest on the applicable Loans and other Obligations, ratably among the
Lenders in proportion to the respective amounts described in this clause Third
payable to them;

Fourth, to payment of that portion of such Obligations constituting unpaid
principal of the Loans, ratably among the Lenders in proportion to the
respective amounts described in this clause Fourth held by them; and

 

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Last, the balance, if any, after all of such Obligations have been indefeasibly
paid in full, to the Borrower or as otherwise required by Law.

ARTICLE IX

ADMINISTRATIVE AGENT

9.01 Appointment and Authority. (a) Each of the Lenders hereby irrevocably
appoints ValueAct Capital Management, L.P. to act on its behalf as the
Administrative Agent hereunder and under the other Loan Documents and authorizes
the Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto. The provisions of this Article are solely for the benefit of the
Administrative Agent and the Lenders, and neither the Borrower nor any other
Loan Party shall have rights as a third party beneficiary of any of such
provisions.

(b) The Administrative Agent shall also act as the “collateral agent” under the
Loan Documents, and each of the Lenders hereby irrevocably appoints and
authorizes the Administrative Agent to act as the agent of such Lender for
purposes of acquiring, holding and enforcing any and all Liens on Collateral
granted by any of the Loan Parties to secure any of the Obligations, together
with such powers and discretion as are reasonably incidental thereto. In this
connection, the Administrative Agent, as “collateral agent” and any co-agents,
sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant
to Section 9.05 for purposes of holding or enforcing any Lien on the Collateral
(or any portion thereof) granted under the Collateral Documents, or for
exercising any rights and remedies thereunder at the direction of the
Administrative Agent), shall be entitled to the benefits of all provisions of
this Article IX and Article XI (including Section 11.04(c), as though such
co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under
the Loan Documents) as if set forth in full herein with respect thereto.

9.02 Rights as a Lender. The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if such Person were not the Administrative Agent hereunder and
without any duty to account therefor to the Lenders.

9.03 Exculpatory Provisions. The Administrative Agent shall not have any duties
or obligations except those expressly set forth herein and in the other Loan
Documents. Without limiting the generality of the foregoing, the Administrative
Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing;

 

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(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents), as applicable; provided, that the
Administrative Agent shall not be required to take any action that, in its
opinion or the opinion of its counsel, may expose the Administrative Agent to
liability or that is contrary to any Loan Document or applicable Law; and

(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower or any of their Affiliates
that is communicated to or obtained by the Person serving as the Administrative
Agent or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken
by it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 11.01 and 8.02), as applicable, or (ii) in
the absence of its own gross negligence or willful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until notice describing such Default is given to the Administrative Agent by
the Borrower or a Lender.

The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document, or the creation,
perfection or priority of any Lien purported to be created by the Collateral
Documents, (v) the value or the sufficiency of any Collateral, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

9.04 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing (including any electronic message, Internet or intranet website posting
or other distribution) believed by it to be genuine and to have been signed,
sent or otherwise authenticated by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper Person, and shall not incur any liability
for relying thereon. In determining compliance with any condition hereunder to
the making of a Loan that by its terms must be fulfilled to the satisfaction of
a Lender, the Administrative Agent may presume that such condition is
satisfactory to such Lender unless the Administrative Agent shall have received
notice to the contrary from such Lender or prior to the making of such Loan.

 

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The Administrative Agent may consult with legal counsel (who may be counsel for
the Borrower), independent accountants and other experts selected by it, and
shall not be liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts.

9.05 Delegation of Duties. The Administrative Agent may perform any and all of
its duties and exercise its rights and powers hereunder or under any other Loan
Document by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.

9.06 Resignation of Administrative Agent. The Administrative Agent may at any
time give notice of its resignation under the Facility to the applicable Lenders
and the Borrower. Upon receipt of any such notice of resignation, the Required
Lenders shall have the right, in consultation with the Borrower, to appoint a
successor. If no such successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the
retiring Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may on behalf of the applicable Lenders, appoint a
successor Administrative Agent meeting the qualifications set forth above;
provided, that if the Administrative Agent shall notify the Borrower and the
Lenders that no qualifying Person has accepted such appointment, then such
resignation shall nonetheless become effective in accordance with such notice
and (a) the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder and under the other Loan Documents (except that in the
case of any collateral security held by the Administrative Agent on behalf of
the applicable Lenders under any of the Loan Documents, the retiring
Administrative Agent shall continue to hold such collateral security until such
time as a successor Administrative Agent is appointed), in each case with
respect to the Facility and (b) all payments, communications and determinations
provided to be made by, to or through the Administrative Agent shall instead be
made by or to each Lender directly, until such time as the Required Lenders
appoint a successor Administrative Agent as provided for above in this Section.
Upon the acceptance of a successor’s appointment as Administrative Agent
hereunder, such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring (or retired)
Administrative Agent and the retiring Administrative Agent shall be discharged
from all of its duties and obligations hereunder or under the other Loan
Documents (if not already discharged therefrom as provided above in this
Section), in each case with respect to the Facility. The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the retiring Administrative Agent’s resignation hereunder and
under the other Loan Documents, the provisions of this Article and Section 11.04
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while the retiring Administrative
Agent was acting as Administrative Agent.

 

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9.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.

9.08 Administrative Agent May File Proofs of Claim. In case of the pendency of
any proceeding under any Debtor Relief Law or any other judicial proceeding
relative to any Loan Party, the Administrative Agent (irrespective of whether
the principal of any Loan shall then be due and payable as herein expressed or
by declaration or otherwise and irrespective of whether the Administrative Agent
shall have made any demand on the Borrower) shall be entitled and empowered, by
intervention in such proceeding or otherwise

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans and all other Obligations that are
owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the applicable Lenders and the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of such Lenders and the Administrative
Agent and their respective agents and counsel and all other amounts due such
Lenders and the Administrative Agent under Sections 2.03(i) and (j), 2.09 and
11.04) allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, if the
Administrative Agent shall consent to the making of such payments directly to
the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Section 11.04.

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender to authorize the Administrative Agent to
vote in respect of the claim of any Lender or in any such proceeding.

9.09 Collateral and Guaranty Matters. The Lenders irrevocably authorize the
Administrative Agent, at its option and in its discretion,

 

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(a) to release any Lien on any property granted to or held by the Administrative
Agent under any applicable Loan Document (i) following the payment in full of
all of the Obligations (other than contingent indemnification obligations),
(ii) that is sold or to be sold as part of or in connection with any sale
permitted hereunder or under any other Loan Document, or (iii) if approved,
authorized or ratified in writing in accordance with Section 11.01;

(b) to release any Guarantor from its obligations under the Guaranty if such
Person ceases to be a Subsidiary as a result of a transaction permitted
hereunder; and

(c) to subordinate any Lien on any property granted to or held by the
Administrative Agent under any Loan Document to the holder of any Lien on such
property that is permitted by Section 7.01(i).

Upon request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations under the Guaranty pursuant to this
Section 9.09. In each case as specified in this Section 9.09, the Administrative
Agent will, at the Borrower’s expense, execute and deliver to the applicable
Loan Party such documents as such Loan Party may reasonably request to evidence
the release of such item of Collateral from the assignment and security interest
granted under the Collateral Documents or to subordinate its interest in such
item, or to release such Guarantor from its obligations under the Guaranty, in
each case in accordance with the terms of the Loan Documents and this
Section 9.09.

ARTICLE X

CONTINUING GUARANTY

10.01 Guaranty. The Guarantors hereby absolutely and unconditionally guarantee,
as a guaranty of payment and performance and not merely as a guaranty of
collection, prompt payment when due, whether at stated maturity, by required
prepayment, upon acceleration, demand or otherwise, and at all times thereafter,
of any and all of the Obligations, whether for principal, interest, premiums,
fees, indemnities, damages, costs, expenses or otherwise, of the Borrower to the
Secured Parties, arising hereunder and under the other Loan Documents (including
all renewals, extensions, amendments, refinancings and other modifications
thereof and all costs, attorneys’ fees and expenses incurred by the Secured
Parties in connection with the collection or enforcement thereof). The
Administrative Agent’s books and records showing the amount of the Obligations
shall be admissible in evidence in any action or proceeding, and shall be
binding upon each Guarantor, and conclusive for the purpose of establishing the
amount of the Obligations. This Guaranty shall not be affected by the
genuineness, validity, regularity or enforceability of the Obligations or any
instrument or agreement evidencing any Obligations, or by the existence,
validity, enforceability, perfection, non-perfection or extent of any collateral
therefor, or by any fact or circumstance relating to the Obligations which might
otherwise constitute a defense to the obligations of the Guarantors under this
Guaranty, and each Guarantor hereby irrevocably waives any defenses it may now
have or hereafter acquire in any way relating to any or all of the foregoing.

 

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10.02 Rights of Lenders. Each Guarantor consents and agrees that the Secured
Parties may, at any time and from time to time, without notice or demand, and
without affecting the enforceability or continuing effectiveness hereof:
(a) amend, extend, renew, compromise, discharge, accelerate or otherwise change
the time for payment or the terms of the Obligations or any part thereof;
(b) take, hold, exchange, enforce, waive, release, fail to perfect, sell, or
otherwise dispose of any security for the payment of this Guaranty or any
Obligations; (c) apply such security and direct the order or manner of sale
thereof as the Administrative Agent and the applicable Lenders in their sole
discretion may determine; and (d) release or substitute one or more of any
endorsers or other guarantors of any of the Obligations. Without limiting the
generality of the foregoing, each Guarantor consents to the taking of, or
failure to take, any action which might in any manner or to any extent vary the
risks of such Guarantor under this Guaranty or which, but for this provision,
might operate as a discharge of such Guarantor.

10.03 Certain Waivers. Each Guarantor waives (a) any defense arising by reason
of any disability or other defense of the applicable or any other guarantor, or
the cessation from any cause whatsoever (including any act or omission of any
Secured Party) of the liability of the Borrower; (b) any defense based on any
claim that such Guarantor’s obligations exceed or are more burdensome than those
of the Borrower; (c) the benefit of any statute of limitations affecting such
Guarantor’s liability hereunder; (d) any right to proceed against the Borrower
proceed against or exhaust any security for the Obligations or pursue any other
remedy in the power of any Secured Party whatsoever; (e) any benefit of and any
right to participate in any security now or hereafter held by any Secured Party;
and (f) to the fullest extent permitted by Law, any and all other defenses or
benefits that may be derived from or afforded by applicable law limiting the
liability of or exonerating guarantors or sureties. Each Guarantor expressly
waives all setoffs and counterclaims and all presentments, demands for payment
or performance, notices of nonpayment or nonperformance, protests, notices of
protest, notices of dishonor and all other notices or demands of any kind or
nature whatsoever with respect to the Obligations and all notices of acceptance
of this Guaranty or of the existence, creation or incurrence of new or
additional Obligations. As provided below, this Guaranty shall be governed by,
and construed in accordance with, the laws of the State of New York.

10.04 Obligations Independent. The obligations of each Guarantor hereunder are
those of primary obligor, and not merely as surety, and are independent of the
Obligations and the obligations of any other guarantor, and a separate action
may be brought against such Guarantor to enforce this Guaranty whether or not
the Borrower or any other Person or entity is joined as a party.

10.05 Subrogation. No Guarantor shall exercise any right of subrogation,
contribution, indemnity, reimbursement or similar rights with respect to any
payments it makes under this Guaranty until all of the Obligations and any
amounts payable under this Guaranty have been indefeasibly paid and performed in
full and the Commitments and the Facility is terminated. If any amounts are paid
to any Guarantor in violation of the foregoing limitation, then such amounts
shall be held in trust for the benefit of the Secured Parties and shall
forthwith be paid to the Secured Parties to reduce the amount of the
Obligations, whether matured or unmatured.

 

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10.06 Termination; Reinstatement. This Guaranty is a continuing and irrevocable
guaranty of all Obligations now or hereafter existing and shall remain in full
force and effect until all such Obligations and any other amounts payable under
this Guaranty are indefeasibly paid in full in cash and the Commitments and the
Facility with respect to such Obligations are terminated. Notwithstanding the
foregoing, this Guaranty shall continue in full force and effect or be revived,
as the case may be, if any payment by or on behalf of the Borrower or any
Guarantor is made, or any of the Secured Parties exercises its right of setoff,
in respect of the Obligations and such payment or the proceeds of such setoff or
any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by any of the Secured Parties in their discretion) to be repaid to
a trustee, receiver or any other party, in connection with any proceeding under
any Debtor Relief Laws or otherwise, all as if such payment had not been made or
such setoff had not occurred and whether or not the Secured Parties are in
possession of or have released this Guaranty and regardless of any prior
revocation, rescission, termination or reduction. The obligations of each
Guarantor under this paragraph shall survive termination of this Guaranty.

10.07 Subordination. Each Guarantor hereby subordinates the payment of all
obligations and indebtedness of the Borrower owing to such Guarantor, whether
now existing or hereafter arising, including but not limited to any obligation
of the Borrower to such Guarantor as subrogee of the Secured Parties or
resulting from such Guarantor’s performance under this Guaranty, to the
indefeasible payment in full in cash of all of the Obligations. If the Secured
Parties so request, any such obligation or indebtedness of the Borrower to each
Guarantor shall be enforced and performance received by such Guarantor as
trustee for such Secured Parties and the proceeds thereof shall be paid over to
such Secured Parties on account of the Obligations, but without reducing or
affecting in any manner the liability of such Guarantor under this Guaranty.

10.08 Stay of Acceleration. If acceleration of the time for payment of any of
the Obligations is stayed, in connection with any case commenced by or against a
Guarantor or the Borrower under any Debtor Relief Laws, or otherwise, all such
amounts shall nonetheless be payable by such Guarantor immediately upon demand
by the Secured Parties.

10.09 Condition of the Borrower. Each Guarantor acknowledges and agrees that it
has the sole responsibility for, and has adequate means of, obtaining from the
Borrower and any other guarantor such information concerning the financial
condition, business and operations of the Borrower and any such other guarantor
as such Guarantor requires, and that none of the Secured Parties has any duty,
and such Guarantor is not relying on the Secured Parties at any time, to
disclose to such Guarantor any information relating to the business, operations
or financial condition of the Borrower or any other guarantor (such Guarantor
waiving any duty on the part of the Secured Parties to disclose such information
and any defense relating to the failure to provide the same).

ARTICLE XI

MISCELLANEOUS

11.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement
or any other Loan Document, and no consent to any departure by the Borrower or

 

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any other Loan Party therefrom, shall be effective unless in writing signed by
the Required Lenders and the Borrower or the applicable Loan Party, as the case
may be, and acknowledged by the Administrative Agent, and each such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such amendment, waiver or
consent shall:

(a) waive any condition set forth in Section 4.01, or, in the case of the
initial Borrowing, Section 4.02, without the written consent of each Lender;

(b) extend or increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 8.02) without the written consent of such Lender;

(c) postpone any date fixed by this Agreement or any other Loan Document for any
payment of principal, interest, fees or other amounts due to the Lenders (or any
of them) hereunder or under such other Loan Document without the written consent
of each Lender entitled to such payment;

(d) reduce the principal of, or the rate of interest specified herein on, any
Loan, or any fees or other amounts payable hereunder or under any other Loan
Document without the written consent of each Lender entitled to such amount;
provided, however, that only the consent of the Required Lenders shall be
necessary to amend the definition of “Default Rate”;

(e) change Section 8.03 in a manner that would alter the pro rata sharing of
payments required thereby without the written consent of each Lender;

(f) change any provision of this Section 11.01 or the definition of “Required
Lenders” or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder (other than the
definitions specified in clause (ii) of this Section 11.01(g)), without the
written consent of each Lender;

(g) release all or substantially all of the Collateral in any transaction or
series of related transactions, without the written consent of each Lender;

(h) release all or substantially all of the value of the Guaranty, without the
written consent of each Lender, except to the extent the release of any
Subsidiary from the Guaranty is permitted pursuant to Section 9.09 (in which
case such release may be made by the Administrative Agent acting alone); or

(i) impose any greater restriction on the ability of any Lender to assign any of
its rights or obligations hereunder without the written consent of each Lender;

and provided, further, that no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Lenders
required above, affect the rights or duties of the Administrative Agent under
this Agreement or any other Loan Document. Notwithstanding anything to the
contrary herein, no Defaulting Lender shall have any right to

 

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approve or disapprove any amendment, waiver or consent hereunder, except that
the Commitment of such Lender may not be increased or extended without the
consent of such Lender.

11.02 Notices; Effectiveness; Electronic Communications. (a) Notices Generally.
Except in the case of notices and other communications expressly permitted to be
given by telephone (and except as provided in subsection (b) below), all notices
and other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by facsimile or other electronic means as follows, and
all notices and other communications expressly permitted hereunder to be given
by telephone shall be made to the applicable telephone number, as follows:

 

  (i) if to the Borrower or the Administrative Agent, to the address, facsimile
number, electronic mail address or telephone number specified for such Person on
Schedule 11.02; and

 

  (ii) if to any other Lender, to the address, facsimile number, electronic mail
address or telephone number as such Lender may from time to time notify the
Borrower and the Administrative Agent.

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by facsimile shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in subsection (b) below shall be effective as provided in such
subsection (b).

(b) Electronic Communications. Notices and other communications to the Lenders
hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent; provided, that the foregoing shall not apply to notices to
any Lender pursuant to Article II if such Lender has notified the Administrative
Agent that it is incapable of receiving notices under such Article by electronic
communication. The Administrative Agent or the Borrower may, in their
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided, that
approval of such procedures may be limited to particular notices or
communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement); provided, that if such notice or other communication
is not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

 

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(c) Change of Address, Etc. Each of the Borrower and the Administrative Agent
may change its address, facsimile or telephone number for notices and other
communications hereunder by notice to the other parties hereto. Each other
Lender may change its address, facsimile or telephone number for notices and
other communications hereunder by notice to the Borrower and the Administrative
Agent. In addition, each Lender agrees to notify the Administrative Agent from
time to time to ensure that the Administrative Agent has on record (i) an
effective address, contact name, telephone number, facsimile number and
electronic mail address to which notices and other communications may be sent
and (ii) accurate wire instructions for such Lender.

(d) Reliance by Administrative Agent and Lenders. The Administrative Agent and
the Lenders shall be entitled to rely and act upon any notices (including
telephonic Committed Loan Notices) purportedly given by or on behalf of the
Borrower even if (i) such notices were not made in a manner specified herein,
were incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof. The Borrower shall indemnify the
Administrative Agent, the Lender and the Related Parties of each of them from
all losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of the Borrower. All
telephonic notices to and other telephonic communications with the
Administrative Agent may be recorded by the Administrative Agent, and each of
the parties hereto hereby consents to such recording.

11.03 No Waiver; Cumulative Remedies. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder or under any other Loan Document
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided, and provided under
each other Loan Document, are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by Law.

11.04 Expenses; Indemnity; Damage Waiver. (a) Costs and Expenses. The Borrower
shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates (including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent), in connection with
the preparation, negotiation, execution, delivery and administration of this
Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated) and (ii) all out of pocket
expenses incurred by the Administrative Agent or any Lender (including the fees,
charges and disbursements of any counsel for the Administrative Agent or any
Lender, in connection with the enforcement or protection of its rights (A) in
connection with this Agreement and the other Loan Documents, including its
rights under this Section, or (B) in connection with Loans made issued
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans.

 

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(b) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender, and each Related
Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses (including the fees,
charges and disbursements of any counsel for any Indemnitee, incurred by any
Indemnitee or asserted against any Indemnitee by any third party or by the
Borrower or any other Loan Party arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby or
thereby, or, in the case of the Administrative Agent (and any sub-agent thereof)
and its Related Parties only, the administration of this Agreement and the other
Loan Documents, (ii) any Loan or the use or proposed use of the proceeds
therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by the Borrower or any other Loan Party, and regardless of whether any
Indemnitee is a party thereto; provided, that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee or (y) result from a claim
brought by the Borrower or any other Loan Party against an Indemnitee for breach
in bad faith of such Indemnitee’s obligations hereunder or under any other Loan
Document, if the Borrower or such Loan Party has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction.

(c) Reimbursement by Lenders. To the extent that the Borrower for any reason
fails to indefeasibly pay any amount required under subsection (a) or (b) of
this Section to be paid by it to the Administrative Agent (or any sub-agent
thereof) or any Related Party of any of the foregoing, each applicable Lender
severally agrees to pay to the Administrative Agent (or any such sub-agent) or
such Related Party, as the case may be, such Lender’s Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided, that the unreimbursed
expense or indemnified loss, claim, damage, liability or related expense, as the
case may be, was incurred by or asserted against the Administrative Agent (or
any such sub-agent) in its capacity as such, or against any Related Party of any
of the foregoing acting for the Administrative Agent (or any such sub-agent) in
connection with such capacity. The obligations of the Lenders under this
subsection (c) are subject to the provisions of Section 2.08(d).

 

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(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable Law, the Borrower shall not assert, and hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or the use of the proceeds
thereof. No Indemnitee referred to in subsection (b) above shall be liable for
any damages arising from the use by unintended recipients of any information or
other materials distributed to such unintended recipients by such Indemnitee
through telecommunications, electronic or other information transmission systems
in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby other than for direct or actual
damages resulting from the gross negligence or willful misconduct of such
Indemnitee as determined by a final and nonappealable judgment of a court of
competent jurisdiction.

(e) Payments. All amounts due under this Section shall be payable not later than
ten Business Days after demand therefor.

(f) Survival. The agreements in this Section shall survive the resignation of
the Administrative Agent, the replacement of any Lender, the termination of the
applicable Commitments and the repayment, satisfaction or discharge of all the
other Obligations.

11.05 Payments Set Aside. To the extent that any payment by or on behalf of the
Borrower is made to the Administrative Agent or any Lender, or the
Administrative Agent or any Lender exercises its right of setoff, and such
payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent
or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred, and (b) each Lender severally agrees to pay to the Administrative
Agent upon demand its applicable share (without duplication) of any amount so
recovered from or repaid by the Administrative Agent, plus interest thereon from
the date of such demand to the date such payment is made at a rate per annum
equal to the Federal Funds Effective Rate from time to time in effect. The
obligations of the Lenders under clause (b) of the preceding sentence shall
survive the payment in full of the Obligations and the termination of this
Agreement.

11.06 Successors and Assigns. (a) Successors and Assigns Generally. The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby,
except that neither the Borrower nor any other Loan Party may assign or
otherwise transfer any of their rights or obligations hereunder without the
prior written consent of the Administrative Agent and each Lender under the
Facility and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an assignee in accordance with the
provisions of Section 11.06(b), (ii) by way of participation in accordance with
the provisions of Section 11.06(d), or (iii) by way of

 

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pledge or assignment of a security interest subject to the restrictions of
Section 11.06(f) (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment(s) and the Loans at the time owing
to it); provided, that any such assignment shall be subject to the following
conditions:

 

  (i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment under the Facility and the Loans at the time owing to it or
in the case of an assignment to a Lender, an Affiliate of a Lender or an
Approved Fund, no minimum amount need be assigned; and

(B) in any case not described in subsection (b)(i)(A) of this Section, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the Commitment is not then in effect, the
principal outstanding balance of the Loans of the assigning Lender subject to
each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than $1,000,000, unless each of the Administrative Agent
and, so long as no Event of Default has occurred and is continuing, the Borrower
otherwise consents (each such consent not to be unreasonably withheld or
delayed); provided, however, that concurrent assignments to members of an
Assignee Group and concurrent assignments from members of an Assignee Group to a
single Eligible Assignee (or to an Eligible Assignee and members of its Assignee
Group) will be treated as a single assignment for purposes of determining
whether such minimum amount has been met;

 

  (ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned;

 

  (iii) Required Consents. No consent shall be required for any assignment
except to the extent required by subsection (b)(i)(B) of this Section and, in
addition:

(A) the consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (1) an Event of Default has occurred and is
continuing at the time of such assignment or (2) such assignment is to a Lender,
an Affiliate of a Lender or an Approved Fund; and

 

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(B) the consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments in respect of (1) any
Commitment if such assignment is to a Person that is not a Lender with a
Commitment in respect of the Facility, an Affiliate of such Lender or an
Approved Fund with respect to such Lender or (2) any Loan to a Person that is
not a Lender, an Affiliate of a Lender or an Approved Fund.

 

  (iv) Assignment and Assumption. The parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Assumption, together
with a processing and recordation fee in the amount of $3,500; provided,
however, that the Administrative Agent may, in its sole discretion, elect to
waive such processing and recordation fee in the case of any assignment.

 

  (v) No Assignment to the Borrower. No such assignment shall be made to the
Borrower or any of the Borrower’s Affiliates or Subsidiaries.

 

  (vi) No Assignment to Natural Persons. No such assignment shall be made to a
natural person.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 3.01 and 11.04 with respect to facts
and circumstances occurring prior to the effective date of such assignment. Upon
request, the Borrower (at its expense) shall execute and deliver a Note to the
assignee Lender. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this subsection shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with Section 11.06(d).

(c) Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative Agent’s Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by the Borrower
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.

 

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(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell participations to any
Person (other than a natural person or the Borrower or any of the Borrower’s
Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans owing to it); provided, that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative Agent
and the Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided, that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, waiver or other modification described in the first proviso to
Section 11.01 that affects such Participant. Subject to subsection (e) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Section 3.01 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to Section 11.06(b). To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 11.08 as though it were a Lender; provided, such Participant agrees to
be subject to Section 2.09 as though it were a Lender.

(e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 3.01 than the applicable Lender would
have been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrower’s prior written consent. A Participant that would be a Foreign
Lender if it were a Lender shall not be entitled to the benefits of Section 3.01
unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower, to comply with
Section 3.01(e) as though it were a Lender.

(f) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided,
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

(g) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be,

 

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to the extent and as provided for in any applicable law, including the Federal
Electronic Signatures in Global and National Commerce Act, the New York State
Electronic Signatures and Records Act, or any other similar state laws based on
the Uniform Electronic Transactions Act.

11.07 Treatment of Certain Information; Confidentiality. Each of the
Administrative Agent and the Lenders agrees to maintain the confidentiality of
the Information (as defined below), except that Information may be disclosed
(a) to its Affiliates and to its and its Affiliates’ respective partners,
directors, officers, employees, agents, advisors and representatives (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable Laws or regulations or by any subpoena or
similar legal process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to
(i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or
(ii) any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to the Borrower and its obligations, (g) with
the consent of the Borrower or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or
(ii) becomes available to the Administrative Agent, any Lender, or any of their
respective Affiliates on a nonconfidential basis from a source other than the
Borrower.

For purposes of this Section, “Information” means all information received from
any Loan Party or any Subsidiary thereof relating to any Loan Party or any
Subsidiary thereof or their respective businesses, other than any such
information that is available to the Administrative Agent or any Lender on a
nonconfidential basis prior to disclosure by any Loan Party or any Subsidiary
thereof, provided, that, in the case of information received from a Loan Party
or any such Subsidiary after the date hereof, such information is clearly
identified at the time of delivery as confidential. Any Person required to
maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.

Each of the Administrative Agent and the Lenders acknowledges that (a) the
Information may include material non-public information concerning the Borrower
or a Subsidiary, as the case may be, (b) it has developed compliance procedures
regarding the use of material non-public information and (c) it will handle such
material non-public information in accordance with applicable Law, including
United States Federal and state securities Laws.

11.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by applicable Law,
to set off and apply any and all deposits (general or special, time or demand,
provisional or final, in whatever currency) at any

 

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time held and other obligations (in whatever currency) at any time owing by such
Lender or any such Affiliate to or for the credit or the account of the Borrower
or any other Loan Party against any and all of the obligations of the Borrower
or such Loan Party now or hereafter existing under this Agreement or any other
Loan Document to such Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement or any other Loan Document and
although such obligations of the Borrower or such Loan Party may be contingent
or unmatured or are owed to a branch or office of such Lender different from the
branch or office holding such deposit or obligated on such indebtedness. The
rights of each Lender and its Affiliates under this Section are in addition to
other rights and remedies (including other rights of setoff) that such Lender or
its Affiliates may have. Each Lender agrees to notify the Borrower and the
Administrative Agent promptly after any such setoff and application; provided,
that the failure to give such notice shall not affect the validity of such
setoff and application.

11.09 Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Loans or, if it
exceeds such unpaid principal, refunded to the Borrower. In determining whether
the interest contracted for, charged, or received by the Administrative Agent or
a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than 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 contemplated
term of the Obligations hereunder.

11.10 Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto in different counterparts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement and the other Loan Documents
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof that, when taken together, bear the signatures
of each of the other parties hereto. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement.

11.11 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Borrowing, and shall continue in full force and
effect as long as any Loan or any other Obligation hereunder shall remain unpaid
or unsatisfied.

 

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11.12 Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

11.13 Replacement of Lenders. If any Lender requests compensation under
Section 3.02, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01, or if any Lender is a Defaulting Lender, then the Borrower may, at
its sole expense and effort, upon notice to such Lender and the Administrative
Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in, and consents
required by, Section 11.06), all of its interests, rights and obligations under
this Agreement and the related Loan Documents to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided, that:

(a) the Borrower shall have paid to the Administrative Agent the assignment fee
specified in Section 11.06(b);

(b) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder and under the other Loan Documents
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts);

(c) in the case of any such assignment resulting from a claim for compensation
under Section 3.02 or payments required to be made pursuant to Section 3.01,
such assignment will result in a reduction in such compensation or payments
thereafter; and

(d) such assignment does not conflict with applicable Laws.

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

11.14 Governing Law; Jurisdiction; Etc. (a) GOVERNING LAW. THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.

(b) SUBMISSION TO JURISDICTION. THE BORROWER AND EACH OTHER LOAN PARTY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW
YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN

 

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DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT
OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK
STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH
FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT
THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF
ANY JURISDICTION.

(c) WAIVER OF VENUE. THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT.

(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.02. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW

11.15 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

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11.16 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrower that pursuant to the requirements of
the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record information that
identifies each Loan Party, which information includes the name and address of
each Loan Party and other information that will allow such Lender or the
Administrative Agent, as applicable, to identify each Loan Party in accordance
with the Act.

[Remainder of page intentionally left blank.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

SEITEL, INC., as Borrower By:  

/s/ Robert D. Monson

  Name:  Robert D. Monson   Title:  President and CEO

 

S-1

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GUARANTORS DATATEL, INC. MATRIX GEOPHYSICAL, INC. N360X, L.L.C.

SEITEL CANADA HOLDINGS, INC.

SEITEL DATA, LTD.

  By:   Seitel Delaware, Inc., its General Partner

SEITEL DELAWARE, INC.

SEITEL IP HOLDINGS, LLC

SEITEL MANAGEMENT, INC.

SEITEL OFFSHORE CORP.

SEITEL SOLUTIONS, INC.

SEITEL SOLUTIONS, LLC

SEITEL SOLUTIONS, LTD.   By:   Seitel Solutions, Inc., its General Partners
SEITEL SOLUTIONS HOLDINGS, LLC DDD ENERGY, INC. SI HOLDINGS, G.P. By:  

/s/ Robert D. Monson

  Name:   Robert D. Monson   Title:   Executive Vice President of each of the
above entities SEITEL DATA CORP. By:  

/s/ Darryl Smith

  Name:   Darryl Smith   Title:   Vice President

 

S-2

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VALUEACT CAPITAL MANAGEMENT, L.P., as Administrative Agent   By:   ValueAct
Capital Management, LLC, its General Partner By:  

/s/ George F. Hamel, Jr.

  Name:   George F. Hamel, Jr.   Title:   Chief Operating Officer VALUEACT
CAPITAL MASTER FUND L.P., as Lender   By:   VA Partners I, LLC, its General
Partner By:  

/s/ George F. Hamel, Jr.

  Name:   George F. Hamel, Jr.   Title:   Chief Operating Officer

 

S-3