exv10w1






Exhibit 10.1




EXECUTION COPY




 





$100,000,000 Revolving Loan




AMENDED AND RESTATED CREDIT AGREEMENT




dated as of




July 3, 2008




Among




ION GEOPHYSICAL CORPORATION,




ION INTERNATIONAL S.À R.L.

The Guarantors Party Hereto,




The Lenders Party Hereto,




HSBC BANK USA, N.A.,

as Administrative Agent, Joint Bookrunner and Joint Lead Arranger,




ABN AMRO INCORPORATED,

as Joint Bookrunner and Joint Lead Arranger




and




CITIBANK, N.A.,

as Syndication Agent




    
               
               
               
          
               
              
            

       


                                              




Andrews Kurth LLP

Counsel to the Administrative Agent





 









 








          AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) dated as of July 3, 2008,
(the “Effective Date”), among ION GEOPHYSICAL CORPORATION, a Delaware corporation (the
“Domestic Borrower”), ION INTERNATIONAL S.À R.L., a Luxembourg private limited company
(société à responsabilité limitée), having its registered office at 560A rue de Neudorf, L-2220
Luxembourg, with a share capital of EUR12,500, and registered with the Luxembourg Register of
Commerce and Companies under the number B-135.679 (the “Foreign Borrower” and together with
the Domestic Borrower, the “Borrowers”) the Guarantors party hereto, the Lenders party
hereto, HSBC BANK USA, N.A. (“HSBC”), as Administrative Agent, Joint Lead Arranger and
Joint Bookrunner, ABN AMRO INCORPORATED, as Joint Lead Arranger and Joint Bookrunner (“ABN
AMRO”, in such capacity and together with HSBC, the “Arrangers”) and CITIBANK, N.A., as
Syndication Agent.




PRELIMINARY STATEMENT:




          WHEREAS, the Domestic Borrower, Citibank, N.A, as administrative agent, and the lenders
thereto are parties to that certain Credit Agreement dated March 22, 2007 (as amended by that
certain First Amendment to Credit Agreement dated February 28, 2008, and as otherwise amended,
supplemented or modified prior to the date hereof, the “Original Agreement”) whereby the
lenders party thereto (the “Existing Lenders”) extended credit to the Domestic Borrower in
the form of loans and letters of credit; and




          WHEREAS, the parties hereto desire to enter into this Agreement, which shall amend and restate
the Original Agreement and provide that the Lenders will commit to make revolving credit loans up
to an initial principal amount of $100,000,000, and participate in Letters of Credit from time to
time pursuant to the terms of this Agreement.




          NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set forth herein,
the Borrowers, Guarantors, the Administrative Agent, the Arrangers and the Lenders agree as
follows:




ARTICLE I




Definitions




     SECTION 1.01 Defined Terms. As used in this Agreement, the following terms have the
meanings specified below:



          “ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to
the Alternate Base Rate.




          “Adjusted LIBO Rate” means, with respect to any Eurodollar and Alternative Currency
Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to (a) the applicable LIBO Rate for such Interest Period multiplied by
(b) the Statutory Reserve Rate.




 









 








          “Administrative Agent” means HSBC Bank USA, N.A., in its capacity as administrative
agent for the Lenders hereunder.




          “Administrative Questionnaire” means an administrative questionnaire in a form
supplied by the Administrative Agent.




          “Affiliate” means, with respect to a specified 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” has the meaning set forth in the introductory paragraph hereof.




          “Alternate Base Rate” means, for any day, a rate per annum equal to the greater of (a)
the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day
plus 1/2 of 1%. Any change in the Alternate 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.




          “Alternative Currency” means with respect to any Loan or Letter of Credit, Euros or
Pounds Sterling.




          “Alternative Currency Borrowing” means a Borrowing comprised of one or more
Alternative Currency Loans or an Alternative Currency Letter of Credit.




          “Alternative Currency Letter of Credit” means a Letter of Credit requested in an
Alternative Currency.




          “Alternative Currency Loan” means a Loan requested in an Alternative Currency with
respect to which a Borrower shall have elected an interest rate based on the LIBO Rate.




          “Applicable Margin” means, on any day, the applicable per annum percentage set forth
at the appropriate intersection in the table shown below, based on the Leverage Ratio for the most
recently ended trailing four-quarter period with respect to which the Domestic Borrower is required
to have delivered the financial statements and Compliance Certificate pursuant to Section
5.01 hereof (as such Leverage Ratio is reflected in the Compliance Certificate delivered under
Section 5.01(c) by the Domestic Borrower in connection with such financial statements):




	 	 	 	 	 	 	 
	Level	 	Leverage Ratio	 	LIBO Rate Margin	 	ABR Margin
	I
	 	<0.75x	 	1.875%	 	0.375%
	II
	 	30.75x<1.25x	 	2.125%	 	0.625%
	III
	 	31.25x<1.75x	 	2.375%	 	0.875%
	IV
	 	31.75x<2.25x	 	2.625%	 	1.125%
	V
	 	32.25x	 	2.875%	 	1.375%






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Each change in the Applicable Margin shall take effect on each date on which such financial
statements and Compliance Certificate are required to be delivered pursuant to Section
5.01, commencing with the date on which such financials statements and Compliance Certificate
are required to be delivered for the four-quarter period ending June 30, 2008. Notwithstanding the
foregoing, for the period from the Effective Date through the receipt of financial statements and
Compliance Certificate are required to be delivered pursuant to Section 5.01 for the fiscal
quarter ended June 30, 2008, the Applicable Margin shall be determined at Level I. In the event
that any financial statement delivered pursuant to Section 5.01 is shown to be inaccurate
when delivered (regardless of whether this Agreement or the Revolving Loan Commitments are in
effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to
the application of a higher Applicable Margin for any period (an “Applicable Period”) than the
Applicable Margin applied for such Applicable Period, and only in such case, then the Domestic
Borrower shall immediately (i) deliver to the Administrative Agent corrected financial statements
for such Applicable Period, (ii) determine the Applicable Margin for such Applicable Period based
upon the corrected financial statements, and (iii) immediately pay to the Administrative Agent the
accrued additional interest owing as a result of such increased Applicable Margin for such
Applicable Period, which payment shall be promptly applied by the Administrative Agent in
accordance with Section 2.16(a). This provision is in addition to the rights of the
Administrative Agent and the Lenders with respect to Section 2.11(d) and their other
respective rights under this Agreement. If the Domestic Borrower fails to deliver the financial
statements and corresponding Compliance Certificate to the Administrative Agent at the time
required pursuant to Section 5.01, then effective as of the date such financial statements
and corresponding Compliance Certificate were required to the delivered pursuant to Section
5.01, the Applicable Margin shall be determined at Level V and shall remain at such level until
the date such financial statements and corresponding Compliance Certificate are so delivered by the
Domestic Borrower.




          “Applicable Percentage” means, with respect to any Lender, the percentage of the total
Revolving Loan Commitments represented by such Lender’s Revolving Loan Commitment. If the
Revolving Loan Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Revolving Loan Commitments most recently in effect, giving effect to any
assignments.




          “Approved Fund” has the meaning assigned to such term in Section 10.04.




          “Arrangers” has the meaning given in the preamble hereto.




          “Asset Sale” means the sale, transfer, lease or disposition by a Borrower or any of
its respective Subsidiaries to any Person other than a Borrower or any of its respective
Subsidiaries of (i) any of the Equity Interests in the Foreign Borrower or any of the Domestic
Borrower’s respective Subsidiaries, (ii) substantially all of the assets of any division or line of
business of a Borrower or any of its respective Subsidiaries, or (iii) any other assets (whether
tangible or intangible) of a Borrower or any of its respective Subsidiaries (including, without
limitation, any accounts receivable but excluding (a) inventory sold in the ordinary course of
business, (b) Permitted Investments, (c) Margin Stock, and (d) obsolete, worn out or surplus
equipment).




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          “Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required by
Section 10.04), and accepted by the Administrative Agent, in substantially the form of
Exhibit 1.01A or any other form approved by the Administrative Agent.




          “Availability Period” means the period from and including the Effective Date to but
excluding the earlier of the Revolving Credit Termination Date and the date of termination of all
of the Revolving Loan Commitments as set forth herein.




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




          “Borrowers” means the Domestic Borrower and the Foreign Borrower.




          “Borrowing” means Revolving Loans of the same Type, made, converted or continued on
the same date and, in the case of any Loan to which the LIBO Rate is applicable, as to which a
single Interest Period is in effect.




          “Borrowing Request” means a request by either Borrower for a Borrowing in accordance
with Section 2.03.




          “Business Acquisition” means (i) an Investment by a Borrower or any of its respective
Subsidiaries in any other Person pursuant to which such Person shall become a Subsidiary or shall
be merged into or consolidated with a Borrower or any of its respective Subsidiaries or (ii) an
acquisition by a Borrower or any of its respective Subsidiaries of the property and assets of any
Person (other than a Borrower or any of its Subsidiary) that constitute substantially all of the
assets of such Person or any division or other business unit of such Person.




          “Business Day” means any day that is not a Saturday, Sunday or other day on which
commercial banks in New York City, New York or Houston, Texas are authorized or required by Law to
remain closed; provided that, when used in connection with a Eurodollar Loan or an
Alternative Currency Loan, the term “Business Day” shall also exclude any day on which banks are
not open for dealings in dollar deposits or Alternative Currencies in the London interbank market
(and if the Borrowings which are the subject of a borrowing, drawing, payment, reimbursement or
rate selection are denominated in Euros, the term “Business Day” shall also exclude any day that is
not a TARGET day).




          “Capital Lease Obligations” of any Person means the obligations of such Person to pay
rent or other amounts under any lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in accordance with GAAP.




          “Change in Law” means (a) the adoption of any Law after the date of this Agreement,
(b) any change in any Law or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or the



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Issuing Lender (or, for purposes of Section 2.14(b), by any lending office of such
Lender or by such Lender’s or the Issuing Lender’s holding company, if any) with any request,
guideline or directive (whether or not having the force of Law) of any Governmental Authority made
or issued after the date of this Agreement.




          “Change of Control” means (a) any Person or group (within the meaning of Rule 13d-5 of
the Commission under the Securities Exchange Act of 1934 as in effect on the date hereof) shall
become the beneficial owner (as defined in Rule 13d-3 of the Commission under the Securities
Exchange Act of 1934 as in effect on the date hereof) of issued and outstanding Equity Interests of
the Domestic Borrower representing more than 35% of the aggregate voting power in elections for
directors of the Domestic Borrower on a fully diluted basis; or (b) a majority of the members of
the board of directors of the Domestic Borrower shall cease to be either (i) Persons who were
members of the board of directors on the Effective Date or (ii) Persons who became members of such
board of directors after the Effective Date and whose election or nomination was approved by a vote
or consent of the majority of the members of the board of directors that are either described in
clause (i) above or who were elected under this clause (ii).




          “Citibank Letters of Credit” means those letters of credit described on Schedule
1.01A-2.




          “Code” means the Internal Revenue Code of 1986, as amended from time to time.




          “Collateral” means all of the property of any Obligor described in any of the Security
Documents.




          “Commission” means the Securities and Exchange Commission as constituted under the
Securities Exchange Act of 1934, or, if at any time such Commission is not existing and performing
the duties now assigned to it, then the body performing such duties at such time.




          “Commitment Fee Rate” means, on any day, the applicable per annum percentage set forth
at the appropriate intersection in the table shown below, based on the Leverage Ratio for the most
recently ended trailing four-quarter period with respect to which the Domestic Borrower is required
to have delivered the financial statements pursuant to Section 5.01 hereof (as such
Leverage Ratio is reflected in the Compliance Certificate delivered under Section 5.01(c)
by the Domestic Borrower in connection with such financial statements):




	 	 	 	 	 
	Level	 	Leverage Ratio	 	Commitment Fee Rate
	I
	 	<0.75x	 	0.300%
	II
	 	30.75x<1.25x	 	0.325%
	III
	 	31.25x<1.75x	 	0.350%
	VI
	 	31.75x<2.25x	 	0.400 %
	V
	 	32.25x	 	0.450%






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Each change in the Commitment Fee Rate shall take effect on each date on which such financial
statements and Compliance Certificate are required to be delivered pursuant to Section
5.01, commencing with the date on which such financials statements and Compliance Certificate
are required to be delivered for the four-quarter period ending June 30, 2008. Notwithstanding the
foregoing, for the period from the Effective Date through the date the financial statements and
Compliance Certificate are required to be delivered pursuant to Section 5.01 for the fiscal
quarter ended June 30, 2008, the Commitment Fee Rate shall be determined at Level I. In the event
any financial statement delivered pursuant to Section 5.01 is shown to be inaccurate when
delivered (regardless of whether this Agreement or the Revolving Loan Commitments are in effect
when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to a higher
Commitment Fee Rate for any period (an “Applicable Commitment Fee Period”) than the
Commitment Fee Rate applied for such Applicable Commitment Fee Period, and only in such case, then
the Domestic Borrower shall immediately (i) deliver to the Administrative Agent corrected financial
statements for such Applicable Commitment Fee Period, (ii) determine the Commitment Fee Rate for
such Applicable Commitment Fee Period based on the corrected financial statements, and (iii)
immediately pay to the Administrative Agent the additional accrued commitment fees owing as a
result of such increased Commitment Fee Rate for such Applicable Commitment Fee Period, which
payment shall be promptly applied in accordance with Section 2.16(a). This provision is in
addition to the rights of the Administrative Agents and Lenders with respect to Section
2.11(d) and their other respective rights under this Agreement. If the Domestic Borrower fails
to deliver the financial statements and corresponding Compliance Certificate to the Administrative
Agent at the time required pursuant to Section 5.01, then effective as of the date such
financial statements and corresponding Compliance Certificate were required to the delivered
pursuant to Section 5.01, the Commitment Fee Rate shall be determined at Level V and shall
remain at such level until the date such financial statements and corresponding Compliance
Certificate are so delivered by the Domestic Borrower.




          “Commitment Increase Agreement” means a Commitment Increase Agreement entered into by
a Lender in accordance with Section 2.18 and accepted by the Administrative Agent
substantially in the form of Exhibit 1.01B, or any other form approved by Administrative
Agent.




          “Commitment Increase Notice” has the meaning assigned to such term in
Section 2.18.




          “Compliance Certificate” means the certificate required to be delivered pursuant to
Section 5.01(c).




          “Consolidated Capital Expenditures” means, for any period, the expenditures for
additions to property, plant and equipment and other capital expenditures for such period, as the
same are or would be set forth in a consolidated statement of cash flows of the Domestic Borrower
and its Subsidiaries for such period.




          “Consolidated Capital Lease Obligations” means, for any period, the Capital Lease
Obligations for such period, as the same are or would be set forth in a consolidated statement of
cash flows of the Domestic Borrower and its Subsidiaries for such period.




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          “Consolidated EBITDA” means, for any period and for any Person, Consolidated Net
Income of such Person for such period plus, to the extent deducted in determining Consolidated Net
Income for such period, the aggregate of (i) Consolidated Interest Expense, (ii) income tax expense
and (iii) depreciation, amortization and other similar non-cash charges. The Consolidated EBITDA
of any Person acquired subsequent to the Effective Date shall be, as of the date of acquisition,
without duplication, said Person’s Consolidated EBITDA calculated for the most recently completed
twelve month period ended prior to such acquisition and, thereafter, its Consolidated EBITDA
calculated on a rolling four quarter basis.




          “Consolidated Indebtedness” means, for any period, the consolidated Indebtedness of
the Domestic Borrower and its Subsidiaries determined on a consolidated basis for such period.




          “Consolidated Interest Expense” means, for any period and for any Person, the sum of
aggregate interest expense of such Person and its Subsidiaries determined on a consolidated basis
for such period.




          “Consolidated Net Income” means, for any period and for any Person, the net income of
such Person and its subsidiaries, determined on a consolidated basis for such period, exclusive of
the effect of any extraordinary gains or losses.




          “Control” means the power, direct or indirect, to vote 35% or more of the voting power
for the election of directors (or the individuals performing similar functions) of such Person.




          “Convertible Notes” means (i) the Senior Convertible Notes and (ii) any other senior
unsecured convertible notes, subordinated unsecured convertible notes or senior subordinated
unsecured convertible notes, in each case, issued by the Domestic Borrower in one or more
transactions after the Effective Date that are mandatorily convertible on a stated date into a
fixed number of the Domestic Borrower’s common shares and not otherwise convertible.




          “Convertible Preferred Stock” means (i) the Existing Convertible Preferred Stock and
(ii) any other capital stock of the Domestic Borrower, in each case, issued by the Domestic
Borrower in one or more transactions after the Effective Date that are mandatorily convertible on a
stated date into a fixed number of the Domestic Borrower’s common shares and not otherwise
convertible.




          “Default” means any event or condition that constitutes an Event of Default or that
upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.




          “Default Rate” means (a) with respect to the Loans, the rate otherwise applicable to
such Loans plus 2%, and (b) with respect to all other amounts, the rate otherwise applicable to ABR
Loans plus 2%.




          “Dollars” or “$” refers to lawful money of the United States of America.




          “Domestic Borrower” has the meaning given in the preamble hereto.




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          “Domestic Guarantors” means (i) ION Exploration Products (USA) Inc., a Delaware
corporation, (ii) I/O Marine Systems Inc., a Louisiana corporation, (iii) GX Technology
Corporation, a Texas corporation and (iv) each of the Domestic Borrower’s existing and subsequently
acquired or organized Material Domestic Subsidiaries.




          “Domestic Revolving Lender” means a Lender that makes a Domestic Revolving Loan to the
Domestic Borrower.




          “Domestic Revolving Loans” means a Loan made to the Domestic Borrower pursuant to
Section 2.01(b).




          “Domestic Security Agreement” means a Security and Pledge Agreement securing the
Domestic Revolving Loans and the guarantees thereof.




          “Domestic Subsidiary” means a Subsidiary organized or formed under the laws of the
United States of America or any state, jurisdiction or territory thereof.




          “Dutch Guarantor” means a Guarantor that is incorporated in The Netherlands.




          “Dutch Obligors” means a borrower that is incorporated in The Netherlands or a Dutch
Guarantor.




          “Effective Date” has the meaning given in the preamble hereto.




          “EMU” means the economic and monetary union in accordance with the Treaty of Rome
1957, as amended by the Single European Act 1986, the Maastricht Treaty of 1992 and the Amsterdam
Treaty of 1998.




          “Environmental Laws” means all Laws, notices or agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way to the environment, preservation or
reclamation of natural resources, the management, release or threatened release of any Hazardous
Material.




          “Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the
Borrowers or any of their 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, to the knowledge of Borrower, 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.




          “Equity Interests” means shares of capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or other equity ownership
interests in a Person, and any warrants, options or other rights entitling the holder thereof to
purchase or acquire any such equity interest.




8









 








          “Equivalent Amount” means, on any day, with respect to any Alternative Currency, the
amount of an Alternative Currency into which an amount of Dollars may be converted based on the
rate at which Dollars may be exchanged into such Alternative Currency, or the amount of Dollars
into which an Alternative Currency may be converted based on the rate at which such Alternative
Currency may be exchanged into Dollars, as set forth at approximately 12:00 noon, Eastern time, on
such date on the Reuters World Currency Page for such Alternative Currency. In the event that such
rate does not appear on any Reuters World Currency Page, the Equivalent Amount with respect to such
Alternative Currency shall be determined by reference to such other publicly available service for
displaying exchange rates as may be reasonably selected by the Administrative Agent or, in the
event no such service is selected, such Equivalent Amount shall instead be calculated on the basis
of the arithmetical mean of the buy and sell spot rates of exchange on the Administrative Agent for
such Alternative Currency on the London market at 12:00 noon, Eastern time, on such date for the
purchase of Dollars with such Alternative Currency or the purchase of such Alternative Currency
with Dollars, for delivery two Business Days later; provided, that if at the time of any
such determination, for any reason, no such spot rate is being quoted, the Administrative Agent,
after consultation with the Borrowers, may use any reasonable method it deems appropriate to
determine such rate, and such determination shall be conclusive absent manifest error.




          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time.




          “ERISA Affiliate” means any trade or business (whether or not incorporated) that,
together with the Domestic Borrower, is treated as a single employer under Section 414(b) or (c) of
the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as
a single employer under Section 414 of the Code.




          “ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or
the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day
notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived;
(c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application
for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the
Domestic Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with
respect to the termination of any Plan; (e) the receipt by the Domestic Borrower or any ERISA
Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate
any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Domestic Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or
partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the Domestic Borrower
or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Domestic
Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or
a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.




     
     “Euro”
“Euros” and “€” mean the currency of the participating
member states of the EMU.




9









 








          “Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by
reference to the Adjusted LIBO Rate.




          “Event of Default” has the meaning assigned to such term in Section 7.01.




          “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the
Issuing Lender or any other recipient of any payment to be made by or on account of any obligation
of a Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income
by the United States of America, or by the jurisdiction 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 located, (b) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which a Borrower is located and (c)
in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrowers
under Section 2.17(b)), any withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a
new lending office) or is attributable to such Foreign Lender’s failure to comply with Section
2.15(f), except to the extent that such Foreign 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 a Borrower with respect to such withholding tax pursuant to Section 2.15(b).




          “Existing Lenders” has the meaning assigned to such term in the first preliminary
statement.




          “Existing Letters of Credit” means those certain letters of credit described on
Schedule 1.01A-1.




          “Existing Convertible Preferred Stock” means those certain (i) Series D-1 Cumulative
Convertible Preferred Stock issued pursuant to the terms of the Certificate of Rights and
Preferences of Series D-1 Cumulative Convertible Preferred Stock dated February 16, 2005,
(ii) Series D-2 Cumulative Convertible Preferred Stock issued pursuant to the terms of the
Certificate of Rights and Preferences of Series D-2 Cumulative Convertible Preferred Stock dated
December 6, 2007, (iii) Series D-3 Cumulative Convertible Preferred Stock issued pursuant to the
terms of the Certificate of Rights and Preferences of Series D-3 Cumulative Convertible Preferred
Stock dated effective as of February 21, 2008 and (iv) shares issued in accordance with the terms
of Section 1(c) of that certain Agreement dated as of February 15, 2005 between the Domestic
Borrower and Fletcher International, Ltd.




          “Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received
by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.




10









 








          “Fee Letter” means the letter agreement dated July 2, 2008, among the Borrowers and
the Administrative Agent pertaining to certain fees payable to the Administrative Agent.




          “Financial Officer” with respect to a Borrower, means the chief financial officer,
principal accounting officer, treasurer or controller of such Borrowers, or any authorized
signatory of such Borrowers.




          “Fixed Charge Coverage Ratio” means, at any date, the ratio of (i) Consolidated EBITDA
less the sum of: (A) cash income tax expense, (B) non-financed Consolidated Capital Expenditures
and (C) capitalized research and development costs; to (ii) the sum of (A) scheduled payments of
(x) lease payments and (y) payments of principal Indebtedness, (B) Consolidated Interest Expense
actually paid and (C) dividends paid in cash, in each case for the period of four consecutive
fiscal quarters most recently ended on or prior to such date for which financial information is
available.




          “Foreign Borrower” has the meaning given in the preamble hereto.




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




          “Foreign Guarantors” means (i) the Domestic Borrower, (ii) the Domestic Guarantors,
(iii) Concept Systems Limited, a private limited company incorporated under the law of Scotland,
(iv) I/O Cayman Islands Ltd., an exempted company incorporated in the Cayman Islands, (v) ION
International Holdings L.P., a Bermuda limited partnership, (vi) Sensor Nederland B.V., a private
company incorporated under the laws of The Netherlands, and (vii) each of the Foreign Borrower’s
existing and subsequently acquired or organized wholly owned Material Foreign Subsidiaries.




          “Foreign Revolving Lender” means a Lender that makes a Foreign Revolving Loan to the
Foreign Borrower.




          “Foreign Revolving Loans” means a Loan made to the Foreign Borrower pursuant to
Section 2.01(c).




          “Foreign Security Agreement” means (i) the Security and Pledge Agreement securing the
Foreign Revolving Loans and the guarantees thereof and (ii) any other agreement or contract under
the law of any foreign jurisdiction necessary or desirable to subject the assets of a Material
Foreign Subsidiary or the Foreign Borrower to a valid, perfected security interest in any property
as collateral for the Obligations owing by the Foreign Borrower and each of the Foreign Guarantors
in form and substance satisfactory to the Administrative Agent.




          “Foreign Subsidiary” means any Subsidiary of the Domestic Borrower that is not
organized or incorporated in the United States or any State or territory thereof.




11









 








          “GAAP” means generally accepted accounting principles in the United States of America
in effect from time to time.




          “Governmental Approval” means (i) any authorization, consent, approval, license,
waiver, ruling, permit, tariff, rate, certification, exemption, filing, variance, claim, order,
judgment, decree, sanction or publication of, by or with; (ii) any notice to; (iii) any declaration
of or with; or (iv) any registration by or with, or any other action or deemed action by or on
behalf of, any Governmental Authority.




          “Governmental Authority” means the government of the United States of America, any
other nation or 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.




          “guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or
otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation to purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or services for the purpose of
assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or liquidity of the
primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or
(d) as an account party in respect of any letter of credit or letter of guaranty issued to support
such Indebtedness or other obligation; provided, that the term guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.




          “Guarantees” means the guarantees issued pursuant to this Agreement as contained in
Article IX hereof.




          “Guarantors” means, as applicable, the Domestic Guarantors and/or the Foreign
Guarantors.




          “Hazardous Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, 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, and any petroleum,
petroleum products or petroleum distillates and associated oil or natural gas exploration,
production and development wastes that are not exempted or excluded from being defined as
“hazardous substances”, “hazardous materials”, “hazardous wastes” and “toxic substances” under such
Environmental Laws.




          “Indebtedness” of any Person means, without duplication, (a) all obligations of such
Person for borrowed money or with respect to deposits or advances of any kind (excluding deposits
from customers of Borrower or its Subsidiaries in the ordinary course of business),




12









 







(b) all obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (d) all obligations of such Person in
respect of the deferred purchase price of property or services (excluding current accounts payable
incurred in the ordinary course of business that are not more than ninety (90) days past due), (e)
all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed, (f) all guarantees by
such Person of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h) all
obligations, contingent or otherwise, of such Person as an account party in respect of letters of
credit and letters of guaranty, (i) all obligations, contingent or otherwise, of such Person in
respect of bankers’ acceptances and (j) any other items required to be listed as a liability under
GAAP. The Indebtedness of any Person shall include the Indebtedness of any other entity (including
any partnership in which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person’s ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that such Person is not liable
therefor.




          “Indemnified Taxes” means Taxes other than Excluded Taxes.




          “Intangible Assets” means assets that are considered to be intangible assets under
GAAP, including customer lists, goodwill, computer software, copyrights, trade names, trademarks,
patents, franchises, licenses, unamortized deferred charges, unamortized debt discount and
capitalized research and development costs provided that Intangible Assets shall expressly exclude
the multi-client data library.




          “Intellectual Property” has the meaning given in Section 3.10.




          “Interest Election Request” means a request by either Borrower to convert or continue
a Revolving Borrowing in accordance with Section 2.06 and substantially in the form
attached hereto as Exhibit 2.06 or such other form reasonably acceptable to the
Administrative Agent.




          “Interest Payment Date” means (a) with respect to any ABR Loan, the last day of each
March, June, September and December and (b) with respect to any Eurodollar Loan, the last day of
the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior to
the last day of such Interest Period that occurs at intervals of three months’ duration after the
first day of such Interest Period.




          “Interest Period” means with respect to any Eurodollar Borrowing and any Alternative
Currency Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or six months
thereafter and if available to all Lenders, nine or twelve months, as a Borrower may elect;
provided, that (i) if any Interest Period would end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case such Interest



13









 






Period shall end on the next preceding Business Day and (ii) any Interest Period pertaining to
a Eurodollar Borrowing that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of such Interest Period)
shall end on the last Business Day of the last calendar month of such Interest Period. For
purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is
made and thereafter shall be the effective date of the most recent conversion or continuation of
such Borrowing.




          “Investment” means (i) any direct or indirect purchase or other acquisition by any
Borrower or any of their Subsidiaries of, or of a beneficial interest in, any Equity Interests of
any other Person (including any Subsidiary of a Borrower) and (ii) any loan, advance (other than
advances to employees for moving, entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution by any Borrower or any of
their Subsidiaries to any other Person (other than, in the case of a Borrower, to a Subsidiary or,
in the case of a Subsidiary, to a Borrower or another such Subsidiary). The amount of any
investment shall be the original cost of such investment plus the cost of all additions thereto,
without any adjustments for increases or decreases in value, or write-ups, write-downs or
write-offs with respect to such Investment.




          “Issuing Lender” means a Lender, in its capacity as the issuer of Letters of Credit
hereunder, and its successors in such capacity as provided in Section 2.04(i). The Issuing
Lender may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates
of the Issuing Lender, in which case the term “Issuing Lender” shall include any such Affiliate
with respect to Letters of Credit issued by such Affiliate.




          “Joinder Agreement” means a Joinder Agreement substantially in the form of Exhibit
1.01C or such other form as the Administrative Agent shall approve executed by any new Material
Domestic Subsidiary making such Subsidiary a Guarantor.




          “Law” means all laws, statutes, treaties, ordinances, codes, acts, rules, regulations,
Government Approvals and Orders of all Governmental Authorities, whether now or hereafter in
effect.




          “LC Disbursement” means a payment made by the Issuing Lender pursuant to a Letter of
Credit.




          “LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all
outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements
that have not yet been reimbursed by or on behalf of a Borrower or converted into a Revolving Loan
pursuant to Section 2.04(e) at such time. The LC Exposure of any Lender at any time shall
be its Applicable Percentage of the total LC Exposure at such time.




          “Lender Swap Agreement” means any Swap Agreement between or among either Borrower or
one or more of their respective Subsidiaries and any Lender or any Affiliate of any Lender, in each
case, entered into in compliance with Section 6.06.




          “Lenders” means the Persons listed on Schedule 2.01 as Lenders, any other
Person that shall become a Lender hereto pursuant to a New Lender Agreement and any other



14









 






Person that shall have become a Lender hereto pursuant to an Assignment and Assumption, other
than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.




          “Letter of Credit” means any letter of credit issued pursuant to this Agreement and
the Citibank Letters of Credit. Letters of Credit may be issued in Dollars or in an Alternative
Currency.




          “Leverage Ratio” means, at any date, for the Domestic Borrower and its Subsidiaries,
the ratio of (i) Total Funded Debt as of such date to (ii) Consolidated EBITDA for the period of
four consecutive fiscal quarters most recently ended on or prior to such date for which financial
information is available.




          “LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period,
the rate appearing on, in the case of Dollars, Reuters BBA Libor Rates Page 3750 and, in the case
of any Alternative Currency, the appropriate page of such service which displays British Bankers
Association Interest Settlement Rates for deposits in such Alternative Currency (or, in each case,
on any successor or substitute page of such service, or any successor to or substitute for such
service, providing rate quotations comparable to those currently provided on such page of such
service, as determined by the Administrative Agent from time to time for purposes of providing
quotations of interest rates applicable to deposits in the relevant currency in the London
interbank market) at approximately 12:00 noon, Eastern time, two (2) Business Days prior to (or, in
the case of Loans denominated in Pounds Sterling, on the day of) the commencement of such Interest
Period, as the rate for deposits in the relevant currency with a maturity comparable to such
Interest Period. In the event that such rate is not available at such time for any reason, then
the “LIBO Rate” with respect to such Eurodollar Borrowing for such Interest Period shall be the
rate at which deposits in the relevant currency in an Equivalent Amount of $5,000,000 and for a
maturity comparable to such Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank market at approximately
12:00 noon, Eastern time, two (2) Business Days prior to the commencement of such Interest Period.




          “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset to secure
or provide for the payment of any obligation of any Person, (b) the interest of a vendor or a
lessor under any conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the foregoing) relating to
such asset and (c) in the case of securities, any purchase option, call or similar right of a third
party with respect to such securities.




          “Loan Documents” means this Agreement, any promissory notes executed in connection
herewith, the Letters of Credit (and any applications therefor and reimbursement agreements
relating thereto), the Security Documents, the Fee Letter, and any other agreements and documents
executed and delivered in connection with this Agreement.




          “Loans” means all Revolving Loans made by the Lenders to a Borrower pursuant to this
Agreement.




15









 








          “Luxembourg Guarantor” means any Foreign Guarantor incorporated or having its
registered office in Luxembourg.




          “Margin Stock” shall have the meaning given to such term in Board Regulation U.




          “Material Adverse Effect” means a material adverse effect on (i) the business, assets,
operations, property or condition (financial or otherwise) of the Borrowers and their Subsidiaries
taken as a whole, (ii) the ability of any of the Obligors to perform its obligations under the Loan
Documents to which such Obligor is a party, (iii) the validity or enforceability of any of the Loan
Documents, or (iv)  the rights and remedies of the Administrative Agent and the Lenders under the
Loan Documents.




          “Material Contract” means any contract or agreement, written or oral, to which a
Borrower or any of its Subsidiaries is a party (other than the Loan Documents) that is listed as a
“Material Contract” in the most recently filed Form 10-K of the Domestic Borrower.




          “Material Domestic Subsidiary” means a Subsidiary of the Domestic Borrower that (i) is
a Domestic Subsidiary and (ii) holds assets having a book value of $50,000,000 or more.




          “Material Foreign Subsidiary” means any Subsidiary of the Domestic Borrower (other
than the Foreign Borrower) that (i) is a Foreign Subsidiary and (ii) holds assets having a book
value of $50,000,000 or more.




          “Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit) or obligations in respect of one or more Swap Agreements, of any one or more of the
Borrowers and its respective Subsidiaries in an aggregate principal amount exceeding $20,000,000.
For purposes of determining Material Indebtedness, the “principal amount” of the obligations of a
Borrower or any of its Subsidiaries in respect of any Swap Agreement at any time shall be the
maximum aggregate amount (giving effect to any netting agreements) that such Borrower or such
Subsidiary would be required to pay if such Swap Agreement were terminated at such time.




          “Moody’s” means Moody’s Investors Service, Inc.




          “Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of
ERISA.




          “Net Worth” means, as of any date of determination, for the Domestic Borrower and its
Subsidiaries on a consolidated basis, the sum of (i) Shareholders’ Equity of the Domestic Borrower
and its Subsidiaries (ii) outstanding Convertible Preferred Stock and (iii) the outstanding
Convertible Notes; provided that if the Convertible Preferred Stock and the Convertible
Notes ever account for more than fifty percent (50%) of the aggregate Net Worth, any such excess
over fifty percent (50%) shall not be considered in calculating Net Worth.




          “New Lender” has the meaning set forth in Section 2.18.




16









 








          “New Lender Agreement” means a New Lender Agreement entered into by a New Lender in
accordance with Section 2.18 and accepted by the Administrative Agent in the form of
Exhibit 1.01D, or any other form approved by Administrative Agent.




          “Note” has the meaning set forth in Section 2.08(g).




          “Obligations” means all of the duties, obligations and liabilities of any kind of any
Borrower and each Guarantor hereunder or under any of the Loan Documents.




          “Obligors” means the Borrowers and each Guarantor.




          “Order” means an order, writ, judgment, award, injunction, decree, ruling or decision
of any Governmental Authority or arbitrator.




          “Other Taxes” means any and 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 from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or
any of the other Loan Documents.




          “Participant” has the meaning set forth in Section 10.04.




          “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA
and any successor entity performing similar functions.




          “Petition Date” has the meaning set forth in Section 9.02.




          “Permitted Investments” means:




          (a) direct obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed or insured by, the United States of America (or by any agency thereof to
the extent such obligations are backed by the full faith and credit of the United States of
America), in each case maturing within one year from the date of acquisition thereof;




          (b) investments in commercial paper maturing within one year from the date of acquisition
thereof and having, at such date of acquisition, a credit rating of at least A-1 from Standard &
Poor’s Rating Service and P-1 from Moody’s Investor’s Service, Inc.;




          (c) investments in certificates of deposit, banker’s acceptances and time deposits maturing
within three (3) years from the date of acquisition thereof issued or guaranteed by or placed with,
and money market deposit accounts issued or offered by, any domestic office of any commercial bank
organized under the Laws of the United States of America or any State thereof that has a combined
capital and surplus and undivided profits of not less than $500,000,000 or any Lender;




          (d) fully collateralized repurchase agreements with a term of not more than 30 days for
securities described in clause (a) above and entered into with a financial institution satisfying
the criteria described in clause (c) above;




17









 








          (e) money market funds that (i) comply with the criteria set forth in Securities and Exchange
Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated or invest solely in
the assets described in clauses (a) through (d) above and (iii) have portfolio assets of at least
$500,000,000;




          (f) marketable direct obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality thereof, in each case
maturing within three (3) years after the date of acquisition and having, at such date, the highest
rating obtainable from either S&P or Moody’s;




          (g) any interest bearing account at, or certificate of deposit maturing not more than three
(3) years after such time issued by, a U.S. savings and loan association which has a rating of “A-”
or better from S&P or a rating of “A3” or better from Moody’s on its long term unsecured debt and
which has combined capital and surplus and undivided profits of not less than $500,000,000;




          (h) any interest bearing account at, or certificate of deposit maturing not more than one year
after such time, payable in U.S. Dollars and issued by, (i) a foreign banking institution or
foreign branch of a U.S. banking institution, which banking institution has a rating of “A-” or
better from S&P or a rating of “A3” or better from Moody’s on its long-term unsecured debt and
combined capital and surplus and undivided profits of not less than $500,000,000, or (ii) any
foreign subsidiary of a U.S. banking institution, which U.S. banking institution has a rating of
“A-” or better from S&P or a rating of “A3” or better from Moody’s and which subsidiary has
combined capital and surplus and undivided profits of not less than $500,000,000 or (iii) by any
Lender;




          (i) any evidence of Indebtedness (including variable rate demand notes), maturing not more
than three (3) years after such time, issued by any State of the United States, by any county or
municipality organized or incorporated under the laws of any State of the United States or by any
agency or subdivision of any of the foregoing, in each case rated “A-” or better by S&P or rated
“A3” or better by Moody’s;




          (j) any auction rate or preferred securities issued by domestic or foreign corporations,
municipalities, or closed-end management investment companies and are designed as short term money
market instruments rated “A-” or better by S&P or rated “A3” or better by Moody’s, provided that
such Investment will not result in any violation of F.R.S. Board Regulation U and further provided
that the Domestic Borrower’s aggregate ownership interest of all of the Obligors does not exceed
(and is not convertible into shares which exceed) 5% of the issuer’s outstanding shares entitled to
vote unless such ownership interest is acquired pursuant to a merger agreement between or among one
or more Obligors and such issuer);




          (k) any mutual funds or similar investment vehicles investing primarily in Investments of the
types set forth in the foregoing clauses (a) through (j), provided that ratings requirements shall
be applicable to the mutual fund rather than the underlying Investments, as follows: such mutual
funds shall, in each case, have a rating of “A-” or better from S&P or a rating of “A3” from
Moody’s or a rating satisfactory to the Administrative Agent from another recognized rating agency
satisfactory to the Administrative Agent, provided, however, that it is



18









 






agreed that (i) any Investment which when made complies with the requirements of any of the
foregoing clauses (e), (f), (g), (h), (i) or (j) may continue to be held notwithstanding that such
Investment if made thereafter would not comply with such requirements; and (ii) no Investment
otherwise permitted by clauses (j) or (k) shall be permitted to be made directly or indirectly
through a mutual fund if, immediately before or after giving effect thereto, any Default shall have
occurred and be continuing; and




          (l) with respect to the Foreign Borrower or its Subsidiaries only, any Investments outside of
the United States that are the functional foreign equivalents in all material respects to the
investments described in the foregoing clauses (a) through (k) of this definition.




          “Permitted Liens” means:




          (a) Liens in favor of the Administrative Agent or the Lenders created by the Security
Documents;




          (b) any Lien on any property or asset of the Borrowers or any Subsidiary existing on the date
hereof and identified on Schedule 1.01B hereto;




          (c) Liens that secure Indebtedness permitted by clause (c) of Section 6.01;




          (d) any Liens arising out of the refinancing, extension, renewal or refunding of any
Indebtedness secured by any Lien permitted by any of the foregoing clauses of this Section,
provided that such Indebtedness is not increased except for increases in an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in
connection with such extension, renewal, refinancing, or replacement and in an amount equal to any
existing commitments unutilized thereunder, and is not secured by any additional assets;




          (e) Liens imposed by Law for taxes that are not yet due or are being contested in compliance
with Section 5.04;




          (f) Statutory Liens of landlords, statutory liens of banks and rights of setoff, carriers’,
warehousemen’s, mechanics’, materialmen’s, workmen’s, repairmen’s, employees’ and other like Liens
imposed by Law, arising in the ordinary course of business and securing obligations that are not
overdue by more than sixty (60) days or are being contested in compliance with Section
5.04;




          (g) Liens, pledges and deposits made in the ordinary course of business in compliance with
workers’ compensation, unemployment insurance, other social security Laws or regulations and by
other similar Laws;




          (h) Liens, deposits or pledges to secure the performance of bids, tenders, trade contracts,
leases, statutory obligations, government contracts, surety and appeal bonds, performance bonds,
return-of-money-bonds and other obligations of a like nature, in each case in the ordinary course
of business;





19











 





          (i)
easements, zoning restrictions, rights-of-way, licenses, restrictions on the use of property or other minor imperfections
in title and similar encumbrances on real property and do not materially detract from the value of the affected property or
interfere with the ordinary conduct of business of the Borrowers and their respective Subsidiaries;




          (j)
leases or subleases granted to third parties in accordance with any applicable terms of the Loan Documents and not interfering
in any material respect with the ordinary conduct of the business of the Borrowers and their respective Subsidiaries;




          (k)
Liens in favor of customs and revenue authorities arising as a matter of Law to secure payment of customs duties in connection
with the importation of goods;




          (l)
any zoning or similar Law or right reserved to or vested in any governmental office or agency to control or regulate the use of
any real property;




          (m)
Liens securing obligations (other than obligations representing Indebtedness for borrowed money) under operating, reciprocal
easement or similar agreements (but not Swap Agreements) entered into in the ordinary course of business of the Borrowers and their
respective Subsidiaries;




          (n)
licenses of patents, trademarks and other intellectual property rights granted by any Borrower or any of their Subsidiaries in the
ordinary course of business and not interfering in any material respect with the ordinary conduct of the business of the Borrowers
and their respective Subsidiaries;




          (o)
the prior rights of consignees and their lenders under consignment arrangements entered into in the ordinary course of business;




          (p)
any obligations or duties affecting any of the property of any Person to any municipality or public authority with respect to
any franchise, grant, license or permit which do not materially impair the use of such property for the purposes for which it is held;




          (q)
Liens on cash deposits in the nature of a right of setoff, banker’s lien, counterclaim or netting of cash amounts owed arising
in the ordinary course of business on deposit accounts;




          (r)
Liens on cash collateral or Permitted Investments for the Existing Letters of Credit and Letters of Credit permitted under
Section 6.01(h), not to exceed the face amount thereof;




    
      (s)
Liens reserved in leases for rent and for compliance with the terms of the lease in the
case of leasehold estates;




          (t)
any Lien existing on any property or asset prior to the acquisition thereof by
any Borrower or any Subsidiary or existing on any
property or asset of any Person that becomes a Subsidiary after the Effective Date prior to the time such Person becomes a Subsidiary;
provide that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a
Subsidiary, as the case may be, (ii) such Lien shall




20









 




not apply to any other Property or assets of any Borrower or any Subsidiary, (iii) such
Lien shall secure only those obligations which it secures on the date of such acquisition or the
date such Person becomes a Subsidiary, as the case may be, and (iv) such Lien, unless otherwise
permitted hereunder, is terminated within ninety (90) days of such Person’s becoming a Subsidiary;




          (u) any Liens on capital assets acquired, constructed or improved by any Borrower or any
Subsidiary; provided that (i) such Liens secure Indebtedness permitted by clause (j) of
Section 6.01, (ii) such Liens and the Indebtedness secured thereby are incurred prior to or
within 90 days after such acquisition or the completion of such construction or improvement, (iii)
the Indebtedness secured thereby does not exceed 80% of the cost of acquiring, constructing or
improving such fixed or capital assets, and (iv) such Liens shall not apply to any other property
of any Borrower or any of their Subsidiaries;




          (v) any Liens created pursuant to any Swap Agreement (i) with any Lender or any Affiliate of
such Lender, or (ii) with any other Person, provided that the aggregate value of the obligation
secured by all such Liens permitted by this clause (v)(ii) shall not exceed $3,000,000 in the
aggregate at any one time outstanding;




          (w) Liens to secure Capital Lease Obligations permitted under Section 6.01(g);
provided that such Liens attach only to the Property that is the subject of such Capital
Lease Obligation;




          (x) any Liens securing purchase money indebtedness;




          (y) any extension, renewal or replacement of the foregoing, provided that the Liens permitted
hereunder shall not secure any additional Indebtedness (other than any refinancing thereof) or
encumber any additional property (other than a substitution of like property); and




          (z) liens on Margin Stock.




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




          “Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA,
and in respect of which a Borrower or any ERISA Affiliate is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.




          “Prime Rate” means the rate of interest per annum publicly announced from time to time
by HSBC Bank USA, N.A., as its prime rate in effect at its principal office located in New York,
New York; each change in the Prime Rate shall be effective from and including the date such change
is publicly announced as being effective.




          “Re-Allocation Date” has the meaning set forth in Section 2.18.




          “Register” has the meaning set forth in Section 10.04.




21









 





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




          “Required Lenders” means, at any time, Lenders having Revolving Credit Exposures and
unused Revolving Loan Commitments representing more than 50.0% of the sum of the total Revolving
Credit Exposures and unused Revolving Loan Commitments at such time.




          “Response” means (a) “response” as such term is defined in CERCLA, 42 U.S.C.
§9601(24), and (b) all other actions required by any Governmental Authority or voluntarily
undertaken to: (i) clean up, remove, treat, abate, or in any other way address any Hazardous
Material in the environment; (ii) prevent the release or threatened release of any Hazardous
Material; or (iii) perform studies and investigations in connection with, or as a precondition to,
clause (i) or (ii) above.




          “Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in any Borrower or any of their
Subsidiaries, or any payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such Equity Interests in any Borrower, or any of their
Subsidiaries or any option, warrant or other right to acquire any such Equity Interests in any
Borrower or any of its Subsidiaries.




          “Revolving Credit Exposure” means, with respect to any Lender at any time, the sum of
the outstanding principal amount of such Lender’s Revolving Loans and its LC Exposure at such time.




          “Revolving Credit Termination Date” means July 3, 2013.




          “Revolving Loan” means a Loan made pursuant to Section 2.01.




          “Revolving Loan Commitment” means, with respect to each Lender, the commitment of such
Lender to make Revolving Loans and to acquire participations in Letters of Credit hereunder,
expressed as an amount representing the maximum aggregate amount of such Lender’s Revolving Credit
Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section
2.07 or (b) increased from time to time pursuant to Section 2.18 or (c) reduced or
increased from time to time pursuant to assignments by or to such Lender pursuant to Section
2.18 or 10.04. The initial amount of each Lender’s Revolving Loan Commitment is set
forth on Schedule 2.01, or in the Assignment and Assumption pursuant to which such Lender
shall have assumed its Revolving Loan Commitment, as applicable. The initial aggregate amount of
the Lenders’ Revolving Loan Commitments is $100,000,000 or an Equivalent Amount computed in an
Alternative Currency.




          “S&P” means Standard & Poor’s Rating Services, a division of the McGraw Hill
Companies, Inc.




          “Security Agreements” shall mean collectively, the Domestic Security Agreement and the
Foreign Security Agreement.




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          “Security Documents” means the Security Agreements, the Guarantees, each Joinder
Agreement, and each other security document or pledge agreement delivered in accordance with
applicable local or foreign law to grant a valid, perfected security interest in any property, and
all UCC or other financing statements or instruments of perfection required by this Agreement, any
security agreement or mortgage to be filed with respect to the security interests in property and
fixtures created pursuant to the Security Agreements or any mortgage and any other document or
instrument utilized to pledge as collateral for the Obligations any property of whatever kind or
nature.




          “Senior Convertible Notes” means those certain 5.50% Convertible Senior Notes due 2008
issued by the Domestic Borrower pursuant to that certain Indenture dated December 10, 2003.




          “Shareholders’ Equity” means, as of any date of determination, consolidated
shareholders’ equity of the Domestic Borrower and its Subsidiaries as of the last day of the most
recently ended fiscal quarter of the Domestic Borrower and its Subsidiaries for which financial
statements are available determined in accordance with GAAP.




          “Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of
which is the number one and the denominator of which is the number one minus the aggregate of the
maximum reserve percentages (including any marginal, special, emergency or supplemental reserves)
expressed as a decimal established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding
and to be subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender under such Regulation D
or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.




          “Subordinated Indebtedness” means unsecured Indebtedness of any Borrower and their
Subsidiaries, provided such Indebtedness (a) is subordinate in payment to the Obligations pursuant
to subordination provisions approved in writing by the Administrative Agent, (b) does not have a
maturity date shorter than one (1) year following the Revolving Credit Termination Date and (c) has
terms that are no more restrictive than the terms of the Loan Documents and which provide they may
not be amended in any manner less favorable to such Borrower or any of its Subsidiaries party
thereto without the consent of the Administrative Agent and the Required Lenders, provided that,
after giving effect to the issuance of such Indebtedness, no Default or Event of Default shall have
occurred or be continuing or would occur as a result thereof.




          “subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity the accounts of
which would be consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership, association or other




23









 







entity (a) of which securities or other ownership interests representing more than 50% of the equity or
more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, Controlled or held, or (b) that is, as
of such date, otherwise Controlled by the parent or one or more subsidiaries of the parent or by
the parent and one or more subsidiaries of the parent.




          “Subsidiary” means any direct or indirect subsidiary of the applicable Borrower.




          “Super Majority Lenders” means, at any time, Lenders having Revolving Credit Exposures
and unused Revolving Loan Commitments representing more than 66 2/3% of the sum of the total
Revolving Credit Exposures and unused Revolving Loan Commitments at such time.




          “Swap Agreement” means any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement involving, or settled by reference to, one or
more rates, currencies, commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing risk or value or any
similar transaction or any combination of these transactions; provided that, no phantom
stock or similar plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of any Borrower or their Subsidiaries shall be
a Swap Agreement.




          “Tangible Net Worth” means, as of any date of determination, for the Domestic Borrower
and its Subsidiaries on a consolidated basis, Net Worth on that date minus the Intangible Assets of
the Domestic Borrower and its Subsidiaries on such date.




          “TARGET Day” means any day on which the Trans-European Automatic Real-time Gross
Settlement Express Transfer payment system is open for the settlement of payments in Euros.




          “Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.




          “Total Funded Debt” means all funded Consolidated Indebtedness, plus Consolidated
Capital Lease Obligations and issued letters of credit net of Cash collateral posted to secure any
such letters of credit.




          “Transactions” means the execution, delivery and performance by the Borrowers and the
Guarantors of this Agreement and the other Loan Documents, the borrowing of Loans, the use of the
proceeds thereof and the issuance of Letters of Credit hereunder.




          “Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the
Adjusted LIBO Rate or the Alternate Base Rate.




          “UCP 600” shall have the meaning set forth in Section 10.09(b).




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          “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.




     SECTION 1.02 Classification of Loans and Borrowings. For purposes of this Agreement,
Loans may be classified and referred to by Type (e.g., a “Eurodollar Loan” or a “Eurodollar
Revolving Loan”). Borrowings also may be classified and referred to by Type (e.g., a
“Eurodollar Borrowing” or a “Eurodollar Revolving Borrowing”).



     SECTION 1.03 Terms Generally. 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 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 (a) any definition of or reference to any agreement, instrument or other
document herein 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), (b) any reference herein to any Person
shall be construed to include such Person’s successors and permitted assigns, (c) the words
“herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof, (d) all references
herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) 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.



     SECTION 1.04 Accounting Terms; GAAP. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time; provided that, if the Domestic Borrower notifies the
Administrative Agent that the Domestic Borrower requests an amendment to any provision hereof to
eliminate the effect of any change occurring after the date hereof in GAAP or in the application
thereof on the operation of such provision (or if the Administrative Agent notifies the Domestic
Borrower that the Required Lenders request an amendment to any provision hereof for such purpose),
regardless of whether any such notice is given before or after such change in GAAP or in the
application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such notice shall have
been withdrawn or such provision amended in accordance herewith. References to quarters and months
with respect to compliance with financial covenants and financial reporting obligations of the
Domestic Borrower shall be fiscal quarters and fiscal months, except where otherwise indicated.



25









 





ARTICLE II




The Credits




     SECTION 2.01 Commitments. (a) Subject to the terms and conditions set forth herein,
each Lender agrees to make Revolving Loans to a Borrower from time to time during the Availability
Period in an aggregate principal amount up to such Lender’s Revolving Loan Commitment. Within the
foregoing limits and subject to the terms and conditions set forth herein, each Borrower may
borrow, prepay and reborrow Revolving Loans.



          (b) Revolving Loans, subject to the limitations in Section 2.01(c), below, may, at the
option of the Domestic Borrower, be requested in an aggregate amount of not more than $75,000,000
or an Equivalent Amount in an Alternative Currency calculated as of the date such Loans are
requested (each a “Domestic Revolving Loan”).




          (c) Revolving Loans may, at the option of the Foreign Borrower, be requested in an aggregate
amount of not more than $60,000,000 or an Equivalent Amount in an Alternative Currency calculated
as of the date such Loans are requested (each a “Foreign Revolving Loan”);



provided, the aggregate principal amount of all Foreign Revolving Loans and all Domestic
Revolving Loans, including the total LC Exposure at any time outstanding, shall not exceed the
total of all of the Lenders’ Revolving Loan Commitments.




     SECTION 2.02 Loans and Borrowings.



          (a) Each Revolving Loan shall be made as part of a Borrowing consisting of Revolving Loans
made by the Lenders ratably in accordance with their respective Revolving Loan Commitments. The
failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender
of its obligations hereunder; provided that the Revolving Loan Commitments of the Lenders
are several and no Lender shall be responsible for any other Lender’s failure to make Loans as
required.




          (b) Subject to Section 2.12, for each Borrowing requested in Dollars the interest rate
shall be based on the Alternative Base Rate or the Adjusted LIBO Rate as a Borrower may request in
accordance herewith. For each Borrowing requested in an Alternative Currency the interest rate
shall be based on the Adjusted LIBO Rate. Each Lender at its option may make any Eurodollar Loan
or Alternative Currency Loan by causing any domestic or foreign branch or Affiliate of such Lender
to make such Loan; provided that any exercise of such option shall not affect the
obligation of such Borrower to repay such Loan in accordance with the terms of this Agreement.




          (c) At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing
shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than
$1,000,000 (or, as applicable, an integral multiple of €750,000
and not less than €750,000,
or an integral multiple of £500,000 and not less than £500,000). At the time that each ABR
Revolving Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral
multiple of $1,000,000 and not less than $1,000,000; provided that an ABR Revolving
Borrowing may be in an aggregate amount that is equal to (i) the entire unused




26









 




balance of the total Revolving Loan Commitments or that (ii)  is required to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.04(e). Borrowings of more
than one Type may be outstanding at the same time; provided that there shall not at any
time be more than a total of ten (10) Eurodollar Borrowings.




          (d) Notwithstanding any other provision of this Agreement, no Borrower shall be entitled to
request, or to elect to convert or continue, any Borrowing if the Interest Period requested with
respect thereto would end after the Revolving Credit Termination Date.




     SECTION 2.03 Requests for Borrowings. To request a Revolving Borrowing, either
Borrower shall notify the Administrative Agent of such request by telephone (a) in the case of a
Eurodollar Borrowing, not later than 1:00 p.m., Eastern time, three (3) Business Days before the
date of the proposed Borrowing, (b) in the case of an ABR Borrowing, not later than 12:00 noon,
Eastern time, on the date of the proposed Borrowing or (c) in the case of any Alternative Currency
Borrowing, not later than 1:00 p.m., Eastern time three (3) Business Days before the Borrowing
Date. Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly
by hand delivery, telecopy, or scanned copy sent by email to the Administrative Agent of a written
Borrowing Request substantially in the form of Exhibit 2.03. Each such telephonic and
written Borrowing Request shall specify the following information in compliance with
Section 2.02:




     (i) the aggregate amount of the requested Borrowing;




     (ii) the date of such Borrowing, which shall be a Business Day;




     (iii) whether such Borrowing is to be an ABR Borrowing, a Eurodollar Borrowing or an
Alternative Currency Borrowing, in which case such Borrower shall designate an Alternative
Currency;




     (iv) in the case of a Eurodollar Borrowing or an Alternative Currency Borrowing, the
initial Interest Period to be applicable thereto, which shall be a period contemplated by
the definition of the term “Interest Period”; and




     (v) the location and number of such Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.05.


If no election as to the Type of Borrowing is specified for Dollar denominated Loans, then the
requested Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to
any requested Eurodollar Borrowing or Alternative Currency Borrowing, then such Borrower shall be
deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of
a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each
Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the
requested Borrowing.




     SECTION 2.04 Letters of Credit.



          (a) General. Subject to the terms and conditions set forth herein, either Borrower
may request the issuance of Letters of Credit in Dollars or in Alternative Currency for



27









 






its own account or the account of any of its Subsidiaries, in a form reasonably acceptable to
the Administrative Agent and the Issuing Lender, at any time and from time to time during the
Availability Period. In the event of any inconsistency between the terms and conditions of this
Agreement and the terms and conditions of any form of letter of credit application or other
agreement submitted by either Borrower to, or entered into by such Borrower with, the Issuing
Lender relating to any Letter of Credit, the terms and conditions of this Agreement shall control.




          (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request
the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter
of Credit), either Borrower shall hand deliver or telecopy (or transmit by scanned copy sent by
email, if arrangements for doing so have been approved by the Issuing Lender) to the Issuing Lender
and the Administrative Agent (three (3) Business Days in advance of the requested date of issuance,
amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such
Letter of Credit is to expire (which shall comply with paragraph (c) of this Section) the amount of
such Letter of Credit, whether such Letter of Credit shall be denominated in Dollars or an
Alternative Currency (and if so, which Alternative Currency), the name and address of the
beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or
extend such Letter of Credit. If requested by the Issuing Lender, such Borrower also shall submit
a letter of credit application on the Issuing Lender’s standard form in connection with any request
for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if
(and upon issuance, amendment, renewal or extension of each Letter of Credit such Borrower shall be
deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or
extension (i) the LC Exposure shall not exceed $35,000,000 and (ii) the total Revolving Credit
Exposures shall not exceed the total Revolving Loan Commitments. Upon the issuance, amendment,
renewal or extension of each Letter of Credit by any Issuing Lender that is not the Administrative
Agent, the Issuing Lender with respect thereto shall immediately notify the Administrative Agent of
such issuance, amendment, renewal or extension thereof.




          (c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of
business on the earlier of (i) the date one year after the date of the issuance of such Letter of
Credit (or, in the case of any renewal or extension thereof, one year after such renewal or
extension) or a date of more than one year if the Issuing Lender agrees to such later date in its
sole discretion and (ii) the date that is five (5) Business Days prior to the Revolving Credit
Termination Date; provided, however, that any Letter of Credit may provide for a
later expiration date if, ninety (90) days prior to the Revolving Credit Termination Date (or
simultaneously with the issuance (or, if applicable, the renewal) thereof if issued after the date
that is ninety (90) days prior to such date), such Borrower pledges to the Issuing Lender in a
manner reasonably satisfactory to it, funds in an account with the Issuing Lender within the United
States of America equal to 105% of the face amount of such Letter of Credit. After the Obligations
are satisfied in full, any Letter of Credit with an expiration after the Revolving Credit
Termination Date shall be considered issued solely by the Issuing Lender.




          (d) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action on the part of the




28









 




Issuing Lender or the Lenders, the Issuing Lender hereby grants to each Lender, and each
Lender hereby acquires from the Issuing Lender, a participation in such Letter of Credit equal to
such Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter
of Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Lender,
such Lender’s Applicable Percentage of each LC Disbursement made by the Issuing Lender and not
reimbursed by the applicable Borrower on the date due as provided in paragraph (e) of this Section,
or of any reimbursement payment required to be refunded to either Borrower for any reason. Each
Lender acknowledges and agrees that its obligation to acquire participations pursuant to this
paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected
by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or an Event of Default or reduction or
termination of the Revolving Loan Commitments, and that each such payment shall be made without any
offset, abatement, withholding or reduction whatsoever.




          (e) Reimbursement. If the Issuing Lender shall make any LC Disbursement in respect of
a Letter of Credit issued for the account of a Borrower, such Borrower shall reimburse such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not
later than 3:00 p.m., Eastern time, on the date that such LC Disbursement is made, if such Borrower
shall have received notice of such LC Disbursement prior to 1:00 p.m., Eastern time, on such date,
or, if such notice has not been received by such Borrower prior to such time on such date, then not
later than 1:00 p.m., Eastern time, (i) the Business Day that such Borrower receives such notice,
if such notice is received prior to 11:00 a.m., Eastern time, on the day of receipt, or (ii) on the
Business Day immediately following the day that such Borrower receives such notice, if such notice
is not received prior to such time on the day of receipt; provided that, if such LC
Disbursement is not less than $1,000,000, and no Default has occurred and is continuing, such
Borrower may, subject to the conditions to borrowing set forth herein, request, in accordance with
Section 2.03, that such payment, in the case of Letters of Credit issued in Dollars, be
financed with an ABR Revolving Borrowing and, to the extent so financed, such Borrower’s obligation
to make such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing. If
such Borrower fails to make such payment when due, the Administrative Agent shall notify each
Lender of the applicable LC Disbursement, the payment then due from such Borrower in respect
thereof and such Lender’s Applicable Percentage thereof. Promptly following receipt of such
notice, each Lender shall pay to the Administrative Agent its Applicable Percentage of the payment
then due from such Borrower, in the same manner as provided in Section 2.05 with respect to
Loans made by such Lender (and Section 2.05 shall apply, mutatis mutandis, to the payment
obligations of the Lenders), and the Administrative Agent shall promptly pay to the Issuing Lender
the amounts so received by it from the Lenders. Promptly following receipt by the Administrative
Agent of any payment from such Borrower pursuant to this paragraph, the Administrative Agent shall
distribute such payment to the Issuing Lender or, to the extent that Lenders have made payments
pursuant to this paragraph to reimburse the Issuing Lender, then to such Lenders and the Issuing
Lender as their interests may appear. Any payment made by a Lender pursuant to this paragraph to
reimburse the Issuing Lender for any LC Disbursement (other than the funding of ABR Revolving Loans
as contemplated above) shall not constitute a Loan and shall not relieve such Borrower of its
obligation to reimburse such LC Disbursement.




29









 








          (f) Obligations Absolute. Each Borrower’s obligation to reimburse LC Disbursements as
provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and
shall be performed strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other
document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any
respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the
Issuing Lender under a Letter of Credit against presentation of a draft or other document that does
not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of
this Section, constitute a legal or equitable discharge of, or provide a right of setoff against,
each Borrower’s obligations hereunder. Neither the Administrative Agent, the Lenders nor the
Issuing Lender, nor any of their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or
failure to make any payment thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in transmission or
delivery of any draft, notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the Issuing Lender;
provided that the foregoing shall not be construed to excuse the Issuing Lender from
liability to a Borrower to the extent of any direct damages (as opposed to consequential damages,
claims in respect of which are hereby waived by each Borrower to the extent permitted by applicable
law) suffered by a Borrower that are caused by the Issuing Lender’s failure to exercise care when
determining whether drafts and other documents presented under a Letter of Credit comply with the
terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or
willful misconduct on the part of the Issuing Lender (as finally determined by a court of competent
jurisdiction), the Issuing Lender shall be deemed to have exercised care in each such
determination. In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Lender may, in its sole
discretion, either accept and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or refuse to accept and
make payment upon such documents if such documents are not in strict compliance with the terms of
such Letter of Credit.




          (g) Disbursement Procedures. The Issuing Lender shall, promptly following its receipt
thereof, examine all documents purporting to represent a demand for payment under a Letter of
Credit. The Issuing Lender shall promptly notify the Administrative Agent and the Borrower for
whose account such Letter of Credit was issued by telephone (confirmed by telecopy) of such demand
for payment and whether the Issuing Lender has made or will make an LC Disbursement thereunder;
provided that any failure to give or delay in giving such notice shall not relieve such
Borrower of its obligation to reimburse the Issuing Lender and the Lenders with respect to any such
LC Disbursement.




          (h) Interim Interest. If the Issuing Lender shall make any LC Disbursement, then,
unless the Borrower for whose account such Letter of Credit was issued shall reimburse such LC
Disbursement in full on the date such LC Disbursement is made, the unpaid amount




30









 







thereof shall bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that such Borrower reimburses such LC Disbursement (i) for Letters
of Credit issued in Dollars, at the rate per annum then applicable to ABR Revolving Loans and (ii)
for Letters of Credit issued in Alternative Currency, the Adjusted LIBO Rate plus the Applicable
Margin; provided that, if such Borrower fails to reimburse such LC Disbursement when due
pursuant to paragraph (e) of this Section, then Section 2.11(d) shall apply. Interest
accrued pursuant to this paragraph shall be for the account of the Issuing Lender, except that
interest accrued on and after the date of payment by any Lender pursuant to paragraph (e) of this
Section to reimburse the Issuing Lender shall be for the account of such Lender to the extent of
such payment.




          (i) Replacement of the Issuing Lender. The Issuing Lender may be replaced at any time
by written agreement among the Borrowers, the Administrative Agent, the replaced Issuing Lender and
the successor Issuing Lender. The Administrative Agent shall notify the Lenders of any such
replacement of the Issuing Lender. At the time any such replacement shall become effective, each
Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Lender owed by
such Borrower pursuant to Section 2.10(b). From and after the effective date of any such
replacement, (i) the successor Issuing Lender shall have all the rights and obligations of the
Issuing Lender under this Agreement with respect to Letters of Credit to be issued thereafter and
(ii) references herein to the term “Issuing Lender” shall be deemed to refer to such successor or
to any previous Issuing Lender, or to such successor and all previous Issuing Lenders, as the
context shall require. After the replacement of an Issuing Lender hereunder, the replaced Issuing
Lender shall remain a party hereto and shall continue to have all the rights and obligations of an
Issuing Lender under this Agreement with respect to Letters of Credit issued by it prior to such
replacement, but shall not be required to issue additional Letters of Credit.




          (j) Cash Collateralization. If any Event of Default shall occur and be continuing, on
the Business Day that the Domestic Borrower receives notice from the Administrative Agent or the
Required Lenders (or, if the maturity of the Loans has been accelerated, or the Lenders with LC
Exposure representing greater than 50% of the total LC Exposure demanding the deposit of cash
collateral pursuant to this paragraph), the Domestic Borrower shall deposit in an account with the
Administrative Agent within the United States of America, in the name of the Administrative Agent
and for the benefit of the Lenders, an amount in cash (in Dollars for any Letter of Credit issued
in Dollars or in the Alternative Currency in which a Letter of Credit is issued for any Letter of
Credit issued in Alternative Currencies) equal to the LC Exposure as of such date plus any accrued
and unpaid interest thereon; provided that the obligation to deposit such cash collateral
shall become effective immediately, and such deposit shall become immediately due and payable,
without demand or other notice of any kind, upon the occurrence of any Event of Default with
respect to the Borrowers described in clause (h) or (i) of Section 7.01. Such deposit
shall be held by the Administrative Agent as collateral for the payment and performance of the
obligations of each Borrower under this Agreement. The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such account. Other than
any interest earned on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Administrative Agent and at the Borrowers’ risk and expense, such
deposits shall not bear interest. Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to
reimburse the Issuing Lender for LC



31









 






Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of the reimbursement obligations of each Borrower for the LC Exposure at
such time or, subject to the consent of Lenders with LC Exposure representing greater than 50% of
the total LC Exposure, be applied to satisfy other obligations of each Borrower under this
Agreement. If the Borrowers are required to provide an amount of cash collateral hereunder, such
amount (to the extent not applied as aforesaid) shall be returned to the Borrowers within three (3)
Business Days after all Events of Default have been cured or waived.




     SECTION 2.05 Funding of Borrowings.



          (a) Each Lender shall make each Eurodollar or ABR Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by 1:00 p.m., Eastern time,
to the account of the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders and shall make each Alternative Currency Loan to be made by it hereunder on
the dates thereof by wire transfer of immediately available funds by 1:00 p.m., Eastern time, to
the account of the Administrative Agent most recently designated by it for such purpose by notice
to the Lenders. The Administrative Agent will make such Loans available to the Borrower that
requested such Loans by promptly crediting the amounts so received, in like funds, to such account
or accounts of the applicable Borrower designated by such Borrower in the applicable Borrowing
Request; provided that ABR Revolving Loans made to finance the reimbursement of an LC
Disbursement as provided in Section 2.04(e) shall be remitted by the Administrative Agent
to the Issuing Lender.




          (b) Unless the Administrative Agent shall have received notice from a Lender prior to the
proposed date of any 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 paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the applicable 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 with interest thereon, plus any
customary charges paid by the Administrative Agent to its correspondent bank, for each day from and
including the date such amount is made available to such Borrower to but excluding the date of
payment to the Administrative Agent, at (i) in the case of 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 or (ii) in the case of such Borrower, the interest rate
applicable to such Borrowings. If such Lender pays such amount to the Administrative Agent, then
such amount shall constitute such Lender’s Loan included in such Borrowing.




     SECTION 2.06 Interest Elections.



          (a) Each Borrowing initially shall be of the Type specified in the applicable Borrowing
Request and, in the case of a Eurodollar Borrowing or an Alternative Currency Borrowing, shall have
an initial Interest Period as specified in such Borrowing Request. Thereafter, the applicable
Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and,
in the case of a Eurodollar Borrowing or an Alternative



32









 






Currency Borrowing, may elect Interest Periods therefor, all as provided in this Section. The
applicable Borrower may elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the
Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing.




          (b) To make an election pursuant to this Section, the applicable Borrower shall notify the
Administrative Agent of such election by telephone by the time that a Borrowing Request would be
required under Section 2.03 if such Borrower were requesting a Borrowing of the Type
resulting from such election to be made on the effective date of such election. Each such
telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery, telecopy, or scanned copy sent by email to the Administrative Agent of a written Interest
Election Request in a form approved by the Administrative Agent and signed by such Borrower.




          (c) Each telephonic, email, or written Interest Election Request shall specify the following
information in compliance with Section 2.02:





     (i) the Borrowing to which such Interest Election Request applies and, if different
options are being elected with respect to different portions thereof, the portions thereof
to be allocated to each resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);




     (ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;




     (iii) whether the resulting Borrowing is to be an ABR Borrowing, a Eurodollar Borrowing
or an Alternative Currency Borrowing, in which case the Borrowers shall designate an
Alternative Currency; and




     (iv) if the resulting Borrowing is a Eurodollar Borrowing or an Alternative Currency
Borrowing, the Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the term “Interest
Period”.


If any such Interest Election Request requests a Eurodollar Borrowing or an Alternative Currency
Borrowing but does not specify an Interest Period, then such Borrower shall be deemed to have
selected an Interest Period of one month’s duration.




          (d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall
advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.




          (e) If the applicable Borrower fails to deliver a timely Interest Election Request with
respect to a Eurodollar Revolving Borrowing denominated in Dollars prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of
such Interest Period such Borrowing shall be converted to an ABR



33









 






Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default has occurred
and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies
such Borrower, then, so long as an Event of Default is continuing (i) no outstanding Borrowing may
be converted to or continued as a Eurodollar Borrowing or an Alternative Currency Borrowing and
(ii) unless repaid, each Eurodollar Borrowing denominated in Dollars shall be converted to an ABR
Borrowing at the end of the Interest Period applicable thereto.




     SECTION 2.07 Termination and Reduction of Commitments.



          (a) Unless previously terminated, the Revolving Loan Commitments shall terminate on the
Revolving Credit Termination Date.




          (b) The Borrowers may at any time terminate or from time to time reduce the Revolving Loan
Commitments; provided that (A) each reduction of the Revolving Loan Commitments shall be in
an amount that is an integral multiple of $1,000,000 and not less than $1,000,000 (B) the Borrowers
shall not terminate or reduce the Revolving Loan Commitments if, after giving effect to any
concurrent prepayment of the Loans in accordance with Section 2.09, the Revolving Credit
Exposures would exceed the total Revolving Loan Commitments and (C) the aggregate principal amount
of all Foreign Revolving Loans at any time outstanding, shall not exceed sixty percent (60%) of the
total of all the Lenders’ Revolving Loan Commitments as such commitments are reduced pursuant to
this Section 2.07.




          (c) The Borrowers shall notify the Administrative Agent of any election to terminate or reduce
the Revolving Loan Commitments under paragraph (b) of this Section no earlier than thirty (30) days
and no later than three (3) Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly following receipt of
any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice
delivered by the Borrowers pursuant to this Section shall be irrevocable; provided that a
notice of termination of the Revolving Loan Commitments delivered by the Domestic Borrower may
state that such notice is conditioned upon the effectiveness of other credit facilities, in which
case such notice may be revoked by the Domestic Borrower (by notice to the Administrative Agent on
or prior to the specified effective date) if such condition is not satisfied. Subject to the
rights of the Domestic Borrower under Section 2.18, any, termination or reduction of the
Revolving Loan Commitments shall be permanent. Each reduction of the Revolving Loan Commitments
shall be made ratably among the Lenders in accordance with their respective Revolving Loan
Commitments.




     SECTION 2.08 Repayment of Loans; Evidence of Debt.



          (a) Each Borrower hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Revolving Loan made to such
Borrower on the Revolving Credit Termination Date.




          (b) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of each Borrower to such Lender resulting from each Loan made by such
Lender, including the amounts of principal and interest payable and paid to such Lender from time
to time hereunder.





34












 





          (c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount
of each Loan made hereunder, the Type, the currency in which said Loan was made thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or
to become due and payable from each Borrower to each Lender hereunder and (iii) the amount of any
sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s
share thereof.




          (d) Repayments of any Loan or any Borrowing shall be made in the same currency in which said
Loan or Borrowing was advanced by the Lenders.




          (e) If at any time Administrative Agent notifies (i) the Domestic Borrower in writing that the
amount of all Domestic Revolving Loans outstanding exceeds $75,000,000 or (ii) the Foreign Borrower
in writing that the amount of all Foreign Revolving Loans outstanding exceeds $60,000,000, or, in
either case, the Equivalent Amount in an Alternative Currency, the applicable Borrower shall,
within ten (10) days of such notice, either (at the applicable Borrower’s option) repay the
applicable Loans or deposit cash in an account with the Administrative Agent until the end of the
applicable Interest Period, in either case, in an aggregate amount sufficient to reduce such amount
outstanding as of such date of payment such that amount outstanding does not exceed Lenders’
Revolving Loan Commitments or an Equivalent Amount in an Alternative Currency.




          (f) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this
Section shall be prima facie evidence of the existence and amounts of the obligations recorded
therein; provided that the failure of any Lender or the Administrative Agent to maintain
such accounts or any error therein shall not in any manner affect the obligation of each Borrower
to repay the Loans in accordance with the terms of this Agreement.




          (g) Any Lender may request that Loans made by it be evidenced by a promissory note. In such
event, each Borrower shall prepare, execute and deliver to such Lender a promissory note (each, a
“Note”) payable to the order of such Lender (or, if requested by such Lender, to such
Lender and its registered assigns) substantially in the form of Exhibit 2.08(g) hereto.
Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 10.04) be represented by one or more
promissory notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).




     SECTION 2.09 Prepayment of Loans.



          (a) Each Borrower shall have the right at any time and from time to time to prepay any
Borrowing made to such Borrower in whole or in part, subject to prior notice in accordance with
paragraph (c) of this Section.




          (b) Each prepayment pursuant to Section 2.09 shall be applied to reduce pro rata all
Loans comprising the designated Borrowing being prepaid.




          (c) Each Borrower shall notify the Administrative Agent by telephone (confirmed by telecopy)
of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later than
1:00 p.m., Eastern time, three (3) Business Days before the




35









 




date of prepayment, (ii) in the case of prepayment of an ABR Borrowing, not later than 1:00
p.m., Eastern time, on the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date and the principal amount of each Borrowing or portion thereof to be
prepaid; provided that, if a notice of prepayment is given in connection with a conditional
notice of termination of the Revolving Loan Commitments as contemplated by Section 2.07,
then such notice of prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.07. Promptly following receipt of any such notice relating to a
Revolving Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof.
Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case
of an advance of a Borrowing of the same Type as provided in Section 2.02. Prepayments
shall be accompanied by accrued interest to the extent required by Section 2.11.




     SECTION 2.10 Fees.



          (a) The Borrowers shall pay to the Administrative Agent for the account of each Lender a
commitment fee, which shall accrue at the Commitment Fee Rate on the daily amount of the unused
Revolving Loan Commitment of such Lender during the period from and including the Effective Date to
but excluding the date on which such Revolving Loan Commitment terminates; provided that,
if such Lender continues to have any Revolving Credit Exposure after its Revolving Loan Commitment
terminates, then such commitment fee shall continue to accrue on the daily amount of such Lender’s
Revolving Credit Exposure from and including the date on which its Revolving Loan Commitment
terminates to but excluding the date on which such Lender ceases to have any Revolving Credit
Exposure. Accrued commitment fees shall be payable in arrears on the last day of March, June,
September and December of each year and on the date on which the Revolving Loan Commitments
terminate, commencing on the first such date to occur after the date hereof; provided that
any commitment fees accruing after the date on which the Revolving Loan Commitments terminate shall
be payable on demand. All commitment fees shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed (including the first day but excluding the
last day).




          (b) Each Borrower shall pay (i) to the Administrative Agent for the account of each Lender a
participation fee with respect to its participations in Letters of Credit issued for the account of
such Borrower, which fee shall accrue at the same Applicable Margin used to determine the interest
rate applicable to Eurodollar Loans on the average daily amount of such Lender’s LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period
from and including the Effective Date to but excluding the later of the date on which such Lender’s
Revolving Loan Commitment terminates and the date on which it ceases to have any LC Exposure and
(ii) to the Issuing Lender a fronting fee, which shall accrue at the rate of 0.125% per annum but
in no event less than $500 on the average daily amount of the LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date of termination of the Revolving Loan
Commitments and the date on which there ceases to be any LC Exposure, as well as the Issuing
Lender’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter
of Credit or processing of drawings thereunder. Participation fees and fronting fees accrued
through and including the last day of March, June, September and December of each year shall be
payable on the third (3rd) Business




36









 




Day following such last day of such months, commencing on the first such date to occur after
the Effective Date; provided that all such fees shall be payable on the date on which the
Revolving Loan Commitments terminate and any such fees accruing after the date on which the
Revolving Loan Commitments terminate shall be payable on demand. Any other fees payable to the
Issuing Lender pursuant to this paragraph shall be payable within ten (10) days after demand. All
participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall
be payable for the actual number of days elapsed (including the first day but excluding the last
day).




          (c) The Domestic Borrower shall pay to the Administrative Agent, for its own account, fees
payable in the amounts and at the times specified in the Fee Letter, or otherwise separately agreed
upon, between the Domestic Borrower and the Administrative Agent.




          (d) All fees payable hereunder shall be paid on the dates due, in immediately available funds,
to the Administrative Agent (or to the Issuing Lender, in the case of fees payable to it) for
distribution, in the case of commitment fees and participation fees, to the Lenders. Fees paid
shall not be refundable under any circumstances.




          (e) Notwithstanding any provision of this Agreement to the contrary, for a period of twelve
(12) months following the Effective Date, the Administrative Agent, each Issuing Lender, the Lead
Arrangers, and the Lenders agree that so long as the Borrowers are in compliance with Sections
6.14, 6.15 and 6.16, the Borrowers will not be assessed any additional
arrangement or upfront fees in connection with any modification of this Credit Facility; provided
said request does not require an amendment to Sections 6.14, 6.15 and 6.16
or the Administrative Agent does not reasonably believe such request materially affects the rights
of the Administrative Agent and the Lenders under the Loan Documents.




     SECTION 2.11 Interest.



          (a) Subject to Section 10.13, the Loans comprising each ABR Borrowing shall bear
interest at the Alternate Base Rate plus the Applicable Margin.




          (b) Subject to Section 10.13, the Loans comprising each Eurodollar Borrowing shall
bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus
the Applicable Margin.




          (c) The Loans comprising each Alternative Currency Loan shall bear interest at the Adjusted
LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Margin.




          (d) Notwithstanding the foregoing, but subject to Section 10.13, if any principal of
or interest on any Loan or any fee or other amount payable by either Borrower hereunder is not paid
when due, such overdue amount shall bear interest at the Default Rate.




          (e) Subject to Section 10.13, accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan and, in the case of Revolving Loans, upon
termination of the Revolving Loan Commitments; provided that (i) interest accrued pursuant
to paragraph (d) of this Section shall be payable on demand, (ii) in the event of any repayment or




37









 




prepayment of any Loan (other than a prepayment of an ABR Loan prior to the end of the
Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable
on the date of such repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such
Loan shall be payable on the effective date of such conversion.




          (f) Subject to Section 10.13, all interest hereunder shall be computed on the basis of
a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times
when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of
365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of
days elapsed (including the first day but excluding the last day). The applicable Alternate Base
Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.




     SECTION 2.12 Alternate Rate of Interest. If prior to the commencement of any Interest
Period for a Eurodollar Borrowing:



          (a) the Administrative Agent determines (which determination shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO
Rate, the LIBO Rate or the rate applicable to Alternative Currency Borrowings, as applicable, for
such Interest Period; or




          (b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate,
the LIBO Rate or the rate applicable to Alternative Currency Borrowings, as applicable, for such
Interest Period will not adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans included in such Borrowing for such Interest Period;



then the Administrative Agent shall give notice thereof to the Borrowers and the Lenders by
telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent
notifies the Borrowers and the Lenders that the circumstances giving rise to such notice no longer
exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing or an Alternative Currency Borrowing, as
applicable, shall be ineffective, and (ii) if any Borrowing Request requests a Eurodollar
Borrowing, such Borrowing shall be made as an ABR Borrowing, and if any Borrowing Request requests
an Alternative Currency Borrowing, such request shall be deemed to be withdrawn; provided
that if the circumstances giving rise to such notice affect only one Type of Borrowings, then the
other Type of Borrowings shall be permitted.




     SECTION 2.13 Increased Costs.



          (a) If any Change in Law shall:





     (i) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit extended by,
any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or the
Issuing Lender; or



38









 






     (ii) impose on any Lender or the Issuing Lender or the London interbank market any
other condition affecting this Agreement, Eurodollar Loans or Alternative Currency Loans
made by such Lender or any Letter of Credit or participation therein;


and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Loan or Alternative Currency Loans (or of maintaining its obligation to
make any such Loan) or to increase the cost to such Lender or the Issuing Lender of participating
in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or
receivable by such Lender or the Issuing Lender hereunder (whether of principal, interest or
otherwise), then each Borrower will pay to such Lender or the Issuing Lender, as the case may be,
such additional amount or amounts as will compensate such Lender or the Issuing Lender, as the case
may be, for such additional costs incurred or reduction suffered in connection with the Loans made
to, or Letters of Credit issued for the account of, such Borrower.




          (b) If any Lender or the Issuing Lender determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such Lender’s or the
Issuing Lender’s capital or on the capital of such Lender’s or the Issuing Lender’s holding
company, if any, as a consequence of this Agreement or the Loans made by, or participations in
Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Lender, to a
level below that which such Lender or the Issuing Lender or such Lender’s or the Issuing Lender’s
holding company could have achieved but for such Change in Law (taking into consideration such
Lender’s or the Issuing Lender’s policies and the policies of such Lender’s or the Issuing Lender’s
holding company with respect to capital adequacy), then from time to time each Borrower will pay to
such Lender or the Issuing Lender, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Lender or such Lender’s or the Issuing Lender’s holding
company for any such reduction suffered in connection with the Loans made to, or Letters of Credit
issued for the account of, such Borrower.




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




          (d) Failure or delay on the part of any Lender or the Issuing Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Lender’s
right to demand such compensation; provided that neither Borrower shall be required to
compensate a Lender or the Issuing Lender pursuant to this Section for any increased costs or
reductions incurred more than 180 days prior to the date that such Lender or the Issuing Lender, as
the case may be, notifies the Borrowers of the Change in Law giving rise to such increased costs or
reductions and of such Lender’s or the Issuing Lender’s intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the 180 day period referred to above shall be extended to include
the period of retroactive effect thereof; provided, further, that no Lender shall
seek compensation from either Borrower unless such Lender is actively seeking compensation from
other similarly situated borrowers as well.




39









 





     SECTION 2.14 Break Funding Payments. In the event of (a) the payment of any principal
of any Eurodollar Loan or Alternative Currency Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any
Eurodollar Loan or Alternative Currency Loan other than on the last day of the Interest Period
applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar Loan or
Alternative Currency Loan on the date specified in any notice delivered pursuant hereto (regardless
of whether such notice may be revoked under Section 2.09(c) and is revoked in accordance
therewith), or (d) the assignment of any Eurodollar Loan or Alternative Currency Loan other than on
the last day of the Interest Period applicable thereto as a result of a request by the Borrowers
pursuant to Section 2.18, then, in any such event, the applicable Borrower shall compensate
each Lender for the loss, cost and expense attributable to such event. In the case of a Eurodollar
Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by
such Lender to be the excess, if any, of (i) the amount of interest that would have accrued on the
principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would
have been applicable to such Loan or the rate applicable to Alternative Currency Loans, as
applicable, for the period from the date of such event to the last day of the then current Interest
Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period for such Loan), over (ii) the amount of interest that would
accrue on such principal amount for such period at the interest rate that such Lender would bid
were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the Eurodollar market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this Section shall be
delivered to the Borrowers and shall be conclusive absent manifest error. The applicable Borrower
shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt
thereof.



     SECTION 2.15 Taxes.



          (a) Any and all payments by or on account of any obligation of either Borrower hereunder shall
be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes;
provided that if a Borrower shall be required to deduct any Indemnified Taxes or 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, Lender or Issuing Lender (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made, (ii) such Borrower
shall make such deductions and (iii) such Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable Law.




          (b) [Intentionally Omitted].




          (c) Each Borrower shall indemnify the Administrative Agent, each Lender and the Issuing
Lender, within ten (10) days after written demand therefor, for the full amount of any Indemnified
Taxes or Other Taxes paid by the Administrative Agent, such Lender or the Issuing Lender, as the
case may be, on or with respect to any payment by or on account of any obligation of such Borrower
hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section 2.15) and any penalties, interest




40









 




and reasonable out-of-pocket expenses arising therefrom or with respect thereto, except as a
result of the finding by a court of competent jurisdiction in a final, non-appealable order that
said sums were imposed as a result of the willful misconduct or gross negligence of the
Administrative Agent or Issuing Lender, 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 such Borrower by a Lender or the Issuing
Lender, or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing
Lender, shall be conclusive absent manifest error. No Administrative Agent, Lender or Issuing
Lender shall be entitled to receive any payment with respect to Indemnified Taxes or Other Taxes
that are incurred or accrued more than 180 days prior to the date such Administrative Agent, Lender
or Issuing Lender gives notice and demand thereof to such Borrower.




          (d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by either
Borrower to a Governmental Authority, such Borrower 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) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax
under the Law of the jurisdiction in which a Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall deliver to such
Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable
Law, such properly completed and executed documentation prescribed by applicable Law or reasonably
requested by such Borrower as will permit such payments to be made without withholding or at a
reduced rate.




          (f) If the Administrative Agent or a 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 either
Borrower or with respect to which such Borrower has paid additional amounts pursuant to this
Section 2.15, it shall pay over such refund to such Borrower (but only to the extent of
indemnity payments made, or additional amounts paid, by such Borrower under this Section
2.15 with respect to the Taxes or Other Taxes giving rise to such refund), net of all
reasonable out-of-pocket expenses of the Administrative Agent or such Lender and without interest
(other than any interest paid by the relevant Governmental Authority with respect to such refund);
provided, that such Borrower, upon the request of the Administrative Agent or such Lender,
agree to repay the amount paid over to such Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the
event the Administrative Agent or such Lender is required to repay such refund to such Governmental
Authority. This Section 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 the Borrowers or any other Person.




          (g) Each Lender and Issuing Lender shall use its best efforts (consistent with its internal
policies and legal and regulatory restrictions) to select a jurisdiction for its applicable lending
office or change the jurisdiction of its applicable lending office, as the case may be, so as to
avoid the imposition of any Indemnified Taxes or Other Taxes or to eliminate or reduce the




41









 




payment of any additional sums under this Section 2.15; provided that no such
selection or change of the jurisdiction for its applicable lending office shall be made if, in the
reasonable judgment of such Lender or Issuing Lender, such selection or change would be materially
disadvantageous to such Lender and Issuing Lender.




     SECTION 2.16 Payments Generally; Pro Rata Treatment; Sharing of Set-offs.



          (a) Each Borrower shall make each payment required to be made by it hereunder on Loans
denominated in Dollars (whether of principal, interest, fees or reimbursement of LC Disbursements,
or of amounts payable under Section 2.13, 2.14 or 2.15, or otherwise) prior
to 1:00 p.m., Eastern time, on the date when due in Dollars, in immediately available funds,
without set-off or counterclaim. Each Borrower shall make each payment of principal and interest
required to be made by it hereunder on Loans denominated in an Alternative Currency at the place
designated by the Administrative Agent in its notice therefor in such Alternative Currency. Any
amounts received after such time on any date may, in the discretion of the Administrative Agent, be
deemed to have been received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent at its offices at
One HSBC Center, 26th Floor, Buffalo, New York 14203, except payments to be made directly to the
Issuing Lender as expressly provided herein and except that payments pursuant to
Sections 2.13, 2.14, 2.15 and 10.03 shall be made directly to the
Persons entitled thereto. The Administrative Agent shall distribute any such payments received by
it for the account of any other Person to the appropriate recipient promptly following receipt
thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon shall be payable for the period of such extension.




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




          (c) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise,
obtain payment in respect of any principal of or interest on any of its Loans or participations in
LC Disbursements resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Loans and participations in LC Disbursements and accrued interest thereon
than the proportion received by any other Lender, then the Lender receiving such greater proportion
shall purchase (for cash at face value) participations in the Loans and participations in LC
Disbursements of other Lenders to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and participations in LC Disbursements; 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




42









 







(ii) the provisions of this paragraph shall not be construed to apply to any payment made by a
Borrower pursuant to and in accordance with the express terms of this Agreement or any payment
obtained by a Lender as consideration for the assignment of or sale of a participation in any of
its Loans or participations in LC Disbursements to any assignee or participant, other than to a
Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall
apply). The Borrowers consent to the foregoing and agree, 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 each Borrower rights of set-off and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of such Borrower in the amount
of such participation.




          (d) Unless the Administrative Agent shall have received notice from a Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of the Lenders or the
Issuing Lender hereunder that such Borrower will not make such payment, the Administrative Agent
may assume that such Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders or the Issuing Lender, as the case may be,
the amount due. In such event, if a Borrower has not in fact made such payment, then each of the
Lenders or the Issuing Lender, as the case may be, severally agrees to repay to the Administrative
Agent forthwith on demand the amount so distributed to such Lender or Issuing Lender 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.




          (e) If any Lender shall fail to make any payment required to be made by it pursuant to
Section 2.04(d) or (e), 2.05(b) or 2.16(d), then the Administrative
Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts
thereafter received by the Administrative Agent for the account of such Lender to satisfy such
Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.




     SECTION 2.17 Mitigation Obligations; Replacement of Lenders.



          (a) If any Lender requests compensation under Section 2.13, or if either Borrower is
required to pay any additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 2.15, 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
reasonable judgment of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Sections 2.13 or 2.15, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. Such Borrower shall pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation or assignment.




          (b) If any Lender requests compensation under Section 2.13, or if either Borrower is
required to pay any additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 2.15, or if any Lender defaults in its obligation




43









 




to fund Loans hereunder, then the Borrowers may, at their 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 Section 10.04),
all its interests, rights and obligations under this Agreement to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such assignment);
provided that (i) the Borrowers shall have received the prior written consent of the
Administrative Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall have
received payment of an amount equal to the outstanding principal of its Loans and participations in
LC Disbursements, accrued interest thereon, accrued fees and all other amounts payable to it
hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrowers (in the case of all other amounts) and (iii) in the case of any such
assignment resulting from a claim for compensation under Section 2.13 or payments required
to be made pursuant to Section 2.15, such assignment will result in a reduction in such
compensation or payments. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrowers to require such assignment and delegation cease to apply.




     SECTION 2.18 Increase of Commitments.



          (a) If no Default or Event of Default shall have occurred and be continuing, the Borrowers may
at any time during the Availability Period request an increase of the aggregate Revolving Loan
Commitments by notice to the Administrative Agent in writing of the amount of such proposed
increase (such notice, a “Commitment Increase Notice”); provided, however,
that the Revolving Loan Commitment of any Lender may not be increased without such Lender’s
consent, the minimum amount of any such increase shall be $10,000,000, the aggregate amount of
the Lenders’ Revolving Loan Commitments shall not exceed $150,000,000 and (iv) the aggregate
principal amount of all Foreign Revolving Loans at any time outstanding, shall not exceed sixty
percent (60%) of the total of all the Lenders’ Revolving Loan Commitments as such commitments are
increased pursuant to this Section 2.18. The Administrative Agent shall, within five (5)
Business Days after receipt of the Commitment Increase Notice, notify each Lender of such request.
Each Lender desiring to increase its Revolving Loan Commitment shall so notify the Administrative
Agent in writing no later than twenty (20) days after receipt by the Lender of such request. Any
Lender that accepts an offer to it by the Borrowers to increase its Revolving Loan Commitment
pursuant to this Section 2.18 shall, in each case, execute a Commitment Increase Agreement
with the Borrowers and the Administrative Agent, whereupon such Lender shall be bound by and
entitled to the benefits of this Agreement with respect to the full amount of its Revolving Loan
Commitment as so increased, and the definition of Revolving Loan Commitment in hereof shall be
deemed to be amended to reflect such increase. Any Lender that does not notify the Administrative
Agent within such period that it will increase its Revolving Loan Commitment shall be deemed to
have rejected such offer to increase its Revolving Loan Commitment. No Lender shall have any
obligation whatsoever to agree to increase its Revolving Loan Commitment. Any agreement to
increase a Lender’s pro rata share of the increased Revolving Loan Commitment shall be irrevocable
and shall be effective upon notice thereof by the Administrative Agent at the same time as that of
all other increasing Lenders.




44









 








          (b) If any portion of the increased Revolving Loan Commitments is not subscribed for by such
Lenders, the Borrowers may, in their sole discretion, but with the consent of the Administrative
Agent as to any Person that is not at such time a Lender (which consent shall not be unreasonably
withheld or delayed), offer to any existing Lender or to one or more additional banks or financial
institutions approved by the Administrative Agent the opportunity to participate in all or a
portion of the increased Revolving Loan Commitments pursuant to paragraph (c) or (d) below, as
applicable, by notifying the Administrative Agent. Promptly and in any event within five (5)
Business Days after receipt of notice from the Borrowers of their desire to offer such unsubscribed
commitments to certain existing Lenders, to the additional banks or financial institutions
identified therein or such additional banks or financial institutions identified by the
Administrative Agent and approved by the Borrowers, the Administrative Agent shall notify such
proposed lenders of the opportunity to participate in all or a portion of such unsubscribed portion
of the increased Revolving Loan Commitments.




          (c) Any additional bank or financial institution that the Borrowers select to offer
participation in the increased Revolving Loan Commitments shall execute and deliver to the
Administrative Agent a New Lender Agreement setting forth its Revolving Loan Commitment, and upon
the effectiveness of such New Lender Agreement such bank or financial institution (a “New
Lender”) shall become a Lender for all purposes and to the same extent as if originally a party
hereto and shall be bound by and entitled to the benefits of this Agreement, and the signature
pages hereof shall be deemed to be amended to add the name of such New Lender and Schedule
2.01 and the definition of Revolving Loan Commitment in Section 1.01 hereof shall be
deemed amended to increase the aggregate Revolving Loan Commitments of the Lenders by the Revolving
Loan Commitment of such New Lender, provided that the Revolving Loan Commitment of any New Lender
shall be an amount not less than $10,000,000. Each New Lender Agreement and Commitment Increase
Agreement shall be irrevocable and shall be effective upon notice thereof by the Administrative
Agent at the same time as that of all other New Lenders or increasing Lenders.




          (d) Any Lender that accepts an offer to it by the Borrowers to increase its Revolving Loan
Commitment pursuant to this Section 2.18 shall, in each case, execute a Commitment Increase
Agreement with the Borrowers and the Administrative Agent, whereupon such Lender shall be bound by
and entitled to the benefits of this Agreement with respect to the full amount of its Revolving
Loan Commitment as so increased, and Schedule 2.01 and the definition of Revolving Loan
Commitment in Section 1.01 hereof shall be deemed to be amended to reflect such increase.
Any Commitment Increase Agreement shall be irrevocable and shall be effective upon notice thereof
by the Administrative Agent at the same time as that of all other New Lenders and increasing
Lenders.




          (e) The effectiveness of any New Lender Agreement or Commitment Increase Agreement shall be
contingent upon receipt by the Administrative Agent of such corporate resolutions of the Borrowers
and legal opinions of counsel to the Borrowers as the Administrative Agent shall reasonably request
with respect thereto, in each case in form and substance reasonably satisfactory to the
Administrative Agent. Once a New Lender Agreement or Commitment Increase Agreement becomes
effective, the Administrative Agent shall reflect the increases in the Revolving Loan Commitments
effected by such agreements by appropriate entries in the Register.




45









 








          (f) If any bank or financial institution becomes a New Lender pursuant to Section
2.18(c) or any Lender’s Revolving Loan Commitment is increased pursuant to Section
2.18(d), additional Loans made on or after the effectiveness thereof (the “Re-Allocation
Date”) shall be made pro rata based on their respective Revolving Loan Commitments in effect on
or after such Re-Allocation Date (except to the extent that any such pro rata borrowings would
result in any Lender making an aggregate principal amount of Loans in excess of its Revolving Loan
Commitment, in which case such excess amount will be allocated to, and made by, such New Lender
and/or Lenders with such increased Revolving Loan Commitments to the extent of, and pro rata based
on, their respective Revolving Loan Commitments), and continuations of Loans outstanding on such
Re-Allocation Date shall be effected by repayment of such Loans on the last day of the Interest
Period applicable thereto or, in the case of ABR Loan, on the date of such increase, and the making
of new Loans of the same Type pro rata based on the respective Revolving Loan Commitments in effect
on and after such Re-Allocation Date.




          (g) If on any Re-Allocation Date there is an unpaid principal amount of Eurodollar Loans,
such Eurodollar Loans shall remain outstanding with the respective holders thereof until the
expiration of their respective Interest Periods (unless the Borrowers elects to prepay any thereof
in accordance with the applicable provisions of this Agreement), and interest on and repayments of
such Eurodollar Loans will be paid thereon to the respective Lenders holding such Eurodollar Loans
pro rata based on the respective principal amounts thereof outstanding.




          (h) Upon the effectiveness of any Commitment Increase Agreement, Section 2.08(b),
Schedule 2.01 and other pertinent sections hereof shall be automatically and
proportionately modified to reflect the increased Revolving Loan Commitment, the exact figures to
be agreed between the Borrowers and the Administrative Agent, and all references to the Revolving
Loan Commitments shall be deemed amended mutatis mutandis.




ARTICLE III




Representations and Warranties




          Each Borrower for itself and for its Subsidiaries represents and warrants to the Lenders that:




     SECTION 3.01 Organization. Each Obligor and its respective Subsidiaries (i) is duly
organized, validly existing and if applicable, in good standing under the Laws of the jurisdiction
of its organization, (ii) has the requisite power and authority to conduct its business in each
jurisdiction as it is presently being conducted, and (iii) is duly qualified or licensed to conduct
business and if applicable, is in good standing, in each such jurisdiction other than any
jurisdiction where the failure to so qualify, could not reasonably be expected to result in a
Material Adverse Effect. As of the Effective Date the Borrowers and their Subsidiaries are
qualified in each jurisdiction listed in Schedule 3.01. As of the Effective Date, no
proceeding to dissolve any Obligor is pending or, to the Borrowers’ knowledge, threatened.



     SECTION 3.02 Authority Relative to this Agreement. Each Obligor has the power and
authority to execute and deliver this Agreement and the other Loan Documents to which it is



46









 




a party and to perform its obligations hereunder and thereunder. The Transactions have been
duly authorized by all necessary corporate, limited liability company or partnership action on the
part of each Obligor that is a party thereto. This Agreement and the other Loan Documents have
been duly and validly executed and delivered by each Obligor party thereto and constitute the
legal, valid and binding obligations of such Obligor, enforceable against such Obligor in
accordance with their respective terms, subject to the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights and remedies
generally and to the effect of general principles of equity (regardless of whether enforcement is
considered in a proceeding at Law or in equity).




     SECTION 3.03 No Violation. Except as set forth in Schedule 3.03, the
Transactions will not:



          (a) result in a breach of the articles or certificate of incorporation, bylaws, partnership
agreement or limited liability company agreement of either Borrower or any other Obligor or any
resolution adopted by the Board of Directors, shareholders, partners, members or managers of any
Obligor;




          (b) result in the imposition of any Lien on any of the Equity Interests of any Obligor or any
of its assets other than the Liens created under the Loan Documents;




          (c) result in, or constitute an event that, with the passage of time or giving of notice or
both, would be, a breach, violation or default (or give rise to any right of termination,
cancellation, prepayment or acceleration) under (i) any agreement to which any Obligor or any of
its respective Subsidiaries is a party, under which any Obligor or any of its respective
Subsidiaries have or may acquire rights or obligations or by which its properties or assets may be
bound or (ii) under any Governmental Approval held by, or relating to the business of either
Borrower or any of its respective Subsidiaries, in each case that could reasonably be expected to
have a Material Adverse Effect;




          (d) require any Obligor to obtain any consent, waiver, approval, exemption, authorization or
other action of, or make any filing with or give any notice to, any Person except (i) such as have
been obtained or made and are in full force and effect or (ii) filings necessary to perfect or
assign Liens created under the Loan Documents and (iii) consents, waivers, approvals, exemptions,
authorizations other actions, filings and notices the failure of which to obtain or make could not
reasonably be expected to have a Material Adverse Effect; or




          (e) violate any Law or Order applicable to any Obligor or by which its properties or assets
may be bound, except where such violation could not reasonably be expected to result in a Material
Adverse Effect.




     SECTION 3.04 Financial Statements. The Domestic Borrower has previously furnished to
the Administrative Agent the consolidated balance sheets of the Domestic Borrower and its
Subsidiaries as of December 31, 2007, the related consolidated statements of operations,
stockholders’ equity and comprehensive income (loss) and cash flows for each of the two years in
the period ended December 31, 2007, the notes thereto and the related financial statement schedule
(all as contained in the Domestic Borrower’s Annual Report on Form 10-K for the year



47









 




ended December 31, 2007) (collectively, the “Financial Statements”). The Financial
Statements fairly present in all material respects the financial condition of the Domestic Borrower
as of their respective dates and the results of operations and cash flows of the Domestic Borrower
for the periods ended on such dates in accordance with GAAP applied on a consistent basis for the
periods covered thereby, subject, in the case of interim financial statements, to absence of
footnotes and normal year-end adjustments (the effect of which will not, individually or in the
aggregate, have a Materially Adverse Effect). Since December 31, 2007, there has been no change
that would have a Material Adverse Effect.




     SECTION 3.05 No Undisclosed Liabilities. Except as set forth in
Schedule 3.05, none of the Obligors or any of their respective Subsidiaries has any
liabilities or obligations of any nature (whether known or unknown, and whether absolute, accrued,
contingent or otherwise) except for (i) liabilities or obligations reflected or reserved against in
the financial statements most recently delivered by the Domestic Borrower pursuant to
Section 4.01(g) or Section 5.01, as applicable, (ii) current liabilities incurred
in the ordinary course of business since the date of such financial statements, (iii) liabilities
or obligations that are not required to be included in financial statements prepared in accordance
with GAAP, (iv) liabilities or obligations arising under Governmental Approvals or contracts to
which any of the Obligor or any of its Subsidiaries is a party or otherwise subject, and (v) other
Permitted Indebtedness.



     SECTION 3.06 Litigation. Schedule 3.06 briefly describes each action, suit or
proceeding pending as of the Effective Date before any Governmental Authority or arbitration panel,
or to the knowledge of the Borrowers or any of their Subsidiaries threatened, (A) involving the
Transactions, or (B) against any Obligor or any of its Subsidiaries regarding the business or
assets owned or used by the Borrowers or any of their Subsidiaries that, individually or in the
aggregate, if in either case was adversely determined could reasonably be expected to have a
Material Adverse Effect.



     SECTION 3.07 Compliance with Law. Except as set forth in Schedule 3.07,
(i) each Obligor and its respective Subsidiaries is in compliance with each Law that is or was
applicable to it or to the conduct or operation of its business or the ownership or use of any of
its assets except where the failure to be in compliance, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect; and (ii) none of the Obligors or
any of their respective Subsidiaries has received any notice of, nor does either of the Borrowers
have knowledge of, the assertion by any Governmental Authority or other Person of any such
violation or of any obligation of the Borrowers or any of their Subsidiaries to undertake any
material remedial action under any Law.



     SECTION 3.08 Material Contracts. (i) The Domestic Borrower is not aware of any
pending or threatened termination or cancellation of any Material Contract, (ii) none of the
Obligors or any of their respective Subsidiaries nor, to the knowledge of either of the Borrowers,
any other party to a Material Contract is in default thereunder, and (iii) no other event has
occurred and no other condition exists that, with notice or lapse of time or both, would constitute
a default by any Obligor or any of its respective Subsidiaries or, to the knowledge of either of
the Borrowers, any other party under any Material Contract.



48









 





     SECTION 3.09 Properties. Each Borrower and its respective Subsidiaries owns (with
good and defensible title in the case of real property, subject only to the matters permitted by
the following sentence), or has valid leasehold interests in, all the properties and assets
(whether real, personal, or mixed and whether tangible or intangible) material to its business.
All such properties and assets are free and clear of all Liens except Permitted Liens. The
properties of the Borrowers and their respective Subsidiaries in the aggregate are generally in
good operating order, condition and repair, ordinary wear and tear excepted.



     SECTION 3.10 Intellectual Property.



          (a) None of the patents, patent applications, trademarks (whether registered or not),
trademark applications, trade names, service marks, and copyrights (the “Intellectual
Property”) owned by the Borrowers or any of their respective Subsidiaries has been declared
invalid or is the subject of a pending or, to the knowledge of such Borrower, threatened action for
cancellation or a declaration of invalidity, and there is no pending judicial proceeding involving
any claim, and neither of the Borrowers nor any of their respective Subsidiaries have received any
written notice or claim, of any infringement, misuse or misappropriation of any patent, trademark,
trade name, copyright, license or similar intellectual property right owned by any third party
that, in any case, would reasonably be expected to cause a Material Adverse Effect. The rights of
the Obligors and any of their respective Subsidiaries in the Intellectual Property are free and
clear of any Liens other than Permitted Liens.




          (b) To the knowledge of the Borrowers, except as set forth in Schedule 3.10, the
conduct by any Obligor or any of its respective Subsidiaries of their respective businesses as
presently conducted does not conflict with, infringe on, or otherwise violate any copyright, trade
secret, or patent rights of any Person except where such conflict, infringement or violation could
not reasonably be expected to have a Material Adverse Effect.




     SECTION 3.11 Taxes. All tax returns and reports of any Obligor or any of its
respective Subsidiaries required to be filed by any of them have been timely filed, and all Taxes
shown on such tax returns to be due and payable and all Taxes imposed upon the Borrowers and their
respective Subsidiaries and upon their respective properties, assets, income, businesses and
franchises that are due and payable have been paid when due and payable except, in each case, where
such unpaid taxes are being contested in good faith and appropriate reserves made therefor. The
Borrowers know of no proposed tax assessment against either Borrower or any of its respective
Subsidiaries that is not being actively contested by such Borrower or such Subsidiary in good faith
and by appropriate proceedings and which, if imposed, could reasonably be expected to result in a
Material Adverse Effect; provided that, in any such case such reserves or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have been made or provided
therefor.



     SECTION 3.12 Environmental Compliance. In each case, except to the extent such
condition or event, individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect or as set forth in Schedule 3.12,



          (a) none of the Obligors or any of their respective Subsidiaries has failed to comply with any
Environmental Law or to obtain, maintain or comply with any Governmental




49









 




Approval required under any Environmental Law or has become subject to any Environmental
Liability.




          (b) none of the Obligors or any of their respective Subsidiaries has received any notice of
any claim with respect to any Environmental Liability or knows of any basis for any Environmental
Liability;




          (c) none of the Obligors or any of their respective Subsidiaries has arranged for the disposal
of Hazardous Material at a site listed for investigation or clean-up by any Governmental Authority
or in violation of Law;




          (d) there is no proceeding pending against any of the Obligors or any of their respective
Subsidiaries by any Governmental Authority with respect to the presence on or release of any
Hazardous Material from any real property or facility owned or operated at any time by the
Borrowers or any of their Subsidiaries or otherwise used in connection with their respective
businesses; and




          (e) neither Borrower has knowledge that any Hazardous Material has been or is currently being
generated, processed, stored or released (or is subject to a threatened Release) from, on or under
any real property or facility owned or operated by any of the Obligors or any of their respective
Subsidiaries, or otherwise used in connection with their respective businesses in a quantity or
concentration that would require remedial action under any applicable Environmental Law if reported
to or discovered by the relevant Governmental Authority.




     SECTION 3.13 Labor Matters. As of the Effective Date, there are no strikes, lockouts
or slowdowns against any of the Obligors or any of their respective Subsidiaries pending or, to the
knowledge of the Borrowers, threatened that could reasonably be expected to have a Material Adverse
Effect. The hours worked by and payments made to employees of the Domestic Borrower have not been
in violation of the Fair Labor Standards Act or any other Law dealing with such matters which could
reasonably be expected to result in a Material Adverse Effect.



     SECTION 3.14 Investment Company Status. Neither the Domestic Borrower nor any of its
Subsidiaries is an “investment company” as defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended.



     SECTION 3.15 Insurance. As of the Effective Date, Schedule 3.15 lists all
policies or binders of fire, liability, worker’s compensation, vehicular or other insurance held by
or for the benefit of the Domestic Borrower or any of its Subsidiaries (specifying the insurer, the
policy number or covering note number with respect to binders). All such insurance is in full
force and effect, is with financially sound and reputable insurers and is in amounts and provides
coverage that are reasonable and customary for Persons engaged in businesses similar to those
conducted by any of the Obligors or any of their respective Subsidiaries and lists the
Administrative Agent as an additional insured on liability policies and as a co-loss payee on
property and casualty policies.



     SECTION 3.16 Solvency. With respect to the Domestic Borrower on a consolidated basis
with its Subsidiaries, immediately following the making of each Loan and



50









 




after giving effect to the application of the proceeds of such Loan, and with respect to each
Guarantor, as of the Effective Date, (a) the fair market value of its assets will exceed its debts
and liabilities; (b) the present fair saleable value of its property will be greater than the
amount that will be required to pay the probable liability of its debts and other liabilities; (c)
it will be able to pay its debts and liabilities as they become absolute and mature; and (d) it
will not have unreasonably small capital with which to conduct its business as such business is now
conducted and is proposed to be conducted following the Effective Date.




     SECTION 3.17 ERISA. No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other such ERISA Events for which liability is reasonably
expected to occur, could reasonably be expected to result in a Material Adverse Effect. The
present value of all accumulated benefit obligations under each Plan (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 by more than $10,000,000 the fair
market value of the assets of such Plan, and 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 by more than $10,000,000 the fair market value of the
assets of all such underfunded Plans.



     SECTION 3.18 Disclosure. Each Borrower has disclosed to the Lenders all agreements,
instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject,
and all other matters known to it, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. None of the other reports, financial statements,
certificates or other information furnished by or on behalf of any Obligor to the Administrative
Agent or any Lender in connection with the negotiation of this Agreement or delivered hereunder (as
modified or supplemented by other information so furnished) contains any material misstatement of
fact or omits to state any material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not materially misleading; provided that,
with respect to projected financial information, each Borrower represents only that such
information was prepared in good faith based upon assumptions believed to be reasonable at the
time.



     SECTION 3.19 Subsidiaries. Schedule 3.19 lists, as of the Effective Date for
each Subsidiary of the Domestic Borrower, its full legal name, its jurisdiction of organization,
the number of shares of capital stock or other Equity Interests outstanding and the owner(s) of
such shares or Equity Interests.



     SECTION 3.20 Margin Stock. No part of any Borrowing shall be used at any time, to
purchase or carry margin stock (within the meaning of Regulation U) or to extend credit to others
for the purpose of purchasing or carrying any margin stock. None of the Borrowers nor any of
their Subsidiaries are engaged principally, or as one of its important activities, in the business
of extending credit for the purposes of purchasing or carrying any such margin stock. No part of
the proceeds of any Borrowing will be used for any purpose which violates, or which is inconsistent
with, any regulations promulgated by the Board.



51









 





     SECTION 3.21 Works Council. There is no works council (ondernemingsraad) established
by a Dutch [Obligor/Guarantor] and no [Obligor/Guarantor] are in the process of establishing a
works council, and no employees of any [Obligor/Guarantor] nor any organisations representing any
[Obligor/Guarantor]’s employees have (i) requested that a works council be established or (ii) made
a request to the district court, cantonal sector (arrondissementsrechtbank, sectie kanton) for the
establishment of a works council and no [Obligor/Guarantor] is required under any collective labour
agreement (collectieve arbeidsovereenkomst) or any other agreement to establish a works council.
Consequently, there is no works council whose advise on any [Obligor/Guarantor]’s entry into the
Loan Documents and the performance of the transactions thereunder must be sought pursuant to the
Works Councils Act (Wet op de ondernemingsraden).



ARTICLE IV




Conditions




     SECTION 4.01 Effective Date. The obligations of the Lenders to make Loans and of the
Issuing Lender to issue Letters of Credit hereunder shall not become effective until the date on
which each of the following conditions is satisfied (or waived in accordance with
Section 10.02):



          (a) The Administrative Agent (or its counsel) shall have received from each party hereto
either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a counterpart of this Agreement.




          (b) The Administrative Agent shall have received a favorable written opinion (addressed to the
Administrative Agent and the Lenders and dated the Effective Date) of (i) David L. Roland, Esq.,
general counsel of Borrowers, (ii) Mayer Brown LLP, New York counsel for the Borrowers and (iii)
foreign counsel for the Borrowers, each in form reasonably satisfactory to the Administrative
Agent.




          (c) The Administrative Agent shall have received such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the organization, existence
and good standing of each Obligor, the authorization of the Transactions, the authority of each
natural Person executing any of the Loan Documents on behalf of any Obligor and any other legal
matters relating to the Obligors, this Agreement or the Transactions, all in form and substance
reasonably satisfactory to the Administrative Agent and its counsel.




          (d) Each Lender requesting a promissory note evidencing Loans made by such Lender shall have
received from the Borrowers a Note payable to such Lender.




          (e) The Lenders, the Administrative Agent and Lead Arrangers shall have received all fees and
other amounts due and payable on or prior to the Effective Date, including reimbursement or payment
of all reasonable out-of-pocket expenses required to be reimbursed or




52









 




paid by the Domestic Borrower hereunder to the extent that invoices have been provided to the
Domestic Borrower in advance of the Effective Date.




          (f) All material governmental and third party approvals necessary or, in the discretion of the
Administrative Agent, advisable in connection with the financing contemplated hereby and the
continuing operations of the Borrowers and their Subsidiaries shall have been obtained and be in
full force and effect.




          (g) The Lenders shall have received (i) audited consolidated financial statements of the
Domestic Borrower and its Subsidiaries for the two most recent fiscal years ended prior to the
Effective Date as to which such financial statements are available, and (ii) satisfactory unaudited
interim consolidated financial statements of the Domestic Borrower and its Subsidiaries for the
fiscal quarter ended March 31, 2008.




          (h) The Administrative Agent shall have received each of the Security Documents from each
applicable Obligor and same shall constitute satisfactory security documentation to create first
priority security interests in the Collateral free and clear of all Liens, other than Permitted
Liens.




          (i) All membership and stock certificates of each Subsidiary of the Borrowers described on
Annex 2 to the Security Agreements will be delivered to Administrative Agent together with related
stock and membership powers executed in blank.




          (j) The Administrative Agent shall have received reports of UCC, tax and judgment Lien
searches conducted by a reputable search firm with respect to each of the Borrowers and their
Subsidiaries in each location reasonably requested by the Administrative Agent and the information
disclosed in such reports shall be reasonably satisfactory to the Administrative Agent.




          (k) The Administrative Agent shall have received, to the extent obtainable using reasonable
commercial efforts, acknowledgments from all parties previously granting landlord lien waivers or
subordination agreements that such landlord lien waivers or subordination agreements are still
effective and for the benefit of the Administrative Agent executed by such landlords in a form
reasonably satisfactory to the Administrative Agent.




          (l) The Lenders shall have received details of the legal and capital structure of the
Borrowers which shall be reasonably satisfactory to the Lenders.




          (m) The Administrative Agent shall have received evidence satisfactory to the Administrative
Agent that substantially simultaneously with the initial Borrowing the Indebtedness identified on
Schedule 4.01(m) hereto will be paid in full.




          (n) The Administrative Agent shall have received evidence of insurance coverage of the
Borrowers and their Subsidiaries, which coverage shall be reasonably satisfactory to the
Administrative Agent in all respects and shall name the Administrative Agent as an additional
insured and as a mortgagee/loss payee on the liability and casualty insurance policies covering the
Mortgaged Property.




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          (o) The Administrative Agent shall have received all documents and other items that it may
reasonably request in writing relating to any other matters relevant hereto, all in form and
substance satisfactory to the Administrative Agent.




     SECTION 4.02 Each Credit Event. The obligation of each Lender to make a Loan on the
occasion of any Borrowing, and of the Issuing Lender to issue, amend, renew or extend any Letter of
Credit, is subject to the satisfaction of the following conditions:



          (a) The representations and warranties of the Borrowers set forth in this Agreement or any
other Loan Document shall be deemed to have been made as a part of said request for each Borrowing
and shall be true and correct in all material respects on and as of the date of such Borrowing or
the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable;
provided, that to the extent such representations and warranties were made as of a specific
date, the same shall be required to remain true and correct in all material respects as of such
specific date.




          (b) No Material Adverse Effect shall have occurred since the date of the most recent
Borrowing.




          (c) The Administrative Agent shall have received a Borrowing Request as required by
Section 2.03 or the Issuing Lender and the Administrative Agent shall have received a
request for the issuance of a Letter of Credit as required by Section 2.04(b);




          (d) At the time of, and immediately after giving effect to, such Borrowing or the issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, no Default or Event of
Default shall have occurred and be continuing.



Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be
deemed to constitute a representation and warranty by the Borrowers on the date thereof as to the
matters specified in paragraphs (a), (b), (c) and (d) of this Section 4.02.




ARTICLE V




Affirmative Covenants




          Until the Revolving Loan Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in full and all Letters
of Credit shall have expired or terminated (except as expressly permitted to extend past the
Revolving Credit Termination Date pursuant to Section 2.04(c)) and all LC Disbursements
shall have been reimbursed, each Borrower, for itself and its Subsidiaries, and each Guarantor, for
itself, covenant and agree with the Lenders that:




     SECTION 5.01 Financial Statements. The Domestic Borrower will furnish to the
Administrative Agent:



          (a) Within ten (10) days after the Domestic Borrower is required to file the same with the
Commission, copies of the annual reports, quarterly reports and current reports containing
financial statements and related financial information (or copies of such portions of




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any of the foregoing as the Commission may from time to time by rules and regulations
prescribe) that the Domestic Borrower may be required to file with the Commission pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; provided,
however, that the foregoing shall not be deemed to require the Domestic Borrower to furnish
any current reports filed with the Commission that consist solely or primarily of the Domestic
Borrower’s public announcement that its quarterly financial results of operations and related
financial information each fiscal quarter have been filed. If the Domestic Borrower is not
required to file information, documents or reports pursuant to either of said Sections, then such
of the supplementary and periodic information, documents and reports which may be required pursuant
to Section 13(a) of the Securities Exchange Act of 1934 in respect of a security listed and
registered on a national securities exchange as may be prescribed from time to time in such rules
and regulations;




          (b) Within sixty (60) days of the end of each fiscal quarter of the Domestic Borrower, a
certificate of a Financial Officer of the Domestic Borrower (i) certifying as to whether a Default
or Event of Default has occurred and, if a Default or Event of Default has occurred, specifying the
details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting
forth reasonably detailed calculations demonstrating compliance with Sections 6.14,
6.15 and 6.16 and (iii) stating whether any change in GAAP or in the application
thereof has occurred since the date of the last audited financial statements delivered pursuant to
Section 5.01(a) and, if any such change has occurred, specifying the effect such change
would have on the financial statements accompanying such certificate;




          (c) within thirty (30) days of an increase in the Revolving Loan Commitments pursuant to
Section 2.18, a calculation of the Leverage Ratio (in accordance with the practice used in
the calculations described in paragraph (c) above), taking into account the effect of such
increased Borrowings;




          (d) promptly after the same become available, copies of all proxy statements distributed by
the Domestic Borrower to its shareholders generally concerning material developments in the
business of the Domestic Borrower or any of its Subsidiaries;




          (e) promptly upon receipt of any complaint, order, citation, notice or other written
communication from any Person with respect to, or upon any Obligor’s obtaining knowledge of, (i)
the existence or alleged existence of a violation of any applicable Environmental Law or any
Environmental Liability in connection with any property now or previously owned, leased or operated
by the Borrowers or any of their Subsidiaries which could reasonably be expected to result in a
Material Adverse Effect, (ii) any release of Hazardous Substances on such property or any part
thereof in a quantity that is reportable under any applicable Environmental Law, and (iii) any
pending or threatened proceeding for the termination, suspension or non-renewal of any permit
required under any applicable Environmental Law, in each case, in which there is a reasonable
likelihood of an adverse decision or determination that could reasonably be expected to result in a
Material Adverse Effect, a certificate of an executive officer of the Domestic Borrower, setting
forth, in reasonable detail, such matter and the actions, if any, that such Obligor is required or
proposes to take;





55












 





          (f) promptly following any request therefor, such other information regarding the operations,
business affairs and financial condition of the Borrowers or any of their Subsidiaries, or
compliance with the terms of this Agreement, as the Administrative Agent or any Lender may
reasonably request in order to enable the Administrative Agent to determine whether the terms,
covenants, provisions and conditions of this Agreement have been complied with; provided
that the foregoing shall not be construed to expand the provisions of Section 5.06 with
respect to annual audits; and




          (g) within ninety (90) days following the commencement of each fiscal year, the Domestic
Borrower’s consolidated operating and capital expenditure budgets and cash flow forecast for such
fiscal year (which shall include a projected consolidated balance sheet summary for the Domestic
Borrower and its Subsidiaries as of the last day of such fiscal year and the related projected
statements of consolidated income and cash flows for such fiscal year).




     SECTION 5.02 Notices of Material Events. The Domestic Borrower will furnish to the
Administrative Agent and each Lender promptly and, in any event, within five (5) Business Days
after acquiring knowledge thereof, written notice of the following:



          (a) the occurrence of any Default of which the Domestic Borrower has knowledge and the action
that the Obligors are taking or propose to take with respect thereto;




          (b) the filing or commencement of any action, suit or proceeding by or before any arbitrator
or Governmental Authority against or affecting any Obligor or any Subsidiary thereof that, if
adversely determined, could reasonably be expected to result in a Material Adverse Effect or that
in any manner questions the validity of the Loan Documents;




          (c) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that
have occurred, could reasonably be expected to result in liability of any Obligor in an aggregate
amount exceeding $10,000,000;




          (d) any default by the Borrowers or any of their Subsidiaries under any Material Contract,
together with a description of the nature of such default and any action taken or proposed to be
taken with respect to such default; and




          (e) any other development with respect to either Borrower and its respective Subsidiaries that
results in, or could reasonably be expected to result in, a Material Adverse Effect.



Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer
or other executive officer of the Domestic Borrower setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken with respect
thereto.




     SECTION 5.03 Existence; Conduct of Business. Each Borrower will, and will cause each
of its respective Subsidiaries to, do or cause to be done all things necessary to preserve and
maintain its legal existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business except where the failure to do so could not reasonably be expected
to result in a Material Adverse Effect; provided that the foregoing shall



56









 




not allow or prohibit any merger, consolidation, liquidation or dissolution to the extent same
is or is not permitted under Section 6.03.




     SECTION 5.04 Payment of Obligations. Each Borrower will, and will cause each of its
respective Subsidiaries to, pay its obligations, including liabilities for Taxes before the same
shall become delinquent or in default, except where (a) the validity or amount thereof is being
contested in good faith by appropriate proceedings, (b) such Borrower or such Subsidiary has set
aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the
failure to make payment pending such contest could not reasonably be expected to result in a
Material Adverse Effect.



     SECTION 5.05 Maintenance of Properties; Insurance. Each Borrower will, and will cause
each of its respective Subsidiaries to, (a) keep and maintain all property material to the conduct
of its business in good working order and condition, unless the failure to so keep, preserve,
protect and maintain such property or the failure to make such repairs, renewals or replacements
could not reasonably be expected to result in a Material Adverse Effect, ordinary wear and tear
excepted, and (b) maintain, with financially sound and reputable insurance companies, insurance in
such amounts and against such risks as are customarily maintained by similarly situated companies
engaged in the same or similar businesses operating in the same or similar locations and shall
cause the Administrative Agent to be listed as a co-loss payee on property and casualty policies
and as an additional insured on liability policies.



     SECTION 5.06 Books and Records; Inspection Rights. Each Borrower will, and will cause
each of its respective Subsidiaries to, keep proper books of record and account in which full, true
and correct entries are made of all dealings and transactions in relation to its business and
activities. Each Borrower will, and will cause each of its respective Subsidiaries to, permit any
representatives designated by the Administrative Agent, upon reasonable prior notice, to visit and
inspect its properties, to examine and make extracts from its books and records, and to discuss its
affairs, finances and condition with its officers and independent accountants, all at such
reasonable times and as often as reasonably requested. The Borrowers will and will cause each of
their Subsidiaries to permit the Administrative Agent to engage a third party auditor (after
obtaining estimates from two auditors) to provide an audit of the type description in Section
4.01(g) if requested by the Administrative Agent at the expense of the Domestic Borrower;
provided that such audits will be limited to once per calendar year unless an Event of
Default exits or any such audit is not reasonably acceptable to Administrative Agent.



     SECTION 5.07 Compliance with Laws. Each Borrower will, and will cause each of its
respective Subsidiaries to, comply with all Laws (including Environmental Laws as more fully set
forth in Section 5.12, below) and Orders applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect.



     SECTION 5.08 Use of Proceeds and Letters of Credit. Each Borrower covenants and
agrees that the proceeds of the Loans will be used only to (i) to finance acquisitions, investments
and share repurchases; (ii) to pay the fees, expenses and other transaction costs of the
transactions contemplated hereby; and (iii) to fund working capital needs and general corporate
purposes of each Borrower and its respective Subsidiaries. Each Borrower covenants



57









 




and agrees that no part of the proceeds of any Loan will be used, whether directly or
indirectly, for any purpose that entails a violation of any of the Regulations of the Board,
including Regulations T, U and X. Letters of Credit will be issued only to support the working
capital needs and general corporate obligations of such Borrower and its Subsidiaries relating to
their respective lines of business as currently conducted.




     SECTION 5.09 Additional Guarantees and Security Documents.



          (a) Subject to the terms of Section 9.01(a), Domestic Borrower shall at all times
cause all Material Domestic Subsidiaries to be Guarantors and, in any event shall cause Domestic
Subsidiaries that in the aggregate hold 85% or more of the domestic assets (excluding stock or
securities in one or more Foreign Subsidiary) of the Domestic Borrower and its Domestic
Subsidiaries to be Guarantors. Foreign Borrower shall at all times cause all Material Foreign
Subsidiaries to be Guarantors of the Foreign Revolving Loans and the other Secured Obligations (as
defined in the Foreign Security Agreement) and, in any event shall cause Foreign Subsidiaries that
in the aggregate hold 85% or more of the foreign assets of the Foreign Borrower and its Foreign
Subsidiaries to be Guarantors of the Foreign Revolving Loans and the other Secured Obligations (as
defined in the Foreign Security Agreement). To the extent required pursuant to the provisions of
this Section 5.09, within thirty (30) days after the Domestic Borrower or the Foreign
Borrower, as applicable, acquires or creates a new Material Domestic Subsidiary or Material Foreign
Subsidiary, respectively, the applicable Borrower or any or its respective Subsidiaries, as
applicable, shall cause such new Subsidiary to execute a Joinder Agreement and shall, and shall
cause such new Subsidiary to, deliver to the Administrative Agent such other documents relating to
such new Subsidiary as the Administrative Agent shall reasonably request in order to comply with
the requirements of this Section.




          (b) The Domestic Borrower covenants and agrees that the Security Agreements executed by the
Domestic Borrower and the Domestic Guarantors create in favor of the Administrative Agent, for the
ratable benefit of the Lenders, a legal, valid and enforceable security interest in 85% of the
aggregate domestic assets (excluding stock or securities in one or more Foreign Subsidiaries) of
the Domestic Borrower and its Domestic Subsidiaries. In the event that the domestic Collateral
granted by the Domestic Borrower and the Domestic Guarantors does not represent 85% of the
aggregate domestic assets (excluding stock or securities in one or more Foreign Subsidiaries) of
the Domestic Borrower and its Domestic Subsidiaries, then the Domestic Borrowers shall, and shall
cause its Domestic Subsidiaries to, grant the Administrative Agent or its designee as security for
the Obligations of the Domestic Borrower and the Domestic Guarantors a first-priority lien on
additional domestic collateral not already subject to a Lien of the Security Agreements such that
after giving effect thereto, the domestic Collateral will represent at least 85% of the aggregate
domestic assets (excluding stock or securities in one or more Foreign Subsidiaries) of the Domestic
Borrower and its Domestic Subsidiaries.




          (c) The Foreign Borrower covenants and agrees that the Security Agreements executed by the
Foreign Borrower and the Foreign Guarantors create in favor of the Administrative Agent as security
for the Foreign Revolving Loans and the other Secured Obligations (as defined in the Foreign
Security Agreement), for the ratable benefit of the




58









 







Lenders, a legal, valid and enforceable security interest in 85% of the foreign assets of the
Foreign Borrower and its Foreign Subsidiaries. In the event the foreign Collateral does not
represent 85% of the aggregate foreign assets of the Foreign Borrower and its Foreign Subsidiaries,
then the Foreign Borrower shall, and shall cause its Foreign Subsidiaries to, grant the
Administrative Agent or its designee as security for the Obligations of the Foreign Borrower and
the Foreign Guarantors a first-priority lien on additional foreign collateral not already subject
to a Lien of the Security Agreements such that after giving effect thereto, the foreign Collateral
will represent at least 85% of the aggregate foreign assets of the Foreign Borrower and its Foreign
Subsidiaries.




     SECTION 5.10 Compliance with ERISA. In addition to and without limiting the
generality of Section 5.07, each Borrower shall, and shall cause each of their respective
Subsidiaries to (a) comply in all material respects with all applicable provisions of ERISA and the
regulations and published interpretations thereunder with respect to all employee benefit plans (as
defined in ERISA), (b) not take any action or fail to take action the result of which would be (i)
a liability to the PBGC (other than liability for PBGC premiums) or (ii) a past due liability to
any Multiemployer Plan, (c) not participate in any prohibited transaction that could result in any
material civil penalty under ERISA or any tax under the Code, (d) operate each employee benefit
plan in such a manner that will not incur any material tax liability under Section 4980B of the
Code or any liability to any qualified beneficiary as defined in Section 4980B of the Code except
to the extent, in each case, where such failure to comply would not reasonably be expected to
result in a Material Adverse Effect and (e) furnish to the Administrative Agent upon the
Administrative Agent’s request such additional information about any employee benefit plan as may
be reasonably requested by the Administrative Agent.



     SECTION 5.11 Compliance With Agreements. Each Borrower shall, and shall cause its
respective Subsidiaries to, comply in all respects with each material term, condition and provision
of all Material Contracts except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect; provided that such
Borrower or any such Subsidiary may contest any such lease, agreement or other instrument in good
faith through applicable proceedings so long as adequate reserves are maintained in accordance with
GAAP.



     SECTION 5.12 Compliance with Environmental Laws; Environmental Reports. In addition
to and without limiting the generality of Section 5.07, each Borrower shall, and shall
cause its respective Subsidiaries to, (i) comply in all respects with all Environmental Laws
applicable to its operations and real property except where the failure to do so, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse Effect; (ii) obtain
and renew all material Governmental Approvals required under Environmental Laws applicable to its
operations and real property except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect; and (iii) conduct any legally required Response in accordance with
applicable Environmental Laws except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect; provided that neither of the Borrowers nor any of their
respective Subsidiaries shall be required to undertake any Response 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.



59









 





     SECTION 5.13 Maintain Business. Each Borrower shall, and shall cause each of its
respective Subsidiaries to, continue to engage primarily in the business or businesses being
conducted on the date of this Agreement and other reasonable expansions and extensions of such
business.



     SECTION 5.14 Further Assurances. Each Obligor will, at its own cost and expense,
execute, acknowledge and deliver all such further acts, documents and assurances (a) as may from
time to time be reasonably necessary or as the Required Lenders may from time to time reasonably
request in order to carry out the intent and purposes of the Loan Documents and the Transactions,
including all such actions to establish, preserve, protect and perfect the estate, right, title and
interest of the Lenders, or the Administrative Agent for the benefit of the Lenders, to the
Collateral (including Collateral acquired after the date hereof).



     SECTION 5.15 Commercial Banking Services.



          (a) Within one hundred and eighty (180) days following the Effective Date, the Borrowers and
their respective Subsidiaries shall have established their primary commercial banking services with
one or more of the Lenders, which include cash management services, letters of credit, foreign
exchange and other services, and their primary banking accounts; provided that the term
commercial banking services shall not be interpreted to include traditional investment banking
services or products.




          (b) Foreign Borrower will not allow the sum total of all bank deposits held by it or any of
its Affiliates or Subsidiaries in the United Arab Emirates to be greater than $4,000,000 (or an
equivalent amount in any other currency) and will establish and maintain a system to transfer all
sums in excess of such limit to an account with a financial institution with which the Agent has a
perfected security interest within three (3) local business days (defined as days on which
commercial banks are generally open in Dubai).




     SECTION 5.16 Post Closing Covenants. Attached hereto on Schedule 5.16 are
certain items that the parties hereto have agreed will be completed after the Closing Date (the
“Post Closing Covenants”). In the event that any of the Post Closing Covenants are not
satisfied by the date set forth for completion of such Post Closing Covenants indicated on
Schedule 5.16, it shall be an Event of Default hereunder, and the Administrative Agent and
Lenders shall be entitled to exercise their remedies hereunder and under the other Loan Documents.



ARTICLE VI




Negative Covenants




          Until the Revolving Loan Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in full and all Letters
of Credit have expired or terminated (except as expressly permitted to extend past the Revolving
Credit Termination Date pursuant to Section 2.04(c)) and all LC Disbursements shall have
been reimbursed, each Borrower and each Guarantor, for itself, covenants and agrees with the
Administrative Agent and the Lenders that:




60









 








     SECTION 6.01 Indebtedness. The Borrowers will not, and will not permit any of their
respective Subsidiaries to, create, incur, assume or permit to exist any Indebtedness, except:



          (a) Indebtedness created hereunder or under any of the Loan Documents, including renewals,
extensions and refinancings hereof or thereof;




          (b) Indebtedness existing on the date hereof and set forth in Schedule 6.01;




          (c) Indebtedness of a Borrower to any Subsidiary and of any Subsidiary to a Borrower or any
other Subsidiary;




          (d) Indebtedness of a Borrower or any of its Subsidiaries under any Swap Agreement entered
into by such Borrower or such Subsidiary in compliance with Section 6.06;




          (e) [Intentionally Omitted];




          (f) Guarantees by a Borrower of Indebtedness of any Subsidiary and by any Subsidiary of
Indebtedness of a Borrower or any other Subsidiary, to the extent such Indebtedness is permitted
hereunder;




          (g) Subject to the provisions of Section 6.01(q), Capital Lease Obligations that, in
the aggregate do not exceed at any time outstanding the greater of (i) $40,000,000 or (ii) ten
percent (10%) of Net Worth;




          (h) the Existing Letters of Credit (as shown on Schedule 1.01A) until the termination
date thereof without giving effect to any automatic extensions and additional letters of credit
and/or bank guarantees that are not issued hereunder or by any Lender up to an aggregate maximum
amount at any time of $6,000,000;




          (i) Subject to the provisions of Section 6.01(q), Indebtedness of any Person that
becomes a Subsidiary after the Effective Date; provided that (i) such Indebtedness exists
at the time such Person becomes a Subsidiary and is not created in contemplation of or in
connection with such Person becoming a Subsidiary, (ii) none of the properties of the Borrowers or
any of their respective other Subsidiaries is bound with respect to such Indebtedness, and (iii)
the aggregate principal amount of Indebtedness permitted by this clause (i) shall not exceed the
greater of (i) $40,000,000 or (ii) ten percent (10%) of Net Worth;




          (j) Subject to the provisions of Section 6.01(q), Indebtedness of a Borrower or any of
its Subsidiaries secured by Liens permitted by clause (u) of the definition of “Permitted Liens” up
to but not exceeding at any one time outstanding the greater of (i) $40,000,000 or (ii) ten percent
(10%) of Net Worth;




          (k) purchase money Indebtedness, including all extensions, renewals, refinancings and
modifications thereof;




          (l) Subordinated Indebtedness;




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          (m) Indebtedness arising on account of deferred charges, deferred workers compensation
liabilities, or deferred employee medical liabilities;




          (n) any financed insurance premiums;




          (o) indemnities and surety obligations in the ordinary course of business;




          (p) Subject to the provisions of Section 6.01(q), other unsecured Indebtedness of a
Borrower or any of its Subsidiaries in an aggregate principal amount not exceeding at any time
outstanding (i) the greater of $40,000,000 or ten percent (10%) of Net Worth where the Leverage
Ratio is equal to or less than 1.25 to 1.0 and (ii) the greater of $20,000,000 or five percent (5%)
of Net Worth where the Leverage Ratio is greater than 1.25 to 1.0; and




          (q) Anything herein to the contrary notwithstanding, the Indebtedness permitted in clauses
(g), (i), (j) or (p) of this Section 6.01 shall not in the aggregate exceed $350,000,000 at
any time outstanding.




     SECTION 6.02 Liens. The Borrowers will not, and will not permit any their respective
direct or indirect Subsidiaries to, create, incur, assume or permit to exist any Lien on any
property or asset now owned or hereafter acquired by it, or rights in respect of any thereof,
except for Permitted Liens.



     SECTION 6.03 Fundamental Changes. The Borrowers will not, and will not permit any of
their respective Subsidiaries to, merge into or consolidate with any other Person, or permit any
other Person to merge into or consolidate with it, or liquidate or dissolve, except that, if at the
time thereof and immediately after giving effect thereto no Default or Event of Default shall have
occurred and be continuing:



          (a) any Subsidiary may merge into a Borrower in a transaction in which such Borrower is the
surviving corporation;




          (b) any Subsidiary may merge into any other Subsidiary in a transaction in which the surviving
entity is a wholly-owned Subsidiary and which is in compliance with Section 5.09;
provided that any such merger involving a Person that is not a wholly owned Subsidiary
immediately prior to such merger shall not be permitted unless also permitted by Section
6.05;




          (c) any Subsidiary may liquidate or dissolve if the net proceeds of such liquidation, if any,
inure to the benefit of a Borrower or a Material Subsidiary, and the Domestic Borrower determines
in good faith that such liquidation or dissolution is in the best interests of the Domestic
Borrower and is not materially disadvantageous to the Lenders; and




          (d) Borrowers or any Subsidiary may merge or consolidate with any other Person if in the case
of a merger or consolidation of either Borrower, such Borrower is the surviving corporation, and,
in any other case, the surviving corporation is a wholly-owned Subsidiary and such Subsidiary (x)
has complied with the requirements of Section 5.09 and (y) shall have assumed and ratified
all obligations of any Subsidiary involved in such merger




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pursuant to documentation in form and substance reasonably satisfactory to the Administrative
Agent.




     SECTION 6.04 Asset Sales. Subject to the provisions of Section 6.04(g), the
Borrowers will not, and will not permit any of their respective Subsidiaries to, make any Asset
Sale except for:



          (a) inventory or other assets sold in the ordinary course of business;




          (b) sales, transfers, leases or other dispositions of assets to any Borrower or to another
wholly-owned Subsidiary provided that after giving effect to any such sale, transfer, lease or
other disposition, the Borrowers and their Subsidiaries remain in compliance with Section
5.09;




          (c) obsolete, worn out or surplus equipment and miscellaneous property;




          (d) sales, exchanges and transfers of Permitted Investments;




          (e) transfers of condemned property to the respective Governmental Authority that has
condemned such property (whether by deed in lieu of condemnation, dation en paiement, or
otherwise), and transfers of property that has been subject to a casualty to the respective insurer
of such property as part of an insurance settlement;




          (f) licenses and sublicenses by a Borrower or any Subsidiary of software, trademarks or other
Intellectual Property in the ordinary course of business and which do not materially interfere with
the business of Borrowers; and




          (g) any asset sale in an aggregate amount not to exceed the greater of $40,000,000 or ten
percent (10%) of Net Worth in any twelve (12) month period, and in no event to exceed $100,000,000
over the term hereof, so long as after giving effect to such asset sale, the Domestic Borrower is
in proforma compliance with the covenants in Sections 6.14, 6.15 and 6.16.




     SECTION 6.05 Investments. The Borrowers will not, and will not permit any of their
respective Subsidiaries to, make an Investment in any other Person, except:



          (a) Permitted Investments;




          (b) intercompany loans or advances to the extent permitted under Section 6.01;




          (c) guarantees constituting Indebtedness permitted by Section 6.01;




          (d) Swap Agreements to the extent permitted under Section 6.06;




          (e) Subject to the provisions of Section 6.05(m), so long as there is at least
$25,000,000 in unused Revolving Loan Commitments prior to giving effect to such Investment,
Investments in Subsidiaries in the same or similar line of business as the Borrowers and their




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Subsidiaries, or in other entities that do not constitute Subsidiaries, so long as such
Investments do not exceed in any twelve (12) month period the lesser of twenty five percent (25%)
of Net Worth and $200,000,000; provided, if such additional amount is funded by new equity
issuances in Borrower, such Investments do not exceed in any twelve (12) month period fifty percent
(50%) of Net Worth;




          (f) Investments existing on the date hereof and described in Schedule 6.05;




          (g) Investments consisting of extensions of credit, commercial trade credit, prepayments,
security deposits or similar transactions entered into in the ordinary course of business;




          (h) Investments by Domestic Borrower or its wholly-owned Subsidiaries in Equity Interests of
wholly-owned Subsidiaries;




          (i) Investments received in connection with the bankruptcy or reorganization of, or settlement
of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary
course of business;




          (j) the extension of commercial trade credit in connection with the sale of inventory in the
ordinary course of business;




          (k) Indebtedness or other non-cash consideration received by Borrower or its Subsidiaries in
connection with dispositions permitted under this Agreement; and




          (l) Investments in cash and cash equivalents.




          (m) Anything herein to the contrary notwithstanding, the Investments permitted in clause (e)
of this Section 6.05 are further subject to the following: (i) No Default or Event of
Default shall have occurred and be continuing both before and immediately after giving effect to
each such Investment; (ii) Domestic Borrower and its respective Subsidiaries are in compliance with
the covenants in Sections 6.14, 6.15 and 6.16 both before and immediately
after giving effect to each such Investment; (iii) any entity to be acquired shall be a going
concern, engaged in a business similar or complementary to the line of business of ION or its
subsidiaries and any assets to be acquired shall be used or useful in such types of business,
(iv) if such Investment or acquisition involves a merger or consolidation any Borrower or any
Guarantor; such Borrower or Guarantor shall be the surviving person and no Change of Control shall
have been effected thereby; (v) if the transaction involves the acquisition of a new operating
subsidiary of a Borrower, such subsidiary shall be joined as an additional Domestic Guarantor or
Foreign Guarantor, as applicable, pursuant to a Joinder Agreement, all in accordance with the terms
of Section 5.09; (vi) the applicable Borrower shall deliver written notice of such proposed
acquisition to the Administrative Agent, which notice shall include the proposed date of the
acquisition, not less than ten (10) Business Days prior to the proposed closing date.




     SECTION 6.06 Swap Agreements. The Borrowers will not, and will not permit any of
their respective Subsidiaries to, enter into any Swap Agreement, except Swap Agreements entered
into to: (a) hedge or mitigate raw material and supply cost risks to which any Borrower or any or
its respective Subsidiaries has actual exposure in the conduct of its business or the



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management of its liabilities (other than those in respect of Equity Interests of any Borrower
or any of its respective Subsidiaries), (b) cap, collar or exchange interest rates (from fixed to
floating rates, from one floating rate to another floating rate or otherwise) with respect to any
interest-bearing liability or investment of any Borrower or any or its respective Subsidiaries, or
(c) mitigate foreign exchange or currency risk in connection with any obligation of any Obligor
incurred in connection with the operation of its business in each case, in connection with the
management of risk in the ordinary course of Borrower’s business and not for speculative purposes.




     SECTION 6.07 Restricted Payments. The Borrowers will not, and will not permit any of
their respective Subsidiaries to, declare or make, or agree to pay or make, any Restricted Payment,
except:



          (a) Subject to the provisions of the last paragraph hereof, the Domestic Borrower may declare
and pay dividends with respect to its Equity Interests payable either (i) in additional shares of
its common stock or (ii) in cash, so long as such cash dividends do not exceed thirty percent (30%)
of Consolidated Net Income of Domestic Borrower for Domestic Borrower’s most recently completed
fiscal year, and no Event of Default exists at the time of such dividend or would exist after
giving effect thereto;




          (b) Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests;




          (c) the Domestic Borrower may make Restricted Payments pursuant to and in accordance with
stock option plans and restricted stock plans or other equity compensation or benefit plans for
management or employees of the Domestic Borrower and its Subsidiaries;




          (d) Domestic Borrower is permitted to declare, pay or make all dividends, redemptions or
distributions (whether in cash or stock) (i) in respect of its Convertible Preferred Stock, and
(ii) and in respect of shares of any and all additional series of Domestic Borrower’s preferred
stock issued in accordance with the terms of Section 1(c) of that certain Agreement dated as of
February 15, 2005 between Input/Output, Inc. and Fletcher International, Ltd., (as amended through
the Effective Date) and having terms substantially the same as the Convertible Preferred Stock,
except as provided under such Purchase Agreement and in the certificate of rights and preferences
with respect to such additional series of preferred stock;




          (e) Subject to the provisions of Section 5.08 and the last paragraph of this
Section 6.07, any and all repurchases by Domestic Borrower of up to $40 million in
principal amount of its Senior Convertible Notes, as and when may be required pursuant to the
Indenture dated as of December 10, 2003, between Domestic Borrower and The Bank of New York Trust
Company of Florida, N.A., as Trustee; and




          (f) Any and all repurchases or acquisitions by Borrowers, from time to time and at any time,
of shares of its outstanding common stock for cash, so long as the amount of cash used for any such
repurchase or acquisition does not exceed an amount equal to thirty percent (30%) of Consolidated
Net Income of Domestic Borrower for Domestic Borrower’s most recently completed fiscal year, and no
Event of Default exists at the time of such repurchase or




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acquisition or would exist after giving effect thereto (except with respect to the acquisition
or “withholding” by Domestic Borrower of shares of its common stock upon and in connection with the
exercise of outstanding stock options, or the lapse of restrictions on outstanding shares of
restricted stock).




          Anything herein to the contrary notwithstanding, in no event shall the dividends, repurchases
or acquisitions permitted in clauses (a) or (e) of this Section 6.07 in the aggregate
exceed an amount equal to thirty percent (30%) of Consolidated Net Income of Domestic Borrower for
Domestic Borrower’s most recently completed fiscal year.




     SECTION 6.08 Transactions with Affiliates. The Borrowers will not, and will not
permit any of their respective Subsidiaries to, sell, lease or otherwise transfer any property or
assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage
in any other transactions with, any holder of five (5%) or more of its Equity Securities or any of
its Affiliates, except:



          (a) in the ordinary course of business at prices and on terms and conditions not less
favorable to such Borrower or such Subsidiary than could be obtained on an arm’s-length basis from
unrelated third parties;




          (b) transactions between or among the Borrowers and their Subsidiaries and between and among
any Subsidiaries not involving any other Person;




          (c) any Restricted Payment permitted by Section 6.07 or as otherwise permitted
hereunder;




          (d) reasonable compensation and reimbursement of expenses paid to members of the boards of
directors of the Domestic Borrower or its Subsidiaries;




          (e) indemnities in favor of any officer or director of the Domestic Borrower pursuant to the
organizational documents of the Domestic Borrower or statutory provisions;




          (f) any employee benefit plan or arrangement, any health, disability or similar insurance plan
which covers employees, and any reasonable employment contract and transactions pursuant thereto;




          (g) any charitable contribution, grant or endowment by the Domestic Borrower or any Subsidiary
to a charitable organization, foundation or university at which an Affiliate’s only relationship is
as a sponsor, donor, volunteer, employee or a director, regent or similar position;




          (h) transactions described on Schedule 6.08; and




          (i) transactions between or among Affiliates of the Borrowers permitted by
Section 6.04.




     SECTION 6.09 Restrictive Agreements. The Borrowers will not, and will not permit any
of their respective Subsidiaries to, directly or indirectly, enter into, incur or permit to



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exist any agreement or other arrangement that prohibits, restricts or imposes any condition
upon (a) the ability of such Borrower or any of its respective Subsidiaries to create, incur or
permit to exist any Lien upon any of its property or assets, or (b) the ability of any Obligor to
pay dividends or other distributions with respect to any shares of its capital stock (to the extent
the holder of such shares is an Obligor) or to make or repay loans or advances to such Borrower or
any Guarantor or to guarantee Indebtedness of such Borrower or any Guarantor; provided that
(i) the foregoing shall not apply to restrictions and conditions imposed by Law or by this
Agreement, (ii) the foregoing shall not apply to restrictions and conditions existing on the date
hereof identified on Schedule 6.09 (but shall apply to any extension or renewal of, or any
amendment or modification expanding the scope of, any such restriction or condition), (iii) the
foregoing shall not apply to customary restrictions and conditions contained in agreements relating
to the sale of a Subsidiary of a Borrower pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder,
(iv) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any
agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or
conditions apply only to the property or assets securing such Indebtedness and (v) clause (a) of
the foregoing shall not apply to customary provisions in leases and other contracts restricting the
assignment thereof.




     SECTION 6.10 Constitutive Documents. The Borrowers will not, and will not permit any
of their respective Subsidiaries to, amend its charter or by-laws or other constitutive documents
in any manner that would adversely and materially affect the rights of the Lenders under this
Agreement or their ability to enforce the same.



     SECTION 6.11 Nature of Business. The Borrowers shall not, and shall not permit any of
their respective Subsidiaries to, engage in any business that is substantially different from the
businesses of the types conducted by the Borrowers and their Subsidiaries on the Effective Date and
businesses reasonably related thereto.



     SECTION 6.12 Sales and Leasebacks. Except for those transactions described on
Schedule 6.12 and any transaction permitted under Section 6.04(b), the Borrowers
shall not, and shall not permit any of their respective Subsidiaries to, directly or indirectly,
become or remain liable as lessee or as a guarantor or other surety with respect to any lease of
any property (whether real, personal or mixed), whether now owned or hereafter acquired, that
(i) any Borrower or any of its respective Subsidiaries has sold or transferred or is to sell or
transfer to any other Person (other than any Borrower or any or its respective Subsidiaries) or
(ii) any Borrower or any or its respective Subsidiaries intends to use for substantially the same
purpose as any other property that has been or is to be sold or transferred by such Borrower or
such Subsidiaries to any Person (other than any other Borrower or any other Subsidiaries of such
Borrower) in connection with such lease.



     SECTION 6.13 Changes in Fiscal Year. The Domestic Borrower and its Subsidiaries shall
not change the end of their fiscal year to a date other than December 31.



     SECTION 6.14 Minimum Fixed Charge Coverage Ratio. The Domestic Borrower and its
Subsidiaries shall not permit the Fixed Charge Coverage Ratio to be less than 1.25 to 1.0.



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     SECTION 6.15 Maximum Leverage Ratio. The Domestic Borrower and its Subsidiaries shall
not permit the Leverage Ratio to exceed 2.5 to 1.0.



     SECTION 6.16 Minimum Tangible Net Worth. The Domestic Borrower and its Subsidiaries
shall maintain a minimum Tangible Net Worth of not less than 80% of the Tangible Net Worth as of
March 31, 2008 plus (i) 50% of the Consolidated Net Income of Borrowers and their respective
Subsidiaries (if positive) for each fiscal quarter thereafter and (ii) 80% of the net proceeds from
any mandatorily convertible notes and preferred and common stock issuances for each fiscal quarter
thereafter.



ARTICLE VII




Events of Default and Remedies




     SECTION 7.01 Events of Default. If any of the following events (each, an “Event
of Default”) shall occur:



          (a) any Borrower shall fail to pay any principal of any Loan or any reimbursement obligation
in respect of any LC Disbursement when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof or otherwise;




          (b) any Borrower shall fail to pay any interest on any Loan or any fee or other amount (other
than an amount referred to in clause (a) of this Section 7.01) payable under this Agreement
or the other Loan Documents, when and as the same shall become due and payable, and such failure
shall continue unremedied for a period of five (5) Business Days;




          (c) any representation or warranty made or deemed made by or on behalf of any Borrower or any
Subsidiary in or in connection with this Agreement, any Loan Document or any amendment or
modification hereof or waiver hereunder, or in any report, certificate, financial statement or
other document furnished pursuant to or in connection with this Agreement or any amendment or
modification hereof or waiver hereunder, shall prove to have been incorrect when made or deemed
made in any material respect (provided such materiality qualifier shall not apply in instances
where a specific representation contains a materiality or Material Adverse Effect qualifier);




          (d) the Borrowers shall fail to observe or perform any covenant, condition or agreement
contained in Sections 5.01, 5.02, 5.03 (with respect to the Domestic
Borrower’s existence) or 5.08 or in Article VI (other than those referenced in (e)
and (f), below);




          (e) any Borrower shall fail to observe or perform any covenant, condition or agreement
contained in this Agreement (other than those specified in clauses (a), (b) or (d) of this Article)
or in any other Loan Document, and such failure shall continue unremedied for a period of thirty
(30) days following the earlier of (i) the date on which such failure first became known to any
officer of such Borrower or (ii) notice of such failure from the Administrative Agent;




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          (f) any Borrower or any Subsidiary shall fail to make any payment (whether of principal or
interest and regardless of amount) in respect of any Material Indebtedness, when and as the same
shall become due and payable after giving effect to any applicable grace period;




          (g) any event or condition occurs that results in any Material Indebtedness becoming due prior
to its scheduled maturity or that enables or permits (with or without the giving of notice, the
lapse of time or both) the holder or holders of such Material Indebtedness or any trustee or agent
on its or their behalf to cause such Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity, provided
that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness;




          (h) any default under the Senior Convertible Notes, subject to any applicable grace periods;




          (i) an involuntary proceeding shall be commenced or an involuntary petition shall be filed
seeking (i) liquidation, reorganization or other relief in respect of the Borrowers or any of their
Subsidiaries or their debts, or of a substantial part of their assets, under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for
the Borrowers or any of their Subsidiaries or for a substantial part of any of their assets, and,
in any such case, such proceeding or petition shall continue undismissed for sixty (60) days or an
order or decree approving or ordering any of the foregoing shall be entered;




          (j) the Borrowers or any of their Subsidiaries shall (i) voluntarily commence any proceeding
or file any petition seeking liquidation, reorganization or other relief under any Federal, state
or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii)
consent to the institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (h) of this Section 7.01, (iii) apply for or
consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar
official for the Borrowers or any of their Subsidiaries or for a substantial part of any of their
assets, (iv) file an answer admitting the material allegations of a petition filed against it in
any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any
action for the purpose of effecting any of the foregoing;




          (k) the Borrowers or any of their Subsidiaries shall become unable, admit in writing its
inability, or fail generally to pay its debts as they become due;




          (l) one or more judgments for the payment of money in an aggregate amount (exclusive of
amounts fully covered by valid and collectible insurance in respect thereof subject to customary
deductibles or fully covered by an indemnity with respect thereto reasonably acceptable to the
Required Lenders) in excess of $20,000,000 shall be rendered against any of the Borrowers or their
Subsidiaries or any combination thereof and the same shall remain undischarged or unstayed for a
period of sixty (60) consecutive days during which execution shall not be effectively stayed, or
any attachment or levy shall be entered upon any assets of such Borrower or such Subsidiary to
enforce any such judgment;




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          (m) an ERISA Event shall have occurred that, in the reasonable opinion of the Required
Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be
expected to result in a Material Adverse Effect;




          (n) any Loan Documents or any material provision thereof shall at any time cease to be in full
force and effect, except expressly in accordance with the terms of the Loan Documents or a
proceeding shall be commenced by the Borrowers or any of their Subsidiaries seeking to establish
the invalidity or unenforceability thereof (exclusive of questions of interpretation thereof), or
any Obligor shall repudiate or deny that it has any liability or obligation for the payment of
principal or interest or other obligations purported to be created under any Loan Document;




          (o) any Lien created by any of the Security Documents shall at any time fail to constitute a
valid and (to the extent required by the Security Documents) perfected Lien on any material portion
of the Collateral purported to be subject thereto, securing the obligations purported to be secured
thereby, with the priority required by the Loan Documents, or any Obligor shall so assert in
writing, in each case other than as a result of action or inaction of the Administrative Agent or
any Lender, including without limitation the expiration of an UCC financing statements or other
instruments necessary to perfect the Administrative Agent’s Lien in the Collateral;




          (p) the occurrence of any Change of Control; or




          (q) any termination of a Lender Swap Agreement by a Lender (or its Affiliate) counterparty
thereto following a default thereunder, requiring a Borrower or any Guarantor, as applicable, to
pay to said counterparty more than $5,000,000;



then, and in every such event (other than an event with respect to the Borrowers described in
clause (i) or (j) of this Section 7.01), and at any time thereafter during the continuance
of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by
notice to the Borrowers, take any or all of the following actions, at the same or different times:
(i) terminate the Revolving Loan Commitments, and thereupon the Revolving Loan Commitments shall
terminate immediately, (ii) declare the Loans then outstanding to be due and payable in whole or in
part (in which case any principal not so declared to be due and payable may thereafter be declared
to be due and payable), and thereupon the principal of the Loans so declared to be due and payable,
together with accrued interest thereon and all fees and other Obligations of the Borrowers accrued
hereunder, shall become due and payable immediately, without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrowers; and in case of any event
described in clause (i) or (j) of this Section 7.01, the Revolving Loan Commitments shall
automatically terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and all fees and other Obligations of the Borrowers accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest notice of acceleration
or the intent to accelerate or any other notice of any kind, all of which are hereby waived by the
Borrowers, (iii) increase the rate of interest charged on all Loans to the Default Rate (after the
acceleration thereof), and (iv) exercise any or all of the remedies available to it under any of
the Loan Documents, at Law or in equity (including, without limitation, conducting a foreclosure
sale of any of the Collateral). All proceeds realized




70









 







from the liquidation or other disposition of collateral or otherwise received after maturity of the
Notes, whether by acceleration or otherwise, shall be applied as set forth in the Security
Agreements.




     SECTION 7.02 Cash Collateral. In addition to the remedies contained in
Section 7.01, upon the occurrence and continuance of any Event of Default, the Borrowers
shall pay after receipt of the notice required under Section 2.04(j) to the Administrative
Agent cash collateral for outstanding Letters of Credit in such amounts and at such times as
contemplated by Section 2.04(j).



ARTICLE VIII




The Administrative Agent




          Each of the Lenders and the Issuing Lender hereby irrevocably appoints the Administrative
Agent as its agent under the 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, together with such actions and powers as are reasonably incidental thereto. Each
of the Lenders and the Issuing Lender hereby irrevocably appoints the Administrative Agent to act
under any Foreign Security Agreement in its own name, for the benefit and on behalf of the Lenders.




          The Lender 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 such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrowers or other Affiliate thereof as if it
were not the Administrative Agent hereunder.




          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,
(a) the Administrative Agent shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default or an Event of Default has occurred and is continuing, (b) the
Administrative Agent shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly contemplated hereby that the
Administrative Agent is required to exercise in writing as directed by the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 10.02), and (c) except as expressly set forth herein, the
Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure
to disclose, any information relating to the Borrowers or any of their Subsidiaries that is
communicated to or obtained by 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 with the
consent or at the request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section 10.02) or in
the absence of its own gross negligence or willful misconduct; PROVIDED, HOWEVER,
THAT IT IS THE INTENTION OF THE PARTIES HERETO THAT EACH OF THE AGENTS BE INDEMNIFIED IN THE CASE
OF ITS OWN NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE), REGARDLESS OF WHETHER SUCH NEGLIGENCE IS




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SOLE OR CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR TECHNICAL. The Administrative
Agent shall be deemed not to have knowledge of any Default or Event of Default unless and until
written notice thereof is given to the Administrative Agent by the Borrowers or a Lender, and 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, (ii) the
contents of any certificate, report or other document delivered hereunder or in connection
herewith, (iii) the performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, 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.




          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 believed by it to be genuine and to have been signed or sent 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 be made by the proper Person, and shall not incur any liability for relying
thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the
Borrowers), 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.




          The Administrative Agent may perform any and all of its duties and exercise its rights and
powers 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 its duties and exercise its
rights and powers through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs 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.




          Subject to the appointment and acceptance of a successor Administrative Agent as provided in
this paragraph, the Administrative Agent may resign at any time by notifying the Lenders, the
Issuing Lender and the Borrowers. Upon any such resignation, the Required Lenders shall have the
right, with the consent of the Borrowers, assuming no Default or Event of Default has occurred and
is continuing, such consent not to be unreasonably withheld, to appoint a successor. If no
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 Lenders and the Issuing Lender,
appoint a successor Administrative Agent with the consent of the Borrowers, assuming no Default or
Event of Default has occurred and is continuing, such consent not to be unreasonably withheld,
which shall be any Lender or a bank with an office in New York, New York or Houston, Texas, or an
Affiliate of any such bank. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties




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and obligations hereunder. The fees payable by the Borrowers to a successor Administrative
Agent shall be the same as those payable to its predecessor unless otherwise agreed between the
Borrowers and such successor. After the Administrative Agent’s resignation hereunder, the
provisions of this Article and Section 10.03 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 it was acting as Administrative
Agent.




          Each Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender 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 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 related agreement or any document furnished hereunder or thereunder.




ARTICLE IX




Guarantee





SECTION 9.01 The Guarantee. (a) (i) Each Domestic Guarantor the assets of which are
all or substantially all comprised of stock or securities in one or more Foreign Subsidiary
hereby jointly, severally, unconditionally and irrevocably with every other such Domestic
Guarantor guarantees the full and punctual payment (whether at stated maturity, upon
acceleration or otherwise) of the principal of and interest on the Foreign Revolving Loans,
and the full and punctual payment of all other Secured Obligations (as defined in the
Foreign Security Agreement) payable by the Foreign Borrower and any Foreign Guarantor under
the Loan Documents or any Lender Swap Agreement to which the Foreign Borrower or any Foreign
Guarantor is a party, as applicable. Upon failure by the Foreign Borrower or any Foreign
Guarantor to pay punctually any such amount, each such Domestic Guarantor shall forthwith on
demand pay the amount not so paid at the place and in the manner specified in this Agreement
or the other Loan Documents or under the applicable Lender Swap Agreement.




     (ii) Each Domestic Guarantor the assets of which are not all or substantially all
comprised of stock or securities in one or more Foreign Subsidiary hereby jointly,
severally, unconditionally and irrevocably with every other such Domestic Guarantor
guarantees the full and punctual payment (whether at stated maturity, upon acceleration or
otherwise) of the principal of and interest on the Foreign Revolving Loans and the Domestic
Revolving Loans, and the full and punctual payment of all other Secured Obligations (as
defined in the applicable Security Agreement) payable by either Borrower or any other
Guarantor under the Loan Documents or any Lender Swap Agreement to which either Borrower or
any Guarantor is a party, as applicable. Upon failure by either Borrower or any other
Guarantor to pay punctually any such amount, each such Domestic Guarantor shall forthwith on
demand pay the amount not so paid at



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     the place and in the manner specified in this Agreement or the other Loan Documents or
under the applicable Lender Swap Agreement.




     (iii) The Guarantee contained in clauses (i) and (ii) of this paragraph is a guaranty of
payment and not of collection. The Lenders shall not be required to exhaust any right or
remedy or take any action against, as applicable, the Domestic Borrower, the Foreign
Borrower, the Foreign Guarantors, the Domestic Guarantors or any other Person or any
Collateral. Each Domestic Guarantor agrees that, as between such Domestic Guarantor and the
Lenders, the Obligations of, as applicable, the Domestic Borrower, the Foreign Borrower, the
Foreign Guarantors or the other Domestic Guarantors may be declared to be due and payable
for the purposes of this Guarantee notwithstanding any stay, injunction or other prohibition
which may prevent, delay or vitiate any declaration as regards the Domestic Borrower or the
Foreign Borrower and that in the event of a declaration or attempted declaration, the
Obligations of, as applicable, the Domestic Borrower, the Foreign Borrower, the Foreign
Guarantors and the other Domestic Guarantors shall immediately become due and payable by
each Domestic Guarantor for the purposes of this Guarantee.



          (b) (i) Each Foreign Guarantor hereby jointly, severally, unconditionally and irrevocably
guarantees the full and punctual payment (whether at stated maturity, upon acceleration or
otherwise) of the principal of and interest on the Foreign Revolving Loans, and the full and
punctual payment of all other Secured Obligations (as defined in the Foreign Security Agreement)
payable by the Foreign Borrower or any other Foreign Guarantor under the Loan Documents or any
Lender Swap Agreement to which the Foreign Borrower or any Foreign Guarantor is a party, as
applicable. Upon failure by the Foreign Borrower or any other Foreign Guarantor to pay punctually
any such amount, each Foreign Guarantor shall forthwith on demand pay the amount not so paid at the
place and in the manner specified in this Agreement or the other Loan Documents or under the
applicable Lender Swap Agreement. This Guarantee is a guaranty of payment and not of collection.
The Lenders shall not be required to exhaust any right or remedy or take any action against the
Foreign Borrower, the Foreign Guarantors, or any other Person or any Collateral. The Foreign
Guarantors agree that, as between the Foreign Guarantors and the Lenders, the Obligations of the
Foreign Borrower and the other Foreign Guarantors may be declared to be due and payable for the
purposes of this Guarantee notwithstanding any stay, injunction or other prohibition which may
prevent, delay or vitiate any declaration as regards the Foreign Borrower and that in the event of
a declaration or attempted declaration, the Obligations of the Foreign Borrower and the other
Foreign Guarantors shall immediately become due and payable by each Foreign Guarantor for the
purposes of this Guarantee.




          (ii) In further limitation of the foregoing, and notwithstanding any other provision of this
Agreement to the contrary, the payment undertaking of any Luxembourg Guarantor for the obligations
of any Obligor which is not a Subsidiary of such Luxembourg Guarantor shall be limited at any time,
to an aggregate amount not exceeding ninety-five per cent. (95%) of the greater of :





(1) the Luxembourg Guarantor’s own funds (“capitaux propres”) and the debt
owed by such Luxembourg Guarantor to any of its direct or



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indirect shareholders, as determined by Article 34 of the Luxembourg law of
19 December 2002 on the register of commerce and companies, accounting and
companies annual accounts, as amended, as at the date of this Agreement;




(2) the Luxembourg Guarantor’s own funds (“capitaux propres”) and the debt
owed by such Luxembourg Guarantor to any of its direct or indirect
shareholders, as determined by Article 34 of the Luxembourg law of 19
December 2002 on the register of commerce and companies, accounting and
companies annual accounts, as amended, as at the date the guarantee is
called.



          The above limitation shall not apply to any amounts borrowed under any Loan and in each case
made available, in any form whatsoever, to such Luxembourg Guarantor or any of its Subsidiaries.




          (c) The Domestic Borrower hereby unconditionally and irrevocably guarantees the full and
punctual payment (whether at stated maturity, upon acceleration or otherwise) of the principal of
and interest on the Foreign Revolving Loans, and the full and punctual payment of all other Secured
Obligations (as defined in the Foreign Security Agreement) payable by the Foreign Borrower or any
Foreign Guarantor under the Loan Documents or any Lender Swap Agreement to which the Foreign
Borrower or any Foreign Guarantor is a party, as applicable. Upon failure by the Foreign Borrower
or any Foreign Guarantor to pay punctually any such amount, the Domestic Borrower shall forthwith
on demand pay the amount not so paid at the place and in the manner specified in this Agreement or
the other Loan Documents or under the applicable Lender Swap Agreement. This Guarantee is a
guaranty of payment and not of collection. The Lenders shall not be required to exhaust any right
or remedy or take any action against the Foreign Borrower, the Foreign Guarantors, or any other
Person or any Collateral. The Domestic Borrower agrees that, as between the Domestic Borrower and
the Lenders, the Obligations of the Foreign Borrower and the Foreign Guarantors may be declared to
be due and payable for the purposes of this Guarantee notwithstanding any stay, injunction or other
prohibition which may prevent, delay or vitiate any declaration as regards the Foreign Borrower and
that in the event of a declaration or attempted declaration, the Obligations of the Foreign
Borrower and the Foreign Guarantors shall immediately become due and payable by the Domestic
Borrower for the purposes of this Guarantee.




          (d) For the avoidance of doubt, it is the express intention of the Borrowers, the Guarantors,
the Administrative Agent, the Issuing Lender and each Lender that nothing herein or in any other
Loan Document shall constitute or be deemed to constitute an investment by a Foreign Subsidiary in
“United States property” within the meaning of Section 956(c). Accordingly, each party hereto
acknowledges and agrees that only the Domestic Guarantors the assets of which are not all or
substantially all comprised of stock or securities in one or more Foreign Subsidiary have
guaranteed the Obligations of the Domestic Borrower and the guarantees provided in this Article IX
shall be construed and limited to give effect to such intention (provided that the foregoing shall
not limit the guarantees of the Domestic Guarantors or the Domestic Borrower of the Foreign
Revolving Loans or the other Obligations of the Foreign Borrower or its Foreign Subsidiaries). To
the extent that any Domestic Guarantor that




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has guaranteed the Obligations of the Domestic Borrower holds stock or securities in one or
more Foreign Subsidiaries, such Domestic Guarantor’s guarantee of the Domestic Borrower’s
Obligations hereunder shall be (and hereby is) limited at all times to an amount equal to the sum
of the fair market value of its domestic assets plus 65% of its stock or securities in such Foreign
Subsidiary.




     SECTION 9.02 Guarantee Unconditional. The respective obligations of each Guarantor
and the Domestic Borrower hereunder shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise affected by:



          (a) any extension, renewal, settlement, compromise, waiver or release in respect of any
Secured Obligation (as defined in the applicable Security Agreement) of either of the Borrowers or
any other Guarantor under the Loan Documents or any Lender Swap Agreement, as applicable, by
operation of law or otherwise;




          (b) any modification, amendment or waiver of or supplement to the Loan Documents or any Lender
Swap Agreement;




          (c) any release, impairment, non-perfection or invalidity of any direct or indirect security
for any obligation of either of the Borrowers or any other Guarantor under the Loan Documents or
any Lender Swap Agreement, as applicable;




          (d) any change in the corporate existence, structure or ownership of the Borrowers or any
other Guarantor, or any insolvency, bankruptcy, reorganization or other similar proceeding
affecting either of the Borrowers, any other Guarantor or their respective assets or any resulting
release or discharge of any obligation of either of the Borrowers or any other Guarantor contained
in the Loan Documents or any Lender Swap Agreement, as applicable;




          (e) the existence of any claim, set-off or other rights which the Guarantor may have at any
time against either of the Borrowers, any other Guarantor, the Administrative Agent, any Lender or
any other Person, whether in connection herewith or any unrelated transactions, provided that
nothing herein shall prevent the assertion of any such claim by separate suit or compulsory
counterclaim;




          (f) any invalidity or unenforceability relating to or against either of the Borrowers or any
other Guarantor for any reason of the Loan Documents or any Lender Swap Agreement, as applicable,
or any provision of applicable law or regulation purporting to prohibit the payment by either of
the Borrowers or any other Guarantor of the principal of or interest on any Loan or any other
amount payable by either of the Borrowers or any other Guarantor under the Loan Documents or any
Lender Swap Agreement, as applicable; or




          (g) any other act or omission to act or delay of any kind by either of the Borrowers, any
other Guarantor, the Administrative Agent, any Lender or any other Person or any other circumstance
whatsoever that might, but for the provisions of this paragraph, constitute a legal or equitable
discharge of the Guarantor’s obligations hereunder.





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          Furthermore, notwithstanding that the Borrowers may not be obligated to the Administrative
Agent and/or the Lenders for interest and/or attorneys’ fees and expenses on, or in connection
with, any Obligations from and after the Petition Date as a result of the provisions of the federal
bankruptcy law or otherwise, Obligations for which the Guarantors shall be obligated shall include
interest accruing on the Obligations at the Default Rate from and after the date on which such
Borrower files for protection under the federal bankruptcy laws or from and after the date on which
an involuntary proceeding is filed against such Borrower under the federal bankruptcy laws (herein
collectively referred to as the “Petition Date”) and all reasonable attorneys’ fees and expenses
incurred by the Administrative Agent and the Lenders from and after the Petition Date in connection
with the Obligations.




     SECTION 9.03 Discharge Only upon Payment in Full; Reinstatement In Certain
Circumstances. The obligations of each Guarantor and the Domestic Borrower hereunder shall
remain in full force and effect until the Revolving Loan Commitments shall have terminated and the
principal of and interest on the Loans and all other amounts payable by the Obligors under the Loan
Documents or any Lender Swap Agreement, as applicable, shall have been paid in full. If at any
time any payment of the principal of or interest on any Loan or any other amount payable by the
Obligors under the Loan Documents or any Lender Swap Agreement, as applicable, is rescinded or must
be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of any Obligor
or otherwise, the obligations of each of the Guarantors and the Domestic Borrower hereunder with
respect to such payment shall be reinstated at such time as though such payment had been due but
not made at such time. The Domestic Guarantors under Section 9.01(a)(i) jointly and
severally agree to indemnify each Foreign Revolving Lender, the Domestic Guarantors under
Section 9.01(a)(ii) jointly and severally agree to indemnify each Domestic Revolving Lender
and the Foreign Guarantors jointly and severally agree to indemnify each Foreign Revolving Lender
on demand for all reasonable costs and expenses (including reasonable fees of counsel) incurred by
such Lender in connection with such rescission or restoration, including any such costs and
expenses incurred in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law,
other than any costs or expenses resulting from the bad faith or willful misconduct of such Lender.



     SECTION 9.04 Waiver by Each Guarantor. Each Guarantor irrevocably waives acceptance
hereof, diligence, presentment, demand, protest notice of acceleration or the intent to accelerate
and any other notice not provided for in this Article IX, as well as any requirement that
at any time any action be taken by any Person against the Borrowers or any other Guarantor or any
other Person.



     SECTION 9.05 Subrogation. Each Domestic Guarantor under Section 9.01(a)(ii)
shall be subrogated to all rights of the Domestic Revolving Lenders, the Administrative Agent and
the holders of the Domestic Revolving Loans against the Domestic Borrower in respect of any amounts
paid by such Domestic Guarantor pursuant to the provisions of this Article IX, and each of
the Domestic Guarantors under Section 9.01(a)(i), the Foreign Guarantors and the Domestic
Borrower shall be subrogated to all rights of the Foreign Revolving Lender the Administrative Agent
and the holders of the Foreign Revolving Loans against the Foreign Borrower; provided that
such Guarantor or the Domestic Borrower shall not be entitled to enforce or to receive any payments
arising out of or based upon such right of subrogation until



77









 




the principal of and interest on the Loans and all other sums at any time payable by the
Borrowers under the Loan Documents or any Lender Swap Agreement, as applicable, shall have been
paid in full. If any amount is paid to any Guarantor or the Domestic Borrower, as applicable on
account of subrogation rights under these Guarantees at any time when all the Obligations have not
been paid in full, the amount shall be held in trust for the benefit of the Domestic Revolving
Lenders and the Foreign Revolving Lenders, as applicable, and shall be promptly paid to the
Administrative Agent to be credited and applied to the Obligations, whether matured or unmatured or
absolute or contingent, in accordance with the terms of this Agreement.




     SECTION 9.06 Stay of Acceleration. If acceleration of the time for payment of any
amount payable by any Obligor under the Loan Documents or any Lender Swap Agreement, as applicable,
is stayed upon insolvency, bankruptcy or reorganization of the Domestic Borrower, all such amounts
otherwise subject to acceleration under the terms of this Agreement shall nonetheless be payable by
each Domestic Guarantor under Section 9.01(a)(ii) for its respective Obligations described
hereunder promptly following demand by the Administrative Agent made at the request of the
requisite proportion of the Lenders specified in Article X of this Agreement.



          If acceleration of the time for payment of any amount payable by any Obligor under the Loan
Documents or any Lender Swap Agreement, as applicable, is stayed upon insolvency, bankruptcy or
reorganization of the Foreign Borrower, all such amounts otherwise subject to acceleration under
the terms of this Agreement shall nonetheless be payable by each Domestic Guarantor under
Section 9.01(a)(i), each Foreign Guarantor and the Domestic Borrower hereunder for its
respective Obligations as described in this Article IX promptly following demand by the
Administrative Agent made at the request of the requisite proportion of the Lenders specified in
Article X of this Agreement.




     SECTION 9.07 Instrument for the Payment of Money. Each Guarantor acknowledges that
the Guarantees in this Article IX constitutes an instrument for the payment of money and
consents and agrees that any Lender or the Administrative Agent, at its sole option, in the event
of a dispute by such Guarantor in the payment of any moneys due hereunder, shall have the right to
bring a motion-action under New York CPLR Section 3213.



     SECTION 9.08 Limit of Liability. The obligations of each of the Guarantors and the
Domestic Borrower hereunder shall be limited to an aggregate amount equal to the largest amount
that would not render its obligations hereunder subject to avoidance under Section 548 of the
United States Bankruptcy Code or any comparable provisions of any applicable state law.



     SECTION 9.09 Release upon Sale. Upon any sale of any Guarantor permitted by this
Agreement, and, if required hereunder, payment to the Administrative Agent, for the prorata benefit
of the applicable Lenders, of the proceeds of such sale, such Guarantor shall (a) be released from
its obligations as a Guarantor hereunder, (b) all Liens, if any, securing such Guarantee shall
automatically be terminated and released and (c) the Administrative Agent will, at the expense of
said Guarantor, execute and deliver such documents as are reasonably necessary to evidence said
releases and terminations, following written request from the applicable Borrower and receipt by
the Administrative Agent of a certificate from the applicable Borrower certifying no Default or
Event of Default exists.



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     SECTION 9.10 Benefit to Guarantor. Each Guarantor acknowledges that the Loans made to
the Borrowers will be, in part, re-loaned to, or used for the benefit of, such Guarantor and its
Affiliates, that each Guarantor, because of the utilization of the proceeds of the Loans, will
receive a direct benefit from the Loans and that, without the Loans, such Guarantor would not be
able to continue its operations and carry on its business as presently conducted. The guarantee of
any Dutch Guarantor shall be deemed to have been given only to the extent that such guarantee does
not violate the prohibition on financial assistance contained in Sections 2:98c and 2:207c of the
Dutch Civil Code (Burgerlijk Wetboek).



ARTICLE X




Miscellaneous




     SECTION 10.01 Notices.



          Except in the case of notices and other communications expressly permitted to be given by
telephone, or email (and subject to paragraph (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 telecopy, as follows:



if to the Borrowers, to:



ION Geophysical Corporation

2105 CityWest Blvd., Suite 400

Houston, Texas 77042

Attention: Chief Financial Officer

Telecopy No.: 281-879-3674

Telephone No. (for confirmation): 281-879-3645



with a copy to:



Mayer Brown LLP

700 Louisiana St., Suite 3400

Houston, Texas 77002-2730

Attention: Marc Folladori

Telecopy No.: 713-238-4888

Telephone No.: 713-238-3000



if to a Guarantor, to it in care of the Borrowers;



if to the Administrative Agent, to:



HSBC Bank USA, N.A.

660 Figueroa St., Suite 800

Los Angeles, California 90017

Attention: Steven Larsen




79









 







Telecopy No.: 213-553-8056

Telephone No. (for confirmation): 213-553-8010



with a copy to:



HSBC Bank USA, N.A.

One HSBC Center, 26th Floor

Buffalo, New York 14203

Attention: Donna Riley

Telecopy No.: 716-841-0269

Telephone No. (for confirmation): 716-841-4178



Andrews Kurth LLP

600 Travis, Suite 4200

Houston, Texas 77002

Attention: Thomas J. Perich

Telecopy No.: 713-238-7175

Telephone No. (for confirmation): 713-220-4268




          if to any other Lender, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire.




          Notices and other communications to the Lenders hereunder may be delivered or furnished by
electronic communications pursuant to procedures approved by the Administrative Agent;
provided that the foregoing shall not apply to notices pursuant to Article II
unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative
Agent or the Borrowers may, in its 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.




          Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and other
communications given to any party hereto in accordance with the provisions of this Agreement shall
be deemed to have been given on the date of receipt.




     SECTION 10.02 Waivers; Amendments. (a) No failure or delay by the Administrative
Agent, the Issuing Lender or any Lender in exercising any right or power hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights and remedies of
the Administrative Agent, the Issuing Lender and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of
this Agreement or consent to any departure by the Borrowers or Guarantors therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this Section, and then
such waiver or consent shall be effective only in the specific instance and for the purpose for
which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of
a Letter of Credit shall not be construed as a



80









 




waiver of any Default, regardless of whether the Administrative Agent, any Lender or the
Issuing Lender may have had notice or knowledge of such Default at the time.




          (b) Except as otherwise provided herein, neither this Agreement nor the other Loan Documents
nor any provision hereof or thereof may be waived, amended or modified except pursuant to (x) an
agreement or agreements in writing entered into by the Borrowers and the Required Lenders or by the
Borrowers and the Administrative Agent with the consent of the Required Lenders or (y) an agreement
or agreements in writing entered into by the Borrowers and the Super Majority Lenders for the
purpose of reducing the interest rate applicable to overdue amounts; provided that no such
agreement shall (i) increase the Revolving Loan Commitment of any Lender without the written
consent of such Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or reduce
the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of
each Lender directly affected thereby, (iii) postpone the scheduled date of payment of the
principal amount of any Loan or LC Disbursement, or any interest thereon, or any fees payable
hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled
date of expiration of any Revolving Loan Commitment, without the written consent of each Lender
directly affected thereby, (iv) change Section 2.10 or Sections 2.16(b)
or(c), in a manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender, (v) change any of the provisions of this
Section 10.02(b) or the definition of “Required Lenders” or any other provision hereof
specifying the number or percentage of Lenders required to waive, amend or modify any rights
hereunder or make any determination or grant any consent hereunder, without the written consent of
each Lender, (vi) release all or substantially all of the Collateral without the written consent of
each Lender, provided, that nothing herein shall prohibit the Administrative Agent from
releasing any Collateral, or require the consent of the other Lenders for such release, in respect
of items sold to the extent such sale is permitted or not prohibited hereunder, or (vii) release
all or substantially all of the Guarantees (other than in connection with any transactions
permitted by the Credit Agreement) without the written consent of each Lender; provided
further that no such agreement shall amend, modify or otherwise affect the rights or duties
of the Administrative Agent or the Issuing Lender hereunder without the prior written consent of
the Administrative Agent or the Issuing Lender, as the case may be.




     SECTION 10.03 Expenses; Indemnity; Damage Waiver.



          (a) The Borrowers shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the fees, charges and disbursements of one
primary law firm as counsel and consultants for the Administrative Agent, in connection with the
syndication of the credit facilities provided for herein, due diligence undertaken by the
Administrative Agent with respect to the financing contemplated by this Agreement, the preparation
and administration of this Agreement or any amendments, modifications or waivers of the provisions
hereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii)
all reasonable out-of-pocket expenses incurred by the Issuing Lender in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment
thereunder and (iii) all reasonable out-of-pocket expenses incurred by the Administrative Agent,
the Issuing Lender or any Lender for fees, charges and disbursements of one primary law firm as
counsel, local counsel as needed and consultants for the Administrative Agent, the Issuing Lender
or any Lender and all other reasonable out-of-pocket expenses of the



81









 






Administrative Agent, the Issuing Lender or any Lender, in connection with the enforcement or
protection of its rights in connection with this Agreement during the existence of a Default or an
Event of Default (whether or not any waiver or forbearance has been granted in respect thereof),
including its rights under this Section, or in connection with the Loans made or Letters of Credit
issued hereunder, including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.




          (b) Each Borrower shall indemnify the Administrative Agent, the Issuing Lender and 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 or asserted against any Indemnitee arising out of, in connection with,
or as a result of (i) the execution or delivery of this Agreement or any agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective obligations
hereunder or the consummation of the Transactions or any other transactions contemplated hereby,
(ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by
the Issuing Lender to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any
property owned or operated by the Borrowers or any of their Subsidiaries, or any Environmental
Liability related in any way to the Borrowers or any of their Subsidiaries, or (iv) any actual
claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; and
whether or not caused by the ordinary, sole or contributory negligence of any Indemnitee, provided
further that such indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses 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 (IT BEING UNDERSTOOD THAT IT IS THE INTENTION OF THE PARTIES
HERETO THAT EACH OF THE INDEMNITEES BE INDEMNIFIED IN THE CASE OF ITS OWN NEGLIGENCE (OTHER THAN
GROSS NEGLIGENCE), REGARDLESS OF WHETHER SUCH NEGLIGENCE IS SOLE OR CONTRIBUTORY, ACTIVE OR
PASSIVE, IMPUTED, JOINT OR TECHNICAL). It is agreed by the parties hereto that the indemnity
obligations of the Domestic Borrower under the Commitment Letter are superseded to the extent
described in this Agreement.




          To the extent that a Borrower fails to pay any amount required to be paid by it to the
Administrative Agent or the Issuing Lender under paragraph (a) or (b) of this Section, each Lender
severally agrees to pay to the Administrative Agent or the Issuing Lender, as the case may be, such
Lender’s pro rata share (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 the Issuing Lender in its capacity as such. For
purposes hereof, a Lender’s “pro rata share” shall be determined based upon its share of the sum of
the total Revolving Credit Exposure and unused Revolving Loan Commitments at the time.




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          To the extent permitted by applicable Law, each of the Borrowers and each Guarantor 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 or any agreement or
instrument contemplated hereby, the Transactions, any Loan or Letter of Credit or the use of the
proceeds thereof.




          All amounts due under this Section shall be payable promptly after receipt of a request
therefore by any Borrower.




     SECTION 10.04 Successors and Assigns.



          (a) 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 (including any
Affiliate of the Issuing Lender that issues any Letter of Credit), except that (i) the Borrowers
may not assign or otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (and any attempted assignment or transfer by the Borrowers without
such consent shall be null and void), and (ii) no Lender may assign or otherwise transfer its
rights or obligations hereunder except in accordance with this Section. 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 (including any Affiliate of the Issuing
Lender that issues any Letter of Credit), Participants (to the extent provided in paragraph (c) of
this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Issuing Lender and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.




          (b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may 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 Revolving Loan Commitment and the Loans at the time owing to it)
with the prior written consent (such consent not to be unreasonably withheld or delayed) of:





          (A) the Borrowers, provided that no consent of the Borrowers shall be required
for an assignment to an Affiliate of a Lender, an Approved Fund or, if an Event of Default
has occurred and is continuing, any other assignee; and




          (B) the Administrative Agent and the Issuing Lender, provided that no such
consent shall be required for an assignment of any Revolving Loan Commitment to an assignee
that is a Lender or an Affiliate of a Lender with a Revolving Loan Commitment immediately
prior to giving effect to such assignment;



          (ii) Assignments shall be subject to the following additional conditions:





          (A) except in the case of an assignment to a Lender or an Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender’s Revolving Loan
Commitment or Loans, the amount of the Revolving Loan Commitment or 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



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Administrative Agent) shall not be less than $5,000,000 and after giving effect to such
assignment, the assigning Lender Revolving Loan Commitment or Loans shall not be less than
$5,000,000 (which amount shall be in the aggregate in the event of simultaneous assignments
to or by two or more Approved Funds) unless each of the Borrowers and the Administrative
Agent otherwise consent, provided that no such consent of the Borrowers shall be
required if an Event of Default under clause (a), (b), (h) or (i) of Section 7.01
has occurred and is continuing;




          (B) 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;




          (C) the parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500
(provided that only one such fee shall be payable in the event of simultaneous assignments
to or by two or more Approved Funds);




          (D) the assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent an Administrative Questionnaire in which the assignee designates one or more credit
contacts to whom all syndicate-level information (which may include material non-public
information about the Borrowers or Guarantors and their Related Parties or their respective
securities) will be made available and who may receive such information in accordance with
such assignee’s compliance procedures and applicable law, including Federal and state
securities laws; and




          (E) prior to any assignment to an assignee that is not a Lender, the Lender making such
an assignment shall first offer the assignment to the other Lenders who shall have five (5)
Business Days to purchase the assignment on the same terms as are proposed to such
non-Lender assignee.



     Section 10.04(b)(ii)(B) shall not be construed to prohibit assignment of a
proportionate part of all the assigning Lender’s rights and obligations in respect of Revolving
Loan Commitments or Loans.



     For the purpose of this Section 10.04(b), the term “Approved Fund” has the
following meaning:



     “Approved Fund” means any Person (other than a natural person) that is engaged in
making, purchasing, holding or investing in bank loans and similar extensions of credit in the
ordinary course of its business and that is owned, 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.




          (iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this
Section, from and after the effective date specified in each Assignment and Assumption the
assignee thereunder shall be a party hereto 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



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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
2.13, 2.14, 2.15 and 10.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with this
Section 10.04 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 paragraph (c) of
this Section.




          (iv) The Administrative Agent, acting for this purpose as an agent of the Borrowers,
shall maintain at one of its offices 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
Revolving Loan Commitment of, and principal amount of the Loans and LC Disbursements owing
to, each Lender pursuant to the terms hereof from time to time (the “Register”).
The entries in the Register shall be conclusive, absent manifest error, and the Borrowers,
the Administrative Agent, the Issuing Lender 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 Borrowers, the Issuing Lender and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.




          (v) Upon its receipt of a duly completed Assignment and Assumption executed by an
assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire
(unless the assignee shall already be a Lender hereunder), the processing and recordation
fee referred to in paragraph (b) of this Section and any written consent to such assignment
required by paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Assumption and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.



               (c) (i) Any Lender may, without the consent of the Administrative Agent or the Issuing Lender,
sell participations to one or more banks or other entities (a “Participant”) in all or a
portion of such Lender’s rights and obligations under this Agreement (including all or a portion of
its Revolving Loan Commitment and the Loans owing to it); provided that (A) such
participations must be approved by the Borrowers so long as no Default has occurred and is
continuing, such approval not to be unreasonably withheld, (B) such Lender’s obligations under this
Agreement shall remain unchanged, (C) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (D) the Borrowers, the Administrative
Agent, the Issuing Lender and the other 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, modification or waiver described in the first proviso to




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     Section 10.02(b) that affects such Participant. Subject to paragraph (c)(ii) of this
Section, the Borrowers agrees that each Participant shall be entitled to the benefits of
Sections 2.13, 2.14 and 2.15 to the same extent as if it were a Lender and
had acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent
permitted by law, each Participant also shall be entitled to the benefits of Section 10.08
as though it were a Lender, provided such Participant agrees to be subject to Section
2.16(c) as though it were a Lender.




     (ii) A Participant shall not be entitled to receive any greater payment under
Section 2.13 or 2.15 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 Borrowers’ 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 2.16 unless the Borrowers are notified of the participation sold
to such Participant and such Participant agrees, for the benefit of the Borrowers, to comply
with Section 2.16(e) as though it were a Lender.



          (d) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including without limitation
any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall
not apply to any such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.




     SECTION 10.05 Survival. All covenants, agreements, representations and warranties
made by the Borrowers and each Guarantor herein and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement shall be considered to have been relied
upon by the other parties hereto and shall survive the execution and delivery of this Agreement and
the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made
by any such other party or on its behalf and notwithstanding that the Administrative Agent, the
Issuing Lender or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and shall continue in full
force and effect as long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Revolving Loan Commitments have not expired or terminated. The
provisions of Sections 2.13, 2.14, 2.15 and 10.03 and Article
VIII shall survive and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the
Letters of Credit and the Revolving Loan Commitments or the termination of this Agreement or any
provision hereof.



     SECTION 10.06 Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts and may be delivered in original or facsimile form (and by different
parties hereto on 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



86









 




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 which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns. 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.




     SECTION 10.07 Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such invalidity, illegality or unenforceability without affecting the validity, legality
and enforceability of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.



     SECTION 10.08 Right of Setoff. Each Lender and each of its Affiliates is hereby
authorized at any time that an Event of Default shall have occurred and is continuing and from time
to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other obligations at any
time owing by such Lender or Affiliate to or for the credit or the account of the Borrowers or any
Guarantor against any and all of the obligations of the Borrowers and each Guarantor now or
hereafter existing under this Agreement held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement and although such obligations may be
unmatured. The rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.



     SECTION 10.09 Governing Law; Jurisdiction; Consent to Service of Process.



          THIS AGREEMENT AND THE LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAW OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAW PRINCIPLES).




          EACH COMMERCIAL OR DOCUMENTARY LETTER OF CREDIT SHALL BE GOVERNED BY THE UNIFORM CUSTOMS AND
PRACTICE FOR DOCUMENTARY CREDITS, INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NO. 500 (1993
VERSION), AND ANY AMENDMENT TO, OR SUCCESSOR OF, SUCH PUBLICATION (THE “UCP 600”) AND EACH
STANDBY LETTER OF CREDIT SHALL BE GOVERNED BY THE INTERNATIONAL STANDBY PRACTICES OF THE INSTITUTE
OF INTERNATIONAL BANKING LAW (THE “ISP 98”), AND IN EITHER CASE, TO THE EXTENT NOT
INCONSISTENT WITH THE UCP 600 OR THE ISP 98, THE LAWS OF THE STATE OF NEW YORK, AND IN THE EVENT
THAT THE PROVISIONS OF THE UCP 600 OR THE ISP 98 CONFLICT WITH THE LAWS OF THE STATE OF NEW YORK,
THEN TO THE EXTENT PERMITTED BY LAW, THE PROVISIONS OF THE UCP 600 OR THE ISP 98 SHALL CONTROL;
PROVIDED THAT ANY LETTER OF CREDIT MAY BE GOVERNED BY SUCH OTHER LAW, CONVENTION OR
PRACTICE, OR SUCH EXCEPTIONS AS THE BORROWERS MAY REASONABLY REQUEST IN THE RELATED LETTER OF




87









 







CREDIT APPLICATION, SUBJECT TO THE APPROVAL OF THE ISSUING LENDER IN ITS SOLE DISCRETION.




          THE BORROWERS AND EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMIT, FOR ITSELF AND
ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK
SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN 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 FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED
BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT
THAT THE ADMINISTRATIVE AGENT, THE ISSUING LENDER OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AGAINST THE BORROWERS AND EACH GUARANTOR OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.




          THE BORROWERS AND EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST
EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
IN ANY COURT REFERRED TO IN PARAGRAPH (C) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO
THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.




          THE BORROWERS HEREBY APPOINTS CT CORPORATION SYSTEM (THE “PROCESS AGENT”) WITH AN
OFFICE ON THE DATE HEREOF OF 111 EIGHTH AVENUE, NEW YORK, NEW YORK 10011, AS ITS AGENT TO RECEIVE
ON BEHALF OF THEM SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY BE
SERVED IN ANY SUCH ACTION OR PROCEEDING. SUCH SERVICE MAY BE MADE BY MAILING BY CERTIFIED MAIL A
COPY OF SUCH PROCESS TO EITHER BORROWER IN CARE OF THE PROCESS AGENT AT THE PROCESS AGENT’S ABOVE
ADDRESS, WITH A COPY TO SUCH PERSON AT ITS ADDRESS SPECIFIED HEREIN AND EACH BORROWER HEREBY
AUTHORIZES AND DIRECTS THE PROCESS AGENT TO RECEIVE SUCH SERVICE ON THEIR BEHALF. AS AN
ALTERNATIVE


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METHOD OF SERVICE, THE BORROWERS ALSO IRREVOCABLY CONSENT TO THE SERVICE OF ANY AND ALL
PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING BY CERTIFIED MAIL OF COPIES OF SUCH PROCESS
TO THEM AND THEIR SUBSIDIARIES SPECIFIED HEREIN. THE BORROWERS AGREE 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 MANNER PROVIDED BY LAW.




          EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED
FOR NOTICES IN SECTION 10.01. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY
TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.




          SECTION 10.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY 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 THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY 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 BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.




     SECTION 10.11 Headings. Article and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement and shall not affect
the construction of, or be taken into consideration in interpreting, this Agreement.



     SECTION 10.12 Confidentiality. Each of the Administrative Agent, the Issuing Lender
and the Lenders agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates’ directors, officers,
employees and agents, including accountants, legal counsel and other advisors (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, (c) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with
the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder, (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 Agreement, (g) with
the consent of the Borrowers or (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii)



89









 







becomes available to the Administrative Agent, the Issuing Lender or any Lender on a
nonconfidential basis from a source other than the Borrowers. For the purposes of this Section,
“Information” means all information received from the Borrowers or their Affiliates
relating to the Borrowers and their Subsidiaries or their business, other than any such information
that is available to the Administrative Agent, the Issuing Lender or any Lender on a
non-confidential basis prior to disclosure by the Borrowers or any of their Affiliates;
provided that, in the case of information received from the Borrowers 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.



     SECTION 10.13 Interest Rate Limitation. It is the intention of the parties hereto to
conform strictly to applicable interest, usury and criminal laws and, anything herein to the
contrary notwithstanding, the obligations of Borrowers and the Guarantors to a Lender, the Issuing
Lender or the Administrative Agent under this Agreement or any Loan Document shall be subject to
the limitation that payments of interest shall not be required to the extent that receipt thereof
would be contrary to provisions of law applicable to such Lender, such Issuing Lender or
Administrative Agent limiting rates of interest which may be charged or collected by such Lender,
such Issuing Lender or Administrative Agent. Accordingly, if the transactions contemplated hereby
or thereby would be illegal, unenforceable, usurious or criminal under laws applicable to a Lender,
the Issuing Lender or the Administrative Agent (including the laws of any jurisdiction whose laws
may be mandatorily applicable to such Lender or Administrative Agent notwithstanding anything to
the contrary in this Agreement or any other Loan Document then, in that event, notwithstanding
anything to the contrary in this Agreement or any other Loan Document, it is agreed as follows:



          (a) the provisions of this Section shall govern and control;




          (b) the aggregate of all consideration which constitutes interest under applicable law that is
contracted for, taken, reserved, charged or received under this Agreement or any Loan Document or
otherwise in connection with this Agreement or any Loan Document by such Lender, such Issuing
Lender or such Administrative Agent shall under no circumstances exceed the maximum amount of
interest allowed by applicable law (such maximum lawful interest rate, if any, with respect to each
Lender, each Issuing Lender and the Agents herein called the “Highest Lawful Rate”), and
any excess shall be cancelled automatically and if theretofore paid shall be credited to Borrowers
by such Lender, such Issuing Lender or such Administrative Agent (or, if such consideration shall
have been paid in full, such excess refunded to Borrowers);




          (c) all sums paid, or agreed to be paid, to such Lender, such Issuing Lender or such
Administrative Agent for the use, forbearance and detention of the indebtedness of Borrowers to
such Lender, such Issuing Lender or such Administrative Agent hereunder or under any Loan Document
shall, to the extent permitted by laws applicable to such Lender, such Issuing Lender or such
Administrative Agent, as the case may be, be amortized, prorated,



90









 






allocated and spread throughout the full term of such indebtedness until payment in full so
that the actual rate of interest is uniform throughout the full term thereof;




          (d) if at any time the interest provided pursuant to this Section or any other clause of this
Agreement or any other Loan Document, together with any other fees or compensation payable pursuant
to this Agreement or any other Loan Document and deemed interest under laws applicable to such
Lender, such Issuing Lender or such Administrative Agent, exceeds that amount which would have
accrued at the Highest Lawful Rate, the amount of interest and any such fees or compensation to
accrue to such Lender, such Issuing Lender or such Administrative Agent pursuant to this Agreement
or such other Loan Document shall be limited, notwithstanding anything to the contrary in this
Agreement or any other Loan Document, to that amount which would have accrued at the Highest Lawful
Rate, but any subsequent reductions, as applicable, shall not reduce the interest to accrue to such
Lender, such Issuing Lender or such Administrative Agent pursuant to this Agreement or such other
Loan Document below the Highest Lawful Rate until the total amount of interest accrued pursuant to
this Agreement or such other Loan Document, as the case may be, and such fees or compensation
deemed to be interest equals the amount of interest which would have accrued to such Lender or
Administrative Agent if a varying rate per annum equal to the interest provided pursuant to any
other relevant Section hereof (other than this Section) or thereof, as applicable, had at all times
been in effect, plus the amount of fees which would have been received but for the effect of this
Section; and




          (e) with the intent that the rate of interest herein shall at all times be lawful, and if the
receipt of any funds owing hereunder or under any other agreement related hereto (including any of
the other Loan Documents) by such Lender, such Issuing Lender or such Administrative Agent would
cause such Lender to charge Borrowers a criminal rate of interest, the Lenders, the Issuing Lender
and the Administrative Agent agree that they will not require the payment or receipt thereof or a
portion thereof which would cause a criminal rate of interest to be charged by such Lender, such
Issuing Lender or such Administrative Agent, as applicable, and if received such affected Lender,
such Issuing Lender or Administrative Agent will return such funds to Borrowers so that the rate of
interest paid by Borrowers shall not exceed a criminal rate of interest from the date this
Agreement was entered into.




     SECTION 10.14 USA Patriot Act. Each Lender hereby notifies the Borrowers 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 the Borrowers, which information includes the name and address of the Borrowers and
other information that will allow such Lender to identify the Borrowers in accordance with the Act.



     SECTION 10.15 Final Agreement of the Parties. THIS WRITTEN AGREEMENT AND THE OTHER
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER
HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.



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     SECTION 10.16 Amendment and Restatement; Purchase and Sale of Loans and
Participations. This Agreement is an amendment and restatement of the Original Agreement in
its entirety upon and subject to the terms, conditions and provisions herein.



          The Existing Lenders hereby sell, assign, transfer and convey, and Lenders hereby purchase and
accept, so much of the loans and obligations outstanding pursuant to the Original Agreement and all
of the related rights, titles, benefits, interests, privileges, claims, liens, security interests,
and obligations existing and to exist (collectively the “Interests”) such that, after
giving effect to such conveyances, each Lender’s commitment and share of outstanding loans and
obligations under the Original Agreement, as continued pursuant to this Agreement, shall be equal
to the Revolving Loan Commitment and Revolving Credit Exposure, respectively, of such Lender,
provided that the Lenders shall not be liable for any act or omission of the Existing Lenders
occurring prior to the Effective Date. The foregoing assignments, transfers and conveyances are
without recourse to the Existing Lenders and without any warranties whatsoever by the
administrative agent under the Original Agreement or any Existing Lender as to title,
enforceability, collectibility, documentation or freedom from liens or encumbrances, in whole or in
part, other than the warranty by each Existing Lender that it has not previously sold, transferred,
conveyed or encumbered such Interests. Each Lender so acquiring a part of such outstanding loans
assumes its Revolving Loan Commitment of the outstanding loans, commitments, rights, titles,
interests, privileges, claims, liens, security interests, benefits and obligations under this
Agreement and the other Loan Documents.




[Signature pages to follow]




92









 





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



	 	 	 	 	 
	 	 	DOMESTIC BORROWER:
	 
	 	 	 	 
	 	 	ION GEOPHYSICAL CORPORATION,

a Delaware corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ R. Brian Hanson
	 

	 	 	 	 
	 

	 	Name:
	 	R. Brian Hanson
	 

	 	Title:
	 	Executive Vice President and
	 

	 	 	 	Chief Financial Officer






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	 	 	FOREIGN BORROWER:
	 
	 	 	 	 
	 	 	ION INTERNATIONAL S.À R.L.,

a Luxembourg private limited liability company
	 
	 	 	 	 
	 

	 	By:
	 	/s/ R. Davis Maxey
	 

	 	 	 	 
	 

	 	Name:
	 	R. Davis Maxey
	 

	 	Title:
	 	Category A Manager






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	 	 	GUARANTOR OF DOMESTIC AND 

FOREIGN LOANS:
	 
	 	 	 	 
	 	 	GX TECHNOLOGY CORPORATION,

a Texas corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ R. Brian Hanson
	 

	 	 	 	 
	 

	 	Name:
	 	R. Brian Hanson
	 

	 	Title:
	 	Vice President






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	 	 	GUARANTOR OF DOMESTIC AND 

FOREIGN LOANS:
	 
	 	 	 	 
	 	 	ION EXPLORATION PRODUCTS (U.S.A.), INC.,

a Delaware corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ R. Brian Hanson
	 

	 	 	 	 
	 

	 	Name:
	 	R. Brian Hanson
	 

	 	Title:
	 	Vice President






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	 	 	GUARANTOR OF DOMESTIC AND 

FOREIGN LOANS:
	 
	 	 	 	 
	 	 	I/O MARINE SYSTEMS, INC.,

a Louisiana corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ R. Brian Hanson
	 

	 	 	 	 
	 

	 	Name:
	 	R. Brian Hanson
	 

	 	Title:
	 	Vice President






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	 	 	GUARANTOR OF FOREIGN LOANS:
	 
	 	 	 	 
	 	 	CONCEPT SYSTEMS LIMITED, a private limited company
incorporated under the law of Scotland
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Alistair Arnot
	 

	 	 	 	 
	 

	 	Name:
	 	Alistair Arnot
	 

	 	Title:
	 	Director






-98-









 






	 	 	 	 	 
	 	 	GUARANTOR OF FOREIGN LOANS:
	 
	 	 	 	 
	 	 	I/O CAYMAN ISLANDS, LTD, an Exempted Company

incorporated in the Cayman Islands
	 
	 	 	 	 
	 

	 	By:
	 	/s/ R. Brian Hanson
	 

	 	 	 	 
	 

	 	Name:
	 	R. Brian Hanson
	 

	 	Title:
	 	Director






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	 	 	GUARANTOR OF FOREIGN LOANS:
	 
	 	 	 	 
	 	 	ION INTERNATIONAL HOLDINGS L.P.,

a Bermuda limited partnership
	 
	 	 	 	 
	 

	 	By: 


	 	ION Exploration Products (USA) Inc., a
Delaware corporation, its General Partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ R. Brian Hanson
	 

	 	 
	 	 
	 

	 	Name:
	 	R. Brian Hanson
	 

	 	Title:
	 	 Vice President






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	 	 	GUARANTOR OF FOREIGN LOANS:
	 
	 	 	 	 
	 	 	SENSOR NEDERLAND B.V., a private company incorporated
under the laws of The Netherlands
	 
	 

	 	By:
	 	/s/ R. Brian Hanson
	 

	 	 	 	 
	 

	 	Name:
	 	R. Brian Hanson
	 

	 	Title:
	 	Director






-101-









 






	 	 	 	 	 
	 	 	ADMINISTRATIVE AGENT AND LENDER:
	 
	 	 	 	 
	 	 	HSBC BANK USA, N.A.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Steven F. Larsen
	 

	 	 	 	 
	 

	 	Name:
	 	Steven F. Larsen
	 

	 	Title:
	 	First Vice President






-102-









 






	 	 	 	 	 
	 	 	LENDER:
	 
	 	 	 	 
	 	 	ABN AMRO BANK N.V.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ James L. Moyes
	 

	 	 	 	 
	 

	 	Name:
	 	James L. Moyes
	 

	 	Title:
	 	Managing Director
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Lizabeth Lary
	 

	 	 	 	 
	 

	 	Name:
	 	Lizabeth Lary
	 

	 	Title:
	 	Director






-103-









 






	 	 	 	 	 
	 	 	LENDER:
	 
	 	 	 	 
	 	 	CITIBANK, N.A.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Faith E. Allen
	 

	 	 	 	 
	 

	 	Name:
	 	Faith E. Allen
	 

	 	Title:
	 	Sr. Vice President
	 

	 	 	 	Area Manager






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	 	 	LENDER:
	 
	 	 	 	 
	 	 	WHITNEY NATIONAL BANK
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Kevin Rafferty
	 

	 	 	 	 
	 

	 	Name:
	 	Kevin Rafferty
	 

	 	Title:
	 	Senior Vice President






-105-









 






	 	 	 	 	 
	 	 	LENDER:
	 
	 	 	 	 
	 	 	PNC BANK, NATIONAL ASSOCIATION
	 
	 	 	 	 
	 

	 	By:
	 	/s/ W. J. Bowne
	 

	 	 	 	 
	 

	 	Name:
	 	W. J. Bowne
	 

	 	Title:
	 	Managing Director






-106-









 






	 	 	 	 	 
	 	 	LENDER:
	 
	 	 	 	 
	 	 	ABU DHABI INTERNATIONAL BANK INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ David J. Young
	 

	 	 	 	 
	 

	 	Name:
	 	David J. Young
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Nagy S. Kolta
	 

	 	 	 	 
	 

	 	Name:
	 	Nagy S. Kolta
	 

	 	Title:
	 	Executive Vice President







-107-