exv10w4



 





Exhibit 10.4




AMENDED AND RESTATED




REVOLVING CREDIT, CAPEX LOAN




AND




SECURITY AGREEMENT




PNC BANK, NATIONAL ASSOCIATION




(AS LENDER AND AS AGENT)




WITH




GEOKINETICS INC.,




GEOPHYSICAL DEVELOPMENT CORPORATION,




QUANTUM GEOPHYSICAL INC.,




GEOKINETICS EXPLORATION INC.,




TRACE ENERGY SERVICES, INC.,




GEOKINETICS HOLDINGS, INC.,




GRANT GEOPHYSICAL, INC.,




GRANT GEOPHYSICAL (INT’L), INC.,




GRANT GEOPHYSICAL CORP.,




AND




ADVANCED SEISMIC TECHNOLOGY, INC.




(BORROWERS)




December 15, 2006




 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 	 	 
	I	 	DEFINITIONS	 	 	1	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	1.1.	 	 	Accounting Terms
	 	 	1	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	1.2.	 	 	General Terms
	 	 	2	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	1.3.	 	 	Uniform Commercial Code Terms
	 	 	28	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	1.4.	 	 	Certain Matters of Construction
	 	 	28	 
	 
	 	 	 	 	 	 	 	 	 	 
	II	 	ADVANCES, PAYMENTS	 	 	29	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.1.	 	 	Revolving Advances
	 	 	29	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.2.	 	 	Procedure for Revolving Advances Borrowing
	 	 	30	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.3.	 	 	Disbursement of Advance Proceeds
	 	 	32	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.4.	 	 	Loans
	 	 	32	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.5.	 	 	Maximum Advances
	 	 	33	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.6.	 	 	Repayment of Advances
	 	 	33	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.7.	 	 	Repayment of Excess Advances
	 	 	34	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.8.	 	 	Statement of Account
	 	 	34	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.9.	 	 	Letters of Credit
	 	 	34	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.10.	 	 	Issuance of Letters of Credit
	 	 	34	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.11.	 	 	Requirements For Issuance of Letters of Credit
	 	 	35	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.12.	 	 	Disbursements, Reimbursement
	 	 	36	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.13.	 	 	Repayment of Participation Advances
	 	 	37	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.14.	 	 	Documentation
	 	 	37	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.15.	 	 	Determination to Honor Drawing Request
	 	 	37	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.16.	 	 	Nature of Participation and Reimbursement Obligations
	 	 	38	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.17.	 	 	Indemnity
	 	 	39	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.18.	 	 	Liability for Acts and Omissions
	 	 	39	 






i









 






	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.19.	 	 	Additional Payments
	 	 	41	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.20.	 	 	Manner of Borrowing and Payment
	 	 	41	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.21.	 	 	Mandatory Prepayments
	 	 	42	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.22.	 	 	Reduction of Commitments
	 	 	43	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.23.	 	 	Use of Proceeds
	 	 	44	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.24.	 	 	Defaulting Lender
	 	 	44	 
	 
	 	 	 	 	 	 	 	 	 	 
	III	 	INTEREST AND FEES	 	 	45	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	3.1.	 	 	Interest
	 	 	45	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	3.2.	 	 	Letter of Credit Fees
	 	 	46	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	3.3.	 	 	Closing Fee and Facility Fee
	 	 	47	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	3.4.	 	 	Collateral Evaluation Fee, Collateral Monitoring Fee; Late Reporting Fee
	 	 	47	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	3.5.	 	 	Computation of Interest and Fees
	 	 	48	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	3.6.	 	 	Maximum Charges
	 	 	48	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	3.7.	 	 	Increased Costs
	 	 	49	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	3.8.	 	 	Basis For Determining Interest Rate Inadequate or Unfair
	 	 	49	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	3.9.	 	 	Capital Adequacy
	 	 	50	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	3.10.	 	 	Gross Up for Taxes
	 	 	50	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	3.11.	 	 	Withholding Tax Exemption
	 	 	51	 
	 
	 	 	 	 	 	 	 	 	 	 
	IV	 	COLLATERAL: GENERAL TERMS	 	 	52	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.1.	 	 	Security Interest in the Collateral
	 	 	52	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.2.	 	 	Perfection of Security Interest
	 	 	52	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.3.	 	 	Disposition of Collateral
	 	 	52	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.4.	 	 	Preservation of Collateral
	 	 	53	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.5.	 	 	Ownership of Collateral
	 	 	53	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.6.	 	 	Defense of Agent’s and Lenders’ Interests
	 	 	54	 






ii









 






	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.7.	 	 	Books and Records
	 	 	54	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.8.	 	 	Financial Disclosure
	 	 	54	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.9.	 	 	Compliance with Laws
	 	 	55	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.10.	 	 	Inspection of Premises
	 	 	55	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.11.	 	 	Insurance
	 	 	55	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.12.	 	 	Failure to Pay Insurance
	 	 	56	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.13.	 	 	Payment of Taxes
	 	 	56	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.14.	 	 	Payment of Leasehold Obligations
	 	 	56	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.15.	 	 	Receivables
	 	 	56	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.16.	 	 	Maintenance of Equipment
	 	 	59	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.17.	 	 	Exculpation of Liability
	 	 	59	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.18.	 	 	Environmental Matters
	 	 	59	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.19.	 	 	Financing Statements
	 	 	62	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.20.	 	 	Location of Equipment
	 	 	62	 
	 
	 	 	 	 	 	 	 	 	 	 
	V	 	REPRESENTATIONS AND WARRANTIES	 	 	62	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.1.	 	 	Authority
	 	 	62	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.2.	 	 	Formation and Qualification
	 	 	62	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.3.	 	 	Survival of Representations and Warranties
	 	 	63	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.4.	 	 	Tax Returns
	 	 	63	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.5.	 	 	Financial Statements
	 	 	63	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.6.	 	 	Entity Names
	 	 	64	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.7.	 	 	O.S.H.A. and Environmental Compliance
	 	 	64	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.8.	 	 	Solvency; No Litigation, Violation, Indebtedness or Default
	 	 	65	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.9.	 	 	Patents, Trademarks, Copyrights and Licenses
	 	 	66	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.10.	 	 	Licenses and Permits
	 	 	67	 






iii









 






	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.11.	 	 	Default of Indebtedness
	 	 	67	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.12.	 	 	No Default
	 	 	67	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.13.	 	 	No Burdensome Restrictions
	 	 	67	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.14.	 	 	No Labor Disputes
	 	 	67	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.15.	 	 	Use of Proceeds; Margin Regulations
	 	 	67	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.16.	 	 	Investment Company Act
	 	 	67	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.17.	 	 	Disclosure
	 	 	67	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.18.	 	 	Swaps
	 	 	68	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.19.	 	 	Conflicting Agreements
	 	 	68	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.20.	 	 	Application of Certain Laws and Regulations
	 	 	68	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.21.	 	 	Business and Property of Borrowers
	 	 	68	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.22.	 	 	Section 20 Subsidiaries
	 	 	68	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.23.	 	 	Anti-Terrorism Laws
	 	 	68	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.24.	 	 	Trading with the Enemy
	 	 	69	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.25.	 	 	Mechanic’s Liens
	 	 	69	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.26.	 	 	Restricted Subsidiaries
	 	 	69	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.27.	 	 	Delivery of Acquisition Agreement
	 	 	69	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.28.	 	 	Internal Controls and Procedures
	 	 	70	 
	 
	 	 	 	 	 	 	 	 	 	 
	VI	 	AFFIRMATIVE COVENANTS	 	 	70	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.1.	 	 	Payment of Fees
	 	 	70	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.2.	 	 	Conduct of Business and Maintenance of Existence and Assets
	 	 	70	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.3.	 	 	Violations
	 	 	70	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.4.	 	 	Government Receivables
	 	 	70	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.5.	 	 	Financial Covenants
	 	 	71	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.6.	 	 	Execution of Supplemental Instruments
	 	 	71	 






iv









 






	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.7.	 	 	Payment of Indebtedness
	 	 	71	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.8.	 	 	Standards of Financial Statements
	 	 	71	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.9.	 	 	Federal Securities Laws
	 	 	71	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.10.	 	 	Mechanic’s Liens
	 	 	71	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.11.	 	 	Restricted Subsidiaries
	 	 	71	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.12.	 	 	Exercise of Rights
	 	 	72	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.13.	 	 	Maintenance of Material Contracts
	 	 	72	 
	 
	 	 	 	 	 	 	 	 	 	 
	VII	 	NEGATIVE COVENANTS	 	 	72	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.1.	 	 	Merger, Consolidation, Acquisition and Sale of Assets
	 	 	72	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.2.	 	 	Creation of Liens
	 	 	72	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.3.	 	 	Guarantees
	 	 	72	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.4.	 	 	Investments
	 	 	72	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.5.	 	 	Loans
	 	 	73	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.6.	 	 	Capital Expenditures
	 	 	73	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.7.	 	 	Dividends
	 	 	73	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.8.	 	 	Indebtedness
	 	 	73	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.9.	 	 	Nature of Business
	 	 	74	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.10.	 	 	Transactions with Affiliates
	 	 	74	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.11.	 	 	[Reserved]
	 	 	74	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.12.	 	 	Subsidiaries
	 	 	74	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.13.	 	 	Fiscal Year and Accounting Changes
	 	 	74	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.14.	 	 	Pledge of Credit
	 	 	74	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.15.	 	 	Amendment of Articles of Incorporation or By-Laws
	 	 	74	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.16.	 	 	Compliance with ERISA
	 	 	74	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.17.	 	 	Prepayment of Indebtedness
	 	 	75	 
	 
	 	 	 	 	 	 	 	 	 	 





v









 






	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.18.	 	 	Anti-Terrorism Laws
	 	 	76	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.19.	 	 	Membership/Partnership Interests
	 	 	76	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.20.	 	 	Trading with the Enemy Act
	 	 	76	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.21.	 	 	Other Agreements
	 	 	76	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.22.	 	 	Change of Control
	 	 	76	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.23.	 	 	Note Documents
	 	 	76	 
	 
	 	 	 	 	 	 	 	 	 	 
	VIII	 	CONDITIONS PRECEDENT	 	 	76	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	8.1.	 	 	Conditions to Initial Advances
	 	 	76	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	8.2.	 	 	Conditions to Each Advance
	 	 	80	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	8.3.	 	 	Conditions to Each CapEx Loan
	 	 	81	 
	 
	 	 	 	 	 	 	 	 	 	 
	IX	 	INFORMATION AS TO BORROWERS	 	 	81	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.1.	 	 	Disclosure of Material Matters
	 	 	81	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.2.	 	 	Schedules
	 	 	81	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.3.	 	 	Environmental Reports
	 	 	82	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.4.	 	 	Litigation
	 	 	82	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.5.	 	 	Material Occurrences
	 	 	82	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.6.	 	 	Government Receivables
	 	 	82	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.7.	 	 	Annual Financial Statements
	 	 	82	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.8.	 	 	Quarterly Financial Statements
	 	 	83	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.9.	 	 	Monthly Financial Statements
	 	 	83	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.10.	 	 	Borrowing Base Certificate
	 	 	83	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.11.	 	 	Other Reports
	 	 	84	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.12.	 	 	Additional Information
	 	 	84	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.13.	 	 	Projected Operating Budget
	 	 	84	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.14.	 	 	[Reserved]
	 	 	84	 






vi









 






	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.15.	 	 	Notice of Suits, Adverse Events
	 	 	84	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.16.	 	 	ERISA Notices and Requests
	 	 	84	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.17.	 	 	Additional Documents
	 	 	85	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.18.	 	 	SEC Information
	 	 	85	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.19.	 	 	Appraisals
	 	 	85	 
	 
	 	 	 	 	 	 	 	 	 	 
	X	 	EVENTS OF DEFAULT	 	 	86	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.1.	 	 	Nonpayment
	 	 	86	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.2.	 	 	Breach of Representation
	 	 	86	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.3.	 	 	Financial Information
	 	 	86	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.4.	 	 	Judicial Actions
	 	 	86	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.5.	 	 	Noncompliance
	 	 	86	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.6.	 	 	Judgments
	 	 	86	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.7.	 	 	Bankruptcy
	 	 	86	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.8.	 	 	Inability to Pay
	 	 	87	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.9.	 	 	Affiliate Bankruptcy
	 	 	87	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.10.	 	 	Material Adverse Effect
	 	 	87	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.11.	 	 	Lien Priority
	 	 	87	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.12.	 	 	Permitted Capital Lease Facility Default
	 	 	87	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.13.	 	 	Cross Default
	 	 	87	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.14.	 	 	Breach of Guaranty
	 	 	87	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.15.	 	 	Change of Ownership
	 	 	87	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.16.	 	 	Invalidity
	 	 	87	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.17.	 	 	Licenses
	 	 	88	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.18.	 	 	Seizures
	 	 	88	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.19.	 	 	Operations
	 	 	88	 






vii









 






	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.20.	 	 	Pension Plans
	 	 	88	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.21.	 	 	Permitted Investor Notes Facility Default
	 	 	88	 
	 
	 	 	 	 	 	 	 	 	 	 
	XI	 	LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT	 	 	88	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.1.	 	 	Rights and Remedies
	 	 	88	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.2.	 	 	Agent’s Discretion
	 	 	91	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.3.	 	 	Setoff
	 	 	91	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.4.	 	 	Rights and Remedies not Exclusive
	 	 	91	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.5.	 	 	Allocation of Payments After Event of Default
	 	 	91	 
	 
	 	 	 	 	 	 	 	 	 	 
	XII	 	WAIVERS AND JUDICIAL PROCEEDINGS	 	 	92	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	12.1.	 	 	Waiver of Notice
	 	 	92	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	12.2.	 	 	Delay
	 	 	92	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	12.3.	 	 	Jury Waiver
	 	 	92	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	12.4.	 	 	Waiver of Rights Under Texas Deceptive Trade Practices Act
	 	 	93	 
	 
	 	 	 	 	 	 	 	 	 	 
	XIII	 	EFFECTIVE DATE AND TERMINATION.	 	 	93	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	13.1.	 	 	Term
	 	 	93	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	13.2.	 	 	Termination
	 	 	93	 
	 
	 	 	 	 	 	 	 	 	 	 
	XIV	 	REGARDING AGENT	 	 	94	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	14.1.	 	 	Appointment
	 	 	94	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	14.2.	 	 	Nature of Duties
	 	 	94	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	14.3.	 	 	Lack of Reliance on Agent and Resignation
	 	 	95	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	14.4.	 	 	Certain Rights of Agent
	 	 	95	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	14.5.	 	 	Reliance
	 	 	95	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	14.6.	 	 	Notice of Default
	 	 	96	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	14.7.	 	 	Indemnification
	 	 	96	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	14.8.	 	 	Agent in its Individual Capacity
	 	 	96	 






viii









 






	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	14.9.	 	 	Delivery of Documents
	 	 	96	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	14.10.	 	 	Borrowers’ Undertaking to Agent
	 	 	96	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	14.11.	 	 	No Reliance on Agent’s Customer Identification Program
	 	 	97	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	14.12.	 	 	Other Agreements
	 	 	97	 
	 
	 	 	 	 	 	 	 	 	 	 
	XV	 	BORROWING AGENCY	 	 	97	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	15.1.	 	 	Borrowing Agency Provisions
	 	 	97	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	15.2.	 	 	Waiver of Subrogation
	 	 	98	 
	 
	 	 	 	 	 	 	 	 	 	 
	XVI	 	MISCELLANEOUS	 	 	98	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	16.1.	 	 	Governing Law
	 	 	98	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	16.2.	 	 	Entire Understanding
	 	 	98	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	16.3.	 	 	Successors and Assigns; Participations; New Lenders
	 	 	101	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	16.4.	 	 	Application of Payments
	 	 	103	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	16.5.	 	 	Indemnity
	 	 	103	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	16.6.	 	 	Notice
	 	 	104	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	16.7.	 	 	Survival
	 	 	106	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	16.8.	 	 	Severability
	 	 	106	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	16.9.	 	 	Expenses
	 	 	106	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	16.10.	 	 	Injunctive Relief
	 	 	106	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	16.11.	 	 	Consequential Damages
	 	 	107	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	16.12.	 	 	Captions
	 	 	107	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	16.13.	 	 	Counterparts; Facsimile Signatures
	 	 	107	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	16.14.	 	 	Construction
	 	 	107	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	16.15.	 	 	Confidentiality; Sharing Information
	 	 	107	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	16.16.	 	 	Publicity
	 	 	108	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	16.17.	 	 	Non-Applicability of Chapter 346
	 	 	108	 






ix









 






	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	16.18.	 	 	Certifications From Banks and Participants; US PATRIOT Act
	 	 	108	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	16.19.	 	 	Amendment and Restatement
	 	 	108	 






 x




 









 








AMENDED AND RESTATED REVOLVING CREDIT, CAPEX LOAN

AND

SECURITY AGREEMENT




     Amended and Restated Revolving Credit, CapEx Loan and Security Agreement dated as of December
15, 2006, among GEOKINETICS INC., a Delaware corporation (“Geokinetics”), GEOPHYSICAL DEVELOPMENT
CORPORATION, a Texas corporation (“GDC”), QUANTUM GEOPHYSICAL, INC., a Texas corporation
(“Quantum”), GEOKINETICS EXPLORATION INC., formerly known as Trace Energy Services Ltd., an entity
organized under the laws of Canada (“Exploration”), and TRACE ENERGY SERVICES, INC., a Texas
corporation (“Trace Energy (U.S.)”), GEOKINETICS HOLDINGS, INC., a Delaware corporation
(“Geokinetics Holdings”), GRANT GEOPHYSICAL, INC., a Delaware corporation (“Grant Geophysical”),
GRANT GEOPHYSICAL (INT’L), INC., a Texas corporation (“Grant Geophysical International”), GRANT
GEOPHYSICAL CORP., a Texas corporation (“Grant Corp.”), ADVANCED SEISMIC TECHNOLOGY, INC.
(“Advanced Seismic”), a Texas corporation (Geokinetics, GDC, Quantum, Exploration, Trace Energy
(U.S.), Geokinetics Holdings, Grant Geophysical, Grant Geophysical International, Grant Corp. and
Advanced Seismic, each a “Borrower,” and collectively, “Borrowers”), the financial institutions
which are now or which hereafter become a party hereto (collectively, the “Lenders” and
individually a “Lender”) and PNC BANK, NATIONAL ASSOCIATION (“PNC”), as administrative and
collateral agent for Lenders (PNC, in such capacity, the “Agent”).



W I T N E S S E T H:




     WHEREAS, Geokinetics, GDC, Quantum, Trace Energy Services Ltd., Trace Energy (U.S.), Agent and
Lenders are party to that certain Revolving Credit, Term Loan and Security Agreement dated as of
June 12, 2006, as amended by that certain Joinder and Amendment No. 1 to Revolving Credit, Term
Loan and Security Agreement, dated as of September 8, 2006, by and among the Borrowers, Agent and
Lenders (as amended, the “Original Agreement”); and



     WHEREAS, the parties hereto wish to completely amend, restate and modify (but not extinguish)
the Original Agreement through the execution of this Agreement; and



     WHEREAS, the Borrowers have requested, and the Lenders have agreed to make available to
Borrower, a revolving credit facility and a capital expenditure facility upon and subject to the
terms and conditions set forth in this Agreement;



     IN CONSIDERATION of the mutual covenants and undertakings herein contained, Borrowers, Lenders
and Agent hereby agree as follows:



I DEFINITIONS.




     1.1. Accounting Terms. As used in this Agreement, the Other Documents or any
certificate, report or other document made or delivered pursuant to this Agreement, accounting
terms not defined in Section 1.2 or elsewhere in this Agreement and accounting terms partly defined
in Section 1.2 to the extent not defined, shall have the respective meanings given to them under
GAAP; provided,
however, whenever such accounting terms are used for the purposes of determining compliance
with financial covenants in this Agreement, such accounting terms shall



Amended & Restated Credit Agreement




 









 




be defined in accordance
with GAAP as applied in preparation of the audited financial statements of Borrowers for the fiscal
year ended December 31, 2005.




     1.2. General Terms. For purposes of this Agreement the following terms shall have the
following meanings:



     “Accountants” shall have the meaning set forth in Section 9.7 hereof.



     “Acquisition Agreement” shall mean collectively, (a) the Stock Purchase Agreement
including all exhibits and schedules thereto dated as of July 29, 2005 between SCF-III, L.P., a
Delaware limited partnership and James White, and individual resident of Texas, as sellers
(individually and collectively, “Seller”) and Geokinetics as buyer and (b) the Grant Acquisition
Agreement.



     “Advance Rate” shall have the meaning set forth in Section 2.1(a)(y)(ii) hereof.



     “Advanced Seismic” shall mean Advanced Seismic Technology, Inc., a Texas corporation.



     “Advances” shall mean and include the Revolving Advances, Letters of Credit, as well
as the CapEx Loans.



     “Affiliate” of any Person shall mean (a) any Person which, directly or indirectly, is
in control of, is controlled by, or is under common control with such Person, or (b) any Person who
is a director, managing member, general partner or officer (i) of such Person, (ii) of any
Subsidiary of such Person or (iii) of any Person described in clause (a) above. For purposes of
this definition, control of a Person shall mean the power, direct or indirect, (x) to vote 10% or
more of the Equity Interests having ordinary voting power for the election of directors of such
Person or other Persons performing similar functions for any such Person, or (y) to direct or cause
the direction of the management and policies of such Person whether by ownership of Equity
Interests, contract or otherwise.



     “Agent” shall have the meaning set forth in the preamble to this Agreement and shall
include its successors and assigns.



     “Agreement” shall mean this Amended and Restated Revolving Credit, CapEx Loan and
Security Agreement, as the same may be amended, restated, supplemented or otherwise modified from
time to time.



     “Alternate Base Rate” shall mean, for any day, a rate per annum equal to the higher of
(i) the Base Rate in effect on such day and (ii) the Federal Funds Open Rate in effect on such day
plus 1/2 of 1%.



     “Anti-Terrorism Laws” shall mean any Applicable Laws relating to terrorism or money
laundering, including Executive Order No. 13224, the USA PATRIOT Act, the Applicable Laws
comprising or implementing the Bank Secrecy Act, and the Applicable Laws administered by the
United States Treasury Department’s Office of Foreign Asset Control (as any of the foregoing
Applicable Laws may from time to time be amended, renewed, extended, or replaced).



Amended & Restated Credit Agreement



 









 





     “Applicable Law” shall mean all laws, rules and regulations applicable to the Person,
conduct, transaction, covenant, Other Document or contract in question, including all applicable
common law and equitable principles; all provisions of all applicable provincial, state, federal
and foreign constitutions, statutes, rules, regulations and orders of any Governmental Body, and
all orders, judgments and decrees of all courts and arbitrators.



     “Applicable Margins” means collectively, the Applicable Revolving Domestic Rate
Margin, the Applicable CapEx Domestic Rate Margin, the Applicable Revolving Eurodollar Rate Margin,
and the Applicable CapEx Eurodollar Rate Margin.



     “Applicable CapEx Domestic Rate Margin” shall mean the per annum interest rate margin
from time to time in effect applicable to CapEx Loans, and payable in addition to the Alternate
Base Rate with respect to Domestic Rate Loans, which shall be one-half of one percent (0.50%) as of
the Restated Closing Date, and otherwise determined by reference to Section 3.1 of the Agreement;
provided, however, that until receipt by Agent of the certified financial statements for the fiscal
year ending December 31, 2006, the Applicable CapEx Domestic Rate Margin shall be one-half of one
percent (0.50%).



     “Applicable CapEx Eurodollar Rate Margin” shall mean the per annum interest rate
margin from time to time in effect applicable to CapEx Loans, and payable in addition to the
Eurodollar Rate with respect to Eurodollar Rate Loans, which shall be two and three-quarters
percent (2.75%) as of the Restated Closing Date, and otherwise determined by reference to Section
3.1 of the Agreement; provided, however, that until receipt by Agent of the certified financial
statements for the fiscal year ending December 31, 2006, the Applicable CapEx Eurodollar Rate
Margin shall be two and three-quarters percent (2.75%).



     “Applicable Revolving Domestic Rate Margin” shall mean the per annum interest rate
margin from time to time in effect applicable to Revolving Advances, and payable in addition to the
Alternate Base Rate with respect to Domestic Rate Loans, which shall be zero percent (0.0%) as of
the Restated Closing Date, and otherwise determined by reference to Section 3.1 of the Agreement;
provided, however, that until receipt by Agent of the certified financial statements for the fiscal
year ending December 31, 2006, the Applicable Revolving Domestic Rate Margin shall be zero percent
(0.00%).



     “Applicable Revolving Eurodollar Rate Margin” shall mean the per annum interest rate
margin from time to time in effect applicable to Revolving Advances, and payable in addition to the
Eurodollar Rate with respect to Eurodollar Rate Loans, which shall be two and one-quarter percent
(2.25%) as of the Restated Closing Date, and otherwise determined by reference to Section 3.1 of
the Agreement; provided, however, that until receipt by Agent of the certified financial statements
for the fiscal year ending December 31, 2006, the Applicable Revolving Eurodollar Rate Margin shall
be two and one-quarter percent (2.25%).



     “Asset Sale” shall mean the sale, transfer or other disposition (by way of merger,
casualty, condemnation or otherwise) by Geokinetics or any of the Subsidiaries to any person other
than Geokinetics or any Subsidiary of (a) any Equity Interests of any of the Subsidiaries or (b)
any other assets of Geokinetics or any of its Subsidiaries.



Amended & Restated Credit Agreement



 









 





     “Authority” shall have the meaning set forth in Section 4.18(d).



     “Base Rate” shall mean the base commercial lending rate of PNC as publicly announced
to be in effect from time to time, such rate to be adjusted automatically, without notice, on the
effective date of any change in such rate. This rate of interest is determined from time to time
by PNC as a means of pricing some loans to its customers and is neither tied to any external rate
of interest or index nor does it necessarily reflect the lowest rate of interest actually charged
by PNC to any particular class or category of customers of PNC.



     “Blocked Accounts” shall have the meaning set forth in Section 4.15(h).



     “Blocked Account Bank” shall have the meaning set forth in Section 4.15(h).



     “Blocked Person” shall have the meaning set forth in Section 5.23(b) hereof.



     “Books and Records” shall have the meaning set forth in Section 4.5(b) hereof.



     “Borrower” or “Borrowers” shall have the meaning set forth in the preamble to
this Agreement and shall extend to all permitted successors and assigns of such Persons.



     “Borrowers on a Consolidated Basis” shall mean the consolidation in accordance with
GAAP of the accounts or other items of the Borrowers and their respective Subsidiaries.



     “Borrowers’ Account” shall have the meaning set forth in Section 2.8.



     “Borrowing Agent” shall mean Geokinetics.



     “Borrowing Base Certificate” shall mean a certificate in substantially the form of
Exhibit 1.2 duly executed by the President, Chief Financial Officer or Controller of the Borrowing
Agent and delivered to the Agent, appropriately completed, by which such officer shall certify to
Agent the Formula Amount and calculation thereof as of the date of such certificate.



     “Business Day” shall mean any day other than Saturday or Sunday or a legal holiday on
which commercial banks are authorized or required by law to be closed for business in East
Brunswick, New Jersey and, if the applicable Business Day relates to any Eurodollar Rate Loans,
such day must also be a day on which dealings are carried on in the London interbank market.



     “Capital Expenditures” shall mean, for any period, (a) the aggregate amount of
additions to property, plant and equipment and other capital expenditures of Geokinetics and its
Subsidiaries that are (or should be) set forth in a consolidated statement of cash flows of
Geokinetics for such period prepared in accordance with GAAP, and (b) Capitalized Lease Obligations
or Synthetic Lease Obligations incurred by Geokinetics and its consolidated Subsidiaries during
such period, but excluding in each case any such expenditure made to
restore, replace or rebuild property to the condition of such property immediately prior to
any damage, loss, destruction or condemnation of such property, to the extent such expenditure is
made with insurance proceeds, condemnation awards or damage recovery proceeds relating to any such
damage, loss, destruction or condemnation.



Amended & Restated Credit Agreement



 









 





     “CapEx Loan Rate” shall mean, with respect to CapEx Loans, an interest rate per annum
equal to (a) the lesser of (i) the sum of the Alternate Base Rate plus the Applicable CapEx
Domestic Rate Margin and (ii) the Maximum Rate, with respect to Domestic Rate Loans, and (b) the
lesser of (i) the sum of the Eurodollar Rate plus the Applicable CapEx Eurodollar Rate Margin and
(ii) the Maximum Rate, with respect to the Eurodollar Rate Loans.



     “CapEx Loans” shall have the meaning set forth in Section 2.4 hereof.



     “Capitalized Lease Obligations” of any person shall mean 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.



     “Cash Balance” shall mean all cash in Blocked Accounts or Depository Accounts.



     “CERCLA” shall mean the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. §§9601 et seq.



     “Change of Control” shall mean (a) during any period of twelve consecutive calendar
months, individuals who at the beginning of such period constituted the board of directors (or
individuals performing similar functions) of Geokinetics (together with any new directors whose
election by the board of directors of Geokinetics or whose nomination for election by the holders
of Equity Interests of Geokinetics was approved by a vote of at least two-thirds of the directors
then still in office who either were directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason other than death or
disability to constitute two-thirds of the directors then in office and (b) the occurrence of any
event (whether in one or more transactions) which results in a transfer of control of any Borrower
to any single person or single group of persons (within the meaning of the Securities Exchange Act
of 1934) who is or are not an Original Owner or (c) any merger or consolidation of or with any
Borrower or sale of all or substantially all of the property or assets of any Borrower
provided, however, the Borrowers may enter into a merger or consolidation between
and among the Borrowers and wholly owned subsidiaries of the Borrowers, so long as Borrowers have
received Agent’s prior written consent to such merger or consolidation, have delivered the
documentation requested by Agent in its consent regarding such merger or consolidation and if
Geokinetics is a party to such merger or consolidation, it is the surviving entity. For purposes
of this definition, “control of any Borrower” shall mean the power, direct or indirect, by contract
or otherwise (x) to vote 50% or more of the Equity Interests having ordinary voting power for the
election of directors (or the individuals performing similar functions) of any Borrower or (y) to
direct or cause the direction of the management and policies of any Borrower.



     “Change of Ownership” shall mean (a) any single person or single group of persons
(within the meaning of the Securities Exchange Act of 1934) who are not Original Owners shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by the SEC under the
Securities Exchange Act of 1934) of 20% or more of the Equity Interests of any Borrower having the
right to vote for the election of directors (or individuals performing similar



Amended & Restated Credit Agreement



 









 




functions) of any
Borrower under ordinary circumstances (including, for purposes of the calculation of percentage
ownership, any Equity Interests into which any Equity Interests of any Borrower are convertible or
for which any such Equity Interests of any Borrower or of any other Person may be exchanged and any
Equity Interests issuable to such Original Owners upon exercise of any warrants, options or similar
rights which may at the time of calculation be held by such Original Owners) or (b) any merger,
consolidation or sale of substantially all of the property or assets of any Borrower; provided,
that the sale by any Borrower of any Equity Interests of any other Borrower shall be deemed a sale
of substantially all of such Borrower’s assets.




     “Charges” shall mean all taxes, charges, fees, imposts, levies or other assessments,
including all net income, gross income, gross receipts, sales, use, ad valorem, value added,
transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment,
social security, unemployment, excise, severance, stamp, occupation and property taxes, custom
duties, fees, assessments, liens, claims and charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts, imposed by any taxing or other
authority, domestic or foreign (including the Pension Benefit Guaranty Corporation or any
environmental agency or superfund), upon the Collateral, any Borrower or any of its Affiliates.



     “CIT” shall mean The CIT Group/Equipment Financing, Inc.



     “CIT Intercreditor Agreement” shall mean an Intercreditor Agreement among Agent,
Borrowers and CIT which shall be in form and substance satisfactory to Agent in its sole
discretion.



     “Code” shall mean the Internal Revenue Code of 1986, as the same may be amended or
supplemented from time to time, and any successor statute of similar import, and the rules and
regulations thereunder, as from time to time in effect.



     “Collateral” shall mean and include:



     (a) all Receivables;



     (b) all Equipment;



     (c) all General Intangibles;



     (d) all Inventory;



     (e) all Investment Property;



     (f) all Subsidiary Stock;



     (g) all of each Borrower’s right, title and interest in and to, whether now owned or hereafter
acquired and wherever located, (i) its respective goods and other property including, but not
limited to, all merchandise returned or rejected by Customers, relating to or securing any of the
Receivables; (ii) all of each Borrower’s rights as a consignor, a consignee, an unpaid vendor,
mechanic, artisan, or other lienor, including stoppage in transit, setoff, detinue, replevin,



Amended & Restated Credit Agreement


 









 




reclamation and repurchase; (iii) all additional amounts due to any Borrower from any Customer
relating to the Receivables; (iv) other property, including warranty claims, relating to any goods
securing the Obligations; (v) all of each Borrower’s contract rights, rights of payment which have
been earned under a contract right, instruments (including promissory notes), documents, chattel
paper (including electronic chattel paper), warehouse receipts, deposit accounts, letters of credit
and money; (vi) all commercial tort claims (whether now existing or hereafter arising); (vii) if
and when obtained by any Borrower, all real and personal property of third parties in which such
Borrower has been granted a lien or security interest as security for the payment or enforcement of
Receivables; (viii) all letter of credit rights (whether or not the respective letter of credit is
evidenced by a writing); (ix) all supporting obligations; (x) all licenses and permits to the
extent Borrowers may grant a security interest in the same in accordance with Applicable Laws and
(xi) any other goods, personal property or real property now owned or hereafter acquired in which
any Borrower has expressly granted a security interest or may in the future grant a security
interest to Agent hereunder, or in any amendment or supplement hereto or thereto, or under any
other agreement between Agent and any Borrower;




     (h) all of each Borrower’s ledger sheets, ledger cards, files, correspondence, records, books
of account, business papers, computers, computer software (owned by any Borrower or in which it has
an interest), computer programs, tapes, disks and documents relating to (a), (b), (c), (d), (e),
(f), or (g) of this Paragraph; and



     (i) all proceeds and products of (a), (b), (c), (d), (e), (f), (g), or (h) in whatever form,
including, but not limited to: cash, deposit accounts (whether or not comprised solely of
proceeds), certificates of deposit, insurance proceeds (including hazard, flood and credit
insurance), negotiable instruments and other instruments for the payment of money, chattel paper,
security agreements, documents, eminent domain proceeds, condemnation proceeds and tort claim
proceeds.



     “Collateral Assignment of Acquisition Agreement” shall mean collectively, (a) that
certain Collateral Assignment of Acquisition Agreement dated as of the Original Closing Date,
executed by Geokinetics in favor of Agent and acknowledged by Seller and (b) that certain
Collateral Assignment of Acquisition Agreement dated as of September 8, 2006, executed by
Geokinetics Holdings in favor of Agent and acknowledged by the sellers under the Grant Acquisition
Agreement.



     “Commitment Percentage” of any Lender shall mean the percentage set forth below such
Lender’s name on the signature page hereof as same may be adjusted upon any assignment by a Lender
pursuant to Section 16.3 hereof.



     “Commitment Transfer Supplement” shall mean a document in the form of Exhibit 16.3
hereto, properly completed and otherwise in form and substance satisfactory to Agent by which
the Purchasing Lender purchases and assumes a portion of the obligation of Lenders to make
Advances under this Agreement.



     “Compliance Certificate” shall mean a compliance certificate to be signed by the Chief
Financial Officer or Controller of Borrowing Agent, which shall state that, based on an examination
sufficient to permit such officer to make an informed statement, no Default or Event



Amended & Restated Credit Agreement


 









 




of Default
exists, or if such is not the case, specifying such Default or Event of Default, its nature, when
it occurred, whether it is continuing and the steps being taken by Borrowers with respect to such
default and, such certificate shall have appended thereto calculations which set forth Borrowers’
compliance with the requirements or restrictions imposed by Sections 6.5, 7.4, 7.5, 7.6, 7.7, 7.8
and 7.11.




     “Consents” shall mean all filings and all licenses, permits, consents, approvals,
authorizations, qualifications and orders of Governmental Bodies and other third parties, domestic
or foreign, necessary to carry on any Borrower’s business or necessary (including to avoid a
conflict or breach under any agreement, instrument, other document, license, permit or other
authorization) for the execution, delivery or performance of this Agreement, the Other Documents,
including any Consents required under all applicable federal, provincial, state or other Applicable
Law.



     “Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for such
period plus



     (a) without duplication and to the extent deducted in determining such Consolidated Net
Income, the sum of



     (i) consolidated interest expense for such period,



     (ii) consolidated income tax expense for such period,



     (iii) foreign currency translation gain or loss,



     (iv) all amounts attributable to depreciation and amortization for such period,



     (v) non-recurring fees and expenses incurred in connection with the Transactions,



     (vi) any non-cash charges (other than the write-down of current assets) for such period,



     minus (b) without duplication all cash payments made during such period on account of non-cash
charges added to Consolidated Net Income pursuant to clause (a)(vi) above in a previous
period.



     Consolidated EBITDA shall be calculated on a Pro Forma Basis to give effect to the Grant
Acquisition, and Asset Sales (other than any dispositions in the ordinary course of business)
consummated at any time on or after the first day of the respective Test Period as if the Grant
Acquisition had been effected on the first day of such period and as if each such Asset Sale had
been consummated on the day prior to the first day of such period.



     “Consolidated Net Income” shall mean, for any period with respect to any person, the
net income or loss of such person for such period determined on a consolidated basis in accordance
with GAAP; provided, that there shall be excluded (without duplication):



Amended & Restated Credit Agreement


 









 





     (a) the income of any Subsidiary to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary of that income is not at the time permitted by operation
of the terms of its charter or any agreement, instrument, judgment, decree, statute, rule or
governmental regulation applicable to such Subsidiary,



     (b) the income or loss of any person accrued prior to the date (i) it becomes a Subsidiary or
is merged into or consolidated with such person or (ii) its assets are acquired by such person or
its Subsidiaries,



     (c) the income or loss in respect of any Investment in a joint venture (other than a
Subsidiary) except to the extent of the amount of dividends or other distributions actually paid to
such person during such period,



     (d) after-tax gains and losses realized upon the sale or other disposition of any property
that is sold or otherwise disposed of other than in the ordinary course of business, and



     (e) extraordinary gains, losses or charges.



     “Contract Rate” shall mean, as applicable, the Revolving Interest Rate or the CapEx
Loan Rate.



     “Controlled Group” shall mean, at any time, each Borrower and all members of a
controlled group of corporations and all trades or businesses (whether or not incorporated) under
common control and all other entities which, together with any Borrower, are treated as a single
employer under Section 414 of the Code.



     “Customer” shall mean and include the account debtor with respect to any Receivable
and/or the prospective purchaser of goods, services or both with respect to any contract or
contract right, and/or any party who enters into or proposes to enter into any contract or other
arrangement with any Borrower, pursuant to which such Borrower is to deliver any personal property
or perform any services.



     “Customs” shall have the meaning set forth in Section 2.11(b) hereof.



     “Debt for Borrowed Money” of any Person means, at any date of determination, the sum
of, without duplication, (a) all items that, in accordance with GAAP, would be classified as
indebtedness on a consolidated balance sheet of such Person at such date and (b) all Capital Lease
Obligations and Synthetic Lease Obligations of such person and all obligations of such person as an
account party in respect of letters of credit or letters of guaranty, in each case, to the extent
functioning as indebtedness for borrowed money.



     “Default” shall mean an event, circumstance or condition which, with the giving of
notice or passage of time or both, would constitute an Event of Default.



     “Default Rate” shall have the meaning set forth in Section 3.1 hereof.



     “Defaulting Lender” shall have the meaning set forth in Section 2.24(a) hereof.



Amended & Restated Credit Agreement


 









 





     “Depository Accounts” shall have the meaning set forth in Section 4.15(h) hereof.



     “Documents” shall have the meaning set forth in Section 8.1(c) hereof.



     “Dollar” and the sign “$” shall mean (i) lawful money of the United States of
America or (ii) with respect to any lawful money of Canada, the amount of such Canadian money
converted to lawful money of the United States of America calculated on the basis of Agent’s
selling rate of exchange in effect from time to time.



     “Domestic Advance Rate” shall have the meaning set forth in Section 2.1(a)(y)(i)
hereof.



     “Domestic Rate Loan” shall mean any Advance that bears interest based upon the
Alternate Base Rate.



     “Drawing Date” shall have the meaning set forth in Section 2.12(b) hereof.



     “Early Termination Date” shall have the meaning set forth in Section 13.1 hereof.



     “Earnings Before Interest and Taxes” shall mean for any period the sum of (i) net
income (or loss) of Borrowers on a Consolidated Basis for such period (excluding extraordinary
gains) plus (ii) all interest expense of Borrowers on a Consolidated Basis for such period, plus
(iii) all charges against income of Borrowers on a Consolidated Basis for such period for federal,
state and local taxes actually paid.



     “EBITDA” shall mean for any period the sum of (i) Earnings Before Interest and Taxes
for such period plus (ii) depreciation expenses for such period, plus (iii) amortization expenses
for such period, plus (iv) other one time non-cash charges, or non-cash extraordinary losses, minus
(v) other one-time non-cash gains or non-cash extraordinary gains.



     “Eligible Domestic Receivables” shall mean and include with respect to each Borrower,
each Receivable, other than Eligible Foreign Receivables, of such Borrower arising in the Ordinary
Course of Business and which Agent, in its sole credit judgment, shall deem to be an Eligible
Domestic Receivable, based on such considerations as Agent may from time to time deem appropriate.
A Receivable shall not be deemed eligible unless such Receivable is subject to Agent’s first
priority perfected security interest and no other Lien (other than Permitted Encumbrances), and is
evidenced by an invoice or other documentary evidence satisfactory to Agent. In addition, no
Receivable shall be an Eligible Domestic Receivable if:



          (a) it arises out of a sale made by any Borrower to an Affiliate of any Borrower or to a
Person controlled by an Affiliate of any Borrower;




          (b) it is due or unpaid more than ninety (90) days after the original invoice date;




          (c) it is due or unpaid more than sixty (60) days after the original due date;




Amended & Restated Credit Agreement


 









 








          (d) fifty percent (50%) or more of the Receivables from such Customer are not deemed Eligible
Receivables hereunder. Such percentage may, in Agent’s sole discretion, be increased or decreased
from time to time;




          (e) any covenant, representation or warranty contained in this Agreement with respect to such
Receivable has been breached;




          (f) the Customer shall (i) apply for, suffer, or consent to the appointment of, or the taking
of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial
part of its property or call a meeting of its creditors, (ii) admit in writing its inability, or be
generally unable, to pay its debts as they become due or cease operations of its present business,
(iii) make a general assignment for the benefit of creditors, (iv) commence a voluntary case under
any state or federal bankruptcy laws (as now or hereafter in effect), (v) be adjudicated a bankrupt
or insolvent, (vi) file a petition seeking to take advantage of any other law providing for the
relief of debtors, (vii) acquiesce to, or fail to have dismissed, any petition which is filed
against it in any involuntary case under such bankruptcy laws, or (viii) take any action for the
purpose of effecting any of the foregoing;




          (g) the sale is to a Customer outside the continental United States of America, unless the
sale is (i) on letter of credit, guaranty or acceptance terms, in each case acceptable to Agent in
its sole discretion; or (ii) made to a Customer located in Canada of a size, industry and
creditworthiness which shall be satisfactory to Agent in its sole discretion;




          (h) the sale to the Customer is on a bill-and-hold, guaranteed sale, sale-and-return, sale on
approval, consignment or any other repurchase or return basis or is evidenced by chattel paper;




          (i) Agent believes, in its sole judgment, that collection of such Receivable is insecure or
that such Receivable may not be paid by reason of the Customer’s financial inability to pay;




          (j) the Customer is (i) the United States of America, any state or any department, agency or
instrumentality of any of them, unless the applicable Borrower assigns its right to payment of such
Receivable to Agent pursuant to the Assignment of Claims Act of 1940, as amended (31 U.S.C.
Sub-Section 3727 et seq. and 41 U.S.C. Sub-Section 15 et seq.) or has otherwise complied with other
applicable statutes or ordinances or (ii) the government of Canada, unless the applicable Borrower
complies with the requirements of the Financial Administration Act (Canada) as to the grant of
security or assignments with respect to such Receivable;




          (k) the goods giving rise to such Receivable have not been delivered to and accepted by the
Customer or the services giving rise to such Receivable have not been performed by the applicable
Borrower and accepted by the Customer or the Receivable otherwise does not represent a final sale;




          (l) the Receivables of the Customer exceed a credit limit determined by Agent, in its sole
discretion, to the extent such Receivable exceeds such limit;




Amended & Restated Credit Agreement


 









 








          (m) the Receivable is subject to any offset, deduction, defense, dispute, or counterclaim, or
represents a progress billing or is otherwise contingent upon the applicable Borrower’s completion
of any further performance, the Customer is also a creditor or supplier of a Borrower or the
Receivable is contingent in any respect or for any reason;




          (n) the applicable Borrower has made any agreement with any Customer for any deduction
therefrom, except for discounts or allowances made in the Ordinary Course of Business for prompt
payment, all of which discounts or allowances are reflected in the calculation of the face value of
each respective invoice related thereto;




          (o) any return, rejection or repossession of the merchandise has occurred or the rendition of
services has been disputed;




          (p) such Receivable is not payable to a Borrower; or




          (q) such Receivable is not otherwise satisfactory to Agent as determined in good faith by
Agent in the exercise of its discretion in a reasonable manner.




     “Eligible Foreign Receivables” shall mean and include with respect to each Borrower,
each Receivable received from a Person headquartered in or formed under the laws of a country other
than the United States, arising in the Ordinary Course of Business and which Agent, in its sole
credit judgment, shall deem to be an Eligible Foreign Receivable, based on such considerations as
Agent may from time to time deem appropriate. A Receivable shall not be deemed an Eligible Foreign
Receivable unless such Receivable is subject to Agent’s first priority perfected security interest
and no other Lien (other than Permitted Encumbrances), and is evidenced by an invoice or other
documentary evidence satisfactory to Agent. In addition, no Receivable shall be an Eligible
Foreign Receivable if any of the items listed in parts (a) through (q) of the definition of
“Eligible Domestic Receivable” shall apply to such Receivable.



     “Eligible Receivables” shall mean, collectively, all Eligible Foreign Receivables and
Eligible Domestic Receivables.



     “Environmental Complaint” shall have the meaning set forth in Section 4.18(d) hereof.



     “Environmental Laws” shall mean all federal, state, provincial, foreign and local
environmental, land use, zoning, health, chemical use, safety and sanitation laws, statutes,
ordinances and codes relating to the protection of the environment and/or governing the use,
storage, treatment, generation, transportation, processing, handling, production or disposal of
Hazardous Substances and the rules, regulations, policies, guidelines, interpretations, decisions,
orders and directives of federal, state and local governmental agencies and authorities with
respect thereto.



     “Equipment” shall mean and include as to each Borrower all of such Borrower’s goods
(other than Inventory) whether now owned or hereafter acquired and wherever located including
all equipment, machinery, apparatus, motor vehicles, fittings, furniture, furnishings,
fixtures, parts, accessories and all replacements and substitutions therefor or accessions thereto.



Amended & Restated Credit Agreement


 









 





     “Equity Interests” of any Person shall mean any and all shares, rights to purchase,
options, warrants, general, limited or limited liability partnership interests, member interests,
participation or other equivalents of or interest in (regardless of how designated) equity of such
Person, whether voting or nonvoting, including common stock, preferred stock, convertible
securities or any other “equity security” (as such term is defined in Rule 3a11-1 of the General
Rules and Regulations promulgated by the SEC under the Exchange Act).



     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended
from time to time and the rules and regulations promulgated thereunder.



     “Eurodollar Rate” shall mean for any Eurodollar Rate Loan for the then current
Interest Period relating thereto the interest rate per annum determined by Agent by dividing (the
resulting quotient rounded upwards, if necessary, to the nearest 1/100th of 1% per annum) (i) the
rate of interest determined by Agent in accordance with its usual procedures (which determination
shall be conclusive absent manifest error) to be the average of the London interbank offered rates
for U.S. Dollars quoted by the British Bankers’ Association as set forth on Moneyline Telerate (or
appropriate successor or, if British Banker’s Association or its successor ceases to provide such
quotes, a comparable replacement determined by Agent) display page 3750 (or such other display page
on the Moneyline Telerate system as may replace display page 3750) two (2) Business Days prior to
the first day of such Interest Period for an amount comparable to such Eurodollar Rate Loan and
having a borrowing date and a maturity comparable to such Interest Period by (ii) a number equal to
1.00 minus the Reserve Percentage. The Eurodollar Rate may also be expressed by the following
formula:



Average of London interbank offered rates quoted by BBA as shown on

Eurodollar Rate =Moneyline Telerate Service display page 3750 or appropriate successor

1.00 — Reserve Percentage.]




     The Eurodollar Rate shall be adjusted with respect to any Eurodollar Rate Loan that is
outstanding on the effective date of any change in the Reserve Percentage as of such effective
date. The Agent shall give prompt notice to the Borrowing Agent of the Eurodollar Rate as
determined or adjusted in accordance herewith, which determination shall be conclusive absent
manifest error.



     “Eurodollar Rate Loan” shall mean an Advance at any time that bears interest based on
the Eurodollar Rate.



     “Event of Default” shall have the meaning set forth in Article X hereof.



     “Exchange Act” shall have the mean the Securities Exchange Act of 1934, as amended.



     “Executive Order No. 13224” shall mean the Executive Order No. 13224 on Terrorist
Financing, effective September 24, 2001, as the same has been, or shall hereafter be, renewed,
extended, amended or replaced.



     “Exploration” shall mean Geokinetics Exploration Inc., formerly known as Trace Energy
Services Ltd., an entity organized under the laws of Canada.



Amended & Restated Credit Agreement


 









 





     “Federal Funds Effective Rate” for any day shall mean the rate per annum (based on a
year of 360 days and actual days elapsed and rounded upward to the nearest 1/100 of 1%) announced
by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted
average of the rates on overnight federal funds transactions arranged by federal funds brokers on
the previous trading day, as computed and announced by such Federal Reserve Bank (or any successor)
in substantially the same manner as such Federal Reserve Bank computes and announces the weighted
average it refers to as the “Federal Funds Effective Rate” as of the date of this Agreement;
provided, if such Federal Reserve Bank (or its successor) does not announce such rate on any day,
the “Federal Funds Effective Rate” for such day shall be the Federal Funds Effective Rate for the
last day on which such rate was announced.



     “Federal Funds Open Rate” shall mean the rate per annum determined by the Agent in
accordance with its usual procedures (which determination shall be conclusive absent manifest
error) to be the “open” rate for federal funds transactions as of the opening of business for
federal funds transactions among members of the Federal Reserve System arranged by federal funds
brokers on such day, as quoted by Garvin Guybutler Corporation, any successor entity thereto, or
any other broker selected by the Agent, as set forth on the applicable Telerate display page;
provided, however; that if such day is not a Business Day, the Federal Funds Open Rate for such day
shall be the “open” rate on the immediately preceding Business Day, or if no such rate shall be
quoted by a Federal funds broker at such time, such other rate as determined by the Agent in
accordance with its usual procedures.



     “Fixed Charge Coverage Ratio” shall mean and include, with respect to any fiscal
period, the ratio of (a) EBITDA minus the sum of (i) all unfinanced Capital Expenditures made
during such period, (ii) all cash taxes paid during such period and (iii) cash dividends paid in
connection with the Preferred Equity to (b) the sum of all Senior Debt Payments (excluding
repayments of the Investor Notes if such repayments are made from the proceeds of the issuance of
equity as permitted by this Agreement) during such period. For the purposes of this definition,
“unfinanced Capital Expenditures” shall exclude: (1) Capital Expenditures made prior to December
31, 2007, using the $20,000,000 of excess cash reflected on Borrowers’ balance sheet as of the
Restated Closing Date, (2) Capital Expenditures made prior to December 31, 2007, using up to
$6,700,000 of the proceeds from the Investor Notes and (3) Capital Expenditures made using proceeds
of the issuance of Equity Interests on terms and conditions satisfactory to Agent.



     “Foreign Advance Rate” shall have the meaning set forth in Section 2.1(a)(y)(ii)
hereof.



     “Foreign Subsidiary” of any Person, shall mean any Subsidiary of such Person that is
not organized or incorporated in the United States or any State or territory thereof.



     “Formula Amount” shall have the meaning set forth in Section 2.1(a).



     “Funded Debt” shall mean, with respect to any Person, without duplication, all
Indebtedness for borrowed money evidenced by notes, bonds, debentures, or similar evidences of
Indebtedness that by its terms matures more than one year from, or is directly or indirectly
renewable or extendible at such Person’s option under a revolving credit or similar agreement
obligating the lender or lenders to extend credit over a period of more than one year from the



Amended & Restated Credit Agreement


 









 




date
of creation thereof, and specifically including Capitalized Lease Obligations, current maturities
of long-term debt, revolving credit and short-term debt extendible beyond one year at the option of
the debtor, and also including, in the case of Borrower, the Obligations and, without duplication,
Indebtedness consisting of guaranties of Funded Debt of other Persons.




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



     “GDC” shall mean Geophysical Development Corporation, a Texas corporation.



     “GDC UK” shall mean GDC, UK, Ltd., an entity formed under the laws of the United
Kingdom.



     “General Intangibles” shall mean and include as to each Borrower all of such
Borrower’s general intangibles, whether now owned or hereafter acquired, including all payment
intangibles, all choses in action, causes of action, corporate or other business records,
inventions, designs, patents, patent applications, equipment formulations, manufacturing
procedures, quality control procedures, trademarks, trademark applications, service marks, trade
secrets, goodwill, copyrights, design rights, software, computer information, source codes, codes,
records and updates, registrations, licenses, franchises, customer lists, tax refunds, tax refund
claims, computer programs, all claims under guaranties, security interests or other security held
by or granted to such Borrower to secure payment of any of the Receivables by a Customer (other
than to the extent covered by Receivables) all rights of indemnification and all other intangible
property of every kind and nature (other than Receivables).



     “Geokinetics” shall mean Geokinetics Inc., a Delaware corporation.



     “Geokinetics Holdings” shall mean Geokinetics Holdings, Inc., a Delaware corporation,
a wholly owned subsidiary of Geokinetics.



     “Governmental Acts” shall have the meaning set forth in Section 2.17.



     “Governmental Body” shall mean any nation or government, any state or other political
subdivision thereof or any entity, authority, agency, division or department exercising the
legislative, judicial, regulatory or administrative functions of or pertaining to a government,
including, without limitation, the SEC.



     “Grant Acquisition” shall mean the acquisition of all of the outstanding capital stock
of Grant Geophysical, Inc., a Delaware corporation, and its subsidiaries pursuant to the Grant
Acquisition Agreement.



     “Grant Acquisition Agreement” shall mean that certain Stock Purchase Agreement
including all exhibits and schedules thereto dated as of September 8, 2006 by and among Geokinetics
Holdings, as buyer, and Elliot Associates, L.P., a Delaware limited partnership and Elliot
International, L.P., a Cayman Islands limited partnership, as sellers.



     “Grant Corp.” shall mean Grant Geophysical Corp., a Texas corporation.



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     “Grant Entities” shall mean individually and collectively, Grant Geophysical, Grant
Geophysical International, Grant Corp. and Advanced Seismic.



     “Grant Geophysical” shall mean Grant Geophysical, Inc., a Delaware corporation.



     “Grant Geophysical International” shall mean Grant Geophysical (Int’l), Inc., a Texas
corporation.



     “Guarantor” shall mean any Person who may hereafter guarantee payment or performance
of the whole or any part of the Obligations and “Guarantors” means collectively all such Persons.



     “Guarantor Security Agreement” shall mean any security agreement executed by any
Guarantor in favor of Agent securing the Guaranty of such Guarantor.



     “Guaranty” shall mean any guaranty of the obligations of Borrowers executed by a
Guarantor in favor of Agent for its benefit and for the ratable benefit of Lenders.



     “Hazardous Discharge” shall have the meaning set forth in Section 4.18(d) hereof.



     “Hazardous Substance” shall mean, without limitation, any flammable explosives, radon,
radioactive materials, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls,
petroleum and petroleum products, methane, hazardous materials, Hazardous Wastes, hazardous or
Toxic Substances or related materials as defined in CERCLA, the Hazardous Materials Transportation
Act, as amended (49 U.S.C. Sections 1801, et seq.), RCRA, Articles 15 and 27 of the New York State
Environmental Conservation Law or any other applicable Environmental Law and in the regulations
adopted pursuant thereto.



     “Hazardous Wastes” shall mean all waste materials subject to regulation under CERCLA,
RCRA or applicable state law, and any other applicable provincial, Federal and state laws now in
force or hereafter enacted relating to hazardous waste disposal.



     “Hedge Liabilities” shall have the meaning provided in the definition of
“Lender-Provided Interest Rate Hedge”.



     “Indebtedness” of a Person at a particular date shall mean all obligations of such
Person which in accordance with GAAP would be classified upon a balance sheet as liabilities
(except capital stock and surplus earned or otherwise) and in any event, without limitation by
reason of enumeration, shall include all indebtedness, debt and other similar monetary obligations
of such Person whether direct or guaranteed, and all premiums, if any, due at the required
prepayment dates of such indebtedness, and all indebtedness secured by a Lien on assets owned by
such Person, whether or not such indebtedness actually shall have been created, assumed or incurred
by such Person. Any indebtedness of such Person resulting from the acquisition by such Person of
any assets subject to any Lien shall be deemed, for the purposes hereof, to be the equivalent of
the creation, assumption and incurring of the indebtedness secured thereby, whether or not actually
so created, assumed or incurred.



Amended & Restated Credit Agreement


 









 





     “Indenture” shall mean an Indenture by and among Geokinetics, GDC, Quantum, Trace
Energy (U.S.), Geokinetics Holdings, Grant Geophysical, Grant Corp., Advanced Seismic and Indenture
Trustee, which shall be in form and substance satisfactory to Agent in Agent’s sole discretion.



     “Indenture Trustee” shall mean Wells Fargo Bank, N.A.



     “Ineligible Security” shall mean any security which may not be underwritten or dealt
in by member banks of the Federal Reserve System under Section 16 of the Banking Act of 1933 (12
U.S.C. Section 24, Seventh), as amended.



     “Initial Adjustment Date” shall mean the later of (i) March 1, 2007 or (ii) the first
day of the month following the date of delivery of the financial statements for the quarter ending
December 31, 2006, pursuant to Section 9.8 hereof.



     “Intellectual Property” shall mean property constituting under any Applicable Law a
patent, patent application, copyright, trademark, service mark, trade name, mask work, trade secret
or license or other right to use any of the foregoing.



     “Intellectual Property Claim” shall mean the assertion by any Person of a claim
(whether asserted in writing, by action, suit or proceeding or otherwise) that any Borrower’s
ownership, use, marketing, sale or distribution of any Inventory, Equipment, Intellectual Property
or other property or asset is violative of any ownership of or right to use any Intellectual
Property of such Person.



     “Intellectual Property Security Agreement” shall mean that certain Intellectual
Property Security Agreement, dated as of the Original Closing Date, executed by Borrowers in favor
of Agent, together with all amendments, restatements or other modifications thereof.



     “Interest Period” shall mean the period provided for any Eurodollar Rate Loan pursuant
to Section 2.2(b).



     “Interest Rate Hedge” shall mean an interest rate exchange, collar, cap, swap,
adjustable strike cap, adjustable strike corridor or similar agreements entered into by any
Borrower or its Subsidiaries in order to provide protection to, or minimize the impact upon, such
Borrower, any Guarantor and/or their respective Subsidiaries of increasing floating rates of
interest applicable to Indebtedness.



     “Inventory” shall mean and include as to each Borrower all of such Borrower’s now
owned or hereafter acquired goods, merchandise and other personal property, wherever located, to be
furnished under any consignment arrangement, contract of service or held for sale or lease, all raw
materials, work in process, finished goods and materials and supplies of any kind, nature or
description which are or might be used or consumed in such Borrower’s business or used in selling
or furnishing such goods, merchandise and other personal property, and all documents of title or
other documents representing them. For the purposes of this Agreement, “Inventory” shall include
seismic data collected for sale to Customers.



Amended & Restated Credit Agreement


 









 





     “Investment Property” shall mean and include as to each Borrower, all of such
Borrower’s now owned or hereafter acquired securities (whether certificated or uncertificated),
securities entitlements, securities accounts, commodities contracts and commodities accounts.



     “Investor Notes” shall mean those notes, in an aggregate principal amount not to
exceed $110,000,000, issued under the Indenture.



     “Issuer” shall mean any Person who issues a Letter of Credit and/or accepts a draft
pursuant to the terms hereof.



     “Leasehold Interests” shall mean all of each Borrower’s right, title and interest in
and to the premises located at the addresses listed on Schedule 4.19.



     “Lender” and “Lenders” shall have the meaning ascribed to such term in the
preamble to this Agreement and shall include each Person which becomes a transferee, successor or
assign of any Lender.



     “Lender-Provided Interest Rate Hedge” shall mean an Interest Rate Hedge which is
provided by any Lender and with respect to which the Agent confirms meets the following
requirements: such Interest Rate Hedge (i) is documented in a standard International Swap Dealer
Association Agreement, (ii) provides for the method of calculating the reimbursable amount of the
provider’s credit exposure in a reasonable and customary manner, and (iii) is entered into for
hedging (rather than speculative) purposes. The liabilities of any Borrower to the provider of any
Lender-Provided Interest Rate Hedge (the “Hedge Liabilities”) shall be “Obligations” hereunder,
guaranteed obligations under any Guaranty and secured obligations under any Guarantor Security
Agreement and otherwise treated as Obligations for purposes of each of the Other Documents. The
Liens securing the Hedge Liabilities shall be pari passu with the Liens securing all other
Obligations under this Agreement and the Other Documents.



     “Letter of Credit Fees” shall have the meaning set forth in Section 3.2.



     “Letter of Credit Borrowing” shall have the meaning set forth in Section 2.12(d).



     “Letter of Credit Sublimit” shall mean $5,000,000.00.



     “Letters of Credit” shall have the meaning set forth in Section 2.9.



     “Leverage Ratio” means, at any date of determination, the ratio of (a) Debt for
Borrowed Money as of the last day of such Test Period to (b) Consolidated EBITDA for such Test
Period, in each case as determined for the Parent and its Subsidiaries on a consolidated basis.



     “License Agreement” shall mean any agreement between any Borrower and a Licensor
pursuant to which such Borrower is authorized to use any Intellectual Property in connection with
the manufacturing, marketing, sale or other distribution of any Inventory of such Borrower or
otherwise in connection with such Borrower’s business operations.



     “Licensor” shall mean any Person from whom any Borrower obtains the right to use
(whether on an exclusive or non-exclusive basis) any Intellectual Property in connection with



Amended & Restated Credit Agreement


 









 




such Borrower’s manufacture, marketing, sale or other distribution of any Inventory or
otherwise in connection with such Borrower’s business operations.




     “Licensor/Agent Agreement” shall mean an agreement between Agent and a Licensor, in
form and content satisfactory to Agent, by which Agent is given the unqualified right, vis-à-vis
such Licensor, to enforce Agent’s Liens with respect to and to dispose of any Borrower’s Inventory
with the benefit of any Intellectual Property applicable thereto, irrespective of such Borrower’s
default under any License Agreement with such Licensor.



     “Lien” shall mean any mortgage, deed of trust, pledge, hypothecation, assignment,
security interest, lien (whether statutory or otherwise), Charge, claim or encumbrance, or
preference, priority or other security agreement or preferential arrangement held or asserted in
respect of any asset of any kind or nature whatsoever including any conditional sale or other title
retention agreement, any lease having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction.



     “Lien Waiver Agreement” shall mean an agreement which is executed in favor of Agent by
a Person who owns or occupies premises at which any Collateral may be located from time to time and
by which such Person shall waive any Lien that such Person may ever have with respect to any of the
Collateral and shall authorize Agent from time to time to enter upon the premises to inspect or
remove the Collateral from such premises or to use such premises to store or dispose of such
Inventory.



     “Material Adverse Effect” shall mean a material adverse effect on (a) the condition
(financial or otherwise), results of operations, assets, business, properties or prospects of any
Borrower or any Guarantor, (b) any Borrower’s ability to duly and punctually pay or perform the
Obligations in accordance with the terms thereof, (c) the value of the Collateral, or Agent’s Liens
on the Collateral or the priority of any such Lien or (d) the practical realization of the benefits
of Agent’s and each Lender’s rights and remedies under this Agreement and the Other Documents.



     “Maximum Face Amount” shall mean, with respect to any outstanding Letter of Credit,
the face amount of such Letter of Credit including all automatic increases provided for in such
Letter of Credit, whether or not any such automatic increase has become effective.



     “Maximum CapEx Loan Amount” shall mean $6,500,000.00 less repayments of the CapEx
Loans.



     “Maximum Loan Amount” shall mean the Maximum Revolving Advance Amount plus the Maximum
CapEx Loan Amount.



     “Maximum Rate” shall have the meaning set forth in Section 3.6.



     “Maximum Revolving Advance Amount” shall mean $14,500,000.00.



     “Maximum Undrawn Amount” shall mean with respect to any outstanding Letter of Credit,
the amount of such Letter of Credit that is or may become available to be drawn,



Amended & Restated Credit Agreement


 









 







including all automatic increases provided for in such Letter of Credit, whether or not any
such automatic increase has become effective.



     “Mitcham Lease” shall mean that certain Lease Agreement dated June 30,2005 entered
into by Borrowers with Mitcham Industries. Inc.



     “Modified Commitment Transfer Supplement” shall have the meaning set forth in Section
16.3(e).



     “Multiemployer Plan” shall mean a “multiemployer plan” as defined in Sections 3(37)
and 4001(a)(3) of ERISA.



     “Multiple Employer Plan” shall mean a Plan which has two or more contributing sponsors
(including any Borrower or any member of the Controlled Group) at least two of whom are not under
common control, as such a plan is described in Section 4064 of ERISA.



     “Negative Pledge” shall mean that certain Negative Pledge, dated as of the Original
Closing Date, executed by Borrowers in favor of Agent.



     “Net Worth” shall mean, at a particular date, (a) the aggregate amount of all assets
of Geokinetics and its consolidated Subsidiaries as may be properly classified as such in
accordance with GAAP consistently applied, less (b) the aggregate amount of all liabilities of
Geokinetics and its consolidated Subsidiaries.



     “Note” shall mean, collectively, the CapEx Note and the Revolving Credit Note.



     “Note Documents” shall mean any and all documents relating to the Investor Notes,
including security documents.



     “Note Indebtedness Limitation” shall mean at any particular date the maximum amount of
Obligations (i) which may at such time be outstanding pursuant to this Agreement that constitute
“Permitted Debt” (as such term is defined in the Indenture), (ii) which may be secured by the Liens
granted to Agent for the benefit of Lenders pursuant to this Agreement and the Other Documents,
with all of such Liens constituting “Permitted Collateral Liens” (as such term is defined in the
Indenture), and (iii) which will not cause or result in a violation of the Indenture, will not
result in or require the creation or imposition of any Lien upon any Collateral to secure the
Investor Notes that is not subordinate and junior to the Liens granted to Agent for the benefit of
Lenders pursuant to this Agreement and the Other Documents or cause or result in any holders of the
Investor Notes (or any trustee or agent for the benefit thereof) having the right to demand
repayment, repurchase, retirement or redemption thereof or any similar right with respect thereto,
as determined by Agent in its sole discretion.



     “Obligations” shall mean and include any and all loans, advances, debts, liabilities,
obligations, covenants and duties owing by any Borrower to Lenders or Agent or to any other direct
or indirect subsidiary or affiliate of Agent or any Lender of any kind or nature, present or future
(including any interest or other amounts accruing thereon after maturity, or after the filing of
any petition in bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding relating to any Borrower, whether or not a claim for post-filing or post-petition



Amended & Restated Credit Agreement


 









 




interest or other amounts is allowed in such proceeding), whether or not evidenced by any
note, guaranty or other instrument, whether arising under any agreement, instrument or document,
(including this Agreement and the Other Documents) whether or not for the payment of money, whether
arising by reason of an extension of credit, opening of a letter of credit, loan, equipment lease
or guarantee, under any interest or currency swap, future, option or other similar agreement, or in
any other manner, whether arising out of overdrafts or deposit or other accounts or electronic
funds transfers (whether through automated clearing houses or otherwise) or out of the Agent’s or
any Lenders non-receipt of or inability to collect funds or otherwise not being made whole in
connection with depository transfer check or other similar arrangements, whether direct or indirect
(including those acquired by assignment or participation), absolute or contingent, joint or
several, due or to become due, now existing or hereafter arising, contractual or tortious,
liquidated or unliquidated, regardless of how such indebtedness or liabilities arise or by what
agreement or instrument they may be evidenced or whether evidenced by any agreement or instrument,
including, but not limited to, any and all of any Borrower’s Indebtedness and/or liabilities under
this Agreement, the Other Documents or under any other agreement between Agent or Lenders and any
Borrower and any amendments, extensions, renewals or increases and all costs and expenses of Agent
and any Lender incurred in the documentation, negotiation, modification, enforcement, collection or
otherwise in connection with any of the foregoing, including but not limited to reasonable
attorneys’ fees and expenses and all obligations of any Borrower to Agent or Lenders to perform
acts or refrain from taking any action.




     “Original Agreement” shall mean that certain Revolving Credit, Term Loan and Security
Agreement, dated June 12, 2006, by and among Geokinetics, GDC, Quantum, Trace Energy Services Ltd.,
Trace Energy (U.S.), the Lenders and Agent, as the same may be amended, restated or otherwise
modified from time to time.



     “Original Closing Date” shall mean June 12, 2006 or such other date as may be agreed
to by the parties hereto.



     “Ordinary Course of Business” shall mean with respect to any Borrower, the ordinary
course of such Borrower’s business as conducted on the Restated Closing Date.



     “Original Owner” shall mean: (a) Maple Leaf Partners, L.P., GeoLease Partners, L.P. or
its assigns, Maple Leaf Offshore, Ltd., Blackhawk Investors, II, LLC, Steven A. Webster, William
R. Ziegler, Maple Leaf Partners I, L.P., Avista Capital Partners, L.P., Avista Capital Partners
(Offshore), L.P., and Levant America, S.A., with respect to Geokinetics, (b) Geokinetics, with
respect to each of GDC, Quantum and Trace Energy Services Ltd., (c) GDC, with respect to GDC UK,
and (d) Trace Energy Services Ltd., with respect to Trace Energy (U.S.).



     “Other Documents” shall mean the Note, the Negative Pledge, the Questionnaire, the
Pledge Agreement, the Collateral Assignment of Acquisition Agreement, the Senior Subordination
Agreement, any Guaranty, any Guarantor Security Agreement, the Intellectual Property Security
Agreement, any Lender-Provided Interest Rate Hedge and any and all other agreements, instruments
and documents, including guaranties, pledges, powers of attorney, consents, interest or currency
swap agreements or other similar agreements and all other writings



Amended & Restated Credit Agreement


 









 




heretofore, now or hereafter executed by any Borrower or any Guarantor and/or delivered to
Agent or any Lender in respect of the transactions contemplated by this Agreement.




     “Out-of-Formula Loans” shall have the meaning set forth in Section 15.2(b).



     “Parent” of any Person shall mean a corporation or other entity owning, directly or
indirectly at least 50% of the shares of stock or other ownership interests having ordinary voting
power to elect a majority of the directors of the Person, or other Persons performing similar
functions for any such Person.



     “Participant” shall mean each Person who shall be granted the right by any Lender to
participate in any of the Advances and who shall have entered into a participation agreement in
form and substance satisfactory to such Lender.



     “Participation Advance” shall have the meaning set forth in Section 2.12(d).



     “Participation Commitment” shall mean each Lender’s obligation to buy a participation
of the Letters of Credit issued hereunder.



     “Payment Office” shall mean initially Two Tower Center Boulevard, East Brunswick, New
Jersey 08816; thereafter, such other office of Agent, if any, which it may designate by notice to
Borrowing Agent and to each Lender to be the Payment Office.



     “PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA or any successor.



     “Pension Benefit Plan” shall mean at any time (i) any employee pension benefit plan
(including a Multiple Employer Plan, but not a Multiemployer Plan) which is covered by Title IV of
ERISA or is subject to the minimum funding standards under Section 412 of the Code and either (A)
is maintained by any member of the Controlled Group for employees of any member of the Controlled
Group; or (B) has at any time within the preceding five years been maintained by any entity which
was at such time a member of the Controlled Group for employees of any entity which was at such
time a member of the Controlled Group and/or (ii) (A) a “pension plan” or “plan” which is subject
to the funding requirements of the Income Tax Act Canada, The Pensions Benefits Act (Quebec), or
applicable pension benefits legislation in any other Canadian jurisdiction and is applicable to
employees resident in Canada of a Person, and (B) any other foreign pension benefit plan or similar
arrangement applicable to employees of a Person.



     “Permanent Reserves” shall mean, an amount equal to the aggregate amounts owing by any
Borrower to any of its sub-contractors or trade creditors which remain unpaid more than ninety (90)
days from the date of invoice.



     “Permitted Capital Lease Facility” shall mean the $6,000,000 Texas Equipment Lease
with Quantum as lessee and CIT as lessor to be entered into after the Original Closing Date for the
lease of certain seismic equipment and which is guaranteed by Geokinetics, Trace Energy Services
Ltd. and GDC, which shall be in form and substance satisfactory to Agent in its sole discretion.



Amended & Restated Credit Agreement


 









 





     “Permitted Encumbrances” shall mean (a) Liens in favor of Agent for the benefit of
Agent and Lenders; (b) Liens for taxes, assessments or other governmental charges not delinquent or
being contested in good faith and by appropriate proceedings and with respect to which proper
reserves have been taken by Borrowers; provided, that, the Lien shall have no effect on the
priority of the Liens in favor of Agent or the value of the assets in which Agent has such a Lien
and a stay of enforcement of any such Lien shall be in effect; (c) Liens disclosed in the financial
statements referred to in Section 5.5, the existence of which Agent has consented to in writing;
(d) deposits or pledges to secure obligations under worker’s compensation, social security or
similar laws, or under unemployment insurance; (e) deposits or pledges to secure bids, tenders,
contracts (other than contracts for the payment of money), leases, statutory obligations, surety
and appeal bonds and other obligations of like nature arising in the Ordinary Course of Business;
(f) Liens arising by virtue of the rendition, entry or issuance against any Borrower or any
Subsidiary, or any property of any Borrower or any Subsidiary, of any judgment, writ, order, or
decree for so long as each such Lien (1) is in existence for less than 20 consecutive days after it
first arises or is being Properly Contested and (2) is at all times junior in priority to any Liens
in favor of Agent; (g) mechanics’, workers’, materialmen’s or other like Liens arising in the
Ordinary Course of Business with respect to obligations which are not due or which are being
contested in good faith by the applicable Borrower; (h) Liens placed upon fixed assets hereafter
acquired to secure a portion of the purchase price thereof, provided that (x) any such lien shall
not encumber any other property of any Borrower and (y) the aggregate amount of Indebtedness
secured by such Liens incurred as a result of such purchases during any fiscal year shall not
exceed the amount provided for in Section 7.6; (j) Liens in favor of CIT to the extent such Liens
are permitted by and remain subject to the terms of the CIT Intercreditor Agreement; (k) Liens on
assets in favor of Indenture Trustee to secure the Investor Notes so long as the Investor Notes are
subject to the RBC Intercreditor Agreement and only to the extent Agent has a valid first priority
Lien with respect to such assets; and (l) Liens disclosed on Schedule 1.2.



     “Permitted Indebtedness” shall have the meaning set forth in Section 7.8 hereof.



     “Person” shall mean any individual, sole proprietorship, partnership, corporation,
business trust, joint stock company, trust, unincorporated organization, association, limited
liability company, limited liability partnership, institution, public benefit corporation, joint
venture, entity or Governmental Body (whether federal, state, county, city, municipal or otherwise,
including any instrumentality, division, agency, body or department thereof).



     “Plan” shall mean any employee benefit plan within the meaning of Section 3(3) of
ERISA (including a Pension Benefit Plan), maintained for employees of any Borrower or any member of
the Controlled Group or any such Plan to which any Borrower or any member of the Controlled Group
is required to contribute on behalf of any of its employees.



     “Pledge Agreement” shall mean, individually and collectively, each Pledge Agreement
executed by a Borrower in favor of Agent.



     “PNC” shall have the meaning set forth in the preamble to this Agreement and shall
extend to all of its successors and assigns.



Amended & Restated Credit Agreement


 









 





     “Preferred Equity” shall mean that preferred stock issued in connection with the
conversion of the Subordinated Debt.



     “Pro Forma Balance Sheet” shall have the meaning set forth in Section 5.5(a) hereof.



     “Pro Forma Financial Statements” shall have the meaning set forth in Section 5.5(b)
hereof.



     “Projections” shall have the meaning set forth in Section 5.5(b) hereof.



     “Properly Contested” shall mean, in the case of any Indebtedness of any Person
(including any taxes) that is not paid as and when due or payable by reason of such Person’s bona
fide dispute concerning its liability to pay same or concerning the amount thereof, (i) such
Indebtedness is being properly contested in good faith by appropriate proceedings promptly
instituted and diligently conducted; (ii) such Person has established appropriate reserves as shall
be required in conformity with GAAP; (iii) the non-payment of such Indebtedness will not have a
Material Adverse Effect and will not result in the forfeiture of any assets of such Person; (iv) no
Lien is imposed upon any of such Person’s assets with respect to such Indebtedness unless such Lien
is at all times junior and subordinate in priority to the Liens in favor of the Agent (except only
with respect to property taxes that have priority as a matter of applicable state law) and
enforcement of such Lien is stayed during the period prior to the final resolution or disposition
of such dispute; (v) if such Indebtedness results from, or is determined by the entry, rendition or
issuance against a Person or any of its assets of a judgment, writ, order or decree, enforcement of
such judgment, writ, order or decree is stayed pending a timely appeal or other judicial review;
and (vi) if such contest is abandoned, settled or determined adversely (in whole or in part) to
such Person, such Person forthwith pays such Indebtedness and all penalties, interest and other
amounts due in connection therewith.



     “Purchasing CLO” shall have the meaning set forth in Section 16.3(d) hereof.



     “Purchasing Lender” shall have the meaning set forth in Section 16.3(c) hereof.



     “Quantum” shall mean Quantum Geophysical, Inc., a Texas corporation.



     “Questionnaire” shall mean the Documentation Information Questionnaire and the
responses thereto provided by Borrowing Agent and delivered to Agent.



     “RBC Intercreditor Agreement” shall mean an Intercreditor Agreement among Agent,
Geokinetics, GDC, Quantum, Trace Energy (U.S.), Geokinetics Holdings, Grant Geophysical, Grant
Geophysical International, Grant Corp., Advanced Seismic and Indenture Trustee which shall be in
form and substance satisfactory to Agent in its sole discretion.



     “RCRA” shall mean the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et
seq., as same may be amended from time to time.



     “Real Property” shall mean all of each Borrower’s right, title and interest in and to
the owned and leased premises identified on Schedule 4.19 hereto.



Amended & Restated Credit Agreement


 









 





     “Receivables” shall mean and include, as to each Borrower, all of such Borrower’s
accounts, contract rights, instruments (including those evidencing indebtedness owed to such
Borrower by its Affiliates), documents, chattel paper (including electronic chattel paper), general
intangibles relating to accounts, drafts and acceptances, credit card receivables and all other
forms of obligations owing to such Borrower arising out of or in connection with the sale or lease
of Inventory or the rendition of services, all supporting obligations, guarantees and other
security therefor, whether secured or unsecured, now existing or hereafter created, and whether or
not specifically sold or assigned to Agent hereunder.



     “Register” shall have the meaning set forth in Section 16.3(e).



     “Reimbursement Obligation” shall have the meaning set forth in Section 2.12(b) hereof.



     “Release” shall have the meaning set forth in Section 5.7(c)(i) hereof.



     “Reportable Event” shall mean a reportable event described in Section 4043(c) of ERISA
or the regulations promulgated thereunder.



     “Required Lenders” shall mean Lenders holding at least sixty-six and two-thirds
percent (66 2/3%) of the Advances and, if no Advances are outstanding, shall mean Lenders holding
sixty-six and two-thirds percent (66 2/3%) of the Commitment Percentages.



     “Reserve Percentage” shall mean as of any day the maximum percentage in effect on such
day as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for
determining the reserve requirements (including supplemental, marginal and emergency reserve
requirements) with respect to eurocurrency funding (currently referred to as “Eurocurrency
Liabilities”.



     “Restated Closing Date” shall mean December 15, 2006, or such other date as may be
agreed to by the parties hereto.



     “Restricted Subsidiary” means a Subsidiary which, as of the Restated Closing Date, has
either (x) no material assets, (y) no material operations or (z) no employees.



     “Revolving Advances” shall mean Advances made other than Letters of Credit, the Term
Loan and the CapEx Loans.



     “Revolving Commitment” means, with respect to each Lender, the commitment, if any, of
such Lender to make Revolving Advances and to acquire participations in Letters of Credit
hereunder, expressed as an amount representing the maximum possible aggregate amount of such
Lender’s revolving exposure hereunder, as such commitment may be (a) reduced from time to time
pursuant to this Agreement and (b) reduced or increased from time to time pursuant to assignments
by or to such Lender pursuant to this Agreement.



     “Revolving Credit Note” shall mean the promissory note referred to in Section 2.1(a)
hereof, as it may be increased, amended, extended or replaced from time to time.



Amended & Restated Credit Agreement


 









 





     “Revolving Interest Rate” shall mean, with respect to Revolving Advances, an interest
rate per annum equal to (a) the lesser of (i) the sum of the Alternate Base Rate plus the
Applicable Revolving Domestic Rate Margin and (ii) the Maximum Rate, with respect to Domestic Rate
Loans, and (b) the lesser of (i) the sum of the Eurodollar Rate plus the Applicable Revolving
Eurodollar Rate Margin and (ii) the Maximum Rate, with respect to the Eurodollar Rate Loans.



     “SEC” shall mean the Securities and Exchange Commission or any successor thereto.



     “Section 20 Subsidiary” shall mean the Subsidiary of the bank holding company
controlling PNC, which Subsidiary has been granted authority by the Federal Reserve Board to
underwrite and deal in certain Ineligible Securities.



     “Securities Act” shall mean the Securities Act of 1933, as amended.



     “Senior Bridge Debt” shall mean the loans in the original principal amount of
$100,000,000 made by Royal Bank of Canada, as agent, and certain other lenders to Geokinetics
Holdings pursuant to that certain Credit Agreement dated as of September 8, 2006.



     “Senior Debt Payments” shall mean and include all cash actually expended by any
Borrower to make (a) interest payments on any Advances hereunder, plus (b) scheduled principal
payments on the CapEx Loans, plus (c) payments for all fees, commissions and charges set forth
herein and with respect to any Advances, plus (d) capitalized lease payments, plus (e) payments
with respect to any other Indebtedness for borrowed money.



     “Settlement Date” shall mean the Restated Closing Date and thereafter Wednesday or
Thursday of each week or more frequently if Agent deems appropriate unless such day is not a
Business Day in which case it shall be the next succeeding Business Day.



     “Subordinated Debt” shall mean the loans in the original principal amount of
$55,000,000 made by lenders party thereto to Geokinetics pursuant to that certain Senior
Subordinated Loan Agreement dated as of September 8, 2006.



     “Subsidiary” of any Person shall mean a corporation or other entity of whose Equity
Interests having ordinary voting power (other than Equity Interests having such power only by
reason of the happening of a contingency) to elect a majority of the directors of such corporation,
or other Persons performing similar functions for such entity, are owned, directly or indirectly,
by such Person.



     “Subsidiary Stock” shall mean all of the issued and outstanding Equity Interests of
any Subsidiary owned by any Borrower (not to exceed 66% of the Equity Interests of any Foreign
Subsidiary).



     “Synthetic Lease Obligations” shall mean all monetary obligations of a person under
(a) a so-called synthetic, off-balance sheet or tax retention lease or (b) an agreement for the use
or possession of any property (whether real, personal or mixed) creating obligations which do not
appear on the balance sheet of such person, but which, upon the insolvency or bankruptcy of



Amended & Restated Credit Agreement


 









 




such person, would be characterized as Indebtedness of such person (without regard to
accounting treatment).




     “Term” shall have the meaning set forth in Section 13.1 hereof.



     “Termination Event” shall mean (i) a Reportable Event with respect to any Plan or
Multiemployer Plan; (ii) the withdrawal of any Borrower or any member of the Controlled Group from
a Plan or Multiemployer Plan during a plan year in which such entity was a “substantial employer”
as defined in Section 4001(a)(2) of ERISA; (iii) the providing of notice of intent to terminate a
Plan in a distress termination described in Section 4041(c) of ERISA; (iv) the institution by the
PBGC of proceedings to terminate a Plan or Multiemployer Plan; (v) any event or condition (a) which
might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of
a trustee to administer, any Plan or Multiemployer Plan, or (b) that may result in termination of a
Multiemployer Plan pursuant to Section 4041A of ERISA; or (vi) the partial or complete withdrawal
within the meaning of Sections 4203 and 4205 of ERISA, of any Borrower or any member of the
Controlled Group from a Multiemployer Plan.



     “Test Period” shall mean, at any time, the four consecutive fiscal quarters of
Geokinetics most recently ended (in each case taken as one accounting period) for which financial
statements have been or are required to be delivered pursuant to Section 9.7 or Section
9.8.



     “Toxic Substance” shall mean and include any material present on the Real Property or
the Leasehold Interests which has been shown to have significant adverse effect on human health or
which is subject to regulation under the Toxic Substances Control Act (TSCA), 15 U.S.C. §§ 2601 et
seq., applicable state law, applicable provincial laws, or any other applicable Federal, provincial
or state laws now in force or hereafter enacted relating to toxic substances. “Toxic Substance”
includes but is not limited to asbestos, polychlorinated biphenyls (PCBs) and lead-based paints.



     “Trace Energy (U.S.)” shall mean Trace Energy Services, Inc., a Texas corporation.



     “Trading with the Enemy Act” shall mean the foreign assets control regulations of the
United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any enabling
legislation or executive order relating thereto.



     “Transactions” shall have the meaning set forth in Section 5.5 hereof.



     “Transferee” shall have the meaning set forth in Section 16.3(d) hereof.



     “Undrawn Availability” at a particular date shall mean an amount equal to (a) the
lesser of (i) the Formula Amount plus the Cash Balance or (ii) the Maximum Revolving Advance Amount
minus (b) the sum of (i) the outstanding amount of Advances (other than the CapEx Loans) plus (ii)
all amounts due and owing to any Borrower’s trade creditors which are 60 days or more past due,
plus (iii) fees and expenses for which Borrowers are liable but which have not been paid or charged
to Borrowers’ Account.



     “Uniform Commercial Code” shall have the meaning set forth in Section 1.3 hereof.



Amended & Restated Credit Agreement


 









 





     “USA PATRIOT Act” shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, as
the same has been, or shall hereafter be, renewed, extended, amended or replaced.



     “Week” shall mean the time period commencing with the opening of business on a
Wednesday and ending on the end of business the following Tuesday.



     “Working Capital” means the result of current assets (as determined in accordance with
GAAP), minus current liabilities (as determined in accordance with GAAP), minus cash and cash
equivalents.



     1.3. Uniform Commercial Code Terms. All terms used herein and defined in the Uniform
Commercial Code as adopted in the State of Texas from time to time or the Personal Property
Security Act of the applicable province with respect to Exploration (the “Uniform Commercial Code”)
shall have the meaning given therein unless otherwise defined herein. Without limiting the
foregoing, the terms “accounts”, “chattel paper”, “instruments”, “general intangibles”, “payment
intangibles”, “supporting obligations”, “securities”, “investment property”, “documents”, “deposit
accounts”, “software”, “letter of credit rights”, “inventory”, “equipment” and “fixtures”, as and
when used in the description of Collateral shall have the meanings given to such terms in Articles
8 or 9 of the Uniform Commercial Code. To the extent the definition of any category or type of
collateral is expanded by any amendment, modification or revision to the Uniform Commercial Code,
such expanded definition will apply automatically as of the date of such amendment, modification or
revision.



     1.4. Certain Matters of Construction. The terms “herein”, “hereof” and “hereunder”
and other words of similar import refer to this Agreement as a whole and not to any particular
section, paragraph or subdivision. 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. Any pronoun used shall be deemed to cover all genders. Wherever appropriate in
the context, terms used herein in the singular also include the plural and vice versa. All
references to statutes and related regulations shall include any amendments of same and any
successor statutes and regulations. Unless otherwise provided, all references to any instruments
or agreements to which Agent is a party, including references to any of the Other Documents, shall
include any and all modifications or amendments thereto and any and all extensions or renewals
thereof. All references herein to the time of day shall mean the time in Dallas, Texas. Whenever
the words “including” or “include” shall be used, such words shall be understood to mean
“including, without limitation” or “include, without limitation”. A Default or Event of Default
shall be deemed to exist at all times during the period commencing on the date that such Default or
Event of Default occurs to the date on which such Default or Event of Default is waived in writing
pursuant to this Agreement or, in the case of a Default, is cured within any period of cure
expressly provided for in this Agreement; and an Event of Default shall “continue” or be
“continuing” until such Event of Default has been waived in writing by the Required Lenders. Any
Lien referred to in this Agreement or any of the Other Documents as having been created in
favor of Agent, any agreement entered into by Agent pursuant to this Agreement or any of the
Other Documents, any payment made by or to or funds received by Agent pursuant to or as
contemplated by this Agreement or any of the Other Documents, or any act taken or omitted to be
taken by Agent, shall, unless otherwise expressly provided, be created,



Amended & Restated Credit Agreement


 









 




entered into, made or
received, or taken or omitted, for the benefit or account of Agent and Lenders. Wherever the phrase
“to the best of Borrowers’ knowledge” or words of similar import relating to the knowledge or the
awareness of any Borrower are used in this Agreement or Other Documents, such phrase shall mean and
refer to (i) the actual knowledge of a senior officer of any Borrower or (ii) the knowledge that a
senior officer would have obtained if he had engaged in good faith and diligent performance of his
duties, including the making of such reasonably specific inquiries as may be necessary of the
employees or agents of such Borrower and a good faith attempt to ascertain the existence or
accuracy of the matter to which such phrase relates. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or otherwise within the
limitations of, another covenant shall not avoid the occurrence of a default if such action is
taken or condition exists. In addition, all representations and warranties hereunder shall be
given independent effect so that if a particular representation or warranty proves to be incorrect
or is breached, the fact that another representation or warranty concerning the same or similar
subject matter is correct or is not breached will not affect the incorrectness of a breach of a
representation or warranty hereunder.




II ADVANCES, PAYMENTS.




     2.1. Revolving Advances.



          (a) Amount of Revolving Advances. Subject to the terms and conditions set forth in
this Agreement including Sections 2.1(b), each Lender, severally and not jointly, will make
Revolving Advances to Borrowers in aggregate amounts outstanding at any time equal to such Lender’s
Commitment Percentage of the lesser of (x) the Maximum Revolving Advance Amount less the aggregate
Maximum Undrawn Amount of all outstanding Letters of Credit, or (y) the Note Indebtedness
Limitation, or (z) an amount equal to the sum of:




     (i) up to 85%, subject to the provisions of Section 2.1(b) hereof, of Eligible Domestic
Receivables (the “Domestic Advance Rate”), plus



     (ii) up to the lesser of (A) 85%, subject to the provisions of Section 2.1(b) hereof, of
Eligible Foreign Receivables or (B) $10,000,000 (the “Foreign Advance Rate” and together with the
Domestic Advance Rate, the “Advance Rate”), minus



     (iii) the aggregate Maximum Undrawn Amount of all outstanding Letters of Credit, minus



     (iv) such reserves as Agent may reasonably deem proper and necessary from time to time,
including, but not limited to, the Permanent Reserves.



     The amount derived from the sum of (x) Sections 2.1(a)(z)(i) and (ii) minus (y) Section
2.1(a)(z)(iv) at any time and from time to time shall be referred to as the “Formula Amount”. The
Revolving Advances shall be evidenced by one or more secured promissory notes (collectively, the
“Revolving Credit Note”) substantially in the form attached hereto as Exhibit 2.1(a).



 









 





          (b) Discretionary Rights. The Advance Rates may be increased or decreased by Agent at
any time and from time to time in the exercise of its reasonable discretion. Each Borrower
consents to any such increases or decreases and acknowledges that decreasing the Advance Rates or
increasing or imposing reserves may limit or restrict Advances requested by Borrowing Agent. The
rights of Agent under this subsection are subject to the provisions of Section 16.2(b).




     2.2. Procedure for Revolving Advances Borrowing.



          (a) Borrowing Agent on behalf of any Borrower may notify Agent prior to 10:00 a.m. (Dallas,
Texas time) on a Business Day of a Borrower’s request to incur, on that day, a Revolving Advance
hereunder. Subject to the satisfaction of the conditions set forth in Section 8.3 hereof, in the
event any Borrower desires a CapEx Loan, Borrowing Agent shall give Agent at least three (3)
Business Days’ prior written notice. Should any amount required to be paid as interest hereunder,
or as fees or other charges under this Agreement or any other agreement with Agent or Lenders, or
with respect to any other Obligation, become due, same shall be deemed a request for a Revolving
Advance as of the date such payment is due, in the amount required to pay in full such interest,
fee, charge or Obligation under this Agreement or any other agreement with Agent or Lenders, and
such request shall be irrevocable.




          (b) Notwithstanding the provisions of subsection (a) above, in the event any Borrower desires
to obtain a Eurodollar Rate Loan, Borrowing Agent shall give Agent written notice by no later than
10:00 a.m. (Dallas, Texas time) on the day which is three (3) Business Days prior to the date such
Eurodollar Rate Loan is to be borrowed, specifying (i) the date of the proposed borrowing (which
shall be a Business Day), (ii) the type of borrowing and the amount on the date of such Advance to
be borrowed, which amount shall be for at least $500,000 and if greater, in an integral multiple of
$100,000 and (iii) the duration of the first Interest Period therefor. Interest Periods for
Eurodollar Rate Loans shall be for one, two, three or six months; provided, if an Interest Period
would end on a day that is not a Business Day, it shall end on the next succeeding Business Day
unless such day falls in the next succeeding calendar month in which case the Interest Period shall
end on the next preceding Business Day. No Eurodollar Rate Loan shall be made available to any
Borrower during the continuance of a Default or an Event of Default. After giving effect to each
requested Eurodollar Rate Loan, including those which are converted from a Domestic Rate Loan under
Section 2.2(d), there shall not be outstanding more than five (5) Eurodollar Rate Loans, in the
aggregate.




          (c) Each Interest Period of a Eurodollar Rate Loan shall commence on the date such Eurodollar
Rate Loan is made and shall end on such date as Borrowing Agent may elect as set forth in
subsection (b)(iii) above provided that the exact length of each Interest Period
shall be determined in accordance with the practice of the interbank market for offshore
Dollar deposits and no Interest Period shall end after the last day of the Term.




     Borrowing Agent shall elect the initial Interest Period applicable to a Eurodollar Rate Loan
by its notice of borrowing given to Agent pursuant to Section 2.2(b) or by its notice of conversion
given to Agent pursuant to Section 2.2(d), as the case may be. Borrowing Agent shall elect the
duration of each succeeding Interest Period by giving irrevocable written notice to Agent of such
duration not later than 10:00 a.m. (Dallas, Texas time) on the day which is three



Amended & Restated Credit Agreement


 









 




(3) Business Days
prior to the last day of the then current Interest Period applicable to such Eurodollar Rate Loan.
If Agent does not receive timely notice of the Interest Period elected by Borrowing Agent,
Borrowing Agent shall be deemed to have elected to convert to a Domestic Rate Loan subject to
Section 2.2(d) hereinbelow.




          (d) Provided that no Event of Default shall have occurred and be continuing, Borrowing Agent
may, on the last Business Day of the then current Interest Period applicable to any outstanding
Eurodollar Rate Loan, or on any Business Day with respect to Domestic Rate Loans, convert any such
loan into a loan of another type in the same aggregate principal amount provided that any
conversion of a Eurodollar Rate Loan shall be made only on the last Business Day of the then
current Interest Period applicable to such Eurodollar Rate Loan. If Borrowing Agent desires to
convert a loan, Borrowing Agent shall give Agent written notice by no later than 10:00 a.m.
(Dallas, Texas time) (i) on the day which is three (3) Business Days’ prior to the date on which
such conversion is to occur with respect to a conversion from a Domestic Rate Loan to a Eurodollar
Rate Loan, or (ii) on the day which is one (1) Business Day prior to the date on which such
conversion is to occur with respect to a conversion from a Eurodollar Rate Loan to a Domestic Rate
Loan, specifying, in each case, the date of such conversion, the loans to be converted and if the
conversion is from a Domestic Rate Loan to any other type of loan, the duration of the first
Interest Period therefor.




          (e) At its option and upon written notice given prior to 10:00 a.m. (Dallas, Texas time) at
least three (3) Business Days’ prior to the date of such prepayment, any Borrower may prepay the
Eurodollar Rate Loans in whole at any time or in part from time to time, with accrued interest on
the principal being prepaid to the date of such repayment. Such Borrower shall specify the date of
prepayment of Advances which are Eurodollar Rate Loans and the amount of such prepayment. In the
event that any prepayment of a Eurodollar Rate Loan is required or permitted on a date other than
the last Business Day of the then current Interest Period with respect thereto, such Borrower shall
indemnify Agent and Lenders therefor in accordance with Section 2.2(f) hereof.




          (f) Each Borrower shall indemnify Agent and Lenders and hold Agent and Lenders harmless from
and against any and all losses or expenses that Agent and Lenders may sustain or incur as a
consequence of any prepayment, conversion of or any default by any Borrower in the payment of the
principal of or interest on any Eurodollar Rate Loan or failure by any Borrower to complete a
borrowing of, a prepayment of or conversion of or to a Eurodollar Rate Loan after notice thereof
has been given, including, but not limited to, any interest payable by Agent or Lenders to lenders
of funds obtained by it in order to make or maintain its Eurodollar Rate Loans hereunder. A
certificate as to any additional amounts payable pursuant to
the foregoing sentence submitted by Agent or any Lender to Borrowing Agent shall be conclusive
absent manifest error.




          (g) Notwithstanding any other provision hereof, if any Applicable Law, treaty, regulation or
directive, or any change therein or in the interpretation or application thereof, shall make it
unlawful for any Lender (for purposes of this subsection (g), the term “Lender” shall include any
Lender and the office or branch where any Lender or any corporation or bank controlling such Lender
makes or maintains any Eurodollar Rate Loans) to make or maintain its Eurodollar Rate Loans, the
obligation of Lenders to make Eurodollar Rate Loans hereunder shall




Amended & Restated Credit Agreement


 









 







forthwith be cancelled and
Borrowers shall, if any affected Eurodollar Rate Loans are then outstanding, promptly upon request
from Agent, either pay all such affected Eurodollar Rate Loans or convert such affected Eurodollar
Rate Loans into loans of another type. If any such payment or conversion of any Eurodollar Rate
Loan is made on a day that is not the last day of the Interest Period applicable to such Eurodollar
Rate Loan, Borrowers shall pay Agent, upon Agent’s request, such amount or amounts as may be
necessary to compensate Lenders for any loss or expense sustained or incurred by Lenders in respect
of such Eurodollar Rate Loan as a result of such payment or conversion, including (but not limited
to) any interest or other amounts payable by Lenders to lenders of funds obtained by Lenders in
order to make or maintain such Eurodollar Rate Loan. A certificate as to any additional amounts
payable pursuant to the foregoing sentence submitted by Lenders to Borrowing Agent shall be
conclusive absent manifest error.




     2.3. Disbursement of Advance Proceeds.



     All Advances shall be disbursed from whichever office or other place Agent may designate from
time to time and, together with any and all other Obligations of Borrowers to Agent or Lenders,
shall be charged to Borrowers’ Account on Agent’s books. During the Term, Borrowers may use the
Revolving Advances by borrowing, prepaying and reborrowing, all in accordance with the terms and
conditions hereof. The proceeds of each Revolving Advance requested by Borrowing Agent on behalf
of any Borrower or deemed to have been requested by any Borrower under Section 2.2 hereof shall,
with respect to requested Revolving Advances to the extent Lenders make such Revolving Advances, be
made available to the applicable Borrower on the day so requested by way of credit to such
Borrower’s operating account at PNC, or such other bank located in the United States as Borrowing
Agent may designate following notification to Agent, in immediately available federal funds or
other immediately available funds or, with respect to Revolving Advances deemed to have been
requested by any Borrower, be disbursed to Agent to be applied to the outstanding Obligations
giving rise to such deemed request.



     2.4. Loans.



          (a) CapEx Loans.




     (i) Subject to the terms and conditions of this Agreement, each
Lender, severally and not jointly, shall, from time to time, make available Advances to one or
more Borrowers (each, a “CapEx Loan” and collectively, the “CapEx Loans”) to finance each
applicable Borrower’s purchase of Equipment for use in each such Borrower’s business. All such
CapEx Loans shall be in such amounts as are requested by Borrowing Agent, but in no event shall any
CapEx Loan exceed ninety (90%) percent of the net invoice cost (excluding taxes, shipping,
delivery, handling, installation, overhead and other so called “soft” costs) of the Equipment then
to be purchased by Borrowers and the total amount of all CapEx Loans outstanding hereunder shall
not exceed, in the aggregate, the sum of Six Million Five Hundred Thousand Dollars ($6,500,000.00).
Once repaid CapEx Loans may not be reborrowed.



     (ii) Advances constituting CapEx Loans shall be accumulated during each six month period (each
a “Borrowing Period”) during the Term. Notwithstanding the



Amended & Restated Credit Agreement


 









 




foregoing, the first Borrowing Period
shall commence on the Restated Closing Date and end on December 31, 2007 (the “Initial Borrowing
Period”). Each subsequent Borrowing Period shall consist of six month periods commencing on
January 1, 2008. For the twelve-month period commencing on the Restated Closing Date and ending on
December 31, 2007, only interest will be due and payable on the CapEx Loans. Thereafter, at the
end of each Borrowing Period, the sum of all CapEx Loans made during the Borrowing Period shall
amortize on the basis of a forty-eight (48) month schedule (such amount as determined with respect
to any Borrowing Period, the “Amortization Amount”). Monthly principal payments will be initially
determined for the CapEx Loans made during the Initial Borrowing Period and the amount of such
monthly principal payments shall be increased upon the completion of each such subsequent Borrowing
Period by the Amortization Amount for each such subsequent Borrowing Period. The CapEx Loans shall
be, with respect to principal, payable in equal monthly installments based upon the amortization
schedule set forth above, commencing on January 1, 2008 and on the first day of each month
thereafter with the balance payable upon the expiration of the Term, subject to acceleration upon
the occurrence of an Event of Default under this Agreement or termination of this Agreement. CapEx
Loans shall be evidenced by one or more secured promissory notes (collectively, the “CapEx Note”)
in substantially the form attached hereto as Exhibit 2.4(a).




     (iii) Voluntary prepayments of the CapEx Loans shall be applied in the inverse order of
scheduled payments and may not be reborrowed.



     2.5. Maximum Advances. The aggregate balance of Revolving Advances outstanding at any
time shall not exceed the lesser of (a) the Maximum Revolving Advance Amount or (b) the Formula
Amount, less, in each case, the aggregate Maximum Undrawn Amount of all issued and outstanding
Letters of Credit.



     2.6. Repayment of Advances.



          (a) The Advances shall be due and payable in full on the last day of the Term subject to
earlier prepayment as herein provided. The CapEx Loans shall be due and payable as
provided in Section 2.4(a) hereof and in the CapEx Note, subject to mandatory prepayments as
herein provided.




          (b) Each Borrower recognizes that the amounts evidenced by checks, notes, drafts or any other
items of payment relating to and/or proceeds of Collateral may not be collectible by Agent on the
date received. In consideration of Agent’s agreement to conditionally credit Borrowers’ Account as
of the Business Day on which Agent receives those items of payment, each Borrower agrees that, in
computing the charges under this Agreement, all items of payment shall be deemed applied by Agent
on account of the Obligations one (1) Business Day after (i) the Business Day Agent receives such
payments via wire transfer or electronic depository check or (ii) in the case of payments received
by Agent in any other form, the Business Day such payment constitutes good funds in Agent’s
account. Agent is not, however, required to credit Borrowers’ Account for the amount of any item
of payment which is unsatisfactory to Agent and Agent may charge Borrowers’ Account for the amount
of any item of payment which is returned to Agent unpaid.




Amended & Restated Credit Agreement


 









 








          (c) All payments of principal, interest and other amounts payable hereunder, or under any of
the Other Documents shall be made to Agent at the Payment Office not later than 1:00 p.m. (Dallas,
Texas time) on the due date therefor in lawful money of the United States of America in federal
funds or other funds immediately available to Agent. Agent shall have the right to effectuate
payment on any and all Obligations due and owing hereunder by charging Borrowers’ Account or by
making Advances as provided in Section 2.2 hereof.




          (d) Borrowers shall pay principal, interest, and all other amounts payable hereunder, or under
any related agreement, without any deduction whatsoever, including, but not limited to, any
deduction for any setoff or counterclaim.




     2.7. Repayment of Excess Advances. The aggregate balance of Advances outstanding at
any time in excess of the maximum amount of Advances permitted hereunder shall be immediately due
and payable without the necessity of any demand, at the Payment Office, whether or not a Default or
Event of Default has occurred.



     2.8. Statement of Account. Agent shall maintain, in accordance with its customary
procedures, a loan account (“Borrowers’ Account”) in the name of Borrowers in which shall be
recorded the date and amount of each Advance made by Agent and the date and amount of each payment
in respect thereof; provided, however, the failure by Agent to record the date and amount of any
Advance shall not adversely affect Agent or any Lender. Each month, Agent shall send to Borrowing
Agent a statement showing the accounting for the Advances made, payments made or credited in
respect thereof, and other transactions between Agent and Borrowers during such month. The monthly
statements shall be deemed correct and binding upon Borrowers in the absence of manifest error and
shall constitute an account stated between Lenders and Borrowers unless Agent receives a written
statement of Borrowers’ specific exceptions thereto within thirty (30) days after such statement is
received by Borrowing Agent. The records of Agent with respect to
the loan account shall be conclusive evidence absent manifest error of the amounts of Advances
and other charges thereto and of payments applicable thereto.



     2.9. Letters of Credit. Subject to the terms and conditions hereof, Agent shall issue
or cause the issuance of standby Letters of Credit (“Letters of Credit”) for the account of any
Borrower; provided, however, that Agent will not be required to issue or cause to be issued any
Letters of Credit to the extent that the issuance thereof would then cause the sum of (i) the
outstanding Revolving Advances plus (ii) the Maximum Undrawn Amount of all outstanding Letters of
Credit to exceed the lesser of (x) the Maximum Revolving Advance Amount or (y) the Formula Amount.
The Maximum Undrawn Amount of outstanding Letters of Credit shall not exceed in the aggregate at
any time the Letter of Credit Sublimit. All disbursements or payments related to Letters of Credit
shall be deemed to be Revolving Advances and shall bear interest at the Revolving Interest Rate;
Letters of Credit that have not been drawn upon shall not bear interest.



     2.10. Issuance of Letters of Credit.



          (a) Borrowing Agent, on behalf of Borrowers, may request Agent to issue or cause the issuance
of a Letter of Credit by delivering to Agent at the Payment Office, prior to





Amended & Restated Credit Agreement


 









 




10:00 a.m. (Dallas,
Texas time), at least five (5) Business Days’ prior to the proposed date of issuance, Agent’s form
of Letter of Credit Application (the “Letter of Credit Application”) completed to the satisfaction
of Agent; and, such other certificates, documents and other papers and information as Agent may
reasonably request. Borrowing Agent, on behalf of Borrowers, also has the right to give
instructions and make agreements with respect to any application, any applicable letter of credit
and security agreement, any applicable letter of credit reimbursement agreement and/or any other
applicable agreement, any letter of credit and the disposition of documents, disposition of any
unutilized funds, and to agree with Agent upon any amendment, extension or renewal of any Letter of
Credit.




          (b) Each Letter of Credit shall, among other things, (i) provide for the payment of sight
drafts, other written demands for payment, or acceptances of usance drafts when presented for honor
thereunder in accordance with the terms thereof and when accompanied by the documents described
therein and (ii) have an expiry date not later than twelve (12) months after such Letter of
Credit’s date of issuance and in no event later than the last day of the Term. Each standby Letter
of Credit shall be subject either to the Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500, and any amendments or revision
thereof adhered to by the Issuer (“UCP 500”) or the International Standby Practices
(ISP98-International Chamber of Commerce Publication Number 590) (the “ISP98 Rules”), as determined
by Agent, and each trade Letter of Credit shall be subject to UCP 500.




          (c) Agent shall use its reasonable efforts to notify Lenders of the request by Borrowing Agent
for a Letter of Credit hereunder.




     2.11. Requirements For Issuance of Letters of Credit.



          (a) Borrowing Agent shall authorize and direct any Issuer to name the applicable Borrower as
the “Applicant” or “Account Party” of each Letter of Credit. If Agent is not the Issuer of any
Letter of Credit, Borrowing Agent shall authorize and direct the Issuer to deliver to Agent all
instruments, documents, and other writings and property received by the Issuer pursuant to the
Letter of Credit and to accept and rely upon Agent’s instructions and agreements with respect to
all matters arising in connection with the Letter of Credit, the application therefor or any
acceptance therefor.




          (b) In connection with all Letters of Credit issued or caused to be issued by Agent under this
Agreement, each Borrower hereby appoints Agent, or its designee, as its attorney, with full power
and authority if an Event of Default shall have occurred, (i) to sign and/or endorse such
Borrower’s name upon any warehouse or other receipts, letter of credit applications and
acceptances, (ii) to sign such Borrower’s name on bills of lading; (iii) to clear Inventory through
the United States of America Customs Department (“Customs”) in the name of such Borrower or Agent
or Agent’s designee, and to sign and deliver to Customs officials powers of attorney in the name of
Borrower for such purpose; and (iv) to complete in such Borrower’s name or Agent’s, or in the name
of Agent’s designee, any order, sale or transaction, obtain the necessary documents in connection
therewith, and collect the proceeds thereof. Neither Agent nor its attorneys will be liable for
any acts or omissions nor for any error of judgment or mistakes of fact or law, except for Agent’s
or its attorney’s willful misconduct. This




Amended & Restated Credit Agreement






 









 







power, being coupled with an interest, is irrevocable
as long as any Letters of Credit remain outstanding.




     2.12. Disbursements, Reimbursement.



          (a) Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to,
and hereby irrevocably and unconditionally agrees to, purchase from Agent a participation in such
Letter of Credit and each drawing thereunder in an amount equal to such Lender’s Commitment
Percentage of the Maximum Face Amount of such Letter of Credit and the amount of such drawing,
respectively.




          (b) In the event of any request for a drawing under a Letter of Credit by the beneficiary or
transferee thereof, Agent will promptly notify Borrowing Agent. Provided that Borrowing Agent
shall have received such notice, the Borrowers shall reimburse (such obligation to reimburse Agent
shall sometimes be referred to as a “Reimbursement Obligation”) Agent prior to 12:00 p.m., Dallas,
Texas time on each date that an amount is paid by Agent under any Letter of Credit (each such date,
a “Drawing Date”) in an amount equal to the amount so paid by Agent. In the event Borrowers fail
to reimburse Agent for the full amount of any drawing under any Letter of Credit by 12:00 p.m.,
Dallas, Texas time, on the Drawing Date, Agent will promptly notify each Lender thereof, and
Borrowers shall be deemed to have
requested that a Domestic Rate Loan be made by the Lenders to be disbursed on the Drawing Date
under such Letter of Credit, subject to the amount of the unutilized portion of the lesser of
Maximum Revolving Advance Amount or the Formula Amount and subject to Section 8.2 hereof. Any
notice given by Agent pursuant to this Section 2.12(b) may be oral if immediately confirmed in
writing; provided that the lack of such an immediate confirmation shall not affect the
conclusiveness or binding effect of such notice.




          (c) Each Lender shall upon any notice pursuant to Section 2.12(b) make available to Agent an
amount in immediately available funds equal to its Commitment Percentage of the amount of the
drawing, whereupon the participating Lenders shall (subject to Section 2.12(d)) each be deemed to
have made a Domestic Rate Loan to Borrowers in that amount. If any Lender so notified fails to
make available to Agent the amount of such Lender’s Commitment Percentage of such amount by no
later than 2:00 p.m., Dallas, Texas time on the Drawing Date, then interest shall accrue on such
Lender’s obligation to make such payment, from the Drawing Date to the date on which such Lender
makes such payment (i) at a rate per annum equal to the Federal Funds Rate during the first three
days following the Drawing Date and (ii) at a rate per annum equal to the rate applicable to
Domestic Rate Loans on and after the fourth day following the Drawing Date. Agent will promptly
give notice of the occurrence of the Drawing Date, but failure of Agent to give any such notice on
the Drawing Date or in sufficient time to enable any Lender to effect such payment on such date
shall not relieve such Lender from its obligation under this Section 2.12(c), provided that such
Lender shall not be obligated to pay interest as provided in Section 2.12(c) (i) and (ii) until and
commencing from the date of receipt of notice from Agent of a drawing.




          (d) With respect to any unreimbursed drawing that is not converted into a Domestic Rate Loan
to Borrowers in whole or in part as contemplated by Section 2.12(b), because of Borrowers’ failure
to satisfy the conditions set forth in Section 8.2 (other than any


Amended & Restated Credit Agreement




 









 







notice requirements) or for any
other reason, Borrowers shall be deemed to have incurred from Agent a borrowing (each a “Letter of
Credit Borrowing”) in the amount of such drawing. Such Letter of Credit Borrowing shall be due and
payable on demand (together with interest) and shall bear interest at the rate per annum applicable
to a Domestic Rate Loan. Each Lender’s payment to Agent pursuant to Section 2.12(c) shall be
deemed to be a payment in respect of its participation in such Letter of Credit Borrowing and shall
constitute a “Participation Advance” from such Lender in satisfaction of its Participation
Commitment under this Section 2.12.




          (e) Each Lender’s Participation Commitment shall continue until the last to occur of any of
the following events: (x) Agent ceases to be obligated to issue or cause to be issued Letters of
Credit hereunder; (y) no Letter of Credit issued or created hereunder remains outstanding and
uncancelled and (z) all Persons (other than the Borrowers) have been fully reimbursed for all
payments made under or relating to Letters of Credit.




     2.13. Repayment of Participation Advances.



          (a) Upon (and only upon) receipt by Agent for its account of immediately available funds from
Borrowers (i) in reimbursement of any payment made by the Agent under
the Letter of Credit with respect to which any Lender has made a Participation Advance to
Agent, or (ii) in payment of interest on such a payment made by Agent under such a Letter of
Credit, Agent will pay to each Lender, in the same funds as those received by Agent, the amount of
such Lender’s Commitment Percentage of such funds, except Agent shall retain the amount of the
Commitment Percentage of such funds of any Lender that did not make a Participation Advance in
respect of such payment by Agent.




          (b) If Agent is required at any time to return to any Borrower, or to a trustee, receiver,
liquidator, custodian, or any official in any insolvency proceeding, any portion of the payments
made by Borrowers to Agent pursuant to Section 2.13(a) in reimbursement of a payment made under the
Letter of Credit or interest or fee thereon, each Lender shall, on demand of Agent, forthwith
return to Agent the amount of its Commitment Percentage of any amounts so returned by Agent plus
interest at the Federal Funds Effective Rate.




     2.14. Documentation. Each Borrower agrees to be bound by the terms of the Letter of
Credit Application and by Agent’s interpretations of any Letter of Credit issued on behalf of such
Borrower and by Agent’s written regulations and customary practices relating to letters of credit,
though Agent’s interpretations may be different from such Borrower’s own. In the event of a
conflict between the Letter of Credit Application and this Agreement, this Agreement shall govern
and control. It is understood and agreed that, except in the case of gross negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final non-appealable judgment),
Agent shall not be liable for any error, negligence and/or mistakes, whether of omission or
commission (INCLUDING WITHOUT LIMITATION, WITH RESPECT TO ANY ACT OR INACTION ARISING FROM AGENT’S
NEGLIGENCE OR STRICT LIABILITY), in following the Borrowing Agent’s or any Borrower’s instructions
or those contained in the Letters of Credit or any modifications, amendments or supplements
thereto.



     2.15. Determination to Honor Drawing Request. In determining whether to honor any
request for drawing under any Letter of Credit by the beneficiary thereof, Agent shall be




Amended & Restated Credit Agreement



 









 







responsible only to determine that the documents and certificates required to be delivered under
such Letter of Credit have been delivered and that they comply on their face with the requirements
of such Letter of Credit and that any other drawing condition appearing on the face of such Letter
of Credit has been satisfied in the manner so set forth.



     2.16. Nature of Participation and Reimbursement Obligations. Each Lender’s obligation
in accordance with this Agreement to make the Revolving Advances or Participation Advances as a
result of a drawing under a Letter of Credit, and the obligations of Borrowers to reimburse Agent
upon a draw under a Letter of Credit, shall be absolute, unconditional and irrevocable, and shall
be performed strictly in accordance with the terms of this Section 2.16 under all circumstances,
including the following circumstances:



               (i) any set-off, counterclaim, recoupment, defense or other right which such Lender may have
against Agent, any Borrower or any other Person for any reason whatsoever;



               (ii) the failure of any Borrower or any other Person to comply, in connection with a Letter of
Credit Borrowing, with the conditions set forth in this Agreement for the making of a Revolving
Advance, it being acknowledged that such conditions are not required for the making of a Letter of
Credit Borrowing and the obligation of the Lenders to make Participation Advances under Section
2.12;



               (iii) any lack of validity or enforceability of any Letter of Credit;



               (iv) any claim of breach of warranty that might be made by Borrower or any Lender against the
beneficiary of a Letter of Credit, or the existence of any claim, set-off, recoupment,
counterclaim, crossclaim, defense or other right which any Borrower or any Lender may have at any
time against a beneficiary, any successor beneficiary or any transferee of any Letter of Credit or
the proceeds thereof (or any Persons for whom any such transferee may be acting), Agent or any
Lender or any other Person, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any underlying transaction between any
Borrower or any Subsidiaries of such Borrower and the beneficiary for which any Letter of Credit
was procured);



               (v) the lack of power or authority of any signer of (or any defect in or forgery of any
signature or endorsement on) or the form of or lack of validity, sufficiency, accuracy,
enforceability or genuineness of any draft, demand, instrument, certificate or other document
presented under or in connection with any Letter of Credit, or any fraud or alleged fraud in
connection with any Letter of Credit, or the transport of any property or provisions of services
relating to a Letter of Credit, in each case even if Agent or any of Agent’s Affiliates has been
notified thereof;



               (vi) payment by Agent under any Letter of Credit against presentation of a demand, draft or
certificate or other document which does not comply with the terms of such Letter of Credit;



               (vii) the solvency of, or any acts or omissions by, any beneficiary of any Letter of Credit,
or any other Person having a role in any transaction or obligation relating to a



Amended & Restated Credit Agreement




 









 




Letter of Credit,
or the existence, nature, quality, quantity, condition, value or other characteristic of any
property or services relating to a Letter of Credit;




               (viii) any failure by the Agent or any of Agent’s Affiliates to issue any Letter of Credit in
the form requested by Borrowing Agent, unless the Agent has received written notice from Borrowing
Agent of such failure within three (3) Business Days after the Agent shall have furnished Borrowing
Agent a copy of such Letter of Credit and such error is material and no drawing has been made
thereon prior to receipt of such notice;



               (ix) any Material Adverse Effect on any Borrower or any Guarantor;



               (x) any breach of this Agreement or any Other Document by any party thereto;



               (xi) the occurrence or continuance of an insolvency proceeding with respect to any Borrower or
any Guarantor;



               (xii) the fact that a Default or Event of Default shall have occurred and be continuing;



               (xiii) the fact that the Term shall have expired or this Agreement or the Obligations
hereunder shall have been terminated; and



               (xiv) any other circumstance or happening whatsoever, whether or not similar to any of the
foregoing.



     2.17. Indemnity. In addition to amounts payable as provided in Section 16.5, each
Borrower hereby agrees to protect, indemnify, defend, pay and save harmless Agent and any of
Agent’s Affiliates that have issued a Letter of Credit from and against any and all claims,
demands, liabilities, damages, taxes, penalties, interest, judgments, settlements, losses, costs,
charges and expenses (including reasonable fees, expenses and disbursements of counsel and
allocated costs of internal counsel) which the Agent or any of Agent’s Affiliates may incur or be
subject to as a consequence, direct or indirect, of the issuance of any Letter of Credit, other
than as a result of (A) the gross negligence or willful misconduct of the Agent as determined by a
final and non-appealable judgment of a court of competent jurisdiction or (B) the wrongful dishonor
by the Agent or any of Agent’s Affiliates of a proper demand for payment made under any Letter of
Credit (INCLUDING, WITHOUT LIMITATION, WITH RESPECT TO ANY OTHERWISE INDEMNIFIED MATTER ARISING
FROM AGENT’S NEGLIGENCE OR STRICT LIABILITY), except if such dishonor resulted from any act or
omission, whether rightful or wrongful, of any present or future de jure or de facto Governmental
Body (all such acts or omissions herein called “Governmental Acts”).



     2.18. Liability for Acts and Omissions. As between Borrowers and Agent and Lenders,
each Borrower assumes all risks of the acts and omissions of, or misuse of the Letters of Credit
by, the respective beneficiaries of such Letters of Credit (INCLUDING, WITHOUT LIMITATION, ALL
RISKS ATTRIBUTABLE TO ANY ACT OR OMISSION ARISING FROM AGENT’S OR LENDER’S NEGLIGENCE OR STRICT
LIABILITY). In furtherance and not in limitation of the respective foregoing, Agent shall not be
responsible for:



Amended & Restated Credit Agreement




 









 







(i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for an issuance of any such
Letter of Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged (even if Agent shall have been notified thereof);
(ii) the validity or sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii)
the failure of the beneficiary of any such Letter of Credit, or any other party
to which such Letter of Credit may be transferred, to comply fully with any conditions
required in order to draw upon such Letter of Credit or any other claim of any Borrower against any
beneficiary of such Letter of Credit, or any such transferee, or any dispute between or among any
Borrower and any beneficiary of any Letter of Credit or any such transferee; (iv) errors,
omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in interpretation of
technical terms; (vi) any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from causes beyond the control of Agent,
including any governmental acts, and none of the above shall affect or impair, or prevent the
vesting of, any of Agent’s rights or powers hereunder. Nothing in the preceding sentence shall
relieve Agent from liability for Agent’s gross negligence or willful misconduct (as determined by a
court of competent jurisdiction in a final non-appealable judgment) in connection with actions or
omissions described in such clauses (i) through (viii) of such sentence. In no event shall Agent
or Agent’s Affiliates be liable to any Borrower for any indirect, consequential, incidental,
punitive, exemplary or special damages or expenses (including without limitation attorneys’ fees),
or for any damages resulting from any change in the value of any property relating to a Letter of
Credit.



     Without limiting the generality of the foregoing, Agent and each of its Affiliates (i) may
rely on any oral or other communication believed in good faith by Agent or such Affiliate to have
been authorized or given by or on behalf of the applicant for a Letter of Credit, (ii) may honor
any presentation if the documents presented appear on their face substantially to comply with the
terms and conditions of the relevant Letter of Credit; (iii) may honor a previously dishonored
presentation under a Letter of Credit, whether such dishonor was pursuant to a court order, to
settle or compromise any claim of wrongful dishonor, or otherwise, and shall be entitled to
reimbursement to the same extent as if such presentation had initially been honored, together with
any interest paid by Agent or its Affiliates; (iv) may honor any drawing that is payable upon
presentation of a statement advising negotiation or payment, upon receipt of such statement (even
if such statement indicates that a draft or other document is being delivered separately), and
shall not be liable for any failure of any such draft or other document to arrive, or to conform in
any way with the relevant Letter of Credit; (v) may pay any paying or negotiating bank claiming
that it rightfully honored under the laws or practices of the place where such bank is located; and
(vi) may settle or adjust any claim or demand made on Agent or its Affiliate in any way related to
any order issued at the applicant’s request to an air carrier, a letter of guarantee or of
indemnity issued to a carrier or any similar document (each an “Order”) and honor any drawing in
connection with any Letter of Credit that is the subject of such Order, notwithstanding that any
drafts or other documents presented in connection with such Letter of Credit fail to conform in any
way with such Letter of Credit.



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     In furtherance and extension and not in limitation of the specific provisions set forth above,
any action taken or omitted by Agent under or in connection with the Letters of Credit issued by it
or any documents and certificates delivered thereunder, if taken or omitted in good faith and
without gross negligence (as determined by a court of competent jurisdiction in a final
non-appealable judgment), shall not put Agent under any resulting liability to any Borrower or any
Lender.



     2.19. Additional Payments. Any sums expended by Agent or any Lender due to any
Borrower’s failure to perform or comply with its obligations under this Agreement or any Other
Document including any Borrower’s obligations under Sections 4.2, 4.4, 4.12, 4.13, 4.14 and 6.1
hereof, may be charged to Borrowers’ Account as a Revolving Advance and added to the Obligations.



     2.20. Manner of Borrowing and Payment.



          (a) Each borrowing of Revolving Advances shall be advanced according to the applicable
Commitment Percentages of Lenders. Each borrowing of CapEx Loans shall be advanced according to
the applicable Commitment Percentages of Lenders.




          (b) Each payment (including each prepayment) by any Borrower on account of the principal of
and interest on the Revolving Advances, shall be applied to the Revolving Advances pro rata
according to the applicable Commitment Percentages of Lenders. Each payment (including each
prepayment) by any Borrower on account of the principal of and interest on the CapEx Note, shall be
applied to that portion of the CapEx Loan evidenced by the CapEx Note pro rata according to the
Commitment Percentages of Lenders. Except as expressly provided herein, all payments (including
prepayments) to be made by any Borrower on account of principal, interest and fees shall be made
without set off or counterclaim and shall be made to Agent on behalf of the Lenders to the Payment
Office, in each case on or prior to 1:00 p.m., Dallas, Texas time, in Dollars and in immediately
available funds.




          (c) (i) Notwithstanding anything to the contrary contained in Sections 2.20(a) and (b) hereof,
commencing with the first Business Day following the Restated Closing Date, each borrowing of
Revolving Advances shall be advanced by Agent and each payment by any Borrower on account of
Revolving Advances shall be applied first to those Revolving Advances advanced by Agent. On or
before 1:00 p.m., Dallas, Texas time, on each Settlement Date commencing with the first Settlement
Date following the Restated Closing Date, Agent and Lenders shall make certain payments as follows:
(I) if the aggregate amount of new Revolving Advances made by Agent during the preceding Week (if
any) exceeds the aggregate amount of repayments applied to outstanding Revolving Advances during
such preceding Week, then each Lender shall provide Agent with funds in an amount equal to its
applicable Commitment Percentage of the difference between (w) such Revolving Advances and (x) such
repayments and (II) if the aggregate amount of repayments applied to outstanding Revolving Advances
during such Week exceeds the aggregate amount of new Revolving Advances made during such Week, then
Agent shall provide each Lender with funds in an amount equal to its applicable Commitment
Percentage of the difference between (y) such repayments and (z) such Revolving Advances.



Amended & Restated Credit Agreement




 









 








               (ii) Each Lender shall be entitled to earn interest at the applicable Contract Rate on
outstanding Advances which it has funded.



               (iii) Promptly following each Settlement Date, Agent shall submit to each Lender a certificate
with respect to payments received and Advances made during the Week
immediately preceding such Settlement Date. Such certificate of Agent shall be conclusive in
the absence of manifest error.



          (d) If any Lender or Participant (a “Benefited Lender”) shall at any time receive any payment
of all or part of its Advances, or interest thereon, or receive any Collateral in respect thereof
(whether voluntarily or involuntarily or by set-off) in a greater proportion than any such payment
to and Collateral received by any other Lender, if any, in respect of such other Lender’s Advances,
or interest thereon, and such greater proportionate payment or receipt of Collateral is not
expressly permitted hereunder, such Benefited Lender shall purchase for cash from the other Lenders
a participation in such portion of each such other Lender’s Advances, or shall provide such other
Lender with the benefits of any such Collateral, or the proceeds thereof, as shall be necessary to
cause such Benefited Lender to share the excess payment or benefits of such Collateral or proceeds
ratably with each of the other Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefited Lender, such purchase shall
be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but
without interest. Each Lender so purchasing a portion of another Lender’s Advances may exercise
all rights of payment (including rights of set-off) with respect to such portion as fully as if
such Lender were the direct holder of such portion.




          (e) Unless Agent shall have been notified by telephone, confirmed in writing, by any Lender
that such Lender will not make the amount which would constitute its applicable Commitment
Percentage of the Advances available to Agent, Agent may (but shall not be obligated to) assume
that such Lender shall make such amount available to Agent on the next Settlement Date and, in
reliance upon such assumption, make available to Borrowers a corresponding amount. Agent will
promptly notify Borrowing Agent of its receipt of any such notice from a Lender. If such amount is
made available to Agent on a date after such next Settlement Date, such Lender shall pay to Agent
on demand an amount equal to the product of (i) the daily average Federal Funds Rate (computed on
the basis of a year of 360 days) during such period as quoted by Agent, times (ii) such amount,
times (iii) the number of days from and including such Settlement Date to the date on which such
amount becomes immediately available to Agent. A certificate of Agent submitted to any Lender with
respect to any amounts owing under this paragraph (e) shall be conclusive, in the absence of
manifest error. If such amount is not in fact made available to Agent by such Lender within three
(3) Business Days after such Settlement Date, Agent shall be entitled to recover such an amount,
with interest thereon at the rate per annum then applicable to such Revolving Advances hereunder,
on demand from Borrowers; provided, however, that Agent’s right to such recovery shall not
prejudice or otherwise adversely affect Borrowers’ rights (if any) against such Lender.




     2.21. Mandatory Prepayments.



          (a) Subject to Section 4.3 hereof and excluding the exceptions set forth therein, when
Borrower (i) sells or otherwise disposes of any Collateral other than Inventory in




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the Ordinary
Course of Business, (ii) other than conversion of the Subordinated Debt to Equity Interests, issues
or sells any equity securities, capital stock or other ownership interests, or receives any capital
contributions (except to the extent the proceeds of such a sale or issuance are
applied to the repayment of the Investor Notes), (iii) incurs any Indebtedness (other than as
permitted by Section 7.8 hereof), or (iv) receives any proceeds payable in connection with
(A) any condemnation proceedings affecting any of the foregoing or any rights thereto or any
interest in or to any Collateral or (B) any damage to or taking of any of the foregoing or any
rights in any Collateral or any interest therein arising from or otherwise relating to any exercise
of the power of eminent domain, or any conveyance in lieu of or under threat of any such taking,
then Borrower shall repay the Advances in an amount equal to the net cash proceeds of the foregoing
(i.e., gross proceeds less the reasonable costs of such sales, issuances, contributions or other
dispositions), such repayments to be made promptly but in no event more than one (1) Business Day
following receipt of such net proceeds, and until the date of payment, such proceeds shall be held
in trust for Agent. The foregoing shall not be deemed to be implied consent to any such sale or
transaction otherwise prohibited by the terms and conditions hereof. Such repayments shall be
applied (i) if the Collateral disposed of is Equipment the purchase of which was financed by a
CapEx Loan, (x) first, to the outstanding principal installments of the CapEx Loans in the inverse
order of the maturities thereof and (y) second, to the remaining Advances in such order as Agent
may determine, subject to Borrowers’ ability to reborrow Revolving Advances in accordance with the
terms hereof or (ii) if the Collateral disposed of is Equipment other than as set forth in (i)
above, (x) first to the outstanding principal installments of the CapEx Loans in the inverse order
of the maturities thereof and (y) second, to the remaining Advances in such order as Agent may
determine, subject to Borrowers’ ability to reborrow Revolving Advances in accordance with the
terms hereof.




     2.22. Reduction of Commitments.



          (a) The Borrowing Agent may from time to time reduce the Revolving Commitments;
provided that (i) each reduction of the Revolving Commitments shall be in an amount that is
an integral multiple of $1,000,000, and (ii) the Borrowing Agent shall not reduce the Revolving
Commitments if, after giving effect to any concurrent prepayment of the Revolving Advances in
accordance with this Agreement, the sum of the outstanding Revolving Advances would exceed the
lesser of (i) the total Maximum Revolving Advance Amount and (ii) the Formula Amount minus the
aggregate Maximum Undrawn Amount of all outstanding Letters of Credit.




          (b) The Borrowing Agent shall notify the Agent of any election to reduce the Revolving
Commitments under paragraph (a) of this Section at least five Business Days prior to the effective
date of such reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Agent shall advise the Lenders of the contents thereof. Each
notice delivered by the Borrowing Agent pursuant to this Section shall be irrevocable. Any
reduction of the Revolving Commitments shall be permanent. Each reduction of the Revolving
Commitments shall be made ratably among the Lenders in accordance with their respective Commitment
Percentage.



Amended & Restated Credit Agreement




 









 








     2.23. Use of Proceeds.



          (a) Borrowers shall apply the proceeds of Advances to (i) pay fees and expenses relating to
the Transaction and (ii) provide for Borrowers’ working capital needs (including Capital
Expenditures permitted hereunder).




          (b) Without limiting the generality of Section 2.23(a) above, neither the Borrowers,
Guarantors, nor any other Person which may in the future become party to this Agreement or the
Other Documents as a Borrower or Guarantor, intends to use nor shall they use any portion of the
proceeds of the Advances, directly or indirectly, for any purpose in violation of the Trading with
the Enemy Act.




     2.24. Defaulting Lender.



          (a) Notwithstanding anything to the contrary contained herein, in the event any Lender (x) has
refused (which refusal constitutes a breach by such Lender of its obligations under this Agreement)
to make available its portion of any Advance or to refund its portion of any excess interest
received as provided in Section 3.6 or (y) notifies either Agent or Borrowing Agent that it does
not intend to make available its portion of any Advance (if the actual refusal would constitute a
breach by such Lender of its obligations under this Agreement) (each, a “Lender Default”), all
rights and obligations hereunder of such Lender (a “Defaulting Lender”) as to which a Lender
Default is in effect and of the other parties hereto shall be modified to the extent of the express
provisions of this Section 2.24 while such Lender Default remains in effect.




          (b) Advances shall be incurred pro rata from Lenders (the “Non-Defaulting Lenders”) which are
not Defaulting Lenders based on their respective Commitment Percentages, and no Commitment
Percentage of any Lender or any pro rata share of any Advances required to be advanced by any
Lender shall be increased as a result of such Lender Default. Amounts received in respect of
principal of any type of Advances shall be applied to reduce the applicable Advances of each Lender
(other than any Defaulting Lender) pro rata based on the aggregate of the outstanding Advances of
that type of all Lenders at the time of such application; provided, that, Agent shall not
be obligated to transfer to a Defaulting Lender any payments received by Agent for the Defaulting
Lender’s benefit, nor shall a Defaulting Lender be entitled to the sharing of any payments
hereunder (including any principal, interest or fees). Amounts payable to a Defaulting Lender
shall instead be paid to or retained by Agent. Agent may hold and, in its discretion, re-lend to a
Borrower the amount of such payments received or retained by it for the account of such Defaulting
Lender.




          (c) A Defaulting Lender shall not be entitled to give instructions to Agent or to approve,
disapprove, consent to or vote on any matters relating to this Agreement and the Other Documents.
All amendments, waivers and other modifications of this Agreement and the Other Documents may be
made without regard to a Defaulting Lender and, for purposes of the definition of “Required
Lenders”, a Defaulting Lender shall be deemed not to be a Lender and not to have Advances
outstanding.




          (d) Other than as expressly set forth in this Section 2.24, the rights and obligations of a
Defaulting Lender (including the obligation to indemnify Agent) and the other




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parties hereto shall remain unchanged. Nothing in this Section 2.24 shall be deemed to
release any Defaulting Lender from its obligations under this Agreement and the Other Documents,
shall alter such obligations, shall operate as a waiver of any default by such Defaulting Lender
hereunder, or shall prejudice any rights which any Borrower, Agent or any Lender may have against
any Defaulting Lender as a result of any default by such Defaulting Lender hereunder.




          (e) In the event a Defaulting Lender retroactively cures to the satisfaction of Agent the
breach which caused a Lender to become a Defaulting Lender, such Defaulting Lender shall no longer
be a Defaulting Lender and shall be treated as a Lender under this Agreement.




III INTEREST AND FEES.




     3.1. Interest. Interest on Advances shall be payable in arrears on the first day of
each month with respect to Domestic Rate Loans and, with respect to Eurodollar Rate Loans, at the
end of each Interest Period. Interest charges shall be computed on the actual principal amount of
Advances outstanding during the month at a rate per annum equal to (i) with respect to Revolving
Advances, the applicable Revolving Interest Rate and (ii) with respect to the CapEx Loans, the
applicable CapEx Loan Rate (as applicable, the “Contract Rate”). Whenever, subsequent to the date
of this Agreement, the Alternate Base Rate is increased or decreased, the applicable Contract Rate
shall be similarly changed without notice or demand of any kind by an amount equal to the amount of
such change in the Alternate Base Rate during the time such change or changes remain in effect.
The Eurodollar Rate shall be adjusted with respect to Eurodollar Rate Loans without notice or
demand of any kind on the effective date of any change in the Reserve Percentage as of such
effective date. Upon and after the occurrence of an Event of Default, and during the continuation
thereof, at the option of Agent or at the direction of Required Lenders, the Obligations shall bear
interest at the Contract Rate plus two percent (2%) per annum (as applicable, the “Default Rate”).



     Commencing on the Initial Adjustment Date, the Applicable Margin with respect to the Revolving
Advances and the CapEx Loans will be adjusted (up or down) prospectively as determined in
accordance with the foregoing table based on the Borrowers’ most recent Financials. For purposes
of this Section 3.1, “Financials” shall mean the annual or quarterly financial statements of the
Borrowers delivered pursuant to Section 9.7 and Section 9.8 of this Agreement. Adjustments, if
any, to the Applicable Margin shall be effective on the first day of the calendar month after the
Agent has received the applicable Financials. If the Borrowers fail to deliver the Financials to
the Agent at the time required pursuant to this Agreement, then the Applicable Margin shall be the
highest Applicable Margin set forth in the foregoing table until five days after such Financials
are so delivered. During the period from the Restated Closing Date through the Initial Adjustment
Date, the Applicable Margin shall be determined in accordance with the foregoing table as if the
Fixed Charge Coverage Ratio were greater than or equal to 1.50 to 1.00 but less than 2.00 to 1.00.




Amended & Restated Credit Agreement



 









 





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	If the Fixed	 	Applicable	 	Applicable	 	Applicable	 	 
	Charge	 	Revolving	 	Revolving	 	CapEx	 	Applicable
	Coverage Ratio	 	Eurodollar Rate	 	Domestic Rate	 	Eurodollar Rate	 	CapEx Domestic
	is:	 	Margin:	 	Margin:	 	Margin	 	Rate Margin
	Less than 1.10:1.00
	 	 	2.75	%	 	 	0.50	%	 	 	3.25	%	 	 	1.00	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Greater than or
equal to 1.10:1.00
and less than
1.50:1.00
	 	 	2.50	%	 	 	0.25	%	 	 	3.00	%	 	 	0.75	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Greater than or
equal to 1.50:1.00
and less than
2.00:1.00
	 	 	2.25	%	 	 	0.00	%	 	 	2.75	%	 	 	0.50	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Greater than or
equal to 2.00:1.00
	 	 	2.00	%	 	 	0.00	%	 	 	2.50	%	 	 	0.25	%






     3.2. Letter of Credit Fees.



          (a) Borrowers shall pay (x) to Agent, for the ratable benefit of Lenders, fees for each Letter
of Credit for the period from and excluding the date of issuance of same to and including the date
of expiration or termination, equal to the average daily face amount of each outstanding Letter of
Credit multiplied by the Applicable Revolving Eurodollar Rate Margin, such fees to be calculated on
the basis of a 360-day year for the actual number of days elapsed and to be payable quarterly in
arrears on the first day of each quarter and on the last day of the Term, and (y) to the Issuer, a
fronting fee of one quarter of one percent (0.25%) per annum, together with any and all
administrative, issuance, amendment, payment and negotiation charges with respect to Letters of
Credit and all fees and expenses as agreed upon by the Issuer and the Borrowing Agent in connection
with any Letter of Credit, including in connection with the opening, amendment or renewal of any
such Letter of Credit and any acceptances created thereunder and shall reimburse Agent for any and
all fees and expenses, if any, paid by Agent to the Issuer (all of the foregoing fees, the “Letter
of Credit Fees”). All such charges shall be deemed earned in full on the date when the same are
due and payable hereunder and shall not be subject to rebate or pro-ration upon the termination of
this Agreement for any reason. Any such charge in effect at the time of a particular transaction
shall be the charge for that transaction, notwithstanding any subsequent change in the Issuer’s
prevailing charges for that type of transaction. All Letter of Credit Fees payable hereunder shall
be deemed earned in full on the
date when the same are due and payable hereunder and shall not be subject to rebate or
pro-ration upon the termination of this Agreement for any reason.




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     On demand, Borrowers will cause cash to be deposited and maintained in an account with Agent,
as cash collateral, in an amount equal to one hundred and five percent (105%) of the Maximum
Undrawn Amount of all outstanding Letters of Credit, and each Borrower hereby irrevocably
authorizes Agent, in its discretion, on such Borrower’s behalf and in such Borrower’s name, to open
such an account and to make and maintain deposits therein, or in an account opened by such
Borrower, in the amounts required to be made by such Borrower, out of the proceeds of Receivables
or other Collateral or out of any other funds of such Borrower coming into any Lender’s possession
at any time. Agent will invest such cash collateral (less applicable reserves) in such short-term
money-market items as to which Agent and such Borrower mutually agree and the net return on such
investments shall be credited to such account and constitute additional cash collateral. No
Borrower may withdraw amounts credited to any such account except upon the occurrence of all of the
following: (x) payment and performance in full of all Obligations, (y) expiration of all Letters of
Credit and (z) termination of this Agreement.



     3.3. Closing Fee and Facility Fee.



          (a) Closing Fee. Upon the execution of this Agreement, Borrowers shall pay to Agent a
closing fee of $75,000.00.




          (b) Facility Fee. If, for any month during the Term, the average daily unpaid balance
of the Revolving Advances and undrawn amount of any outstanding Letters of Credit for each day of
such month does not equal the Maximum Revolving Advance Amount and/or the average daily unpaid
balance of the CapEx Loans for each day of such month does not equal the Maximum CapEx Loan Amount,
then Borrowers shall pay to Agent for the ratable benefit of Lenders a fee at a rate equal to
one-quarter of one percent (.25%) per annum on the amount by which the Maximum Revolving Advance
Amount and/or Maximum CapEx Loan Amount (as applicable) exceeds such average daily unpaid balance.
Such fee shall be payable to each Lender (in proportion to such Lender’s commitment) in arrears on
the first day of each month with respect to the previous month.




     3.4. Collateral Evaluation Fee, Collateral Monitoring Fee; Late Reporting Fee.



          (a) Collateral Evaluation Fee. Borrowers shall pay Agent a collateral evaluation fee
equal to $1,250.00 per month commencing on the first day of the month following the Restated
Closing Date and on the first day of each month thereafter during the Term. The collateral
evaluation fee shall be deemed earned in full on the date when same is due and payable hereunder
and shall not be subject to rebate or proration upon termination of this Agreement for any reason.




          (b) Collateral Monitoring Fee. Borrowers shall pay to Agent on the first day of each
month following any month in which Agent performs any collateral monitoring — namely any field
examination, collateral analysis or other business analysis, the need for which is to be determined
by Agent and which monitoring is undertaken by Agent or for Agent’s benefit — a collateral
monitoring fee in an amount of at least $750.00 per day (subject to change from time to time based
on market rates) for each person employed to perform such monitoring, plus all costs and
disbursements incurred by Agent in the performance of such examination or analysis.



Amended & Restated Credit Agreement





 









 








          (c) Late Reporting Fee. At Agent’s option, Borrowers shall pay to Agent a late
reporting fee in the amount of $500.00 per day, for each report or other deliverable required on or
after January 1, 2007, under Sections 9.7, 9.8, 9.9, 9.10, 9.11 and 9.13 which is not received by
Agent on the date such report or deliverable is due.




     3.5. Computation of Interest and Fees. Interest and fees hereunder shall be computed
on the basis of a year of 360 days and for the actual number of days elapsed. If any payment to be
made hereunder becomes due and payable on a day other than a Business Day, the due date thereof
shall be extended to the next succeeding Business Day and interest thereon shall be payable at the
applicable Contract Rate during such extension.



     3.6. Maximum Charges. It is the intention of the parties to comply strictly with
applicable usury laws. Accordingly, notwithstanding any provision to the contrary in this
Agreement or the Other Documents, in no event shall any Obligations require the payment or permit
the payment, taking, reserving, receiving, collection or charging of any sums constituting interest
under Applicable Laws that exceed the maximum amount permitted by such laws, as the same may be
amended or modified from time to time (the “Maximum Rate”). If any such excess interest is called
for, contracted for, charged, taken, reserved or received in connection herewith or therewith, or
in any communication by Agent, any Lender or any other Person to Borrower, any Guarantor or any
other Person liable for the Obligations, or in the event that all or part of the principal or
interest hereof or thereof shall be prepaid or accelerated, so that under any of such circumstances
or under any other circumstance whatsoever the amount of interest contracted for, charged, taken,
reserved or received on the amount of principal actually outstanding from time to time under the
Obligations shall exceed the Maximum Rate, then in such event it is agreed that: (a) the provisions
of this paragraph shall govern and control; (b) neither Borrower, any Guarantor nor any other
Person now or hereafter liable for the payment of any of the Obligations shall be obligated to pay
the amount of such interest to the extent it is in excess of the Maximum Rate; (c) any such excess
interest which is or has been received by Agent or any Lender, notwithstanding this paragraph,
shall be credited against the then unpaid principal balance of the Obligations (or, if the
principal amount of the Obligations shall have been paid in full, refunded by Lenders to the party
primarily liable on the Obligation, and each Lender shall refund its pro rat share of such
interest); and (d) the provisions of this Agreement and the Obligations, and any other
communication to Borrower or any Guarantor, shall immediately be deemed reformed and such excess
interest reduced, without the necessity of executing any other document, to the Maximum Rate. The
right to accelerate the maturity of the Obligations does not include the right
to accelerate, collect or charge unearned interest, but only such interest that has otherwise
accrued as of the date of acceleration. Without limiting the foregoing, all calculations of the
rate of interest contracted for, charged, taken, reserved or received in connection with any of the
Obligations which are made for the purpose of determining whether such rate exceeds the Maximum
Rate shall be made to the extent permitted by Applicable Laws by amortizing, prorating, allocating
and spreading during the period of the full term of such Obligations, including all prior and
subsequent renewals and extensions hereof or thereof, all interest at any time contracted for,
charged, taken, reserved or received by Agent or any Lender. To the extent that either Chapter 303
or 306, or both, of the Texas Finance Code apply in determining the Maximum Rate, Agent and Lenders
hereby elect to determine the applicable rate ceiling by using the weekly ceiling from time to time
in effect, subject to Agent’s right subsequently to change




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such method in accordance with Applicable Law, as the same may be amended or modified from time to time.



     3.7. Increased Costs. In the event that any Applicable Law, treaty or governmental
regulation, or any change therein or in the interpretation or application thereof, or compliance by
any Lender (for purposes of this Section 3.7, the term “Lender” shall include Agent or any Lender
and any corporation or bank controlling Agent or any Lender) and the office or branch where Agent
or any Lender (as so defined) makes or maintains any Eurodollar Rate Loans with any request or
directive (whether or not having the force of law) from any central bank or other financial,
monetary or other authority, shall:



          (a) subject Agent or any Lender to any tax of any kind whatsoever with respect to this
Agreement or any Other Document or change the basis of taxation of payments to Agent or any Lender
of principal, fees, interest or any other amount payable hereunder or under any Other Documents
(except for changes in the rate of tax on the overall net income of Agent or any Lender by the
jurisdiction in which it maintains its principal office);




          (b) impose, modify or hold applicable any reserve, special deposit, assessment or similar
requirement against assets held by, or deposits in or for the account of, advances or loans by, or
other credit extended by, any office of Agent or any Lender, including pursuant to Regulation D of
the Board of Governors of the Federal Reserve System; or




          (c) impose on Agent or any Lender or the London interbank Eurodollar market any other
condition with respect to this Agreement or any Other Document;




     and the result of any of the foregoing is to increase the cost to Agent or any Lender of
making, renewing or maintaining its Advances hereunder by an amount that Agent or such Lender deems
to be material or to reduce the amount of any payment (whether of principal, interest or otherwise)
in respect of any of the Advances by an amount that Agent or such Lender deems to be material,
then, in any case Borrowers shall promptly pay Agent or such Lender, upon its demand, such
additional amount as will compensate Agent or such Lender for such additional cost or such
reduction, as the case may be, provided that the foregoing shall not apply to increased costs which
are reflected in the Eurodollar Rate, as the case may be. Agent or such
Lender shall certify the amount of such additional cost or reduced amount to Borrowing Agent,
and such certification shall be conclusive absent manifest error.



     3.8. Basis For Determining Interest Rate Inadequate or Unfair. In the event that
Agent or any Lender shall have determined that:



          (a) reasonable means do not exist for ascertaining the Eurodollar Rate applicable pursuant to
Section 2.2 hereof for any Interest Period; or




          (b) Dollar deposits in the relevant amount and for the relevant maturity are not available in
the London interbank Eurodollar market, with respect to an outstanding Eurodollar Rate Loan, a
proposed Eurodollar Rate Loan, or a proposed conversion of a Domestic Rate Loan into a Eurodollar
Rate Loan, then Agent shall give Borrowing Agent prompt written, telephonic or telegraphic notice
of such determination. If such notice is given, (i) any such requested Eurodollar Rate Loan shall
be made as a Domestic Rate Loan, unless Borrowing Agent shall



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notify Agent no later than 10:00 a.m.
(Dallas, Texas time) two (2) Business Days prior to the date of such proposed borrowing, that its
request for such borrowing shall be cancelled or made as an unaffected type of Eurodollar Rate
Loan, (ii) any Domestic Rate Loan or Eurodollar Rate Loan which was to have been converted to an
affected type of Eurodollar Rate Loan shall be continued as or converted into a Domestic Rate Loan,
or, if Borrowing Agent shall notify Agent, no later than 10:00 a.m. (Dallas, Texas time) two (2)
Business Days prior to the proposed conversion, shall be maintained as an unaffected type of
Eurodollar Rate Loan, and (iii) any outstanding affected Eurodollar Rate Loans shall be converted
into a Domestic Rate Loan, or, if Borrowing Agent shall notify Agent, no later than 10:00 a.m.
(Dallas, Texas time) two (2) Business Days prior to the last Business Day of the then current
Interest Period applicable to such affected Eurodollar Rate Loan, shall be converted into an
unaffected type of Eurodollar Rate Loan, on the last Business Day of the then current Interest
Period for such affected Eurodollar Rate Loans. Until such notice has been withdrawn, Lenders
shall have no obligation to make an affected type of Eurodollar Rate Loan or maintain outstanding
affected Eurodollar Rate Loans and no Borrower shall have the right to convert a Domestic Rate Loan
or an unaffected type of Eurodollar Rate Loan into an affected type of Eurodollar Rate Loan.




     3.9. Capital Adequacy.



          (a) In the event that Agent or any Lender shall have determined that any Applicable Law, rule,
regulation or guideline regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any Governmental Body, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance by Agent or any
Lender (for purposes of this Section 3.9, the term “Lender” shall include Agent or any Lender and
any corporation or bank controlling Agent or any Lender) and the office or branch where Agent or
any Lender (as so defined) makes or maintains any Eurodollar Rate Loans with any request or
directive regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of reducing the rate of
return on Agent or any Lender’s capital as a consequence
of its obligations hereunder to a level below that which Agent or such Lender could have
achieved but for such adoption, change or compliance (taking into consideration Agent’s and each
Lender’s policies with respect to capital adequacy) by an amount deemed by Agent or any Lender to
be material, then, from time to time, Borrowers shall pay upon demand to Agent or such Lender such
additional amount or amounts as will compensate Agent or such Lender for such reduction. In
determining such amount or amounts, Agent or such Lender may use any reasonable averaging or
attribution methods. The protection of this Section 3.9 shall be available to Agent and each
Lender regardless of any possible contention of invalidity or inapplicability with respect to the
Applicable Law, regulation or condition.




          (b) A certificate of Agent or such Lender setting forth such amount or amounts as shall be
necessary to compensate Agent or such Lender with respect to Section 3.9(a) hereof when delivered
to Borrowing Agent shall be conclusive absent manifest error.




     3.10. Gross Up for Taxes. If any Borrower shall be required by Applicable Law to
withhold or deduct any taxes from or in respect of any sum payable under this Agreement or any of
the Other Documents to Agent, or any Lender, assignee of any Lender, or Participant (each,
individually, a “Payee” and collectively, the “Payees”), (a) the sum payable to such Payee or




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Payees, as the case may be, shall be increased as may be necessary so that, after making all
required withholding or deductions, the applicable Payee or Payees receives an amount equal to the
sum it would have received had no such withholding or deductions been made (the “Gross-Up
Payment”), (b) such Borrower shall make such withholding or deductions, and (c) such Borrower shall
pay the full amount withheld or deducted to the relevant taxation authority or other authority in
accordance with Applicable Law. Notwithstanding the foregoing and only with respect to any
withholdings or deductions for taxes payable pursuant to the laws of the United States of America
or any state or jurisdiction thereof, no Borrower shall be obligated to make any portion of the
Gross-Up Payment that is attributable to any withholding or deductions that would not have been
paid or claimed had the applicable Payee or Payees properly claimed a complete exemption with
respect thereto pursuant to Section 3.11 hereof.



     3.11. Withholding Tax Exemption.



          (a) Each Payee that is not incorporated under the Laws of the United States of America or a
state thereof (and, upon the written request of Agent, each other Payee) agrees that it will
deliver to Borrowing Agent and Agent two (2) duly completed appropriate valid Withholding
Certificates (as defined under §1.1441-1(c)(16) of the Income Tax Regulations (“Regulations”))
certifying its status (i.e., U.S. or foreign person) and, if appropriate, making a claim of
reduced, or exemption from, U.S. withholding tax on the basis of an income tax treaty or an
exemption provided by the Code. The term “Withholding Certificate” means a Form W-9; a Form
W-8BEN; a Form W-8ECI; a Form W-8IMY and the related statements and certifications as required
under §1.1441-1(e)(2) and/or (3) of the Regulations; a statement described in §1.871-14(c)(2)(v) of
the Regulations; or any other certificates under the Code or
Regulations that certify or establish the status of a payee or beneficial owner as a U.S. or
foreign person.




          (b) Each Payee required to deliver to Borrowing Agent and Agent a valid Withholding
Certificate pursuant to Section 3.11(a) hereof shall deliver such valid Withholding Certificate as
follows: (A) each Payee which is a party hereto on the Restated Closing Date shall deliver such
valid Withholding Certificate at least five (5) Business Days prior to the first date on which any
interest or fees are payable by any Borrower hereunder for the account of such Payee; (B) each
Payee shall deliver such valid Withholding Certificate at least five (5) Business Days before the
effective date of such assignment or participation (unless Agent in its sole discretion shall
permit such Payee to deliver such Withholding Certificate less than five (5) Business Days before
such date in which case it shall be due on the date specified by Agent). Each Payee which so
delivers a valid Withholding Certificate further undertakes to deliver to Borrowing Agent and Agent
two (2) additional copies of such Withholding Certificate (or a successor form) on or before the
date that such Withholding Certificate expires or becomes obsolete or after the occurrence of any
event requiring a change in the most recent Withholding Certificate so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably requested by Borrowing
Agent or Agent.




          (c) Notwithstanding the submission of a Withholding Certificate claiming a reduced rate of or
exemption from U.S. withholding tax required under Section 3.11(b) hereof, Agent shall be entitled
to withhold United States federal income taxes at the full 30% withholding rate if in its
reasonable judgment it is required to do so under the due diligence



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requirements imposed upon a
withholding agent under §1.1441-7(b) of the Regulations. Further, Agent is indemnified under
§1.1461-1(e) of the Regulations against any claims and demands of any Payee for the amount of any
tax it deducts and withholds in accordance with regulations under §1441 of the Code.




IV COLLATERAL: GENERAL TERMS




     4.1. Security Interest in the Collateral. To secure the prompt payment and
performance to Agent and each Lender of the Obligations, each Borrower hereby assigns, pledges and
grants to Agent for its benefit and for the ratable benefit of each Lender a continuing security
interest in and to and Lien on all of its Collateral, whether now owned or existing or hereafter
acquired or arising and wheresoever located. Each Borrower shall mark its Books and Records as may
be necessary or appropriate to evidence, protect and perfect Agent’s security interest and shall
cause its financial statements to reflect such security interest. Each Borrower shall promptly
provide Agent with written notice of all commercial tort claims, such notice to contain the case
title together with the applicable court and a brief description of the claim(s). Upon delivery of
each such notice, such Borrower shall be deemed to hereby grant to Agent a security interest and
lien in and to such commercial tort claims and all proceeds thereof.



     4.2. Perfection of Security Interest . Each Borrower shall take all action that may be necessary or desirable, or that Agent may
request, so as at all times to maintain the validity, perfection, enforceability and priority of
Agent’s security interest in and Lien on the Collateral or to enable Agent to protect, exercise or
enforce its rights hereunder and in the Collateral, including, but not limited to, (i) immediately
discharging all Liens other than Permitted Encumbrances, (ii) obtaining Lien Waiver Agreements,
(iii) delivering to Agent, endorsed or accompanied by such instruments of assignment as Agent may
specify, and stamping or marking, in such manner as Agent may specify, any and all chattel paper,
instruments, letters of credits and advices thereof and documents evidencing or forming a part of
the Collateral, (iv) entering into warehousing, lockbox and other custodial arrangements
satisfactory to Agent, and (v) executing and delivering financing statements, control agreements,
instruments of pledge, mortgages, notices and assignments, in each case in form and substance
satisfactory to Agent, relating to the creation, validity, perfection, maintenance or continuation
of Agent’s security interest and Lien under the Uniform Commercial Code or other Applicable Law.
By its signature hereto, each Borrower hereby authorizes Agent to file against such Borrower, one
or more financing, continuation or amendment statements pursuant to the Uniform Commercial Code in
form and substance satisfactory to Agent (which statements may have a description of collateral
which is broader than that set forth herein). All charges, expenses and fees Agent may incur in
doing any of the foregoing, and any local taxes relating thereto, shall be charged to Borrowers’
Account as a Revolving Advance of a Domestic Rate Loan and added to the Obligations, or, at Agent’s
option, shall be paid to Agent for its benefit and for the ratable benefit of Lenders immediately
upon demand.



     4.3. Disposition of Collateral. Each Borrower will safeguard and protect all
Collateral for Agent’s general account and make no disposition thereof whether by sale, lease or
otherwise except (a) the sale of Inventory in the Ordinary Course of Business and (b) the
disposition or transfer of obsolete and worn-out Equipment in the Ordinary Course of Business
during any fiscal year having an aggregate fair market value of not more than $500,000 and only to
the



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extent that (i) the proceeds of any such disposition are used to acquire replacement Equipment
which is subject to Agent’s first priority security interest or (ii) the proceeds of which are
remitted to Agent to be applied pursuant to Section 2.21.



     4.4. Preservation of Collateral. In addition to the rights and remedies set forth in
Section 11.1 hereof, Agent: (a) may at any time take such steps as Agent deems necessary to protect
Agent’s interest in and to preserve the Collateral, including the hiring of such security guards or
the placing of other security protection measures as Agent may deem appropriate; (b) may employ and
maintain at any of any Borrower’s premises a custodian who shall have full authority to do all acts
necessary to protect Agent’s interests in the Collateral; (c) may lease warehouse facilities to
which Agent may move all or part of the Collateral; (d) may use any Borrower’s owned or leased
lifts, hoists, trucks and other facilities or equipment for handling or removing the Collateral;
and (e) shall have, and is hereby granted, a right of ingress and egress to the places where the
Collateral is located, and may proceed over and through any of Borrower’s owned or leased property.
Each Borrower shall cooperate fully with all of Agent’s efforts to preserve the Collateral and
will take such
actions to preserve the Collateral as Agent may direct. All of Agent’s expenses of preserving
the Collateral, including any expenses relating to the bonding of a custodian, shall be charged to
Borrowers’ Account as a Revolving Advance and added to the Obligations.



     4.5. Ownership of Collateral.



          (a) With respect to the Collateral, at the time the Collateral becomes subject to Agent’s
security interest: (i) each Borrower shall be the sole owner of and fully authorized and able to
sell, transfer, pledge and/or grant a first priority security interest in each and every item of
the its respective Collateral to Agent; and, except for Permitted Encumbrances the Collateral shall
be free and clear of all Liens and encumbrances whatsoever; (ii) each document and agreement
executed by each Borrower or delivered to Agent or any Lender in connection with this Agreement
shall be true and correct in all respects; (iii) all signatures and endorsements of each Borrower
that appear on such documents and agreements shall be genuine and each Borrower shall have full
capacity to execute same; and (iv) except with respect to Collateral being used by work crews of
any Borrower in the ordinary course of such Borrower’s business, each Borrower’s Collateral shall
be located as set forth on Schedule 4.5 and shall not be removed from such location(s) without the
prior written consent of Agent except with respect to the sale of Inventory in the Ordinary Course
of Business and Equipment to the extent permitted in Section 4.3 hereof.




          (b) (i) There is no location at which any Borrower has any Inventory (except for Inventory in
transit) other than those locations listed on Schedule 4.5; (ii) Schedule 4.5 hereto contains a
correct and complete list, as of the Restated Closing Date, of the legal names and addresses of
each warehouse at which Inventory of any Borrower is stored; none of the receipts received by any
Borrower from any warehouse states that the goods covered thereby are to be delivered to bearer or
to the order of a named Person or to a named Person and such named Person’s assigns; (iii) Schedule
4.5 hereto sets forth a correct and complete list as of the Restated Closing Date of (A) each place
of business of each Borrower and (B) the chief executive office of each Borrower; and (iv) Schedule
4.5 hereto sets forth a correct and complete list as of the Restated Closing Date of the location,
by state and street address, of all Real Property owned or




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leased by each Borrower, together with
the names and addresses of any landlords. With respect to any books and records in connection with
any Collateral or in any way relating thereto or evidencing the Collateral (collectively, the
“Books and Records”) which are located at a leased location, such Books and Records shall only be
located in and at such locations for which Agent has received an executed landlord agreement in
form and substance satisfactory to Agent.




     4.6. Defense of Agent’s and Lenders’ Interests. Until (a) payment and performance in
full of all of the Obligations and (b) termination of this Agreement, Agent’s interests in the
Collateral shall continue in full force and effect. During such period no Borrower shall, without
Agent’s prior written consent, pledge, sell (except Inventory in the Ordinary Course of Business
and Equipment to the extent permitted in Section 4.3 hereof), assign, transfer, create or suffer to
exist a Lien upon or encumber or allow or suffer to be encumbered in any way except for Permitted
Encumbrances, any part of the Collateral.
Each Borrower shall defend Agent’s interests in the Collateral against any and all Persons
whatsoever. At any time following demand by Agent for payment of all Obligations, Agent shall have
the right to take possession of the indicia of the Collateral and the Collateral in whatever
physical form contained, including: labels, stationery, documents, instruments and advertising
materials. If Agent exercises this right to take possession of the Collateral, Borrowers shall,
upon demand, assemble it in the best manner possible and make it available to Agent at a place
reasonably convenient to Agent. In addition, with respect to all Collateral, Agent and Lenders
shall be entitled to all of the rights and remedies set forth herein and further provided by the
Uniform Commercial Code or other Applicable Law. Each Borrower shall, and Agent may, at its
option, instruct all suppliers, carriers, forwarders, warehousers or others receiving or holding
cash, checks, Inventory, documents or instruments in which Agent holds a security interest to
deliver same to Agent and/or subject to Agent’s order and if they shall come into any Borrower’s
possession, they, and each of them, shall be held by such Borrower in trust as Agent’s trustee, and
such Borrower will immediately deliver them to Agent in their original form together with any
necessary endorsement.



     4.7. Books and Records. Each Borrower shall (a) keep proper books of record and
account in which full, true and correct entries will be made of all dealings or transactions of or
in relation to its business and affairs; (b) set up on its books accruals with respect to all
taxes, assessments, charges, levies and claims; and (c) on a reasonably current basis set up on its
books, from its earnings, allowances against doubtful Receivables, advances and investments and all
other proper accruals (including by reason of enumeration, accruals for premiums, if any, due on
required payments and accruals for depreciation, obsolescence, or amortization of properties),
which should be set aside from such earnings in connection with its business. All determinations
pursuant to this subsection shall be made in accordance with, or as required by, GAAP consistently
applied in the opinion of such independent public accountant as shall then be regularly engaged by
Borrowers.



     4.8. Financial Disclosure. Each Borrower hereby irrevocably authorizes and directs
all accountants and auditors employed by such Borrower at any time during the Term to exhibit and
deliver to Agent and each Lender copies of any of such Borrower’s financial statements, trial
balances or other accounting records of any sort in the accountant’s or auditor’s possession, and
to disclose to Agent and each Lender any information such accountants may have concerning such
Borrower’s financial status and business operations. Each Borrower hereby authorizes all



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Governmental Bodies to furnish to Agent and each Lender copies of reports or examinations relating
to such Borrower, whether made by such Borrower or otherwise; however, Agent and each Lender will
attempt to obtain such information or materials directly from such Borrower prior to obtaining such
information or materials from such accountants or Governmental Bodies.




     4.9. Compliance with Laws. Each Borrower shall comply with all Applicable Laws with
respect to the Collateral or any part thereof or to the operation of such Borrower’s business the
non-compliance with which could reasonably be expected to have a Material Adverse Effect. Each
Borrower may, however,
contest or dispute any Applicable Laws in any reasonable manner, provided that any related
Lien is inchoate or stayed and sufficient reserves are established to the reasonable satisfaction
of Agent to protect Agent’s Lien on or security interest in the Collateral. The assets of
Borrowers at all times shall be maintained in accordance with the requirements of all insurance
carriers which provide insurance with respect to the assets of Borrowers so that such insurance
shall remain in full force and effect.



     4.10. Inspection of Premises. At all reasonable times and, unless a Default or Event
of Default shall have occurred or is continuing, during normal business hours, Agent, each Lender
and their agents shall have full access to and the right to audit, appraise, check, inspect and
make abstracts and copies from each Borrower’s books, records, audits, correspondence and all other
papers relating to the Collateral and the operation of each Borrower’s business. Agent, any Lender
and their agents may enter upon any premises of any Borrower at any time during business hours and
at any other reasonable time, and from time to time, for the purpose of inspecting and appraising
the Collateral and any and all records pertaining thereto and the operation of such Borrower’s
business.



     4.11. Insurance. The assets and properties of each Borrower at all times shall be
maintained in accordance with the requirements of all insurance carriers which provide insurance
with respect to the assets and properties of such Borrower so that such insurance shall remain in
full force and effect. Each Borrower shall bear the full risk of any loss of any nature whatsoever
with respect to the Collateral. At each Borrower’s own cost and expense in amounts and with
carriers acceptable to Agent, each Borrower shall (a) keep all its insurable properties and
properties in which such Borrower has an interest insured against the hazards of fire, flood,
sprinkler leakage, those hazards covered by extended coverage insurance and such other hazards, and
for such amounts, as is customary in the case of companies engaged in businesses similar to such
Borrower’s; (b) maintain public and, if applicable, product liability insurance against claims for
personal injury, death or property damage suffered by others; (c) maintain all such worker’s
compensation or similar insurance as may be required under the laws of any state or jurisdiction in
which such Borrower is engaged in business; (d) furnish Agent with (i) copies of all policies and
evidence of the maintenance of such policies by the renewal thereof at least thirty (30) days
before any expiration date, and (ii) appropriate loss payable endorsements in form and substance
satisfactory to Agent, naming Agent as a co-insured and loss payee as its interests may appear with
respect to all insurance coverage referred to in clauses (a) and (c) above, and providing (A) that
all proceeds thereunder shall be payable to Agent, (B) no such insurance shall be affected by any
act or neglect of the insured or owner of the property described in such policy, and (C) that such
policy and loss payable clauses may not be cancelled, amended or terminated unless at least thirty
(30) days’ prior written notice is given to Agent. In the event of any loss thereunder, the
carriers named therein hereby are directed by Agent and the applicable Borrower



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to make payment for
such loss to Agent and not to such Borrower and Agent jointly. If any insurance losses are paid by
check, draft or other instrument payable to any Borrower and Agent jointly, Agent may endorse such
Borrower’s name thereon and do such other things as Agent may deem advisable to reduce the same to
cash. Agent is hereby authorized to adjust and
compromise claims under insurance coverage referred to in clauses (a) and (b) above. All loss
recoveries received by Agent upon any such insurance may be applied to the Obligations, in such
order as Agent in its sole discretion shall determine. Any surplus shall be paid by Agent to
Borrowers or applied as may be otherwise required by law. Any deficiency thereon shall be paid by
Borrowers to Agent, on demand.



     4.12. Failure to Pay Insurance. If any Borrower fails to obtain insurance as
hereinabove provided, or to keep the same in force, Agent, if Agent so elects, may obtain such
insurance and pay the premium therefor on behalf of such Borrower, and charge Borrowers’ Account
therefor as a Revolving Advance of a Domestic Rate Loan and such expenses so paid shall be part of
the Obligations.



     4.13. Payment of Taxes. Each Borrower will pay, when due, all taxes, assessments and
other Charges lawfully levied or assessed upon such Borrower or any of the Collateral including
real and personal property taxes, assessments and charges and all franchise, income, employment,
social security benefits, withholding, and sales taxes unless such Borrower is contesting such
taxes in good faith, by appropriate proceedings, and is maintaining adequate reserves for such
taxes in accordance with GAAP. Notwithstanding the foregoing, if a Lien securing any such taxes is
filed in any public office and such Lien is not a Permitted Lien, then the Borrowers shall pay all
taxes secured by such Lien immediately and remove such Lien of record promptly. If any tax by any
Governmental Body is or may be imposed on or as a result of any transaction between any Borrower
and Agent or any Lender which Agent or any Lender may be required to withhold or pay or if any
taxes, assessments, or other Charges remain unpaid after the date fixed for their payment, or if
any claim shall be made which, in Agent’s or any Lender’s opinion, may possibly create a valid Lien
on the Collateral, Agent may without notice to Borrowers pay the taxes, assessments or other
Charges and each Borrower hereby agrees to indemnify, defend and hold Agent and each Lender
harmless in respect thereof. The amount of any payment by Agent under this Section 4.13 shall be
charged to Borrowers’ Account as a Revolving Advance and added to the Obligations and, until
Borrowers shall furnish Agent with an indemnity therefor (or supply Agent with evidence
satisfactory to Agent that due provision for the payment thereof has been made), Agent may hold
without interest any balance standing to Borrowers’ credit and Agent shall retain its security
interest in and Lien on any and all Collateral held by Agent.



     4.14. Payment of Leasehold Obligations. Each Borrower shall at all times pay, when
and as due, its rental obligations under all leases under which it is a tenant, and shall otherwise
comply, in all material respects, with all other terms of such leases and keep them in full force
and effect and, at Agent’s request will provide evidence of having done so.



     4.15. Receivables.



          (a) Nature of Receivables. Each of the Receivables shall be a bona fide and valid
account representing a bona fide indebtedness incurred by the Customer therein named, for



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a fixed
sum as set forth in the invoice relating thereto (provided immaterial or unintentional invoice
errors shall not be deemed to be a breach hereof) with respect to an absolute sale or lease and
delivery of goods upon stated terms of a Borrower, or work, labor or services theretofore rendered
by a Borrower as of the date each Receivable is created. Same shall be due and owing in accordance
with the applicable Borrower’s standard terms of sale without dispute, setoff or counterclaim
except as may be stated on the accounts receivable schedules delivered by Borrowers to Agent.




          (b) Solvency of Customers. Each Customer, to the best of each Borrower’s knowledge,
as of the date each Receivable is created, is and will be solvent and able to pay all Receivables
on which the Customer is obligated in full when due or with respect to such Customers of any
Borrower who are not solvent such Borrower has set up on its books and in its financial records bad
debt reserves adequate to cover such Receivables.




          (c) Location of Borrowers. Each Borrower’s chief executive office is located at the
location set forth on Schedule 4.15(c). Until written notice is given to Agent by Borrowing Agent
of any other office at which any Borrower keeps its records pertaining to Receivables, all such
records shall be kept at such executive office.




          (d) Collection of Receivables. Until any Borrower’s authority to do so is terminated
by Agent (which notice Agent may give at any time following the occurrence of an Event of Default
or a Default or when Agent in its sole discretion deems it to be in Lenders’ best interest to do
so), each Borrower will, at such Borrower’s sole cost and expense, but on Agent’s behalf and for
Agent’s account, collect as Agent’s property and in trust for Agent all amounts received on
Receivables, and shall not commingle such collections with any Borrower’s funds or use the same
except to pay Obligations. Each Borrower shall deposit in the Blocked Account or, upon request by
Agent, deliver to Agent, in original form and on the date of receipt thereof, all checks, drafts,
notes, money orders, acceptances, cash and other evidences of Indebtedness.




          (e) Notification of Assignment of Receivables. At any time, Agent shall have the
right to send notice of the assignment of, and Agent’s security interest in and Lien on, the
Receivables to any and all Customers or any third party holding or otherwise concerned with any of
the Collateral. Thereafter, Agent shall have the sole right to collect the Receivables, take
possession of the Collateral, or both. Agent’s actual collection expenses, including, but not
limited to, stationery and postage, telephone and telegraph, secretarial and clerical expenses and
the salaries of any collection personnel used for collection, may be charged to Borrowers’ Account
and added to the Obligations.




          (f) Power of Agent to Act on Borrowers’ Behalf. Upon the occurrence and during the
continuation of a Default or Event of Default or as otherwise provided in a lockbox agreement
between Agent and any Borrower, Agent shall have the right to receive, endorse, assign and/or
deliver in the name of Agent or any Borrower any and all checks, drafts and other instruments for
the payment of money relating to the Receivables, and each Borrower hereby waives notice of
presentment, protest and non-payment of any instrument so endorsed. Each Borrower hereby
constitutes Agent or Agent’s designee as such Borrower’s attorney with power
(i) to endorse such Borrower’s name upon any notes, acceptances, checks, drafts, money orders
or other evidences of payment or Collateral; (ii) to sign such Borrower’s name on any invoice or



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bill of lading relating to any of the Receivables, drafts against Customers, assignments and
verifications of Receivables; (iii) to send verifications of Receivables to any Customer; (iv) to
sign such Borrower’s name on all financing statements or any other documents or instruments deemed
necessary or appropriate by Agent to preserve, protect, or perfect Agent’s interest in the
Collateral and to file same; (v) to demand payment of the Receivables; (vi) to enforce payment of
the Receivables by legal proceedings or otherwise; (vii) to exercise all of such Borrower’s rights
and remedies with respect to the collection of the Receivables and any other Collateral; (viii) to
settle, adjust, compromise, extend or renew the Receivables; (ix) to settle, adjust or compromise
any legal proceedings brought to collect Receivables; (x) to prepare, file and sign such Borrower’s
name on a proof of claim in bankruptcy or similar document against any Customer; (xi) to prepare,
file and sign such Borrower’s name on any notice of Lien, assignment or satisfaction of Lien or
similar document in connection with the Receivables; and (xii) to do all other acts and things
necessary to carry out this Agreement. All acts of said attorney or designee are hereby ratified
and approved, and said attorney or designee shall not be liable for any acts of omission or
commission nor for any error of judgment or mistake of fact or of law (INCLUDING, WITHOUT
LIMITATION, WITH RESPECT TO AN ACT OR INACTION ARISING FROM AGENT’S NEGLIGENCE OR STRICT
LIABILITY), unless done maliciously or with gross (not mere) negligence (as determined by a court
of competent jurisdiction in a final non-appealable judgment); this power being coupled with an
interest is irrevocable while any of the Obligations remain unpaid. Agent shall have the right at
any time to change the address for delivery of mail addressed to any Borrower to such address as
Agent may designate and to receive, open and dispose of all mail addressed to any Borrower.




          (g) No Liability. Neither Agent nor any Lender shall, under any circumstances or in
any event whatsoever, have any liability for any error or omission or delay of any kind (INCLUDING,
WITHOUT LIMITATION, WITH RESPECT TO AN ACT OR INACTION ARISING FROM AGENT’S OR ANY LENDER’S
NEGLIGENCE OR STRICT LIABILITY BUT NOT AGENT’S OR ANY LENDER’S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT) occurring in the settlement, collection or payment of any of the Receivables or any
instrument received in payment thereof, or for any damage resulting therefrom. Agent may, without
notice or consent from any Borrower, sue upon or otherwise collect, extend the time of payment of,
compromise or settle for cash, credit or upon any terms any of the Receivables or any other
securities, instruments or insurance applicable thereto and/or release any obligor thereof. Agent
is authorized and empowered to accept the return of the goods represented by any of the
Receivables, without notice to or consent by any Borrower, all without discharging or in any way
affecting any Borrower’s liability hereunder.




          (h) Establishment of a Lockbox Account, Dominion Account. All proceeds of Collateral
shall be deposited by Borrowers into either (i) a lockbox account, full dominion account or such
other “blocked account” in which no Borrower has access to the funds contained therein (“Blocked
Accounts”) established at a bank or banks (each such bank, a “Blocked Account Bank”) pursuant to an
arrangement with such Blocked Account Bank as may be selected by Borrowing Agent and be acceptable
to Agent or (ii) depository accounts (“Depository Accounts”) established at the Agent for the
deposit of such proceeds. Each applicable Borrower (other than Exploration), Agent and each
Blocked Account Bank shall enter
into a deposit account control agreement in form and substance satisfactory to Agent directing
such Blocked Account Bank to transfer such funds so deposited to Agent, either to any account



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maintained by Agent at said Blocked Account Bank or by wire transfer to appropriate account(s) of
Agent. Exploration shall enter into a deposit account control agreement with Agent and each
Blocked Account Bank in form and substance satisfactory to Agent directing such Blocked Account
Bank, upon notice from Agent (“Notice”), to transfer such funds so deposited to Agent, either to
any account maintained by Agent at said Blocked Account Bank or by wire transfer to appropriate
account(s) of Agent. Agent may deliver such Notice at anytime (i) upon the occurrence and during
the continuation of a Default or Event of Default or (ii) Undrawn Availability is less than
$3,000,000. All funds deposited in such Blocked Accounts shall immediately become the property of
Agent and Borrowing Agent shall obtain the agreement by such Blocked Account Bank to waive any
offset rights against the funds so deposited. Neither Agent nor any Lender assumes any
responsibility for such blocked account arrangement, including any claim of accord and satisfaction
or release with respect to deposits accepted by any Blocked Account Bank thereunder. All deposit
accounts and investment accounts of each Borrower and its Subsidiaries are set forth on Schedule
4.15(h).




          (i) Adjustments. No Borrower will, without Agent’s consent, compromise or adjust any
Receivables (or extend the time for payment thereof) or accept any returns of merchandise or grant
any additional discounts, allowances or credits thereon except for those compromises, adjustments,
returns, discounts, credits and allowances as have been heretofore customary in the business of
such Borrower, provided, however, that upon notice from Agent at any time upon the occurrence and
during the continuance of an Event of Default, no Borrower shall adjust or compromise any
Receivables under any circumstances.




     4.16. Maintenance of Equipment. The Equipment shall be maintained in good operating
condition and repair (reasonable wear and tear excepted) and all necessary replacements of and
repairs thereto shall be made so that the value and operating efficiency of the Equipment shall be
maintained and preserved. No Borrower shall use or operate the Equipment in violation of any law,
statute, ordinance, code, rule or regulation.



     4.17. Exculpation of Liability. Nothing herein contained shall be construed to
constitute Agent or any Lender as any Borrower’s agent for any purpose whatsoever, nor shall Agent
or any Lender be responsible or liable for any shortage, discrepancy, damage, loss or destruction
of any part of the Collateral wherever the same may be located and regardless of the cause thereof
(INCLUDING, WITHOUT LIMITATION, WITH RESPECT TO AN ACT OR INACTION ARISING FROM AGENT’S OR ANY
LENDER’S NEGLIGENCE OR STRICT LIABILITY BUT NOT AGENT’S OR ANY LENDER’S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT). Neither Agent nor any Lender, whether by anything herein or in any assignment or
otherwise, assume any of any Borrower’s obligations under any contract or agreement assigned to
Agent or such Lender, and neither Agent nor any Lender shall be responsible in any way for the
performance by any Borrower of any of the terms and conditions thereof.



     4.18. Environmental Matters.



          (a) Borrowers shall ensure that the Real Property and all operations and businesses conducted
thereon remain in compliance with all Environmental Laws and they shall




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not place or permit to be
placed any Hazardous Substances on any Real Property except as permitted by Applicable Law or
appropriate governmental authorities.




          (b) Borrowers shall establish and maintain a system to assure and monitor continued compliance
with all applicable Environmental Laws which system shall include periodic reviews of such
compliance.




          (c) Borrowers shall (i) employ in connection with the use of the Real Property appropriate
technology necessary to maintain compliance with any applicable Environmental Laws and (ii) dispose
of any and all Hazardous Waste generated at the Real Property only at facilities and with carriers
that maintain valid permits under RCRA and any other applicable Environmental Laws. Borrowers
shall use their best efforts to obtain certificates of disposal, such as hazardous waste manifest
receipts, from all treatment, transport, storage or disposal facilities or operators employed by
Borrowers in connection with the transport or disposal of any Hazardous Waste generated at the Real
Property.




          (d) In the event any Borrower obtains, gives or receives notice of any Release or threat of
Release of a reportable quantity of any Hazardous Substances at the Real Property (any such event
being hereinafter referred to as a “Hazardous Discharge”) or receives any notice of violation,
request for information or notification that it is potentially responsible for investigation or
cleanup of environmental conditions at the Real Property, demand letter or complaint, order,
citation, or other written notice with regard to any Hazardous Discharge or violation of
Environmental Laws affecting the Real Property or any Borrower’s interest therein (any of the
foregoing is referred to herein as an “Environmental Complaint”) from any Person, including any
state agency responsible in whole or in part for environmental matters in the state in which the
Real Property is located or the United States Environmental Protection Agency (any such person or
entity hereinafter the “Authority”), then Borrowing Agent shall, within five (5) Business Days,
give written notice of same to Agent detailing facts and circumstances of which any Borrower is
aware giving rise to the Hazardous Discharge or Environmental Complaint. Such information is to be
provided to allow Agent to protect its security interest in and Lien on the Real Property and the
Collateral and is not intended to create nor shall it create any obligation upon Agent or any
Lender with respect thereto.




          (e) Borrowing Agent shall promptly forward to Agent copies of any request for information,
notification of potential liability, demand letter relating to potential responsibility with
respect to the investigation or cleanup of Hazardous Substances at any other site owned, operated
or used by any Borrower to dispose of Hazardous Substances and shall continue to forward copies of
correspondence between any Borrower and the Authority regarding such claims to Agent until the
claim is settled. Borrowing Agent shall promptly forward to Agent copies of all documents and
reports concerning a Hazardous Discharge at the Real Property that any Borrower is required to file
under any Environmental Laws. Such
information is to be provided solely to allow Agent to protect Agent’s security interest in
and Lien on the Real Property and the Collateral.




          (f) Borrowers shall respond promptly to any Hazardous Discharge or Environmental Complaint and
take all necessary action in order to safeguard the health of any Person and to avoid subjecting
the Collateral or Real Property to any Lien. If any Borrower shall



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fail to respond promptly to any
Hazardous Discharge or Environmental Complaint or any Borrower shall fail to comply with any of the
requirements of any Environmental Laws, Agent on behalf of Lenders may, but without the obligation
to do so, for the sole purpose of protecting Agent’s interest in the Collateral: (A) give such
notices or (B) enter onto the Real Property (or authorize third parties to enter onto the Real
Property) and take such actions as Agent (or such third parties as directed by Agent) deem
reasonably necessary or advisable, to clean up, remove, mitigate or otherwise deal with any such
Hazardous Discharge or Environmental Complaint. All reasonable costs and expenses incurred by
Agent and Lenders (or such third parties) in the exercise of any such rights, including any sums
paid in connection with any judicial or administrative investigation or proceedings, fines and
penalties, together with interest thereon from the date expended at the Default Rate for Domestic
Rate Loans constituting Revolving Advances shall be paid upon demand by Borrowers, and until paid
shall be added to and become a part of the Obligations secured by the Liens created by the terms of
this Agreement or any other agreement between Agent, any Lender and any Borrower.




          (g) Promptly upon the written request of Agent from time to time, Borrowers shall provide
Agent, at Borrowers’ expense, with an environmental site assessment or environmental audit report
prepared by an environmental engineering firm acceptable in the reasonable opinion of Agent, to
assess with a reasonable degree of certainty the existence of a Hazardous Discharge and the
potential costs in connection with abatement, cleanup and removal of any Hazardous Substances found
on, under, at or within the Real Property. Any report or investigation of such Hazardous Discharge
proposed and acceptable to an appropriate Authority that is charged to oversee the clean-up of such
Hazardous Discharge shall be acceptable to Agent. If such estimates, individually or in the
aggregate, exceed $100,000, Agent shall have the right to require Borrowers to post a bond, letter
of credit or other security reasonably satisfactory to Agent to secure payment of these costs and
expenses.




          (h) Borrowers shall defend and indemnify Agent and Lenders and hold Agent, Lenders and their
respective employees, agents, directors and officers harmless from and against all loss, liability
(INCLUDING, WITHOUT LIMITATION, ANY STRICT LIABILITY), damage and expense, claims, costs, fines and
penalties, including attorney’s fees, suffered or incurred by Agent or Lenders under or on account
of any Environmental Laws, including the assertion of any Lien thereunder, with respect to any
Hazardous Discharge, the presence of any Hazardous Substances affecting the Real Property, whether
or not the same originates or emerges from the Real Property or any contiguous real estate,
including any loss of value of the Real Property as a result of the foregoing and INCLUDING,
WITHOUT LIMITATION, WITH RESPECT TO ANY ACT OR INACTION ARISING FROM AGENT’S OR ANY LENDER’S
NEGLIGENCE OR STRICT LIABILITY BUT NOT AGENT’S OR ANY LENDER’S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT. Borrowers’ obligations under this Section 4.18 shall arise upon the discovery of the
presence of any Hazardous Substances at the Real Property, whether or not any federal, state, or
local
environmental agency has taken or threatened any action in connection with the presence of any
Hazardous Substances. Borrowers’ obligation and the indemnifications hereunder shall survive the
termination of this Agreement.




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          (i) For purposes of Section 4.18 and 5.7, all references to Real Property shall be deemed to
include all of each Borrower’s right, title and interest in and to its owned and leased premises.




     4.19. Financing Statements. Except as to the financing statements filed by Agent and
the financing statements described on Schedule 1.2, no financing statement covering any of the
Collateral or any proceeds thereof is on file in any public office.



     4.20. Location of Equipment. Borrowers shall maintain Equipment within the United
States or Canada having a net book value (as determined in accordance with GAAP) of no less than
(i) thirty percent (30%) of the total net book value of all Equipment owned by Borrowers
irrespective of its location and (ii) $25,000,000.



V REPRESENTATIONS AND WARRANTIES.




     Each Borrower represents and warrants as follows:



     5.1. Authority. Each Borrower has full power, authority and legal right to enter into
this Agreement, the CIT Intercreditor Agreement, the RBC Intercreditor Agreement and the Other
Documents and to perform all its respective Obligations hereunder and thereunder. This Agreement
and the Other Documents have been duly executed and delivered by each Borrower, and this Agreement
and the Other Documents constitute the legal, valid and binding obligation of such Borrower
enforceable in accordance with their terms, except as such enforceability may be limited by any
applicable bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights
generally. The execution, delivery and performance of this Agreement and of the Other Documents
(a) are within such Borrower’s corporate powers, have been duly authorized by all necessary
corporate action, are not in contravention of law or the terms of such Borrower’s by-laws,
certificate of incorporation or other applicable documents relating to such Borrower’s formation or
to the conduct of such Borrower’s business or of any material agreement or undertaking to which
such Borrower is a party or by which such Borrower is bound, (b) will not conflict with or violate
any law or regulation, or any judgment, order or decree of any Governmental Body, (c) will not
require the Consent of any Governmental Body or any other Person, except those Consents set forth
on Schedule 5.1 hereto, all of which will have been duly obtained, made or compiled prior to the
Restated Closing Date and which are in full force and effect and (d) will not conflict with, nor
result in any breach in any of the provisions of or constitute a default under or result in the
creation of any Lien except Permitted Encumbrances upon any asset of such Borrower under the
provisions of any agreement, charter document, instrument, by-law or other instrument to which such
Borrower is a party or by which it or its
property is a party or by which it may be bound, including under the provisions of the
Acquisition Agreement.



     5.2. Formation and Qualification.



          (a) Each Borrower is duly organized and in good standing under the laws of the state or
province listed on Schedule 5.2(a) and is qualified to do business and is in good standing in the
states listed on Schedule 5.2(a) which constitute all states in which qualification and good
standing are necessary for such Borrower to conduct its business and own its property



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and where the
failure to so qualify could reasonably be expected to have a Material Adverse Effect on such
Borrower. Each Borrower has delivered to Agent true and complete copies of its certificate of
incorporation and by-laws or analogous documents and will promptly notify Agent of any amendment or
changes thereto.




          (b) The only Subsidiaries of each Borrower are listed on Schedule 5.2(b). With the exception
of Geokinetics, all equity interests of each Subsidiary listed on Schedule 5.2(b) are owned by
Geokinetics Holdings. All equity interests of Geokinetics Holdings are owned by Geokinetics.




     5.3. Survival of Representations and Warranties. All representations and warranties
of such Borrower contained in this Agreement and the Other Documents shall be true at the time of
such Borrower’s execution of this Agreement and the Other Documents, and shall survive the
execution, delivery and acceptance thereof by the parties thereto and the closing of the
transactions described therein or related thereto.



     5.4. Tax Returns. Each Borrower’s federal tax identification number is set forth on
Schedule 5.4. Each Borrower has filed all federal, state, provincial and local tax returns and
other reports each is required by law to file and has paid all taxes, assessments, fees and other
governmental charges that are due and payable. Federal, state and local income tax returns of each
Borrower have been examined and reported upon by the appropriate taxing authority or closed by
applicable statute and satisfied for all fiscal years prior to and including the fiscal year ending
December 31, 2001. The provision for taxes on the books of each Borrower is adequate for all years
not closed by applicable statutes, and for its current fiscal year, and no Borrower has any
knowledge of any deficiency or additional assessment in connection therewith not provided for on
its books.



     5.5. Financial Statements.



          (a) The pro forma balance sheet of Borrowers on a Consolidated Basis (the “Pro Forma Balance
Sheet”) furnished to Agent on the Restated Closing Date reflects the consummation of the
transactions contemplated under this Agreement (collectively, the “Transactions”) and is accurate,
complete and correct and fairly reflects the financial condition
of Borrowers on a Consolidated Basis as of the Restated Closing Date after giving effect to
the Transactions, and has been prepared in accordance with GAAP, consistently applied. The Pro
Forma Balance Sheet has been certified as accurate, complete and correct in all material respects
by the President and Chief Financial Officer of Borrowing Agent. All financial statements referred
to in this subsection 5.5(a), including the related schedules and notes thereto, have been
prepared, in accordance with GAAP, except as may be disclosed in such financial statements.




          (b) The twelve-month cash flow projections of Borrowers on a Consolidated Basis and their
projected balance sheets as of the Restated Closing Date, copies of which are annexed hereto as
Exhibit 5.5(b) (the “Projections”) were prepared by the Chief Financial Officer of Borrowing Agent,
are based on underlying assumptions which provide a reasonable basis for the projections contained
therein and reflect Borrowers’ judgment based on present circumstances of the most likely set of
conditions and course of action for the projected period.



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The cash flow Projections together with
the Pro Forma Balance Sheet, are referred to as the “Pro Forma Financial Statements”.




          (c) The consolidated and consolidating balance sheets of Borrowers, their Subsidiaries and
such other Persons described therein (including the accounts of all Subsidiaries for the respective
periods during which a subsidiary relationship existed) as of December 31, 2005, and the related
statements of income, changes in stockholder’s equity, and changes in cash flow for the period
ended on such date, all accompanied by reports thereon containing opinions without qualification by
independent certified public accountants, copies of which have been delivered to Agent, have been
prepared in accordance with GAAP, consistently applied (except for changes in application in which
such accountants concur and present fairly the financial position of Borrowers and their
Subsidiaries at such date and the results of their operations for such period. Since December 31,
2005, there has been no change in the condition, financial or otherwise, of Borrowers or their
Subsidiaries as shown on the consolidated balance sheet as of such date and no change in the
aggregate value of machinery, equipment and Real Property owned by Borrowers and their respective
Subsidiaries, except changes in the Ordinary Course of Business, none of which individually or in
the aggregate has been materially adverse.




     5.6. Entity Names. Other than Geokinetics Exploration, Inc. formerly known as Trace
Energy Services Ltd., no Borrower has been known by any other corporate name in the past five years
and does not sell Inventory under any other name except as set forth on Schedule 5.6, nor has any
Borrower been the surviving corporation of a merger or consolidation or acquired all or
substantially all of the assets of any Person during the preceding five (5) years.



     5.7. O.S.H.A. and Environmental Compliance.



          (a) Each Borrower has duly complied with, and its facilities, business, assets, property,
leaseholds, Real Property and Equipment are in compliance in all material respects with, the
provisions of the Federal Occupational Safety and Health Act, the Environmental Protection Act,
RCRA and all other Environmental Laws, and any Canadian equivalent thereof
with respect to the foregoing statutes; there have been no outstanding citations, notices or
orders of non-compliance issued to any Borrower or relating to its business, assets, property,
leaseholds or Equipment under any such laws, rules or regulations.




          (b) Each Borrower has been issued all required federal, state and local licenses, certificates
or permits relating to all applicable Environmental Laws.




          (c) (i) There are no visible signs of releases, spills, discharges, leaks or disposal
(collectively referred to as “Releases”) of Hazardous Substances at, upon, under or within any Real
Property or any premises leased by any Borrower; (ii) there are no underground storage tanks or
polychlorinated biphenyls on the Real Property or any premises leased by any Borrower; (iii)
neither the Real Property nor any premises leased by any Borrower has ever been used as a
treatment, storage or disposal facility of Hazardous Waste; and (iv) no Hazardous Substances are
present on the Real Property or any premises leased by any Borrower, excepting such quantities as
are handled in accordance with all applicable manufacturer’s instructions and governmental
regulations and in proper storage containers and as are necessary for the operation of the
commercial business of any Borrower or of its tenants.




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     5.8. Solvency; No Litigation, Violation, Indebtedness or Default.



          (a) Before and after giving effect to the Transactions and the funding of each Advance made
pursuant to this Agreement, each Borrower is and will be solvent, able to pay its debts as they
mature, has and will have capital sufficient to carry on its business and all businesses in which
it is about to engage, and (i) as of the Restated Closing Date, the fair present saleable value of
its assets, calculated on a going concern basis, is in excess of the amount of its liabilities and
(ii) subsequent to the Restated Closing Date, the fair saleable value of its assets (calculated on
a going concern basis) will be in excess of the amount of its liabilities.




          (b) Except as disclosed in Schedule 5.8(b), no Borrower has (i) any pending or threatened
litigation, arbitration, actions or proceedings which involve the possibility of having a Material
Adverse Effect, and (ii) any liabilities or indebtedness for borrowed money other than the
Obligations.




          (c) No Borrower is in violation of any applicable statute, law, rule, regulation or ordinance
in any respect which could reasonably be expected to have a Material Adverse Effect, nor is any
Borrower in violation of any order of any court, Governmental Body or arbitration board or
tribunal.




          (d) No Borrower nor any member of the Controlled Group maintains or contributes to any Plan
other than those listed on Schedule 5.8(d) hereto. (i) No Plan has incurred any “accumulated
funding deficiency,” as defined in Section 302(a)(2) of ERISA and Section 412(a) of the Code,
whether or not waived, and each Borrower and each member of the Controlled Group has met all
applicable minimum funding requirements under Section 302 of ERISA in respect of each Plan; (ii)
each Plan which is intended to be a qualified plan under Section 401(a) of the Code as currently in
effect has been determined by the Internal Revenue Service to be qualified under Section 401(a) of
the Code and the trust related thereto is exempt
from federal income tax under Section 501(a) of the Code; (iii) neither any Borrower nor any
member of the Controlled Group has incurred any liability to the PBGC other than for the payment of
premiums, and there are no premium payments which have become due which are unpaid; (iv) no Plan
has been terminated by the plan administrator thereof nor by the PBGC, and there is no occurrence
which would cause the PBGC to institute proceedings under Title IV of ERISA to terminate any Plan;
(v) at this time, the current value of the assets of each Plan exceeds the present value of the
accrued benefits and other liabilities of such Plan and neither any Borrower nor any member of the
Controlled Group knows of any facts or circumstances which would materially change the value of
such assets and accrued benefits and other liabilities; (vi) neither any Borrower nor any member of
the Controlled Group has breached any of the responsibilities, obligations or duties imposed on it
by ERISA with respect to any Plan; (vii) neither any Borrower nor any member of a Controlled Group
has incurred any liability for any excise tax arising under Section 4972 or 4980B of the Code, and
no fact exists which could give rise to any such liability; (viii) neither any Borrower nor any
member of the Controlled Group nor any fiduciary of, nor any trustee to, any Plan, has engaged in a
“prohibited transaction” described in Section 406 of the ERISA or Section 4975 of the Code nor
taken any action which would constitute or result in a Termination Event with respect to any such
Plan which is subject to ERISA; (ix) each Borrower and each member of the Controlled Group has made
all contributions due and payable with respect to each Plan; (x) there exists no event



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described in
Section 4043(b) of ERISA, for which the thirty (30) day notice period has not been waived; (xi)
neither any Borrower nor any member of the Controlled Group has any fiduciary responsibility for
investments with respect to any plan existing for the benefit of persons other than employees or
former employees of any Borrower and any member of the Controlled Group; (xii) neither any Borrower
nor any member of the Controlled Group maintains or contributes to any Plan which provides health,
accident or life insurance benefits to former employees, their spouses or dependents, other than in
accordance with Section 4980B of the Code; (xiii) neither any Borrower nor any member of the
Controlled Group has withdrawn, completely or partially, from any Multiemployer Plan so as to incur
liability under the Multiemployer Pension Plan Amendments Act of 1980 and there exists no fact
which would reasonably be expected to result in any such liability; (xiv) no Plan fiduciary (as
defined in Section 3(21) of ERISA) has any liability for breach of fiduciary duty or for any
failure in connection with the administration or investment of the assets of a Plan and (xv) with
respect to any Canadian Plans: (A) all contributions (including employee contributions made by
authorized payroll deductions or other withholdings) required to be made to the appropriate funding
agency in accordance with all Applicable Law and the terms of each Plan have been made in
accordance with all Applicable Law and the terms of each Plan; (B) all liabilities under each Plan
are funded, on a going concern and solvency basis, in accordance with the terms of the respective
Plans and the most recent actuarial report filed with respect to the Plan; and (C) to the extent
required by applicable pension benefit laws and applicable regulatory authorities, no event has
occurred and no conditions exist with respect to any Plan that has resulted or could reasonably be
expected to result in any Plan having its registration revoked or refused for the purposes of any
administration of any relevant pension benefits regulatory authority or being required to pay any
taxes or penalties under any applicable pension benefits or tax laws and there are no pending,
threatened or anticipated claims involving or relating to any of the Plans or welfare Plans (other
than routine claims for benefits).




     5.9. Patents, Trademarks, Copyrights and Licenses. All patents, patent applications, trademarks, trademark applications, service marks,
service mark applications, copyrights, copyright applications, design rights, tradenames, assumed
names, trade secrets and licenses owned or utilized by any Borrower are set forth on Schedule 5.9,
are valid and have been duly registered or filed with all appropriate Governmental Bodies and
constitute all of the intellectual property rights which are necessary for the operation of its
business; there is no objection to or pending challenge to the validity of any such patent,
trademark, copyright, design rights, tradename, trade secret or license and no Borrower is aware of
any grounds for any challenge, except as set forth in Schedule 5.9 hereto. Each patent, patent
application, patent license, trademark, trademark application, trademark license, service mark,
service mark application, service mark license, design rights, copyright, copyright application and
copyright license owned or held by any Borrower and all trade secrets used by any Borrower consist
of original material or property developed by such Borrower or was lawfully acquired by such
Borrower from the proper and lawful owner thereof. Each of such items has been maintained so as to
preserve the value thereof from the date of creation or acquisition thereof. With respect to all
software used by any Borrower, such Borrower is in possession of all source and object codes
related to each piece of software or is the beneficiary of a source code escrow agreement, each
such source code escrow agreement being listed on Schedule 5.9 hereto.




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     5.10. Licenses and Permits. Except as set forth in Schedule 5.10, each Borrower (a)
is in compliance with and (b) has procured and is now in possession of, all material licenses or
permits required by any applicable federal, state, provincial or local law, rule or regulation for
the operation of its business in each jurisdiction wherein it is now conducting or proposes to
conduct business and where the failure to procure such licenses or permits could have a Material
Adverse Effect.



     5.11. Default of Indebtedness. No Borrower is in default in the payment of the
principal of or interest on any Indebtedness or under any instrument or agreement under or subject
to which any Indebtedness has been issued and no event has occurred under the provisions of any
such instrument or agreement which with or without the lapse of time or the giving of notice, or
both, constitutes or would constitute an event of default thereunder.



     5.12. No Default. No Borrower is in default in the payment or performance of any of
its contractual obligations and no Default or Event of Default has occurred or, after giving effect
to the incurrence of any Obligations by Borrowers or the grant or perfection of Agent’s Liens on
the collateral, will occur.



     5.13. No Burdensome Restrictions. No Borrower is party to any contract or agreement
the performance of which could have a Material Adverse Effect. Each Borrower has heretofore
delivered to Agent true and complete copies of all material contracts to which it is a party or to
which it or any of its properties is subject. No Borrower has agreed or consented to cause or
permit in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or
hereafter acquired, to be subject to a Lien which is not a Permitted Encumbrance.



     5.14. No Labor Disputes. No Borrower is involved in any labor dispute; there are no
strikes or walkouts or union organization of any Borrower’s employees threatened or in existence
and no labor contract is scheduled to expire during the Term other than as set forth on Schedule
5.14 hereto.



     5.15. Use of Proceeds; Margin Regulations. The proceeds of the Advances are intended
to be and shall be used solely for the purposes set forth in and permitted by Section 2.23. No
Borrower is engaged, nor will it engage, principally or as one of its important activities, in the
business of extending credit for the purpose of “purchasing” or “carrying” any “margin stock”
within the respective meanings of each of the quoted terms under Regulation U of the Board of
Governors of the Federal Reserve System as now and from time to time hereafter in effect. No part
of the proceeds of any Advance will be used for “purchasing” or “carrying” “margin stock” as
defined in Regulation U of such Board of Governors.



     5.16. Investment Company Act. No Borrower is an “investment company” registered or
required to be registered under the Investment Company Act of 1940, as amended, nor is it
controlled by such a company.



     5.17. Disclosure. No representation or warranty made by any Borrower in this
Agreement, the Acquisition Agreement, or in any financial statement, report, certificate or any
other document furnished in connection herewith contains any untrue statement of fact or omits




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to
state any fact necessary to make the statements herein or therein not misleading. There is no fact
known to any Borrower or which reasonably should be known to such Borrower which such Borrower has
not disclosed to Agent in writing with respect to the transactions contemplated by this Agreement
or the Acquisition Agreement which could reasonably be expected to have a Material Adverse Effect.




     5.18. Swaps. No Borrower is a party to, nor will it be a party to, any swap agreement
whereby such Borrower has agreed or will agree to swap interest rates or currencies unless same
provides that damages upon termination following an event of default thereunder are payable on an
unlimited “two-way basis” without regard to fault on the part of either party.



     5.19. Conflicting Agreements. No provision of any mortgage, indenture, contract,
agreement, judgment, decree or order binding on any Borrower or affecting the Collateral conflicts
with, or requires any Consent
which has not already been obtained to, or would in any way prevent the execution, delivery or
performance of, the terms of this Agreement or the Other Documents.



     5.20. Application of Certain Laws and Regulations. Neither any Borrower nor any
Affiliate of any Borrower is subject to any law, statute, rule or regulation which regulates the
incurrence of any Indebtedness, including laws, statutes, rules or regulations relative to common
or interstate carriers or to the sale of electricity, gas, steam, water, telephone, telegraph or
other public utility services.



     5.21. Business and Property of Borrowers.



     Upon and after the Restated Closing Date, Borrowers do not propose to engage in any business
other than the acquisition and processing of high resolution seismic data for the petroleum
industry and activities necessary to conduct the foregoing. On the Restated Closing Date, each
Borrower will own all the property and possess all of the rights and Consents necessary for the
conduct of the business of such Borrower.



     5.22. Section 20 Subsidiaries. Borrowers do not intend to use and shall not use any
portion of the proceeds of the Advances, directly or indirectly, to purchase during the
underwriting period, or for 30 days thereafter, Ineligible Securities being underwritten by a
Section 20 Subsidiary.



     5.23. Anti-Terrorism Laws.



          (a) General. Neither any Borrower nor any Affiliate of any Borrower is in violation
of any Anti-Terrorism Law or engages in or conspires to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions
set forth in any Anti-Terrorism Law.




          (b) Executive Order No. 13224. Neither any Borrower nor any Affiliate of any Borrower
or their respective agents acting or benefiting in any capacity in connection with the Advances or
other transactions hereunder, is any of the following (each a “Blocked Person”):




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               (i) a Person that is listed in the annex to, or is otherwise subject to the provisions of, the
Executive Order No. 13224;



               (ii) a Person owned or controlled by, or acting for or on behalf of, any Person that is
listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No.
13224;



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



               (iv) a Person or entity that commits, threatens or conspires to commit or supports “terrorism”
as defined in the Executive Order No. 13224;



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



               (vi) a Person or entity who is affiliated or associated with a Person or entity listed above.



     Neither any Borrower nor to the knowledge of any Borrower, any of its agents acting in any
capacity in connection with the Advances or other transactions hereunder (i) conducts any business
or engages in making or receiving any contribution of funds, goods or services to or for the
benefit of any Blocked Person, or (ii) deals in, or otherwise engages in any transaction relating
to, any property or interests in property blocked pursuant to the Executive Order No. 13224.



     5.24. Trading with the Enemy. No Borrower has engaged, nor does it intend to engage,
in any business or activity prohibited by the Trading with the Enemy Act.



     5.25. Mechanic’s Liens. No mechanic’s liens, materialmen’s liens, liens against
mineral property or similar liens have been asserted by any party arising out of or in connection
with any labor performed or goods provided by the claimant while employed by, or under contract
with, any Borrower.



     5.26. Restricted Subsidiaries. None of the Restricted Subsidiaries (a) has assets
greater than $125,000 in the aggregate, or (b) has liabilities in excess of $500,000 in the
aggregate or (c) conducts any material business.



     5.27. Delivery of Acquisition Agreement. Agent has received complete copies of the
Acquisition Agreement (including all exhibits, schedules and disclosure letters referred to therein
or delivered pursuant thereto, if any) and all amendments thereto, waivers relating thereto and
other side letters or agreements affecting the terms thereof. None of such documents and
agreements has been amended or supplemented, nor have any of the provisions thereof been waived,
except pursuant to a written agreement or instrument which has heretofore been delivered to Agent.



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     5.28. Internal Controls and Procedures. The Borrowers maintain accurate Books and
Records and internal accounting controls which provide reasonable assurance that (i) all
transactions to which the Borrowers (or any of
them) are a party or by which their properties are bound are executed with management’s
authorization; (ii) the reported accountability of the Borrowers’ assets are compared with existing
assets at regular intervals; (iii) access to the Borrowers’ assets is permitted only in accordance
with management’s authorization; and (iv) all transactions to which the Borrowers (or any of them)
are a party or by which their properties are bound are recorded as necessary to permit preparation
of the financial statements of the Borrowers in accordance with GAAP.



VI AFFIRMATIVE COVENANTS.




     Each Borrower shall, until payment in full of the Obligations and termination of this
Agreement:



     6.1. Payment of Fees. Pay to Agent on demand all usual and customary fees and
expenses which Agent incurs in connection with (a) the forwarding of Advance proceeds and (b) the
establishment and maintenance of any Blocked Accounts or Depository Accounts as provided for in
Section 4.15(h). Agent may, without making demand, charge Borrowers’ Account for all such fees and
expenses.



     6.2. Conduct of Business and Maintenance of Existence and Assets.



          (a) Conduct continuously and operate actively its business according to good business
practices and maintain all of its properties and Equipment useful or necessary in its business in
good working order and condition (reasonable wear and tear excepted and except as such properties
may be disposed of in accordance with the terms of this Agreement), including all licenses,
patents, copyrights, design rights, tradenames, trade secrets and trademarks and take all actions
necessary to enforce and protect the validity of any intellectual property right or other right
included in the Collateral; (b) keep in full force and effect its existence and comply in all
material respects with the laws and regulations governing the conduct of its business where the
failure to do so could reasonably be expected to have a Material Adverse Effect; and (c) make all
such reports and pay all such franchise and other taxes and license fees and do all such other acts
and things as may be lawfully required to maintain its rights, licenses, leases, powers and
franchises under the laws of the United States or any political subdivision thereof and the laws of
Canada or any political subdivision thereof.




     6.3. Violations. Promptly notify Agent in writing of any violation of any law,
statute, regulation or ordinance of any Governmental Body, or of any agency thereof, applicable to
any Borrower which could reasonably be expected to have a Material Adverse Effect.



     6.4. Government Receivables.



          (a) Take all steps necessary to protect Agent’s interest in the Collateral under the Federal
Assignment of Claims Act, the Uniform Commercial Code and the Financial Administration Act
(Canada); and all other applicable state or local statutes or ordinances and deliver to Agent
appropriately endorsed, any instrument or chattel paper connected with any



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Receivable arising out
of contracts between any Borrower and the United States, any state or any department, agency or
instrumentality of any of them.




     6.5. Financial Covenants.




     (a) Net Worth. Maintain at all times a Net Worth in an amount
not less than $75,000,000.00.




     (b) Fixed Charge Coverage Ratio. Cause to be maintained as of
the end of each Test Period, a Fixed Charge Coverage Ratio of not less than
1.10 to 1.0.




     (c) Leverage Ratio. Maintain as at the last day of each Test Period a
Leverage Ratio of not more than 3.25:1.00.



     6.6. Execution of Supplemental Instruments. Execute and deliver to Agent from time to
time, upon demand, such supplemental agreements, statements, assignments and transfers, or
instructions or documents relating to the Collateral, and such other instruments as Agent may
request, in order that the full intent of this Agreement may be carried into effect.



     6.7. Payment of Indebtedness. Pay, discharge or otherwise satisfy at or before
maturity (subject, where applicable, to specified grace periods and, in the case of the trade
payables, to normal payment practices) all its obligations and liabilities of whatever nature,
except when the failure to do so could not reasonably be expected to have a Material Adverse Effect
or when the amount or validity thereof is currently being contested in good faith by appropriate
proceedings and each Borrower shall have provided for such reserves as Agent may reasonably deem
proper and necessary, subject at all times to any applicable subordination arrangement in favor of
Lenders.



     6.8. Standards of Financial Statements. Cause all financial statements referred to in
Sections 9.7, 9.8, 9.9, 9.10, 9.11, 9.12, 9.13, and 9.14 as to which GAAP is applicable to be
complete and correct in all material respects (subject, in the case of interim financial
statements, to normal year-end audit adjustments) and to be prepared in reasonable detail and in
accordance with GAAP applied consistently throughout the periods reflected therein (except as
concurred in by such reporting accountants or officer, as the case may be, and disclosed therein).



     6.9. Federal Securities Laws. Promptly notify Agent in writing if any Borrower or any of its Subsidiaries (i) is required
to file periodic reports under the Exchange Act, (ii) registers any securities under the Exchange
Act or (iii) files a registration statement under the Securities Act.



     6.10. Mechanic’s Liens. Promptly notify Agent of any mechanic’s liens, materialmen’s
liens, liens against mineral property or similar liens being asserted by any party arising out of
or in connection with any labor performed or goods provided by the claimant while employed by any
Borrower.



     6.11. Restricted Subsidiaries. Take all steps reasonably necessary to cause all of
the Restricted Subsidiaries to dissolve or otherwise terminate their existence in accordance with
the laws of their respective jurisdictions promptly following the Restated Closing Date and, at all




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times prior thereto, cause such Restricted Subsidiaries to conduct no material business activities,
to incur no obligations and to acquire no assets at any time after the Restated Closing Date.



     6.12. Exercise of Rights. Enforce all of its rights under the Acquisition Agreement
and any documents executed in connection therewith including, but not limited to, all
indemnification rights and pursue all remedies available to it with diligence and in good faith in
connection with the enforcement of any such rights, unless the failure to so exercise such rights
or pursue such remedies could not reasonably be expected to have a Material Adverse Effect.



     6.13. Maintenance of Material Contracts. Maintain all material contracts to which any
Borrower is a party as of the Restated Closing Date.



VII NEGATIVE COVENANTS.




     No Borrower shall, until satisfaction in full of the Obligations and termination of this
Agreement:



     7.1. Merger, Consolidation, Acquisition and Sale of Assets.



          (a) Except for the Grant Acquisition, enter into any merger, consolidation or other
reorganization with or into any other Person or acquire all or a substantial portion of the assets
or Equity Interests of any Person or permit any other Person to consolidate with or merge with it.




          (b) Sell, lease, transfer or otherwise dispose of any of its properties or assets, except (i)
dispositions of Inventory and Equipment to the extent expressly permitted by Section 4.3 and (ii)
any other sales or dispositions expressly permitted by this Agreement.”




     7.2. Creation of Liens. Create or suffer to exist any Lien or transfer upon or
against any of its property or assets now owned or hereafter acquired, except Permitted
Encumbrances.



     7.3. Guarantees. Become liable upon the obligations or liabilities of any Person by
assumption, endorsement or guaranty thereof or otherwise (other than to Lenders) except (a) as
disclosed on Schedule 7.3 and (b) the endorsement of checks in the Ordinary Course of Business.



     7.4. Investments. Purchase or acquire obligations or Equity Interests of, or any
other interest in, any Person, except (a) obligations issued or guaranteed by the United States of
America or any agency thereof, (b) commercial paper with maturities of not more than 270 days and a
published rating of not less than A-1 or P-1 (or the equivalent rating), (c) certificates of time
deposit and bankers’ acceptances having maturities of not more than 180 days and repurchase
agreements backed by United States government securities of a commercial bank if (i) such bank has
a combined capital and surplus of at least $500,000,000, or (ii) its debt obligations, or those of
a holding company of which it is a Subsidiary, are rated not less than A (or the equivalent rating)
by a nationally recognized investment rating agency, and (d) U.S. money market funds that invest
solely in obligations issued or guaranteed by the United States of America or an agency thereof.
Also excepted from this Section 7.4 are any deemed purchases of Equity Interests resulting from the
cashless exercise of stock options by the holders thereof and any repurchases of shares resulting
from the cashless exercise of stock options.




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     7.5. Loans. Make advances, loans or extensions of credit to any Person, including any
Parent, Subsidiary or Affiliate except with respect to (a) the extension of commercial trade credit
in connection with the sale of Inventory in the Ordinary Course of Business (b) loans to its
employees in the Ordinary Course of Business not to exceed the aggregate amount of $100,000 at any
time outstanding and (c) loans to other Borrowers provided that (1) such loans shall be
evidenced by a demand note (collectively, the “Intercompany Notes”), which Intercompany
Notes shall be in form and substance reasonably satisfactory to Agent and shall be pledged and
delivered to Agent pursuant to the applicable Pledge Agreement as additional collateral security
for the Obligations; (2) Borrowers shall record all intercompany transactions on their Books and
Records in a manner reasonably satisfactory to Agent; (3) the obligations of any Borrower under
any such Intercompany Notes shall be subordinated to the Obligations of Borrowers hereunder in a
manner reasonably satisfactory to Agent; (4) at the time any such intercompany loan or advance is
made by a Borrower to any other Borrower and after giving effect thereto, such Borrowers shall be
solvent and (5) no Default or Event of Default would occur and be continuing after giving effect to
any such proposed intercompany loan.



     7.6. Capital Expenditures. Permit the aggregate amount of Capital Expenditures made by Geokinetics and its
Subsidiaries in any fiscal year set forth below to exceed the amount set forth below for such
fiscal year:



	 	 	 	 	 
	Fiscal Year	 	Amount
	2006
	 	$	25,000,000	 
	 
	 	 	 	 
	2007
	 	$	36,500,000	 
	 
	 	 	 	 
	2008
	 	 	 	 
	and each fiscal year thereafter
	 	$	25,000,000	 






     7.7. Dividends. Declare, pay or make any dividend or distribution on any shares of
the common stock or preferred stock of any Borrower (other than (i) dividends and distributions by
Subsidiaries of Borrower paid to Borrower and dividends or distributions payable in its stock, or
split-ups or reclassifications of its stock and (ii) cash dividends paid in connection with the
Preferred Equity, provided that (a) there is no Default or Event of Default existing at the time of
the dividend payment and no Default or Event of Default shall occur as a result of such dividend
payment, (b) Undrawn Availability shall be at least $6,000,000.00 after giving effect to such
dividend payment and (c) Borrowers are in compliance with the Fixed Charge Coverage Ratio, on a pro
forma basis, after giving effect to such dividend payments) or apply any of its funds, property or
assets to the purchase, redemption or other retirement of any common or preferred stock, or of any
options to purchase or acquire any such shares of common or preferred stock of any Borrower. Also
excepted from this Section 7.7 are any deemed dividends or distributions resulting from the
cashless exercise of stock options by the holders thereof and any repurchases of shares resulting
from the cashless exercise of stock options.



     7.8. Indebtedness. Create, incur, assume or suffer to exist any Indebtedness
(exclusive of trade debt) except in respect of (i) Indebtedness to Lenders; (ii) Indebtedness
incurred for the



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Permitted Capital Lease Facility and Capital Expenditures permitted under Section
7.6 hereof; (iii) Indebtedness listed on Schedule 7.8 hereto; and (iv) the Investor Notes (the
foregoing being referred to herein as “Permitted Indebtedness”).



     7.9. Nature of Business. Substantially change the nature of the business in which it
is presently engaged, nor except as specifically permitted hereby purchase or invest, directly or
indirectly, in any assets or property other than in the Ordinary Course of Business for assets or
property which are useful in, necessary for and are to be used in its business as presently
conducted.



     7.10. Transactions with Affiliates. Unless expressly permitted under this Agreement, directly or indirectly, purchase, acquire
or lease any property from, or sell, transfer or lease any property to, or otherwise enter into any
transaction or deal with, any Affiliate, except transactions disclosed to the Agent, which are in
the Ordinary Course of Business, on an arm’s-length basis on terms and conditions no less favorable
than terms and conditions which would have been obtainable from a Person other than an Affiliate.



     7.11. [Reserved].



     7.12. Subsidiaries.



          (a) Form any Subsidiary unless (i) such Subsidiary expressly joins in this Agreement as a
borrower and becomes jointly and severally liable for the obligations of Borrowers hereunder, under
the Notes, and under any other agreement between any Borrower and Lenders and (ii) Agent shall have
received all documents, including legal opinions, it may reasonably require to establish compliance
with each of the foregoing conditions.




          (b) Enter into any partnership, joint venture or similar arrangement.




     7.13. Fiscal Year and Accounting Changes. Change its fiscal year from December 31 or
make any change (i) in accounting treatment and reporting practices except as required by GAAP or
(ii) in tax reporting treatment except as required by law.



     7.14. Pledge of Credit. Now or hereafter pledge Agent’s or any Lender’s credit on any
purchases or for any purpose whatsoever or use any portion of any Advance in or for any business
other than such Borrower’s business as conducted on the date of this Agreement.



     7.15. Amendment of Articles of Incorporation or By-Laws. Amend, modify or waive any
material term or material provision of its Articles of Incorporation or By-Laws unless required by
law.



     7.16. Compliance with ERISA. (i) (x) Maintain, or permit any member of the Controlled
Group to maintain, or (y) become obligated to contribute, or permit any member of the Controlled
Group to become obligated to contribute, to any Plan, other than those Plans disclosed on Schedule
5.8(d), (ii) engage, or permit any member of the Controlled Group to engage, in any non-exempt
“prohibited transaction”, as that term is defined in section 406 of ERISA and Section 4975 of the
Code, (iii) incur, or permit any member of the Controlled Group to incur, any “accumulated
funding deficiency”, as that term is defined in Section 302 of ERISA



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or Section 412 of the
Code, (iv) terminate, or permit any member of the Controlled Group to terminate, any Plan where
such event could result in any liability of any Borrower or any member of the Controlled Group or
the imposition of a lien on the property of any Borrower or any member of the Controlled Group
pursuant to Section 4068 of ERISA, (v) assume, or permit any member of the Controlled Group to
assume, any obligation to contribute to any Multiemployer Plan not disclosed on Schedule 5.8(d),
(vi) incur, or permit any member of the Controlled Group to incur, any withdrawal liability to any
Multiemployer Plan; (vii) fail promptly to notify Agent of the occurrence of any Termination Event,
(viii) fail to comply, or permit a member of the Controlled Group to fail to comply, with the
requirements of ERISA or the Code or other Applicable Laws in respect of any Plan, (ix) fail to
meet, or permit any member of the Controlled Group to fail to meet, all minimum funding
requirements under ERISA or the Code or postpone or delay or allow any member of the Controlled
Group to postpone or delay any funding requirement with respect of any Plan and (x) with respect to
Canadian Plans, fail to make contributions (including employee contributions made by authorized
payroll deductions or other withholdings) required to be made to the appropriate funding agency in
accordance with all Applicable Law and the terms of each Plan, in accordance with all Applicable
Law and the terms of each Plan or permit any liabilities under each Plan to be fully funded, on a
going concern and solvency basis, in accordance with the terms of the respective Plans, and the
most recent actuarial report filed with respect to the Plan, and to the extent required by
applicable pension benefit laws and applicable regulatory authorities, or permit any Plan to have
its registration revoked or refused for the purposes of any administration of any relevant pension
benefits regulatory authority or have to pay any taxes or penalties under any applicable pension
benefits or tax laws.



     7.17. Prepayment of Indebtedness. At any time, (i) other than the conversion of the
Subordinated Debt to Equity Interests, directly or indirectly, prepay, repurchase, redeem, retire
or otherwise acquire any subordinated Indebtedness, (ii) use the proceeds of any Indebtedness to
prepay, repurchase, redeem, retire or otherwise acquire any other Indebtedness (including
subordinated Indebtedness), (iii) make or receive any payments whatsoever with respect to any
Intercompany Note without the prior written consent of Agent, except, that, a
Borrower may make or receive payments in satisfaction of such Intercompany Note in the form of the
Equity Interests of the debtor with respect to such Intercompany Note, (iv) prepay, repurchase,
redeem, retire or otherwise acquire any Indebtedness of any Borrower, but (a) if (1) no Default or
Event of Default has occurred and is continuing and no Default or Event of Default would result
from such payment or transaction and (2) Undrawn Availability is at least $6,000,000 after giving
effect to such prepayment or transaction, then Borrowers may prepay, repurchase, redeem, retire or
otherwise acquire any Indebtedness (other than the Investor Notes) of any Borrower, or (b) if (1)
no Default or Event of Default has occurred and is continuing and no Default or Event of Default
would result from such payment or transaction, (2) Undrawn Availability is at least $6,000,000
after giving effect to such prepayment or transaction and (3) the funds used to make such
prepayment, repurchase, redemption retirement or acquisition are the proceeds of new equity issued
by Geokinetics, then Borrowers may prepay, repurchase, redeem, retire or otherwise acquire the
Investor Notes or prepay the Permitted Capital Lease Facility, and (c) if (1) no Default or Event
of Default has occurred and is continuing and no Default or Event of Default would result from such
payment or transaction, (2) the funds used to make such prepayment, repurchase, redemption
retirement or
acquisition are the proceeds of new equity issued by Geokinetics and (3) the redemption of the
Investor Notes will be made within six months after




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the Restated Closing Date pursuant to and in
compliance with Section 3.07(a) of the Indenture, then Borrowers may redeem the Investor Notes
pursuant to such Section 3.07(a).



     7.18. Anti-Terrorism Laws. No Borrower shall, until satisfaction in full of the
Obligations and termination of this Agreement, nor shall it permit any Affiliate or agent to:



          (a) Conduct any business or engage in any transaction or dealing with any Blocked Person,
including the making or receiving any contribution of funds, goods or services to or for the
benefit of any Blocked Person.




          (b) Deal in, or otherwise engage in any transaction relating to, any property or interests in
property blocked pursuant to the Executive Order No. 13224.




          (c) Engage in or conspire to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in the
Executive Order No. 13224, the USA PATRIOT Act or any other Anti-Terrorism Law. Borrower shall
deliver to Lenders any certification or other evidence requested from time to time by any Lender in
its sole discretion, confirming Borrower’s compliance with this Section.




     7.19. Membership/Partnership Interests. Elect to treat or permit any of its
Subsidiaries to (x) treat its limited liability company membership interests or partnership
interests, as the case may be, as securities as contemplated by the definition of “security” in
Section 8-102(15) and by Section 8-103 of Article 8 of Uniform Commercial Code or (y) certificate
its limited liability company membership interests or partnership interests, as the case may be.



     7.20. Trading with the Enemy Act. Engage in any business or activity in violation of
the Trading with the Enemy Act.



     7.21. Other Agreements. Enter into any material amendment, waiver or modification of
the Acquisition Agreement or any related agreements.



     7.22. Change of Control. Permit any Change of Control or Change of Ownership to
occur.



     7.23. Note Documents. Without the prior written consent of Agent, amend, modify or
supplement, nor permit or consent to any amendment, modification or supplement of the Note
Documents in any manner that would (i) result in a default under this Agreement, (ii) increase the
obligations of any Borrower under the Indenture or the Note Documents, (iii) confer additional
material rights on the Indenture Trustee or the holders of the Investor Notes in a manner adverse
in any material respect to any Borrower, Agent or the Lenders, nor permit any other Person to do
any of the foregoing.



VIII CONDITIONS PRECEDENT.




     8.1. Conditions to Initial Advances. The agreement of Lenders to make the initial
Advances requested to be made on the Restated Closing Date is subject to the satisfaction, or
waiver by Agent, immediately prior to or concurrently with the making of such Advances, of the
following conditions precedent:



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          (a) Notes. Agent shall have received the Notes duly executed and delivered by an
authorized officer of each Borrower;




          (b) Filings, Registrations and Recordings. Each document (including any Uniform
Commercial Code financing statement) required by this Agreement, any related agreement or under law
or reasonably requested by the Agent to be filed, registered or recorded in order to create, in
favor of Agent, a perfected security interest in or lien upon the Collateral shall have been
properly filed, registered or recorded in each jurisdiction in which the filing, registration or
recordation thereof is so required or requested, and Agent shall have received an acknowledgment
copy, or other evidence satisfactory to it, of each such filing, registration or recordation and
satisfactory evidence of the payment of any necessary fee, tax or expense relating thereto;




          (c) Company Proceedings of Borrowers. Agent shall have received a copy of the
resolutions in form and substance reasonably satisfactory to Agent, of the board of directors,
management committee, or managing member, as applicable, of each Borrower authorizing (i) the
execution, delivery and performance of this Agreement, the Notes, the Permitted Capital Lease
Facility, and any related agreements, (collectively the “Documents”) and (ii) the granting by each
Borrower of the security interests in and liens upon the Collateral in each case certified by the
Secretary or an Assistant Secretary of each Borrower as of the Restated Closing Date; and, such
certificate shall state that the resolutions thereby certified have not been amended, modified,
revoked or rescinded as of the date of such certificate;




          (d) Incumbency Certificates of Borrowers. Agent shall have received a certificate of
the Secretary or an Assistant Secretary of each Borrower, dated the Restated Closing Date, as to
the incumbency and signature of the officers of each Borrower executing this Agreement, the Other
Documents, any certificate or other documents to be delivered by it pursuant hereto, together with
evidence of the incumbency of such Secretary or Assistant Secretary;




          (e) Certificates. Agent shall have received a copy of the Articles or Certificate of
Incorporation or analogous document of each Borrower and all amendments thereto, certified by the
Secretary of State or other appropriate official of its jurisdiction of incorporation or
organization together with copies of the By-Laws or analogous document of
each Borrower and all agreements of each Borrower’s shareholders or members, as applicable,
certified as accurate and complete by the Secretary of each Borrower;




          (f) Good Standing Certificates. Agent shall have received good standing certificates
or similar document for each Borrower dated not more than ten (10) days prior to the Restated
Closing Date, issued by the Secretary of State or other appropriate official of each Borrower’s
jurisdiction of incorporation or organization and each jurisdiction where the conduct of each
Borrower’s business activities or the ownership of its properties necessitates qualification;




          (g) Legal Opinion. Agent shall have received the executed legal opinion (upon which
the Lenders shall be permitted to rely) of Borrowers’ counsel in form and substance satisfactory to
Agent which shall cover such matters incident to the transactions contemplated by




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this Agreement,
the Notes, the Other Documents and related agreements as Agent may reasonably require and each
Borrower hereby authorizes and directs such counsel to deliver such opinions to Agent and Lenders;




          (h) No Litigation. (i) No litigation, investigation or proceeding before or by any
arbitrator or Governmental Body shall be continuing or threatened against any Borrower or against
the officers or directors of any Borrower (A) in connection with this Agreement, the Other
Documents or any of the transactions contemplated thereby and which, in the reasonable opinion of
Agent, is deemed material or (B) which could, in the reasonable opinion of Agent, have a Material
Adverse Effect; and (ii) no injunction, writ, restraining order or other order of any nature
materially adverse to any Borrower or the conduct of its business or inconsistent with the due
consummation of the Transactions shall have been issued by any Governmental Body;




          (i) Financial Condition Certificates. Agent shall have received an executed Financial
Condition Certificate in the form of Exhibit 8.1(k).




          (j) Collateral Examination. Agent shall have completed Collateral examinations,
audits and received appraisals, the results of which shall be satisfactory in form and substance to
Lenders, of the Receivables, Inventory, General Intangibles, Real Property, Leasehold Interest and
Equipment of each Borrower and all Books and Records in connection therewith;




          (k) Fees. Agent shall have received all fees payable to Agent and Lenders on or prior
to the Restated Closing Date hereunder, including pursuant to Article III hereof and received
payment of all expenses reimbursable to Agent pursuant to this Agreement;




          (l) Pro Forma Financial Statements. Agent shall have received a copy of the Pro Forma
Financial Statements, including projections covering the Term, such projections evidencing
Borrowers’ ability to repay all Advances and Obligations hereunder, which Pro Forma Financial
Statements and projections shall be satisfactory in all respects to Lenders;




          (m) Insurance. Agent shall have received in form and substance satisfactory to Agent,
certified copies of Borrowers’ casualty insurance policies, together with loss payable endorsements
on Agent’s standard form of loss payee endorsement naming Agent as loss payee,
and certified copies of Borrowers’ liability insurance policies, together with endorsements
naming Agent as a co-insured;




          (n) Payment Instructions. Agent shall have received written instructions from
Borrowing Agent directing the application of proceeds of the initial Advances made pursuant to this
Agreement;




          (o) Blocked Accounts. Agent shall have received duly executed agreements establishing
the Blocked Accounts or Depository Accounts with financial institutions acceptable to Agent for the
collection or servicing of the Receivables and proceeds of the Collateral;




          (p) Consents. Agent shall have received any and all Consents necessary to permit the
effectuation of the transactions contemplated by this Agreement and the Other



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Documents; and, Agent
shall have received such Consents and waivers of such third parties as might assert claims with
respect to the Collateral, as Agent and its counsel shall deem necessary;




          (q) No Adverse Material Change. (i) since December 31, 2005, there shall not have
occurred any material change or any event, condition or state of facts which could reasonably be
expected to have a Material Adverse Effect and (ii) no representations made or information supplied
to Agent or Lenders shall have been proven to be inaccurate or misleading in any material respect;




          (r) Leasehold Agreements. Agent shall have received all required landlord, mortgagee
or warehouseman agreements satisfactory to Agent with respect to any premises leased by Borrowers
at which Collateral and Books and Records are located;




          (s) Financial Statements. Agent shall have received the Borrowers’ financial
statements (i) described in Section 9.7 hereof for the Borrowers’ fiscal year ending in 2005, (ii)
described in Section 9.8 hereof for the Borrowers’ fiscal quarter ending September 30, 2006 and
(iii) described in Section 9.9 hereof for the month ending October 31, 2006;




          (t) Document Review. Agent shall have reviewed (i) all material contracts of
Borrowers including purchase and sale agreements (including related documentation specifying
representations and warranties), leases, union contracts, labor contracts, vendor supply contracts,
customer agreements, license agreements and distributorship agreements and such contracts and
agreements shall be satisfactory in all respects to Agent, (ii) the books and records of Borrowers
and such books and records shall be satisfactory in all respects to Agent and (iii) trade
references satisfactory in all respects to Agent;




          (u) Closing Certificate. Agent shall have received a closing certificate signed by
the Chief Financial Officer of each Borrower dated as of the date hereof, stating that (i) all
representations and warranties set forth in this Agreement and the Other Documents are true and
correct on and as of such date, (ii) Borrowers are on such date in compliance with all the terms
and provisions set forth in this Agreement and the Other Documents and (iii) on such date no
Default or Event of Default has occurred or is continuing;




          (v) Borrowing Base. Agent shall have received an executed Borrowing Base Certificate
dated as of the Restated Closing Date in form and substance satisfactory to Agent;




          (w) Undrawn Availability. After giving effect to the initial Advances hereunder,
Borrowers shall have Undrawn Availability of at least $20,000,000.00. Cash Balance in Blocked
Accounts or funds in accounts with Agent shall be included for the purposes of testing Undrawn
Availability on the Restated Closing Date;




          (x) Compliance with Laws. Agent shall be reasonably satisfied that each Borrower is
in compliance with all pertinent federal, state, local, provincial, foreign or territorial
regulations, including those with respect to the Federal Occupational Safety and Health Act, the
Environmental Protection Act, ERISA and the Trading with the Enemy Act and any Canadian equivalent
thereof.




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          (y) Reasonable Assurances. Agent shall have received and be satisfied with an
analysis by Agent’s counsel of the applicability of mechanic’s liens and/or liens against mineral
property in the Borrowers’ industry as they relate to subcontractors, accounts payable risks and
reservations from borrowing base.




          (z) Field Examination. Agent shall have received a satisfactory asset-based field
examination to be completed by examiners selected by Agent.




          (aa) Existing Financing. (i) All loans and obligations of the Borrowers with respect
to the Senior Bridge Debt shall be repaid with the Investor Notes and the Subordinated Debt shall
be repaid through conversion to preferred equity, such transactions to be acceptable to Agent in
its sole discretion, and (ii) each of the Credit Agreement, dated as of September 8, 2006, by and
among Royal Bank of Canada, as agent, and certain other lenders and Geokinetics Holdings and the
Senior Subordinated Loan Agreement, dated as of September 8, 2006, shall be terminated and all
liens and security interests in favor of the agent and lenders party thereto shall be terminated
and/or released.




          (bb) Other Documents. Agent shall have received (i) the executed Pledge Agreements,
and (ii) the executed Other Documents, all in form and substance satisfactory to Agent.




          (cc) Payoff of Debt and Release of Liens. Borrowers shall have paid in full all
existing debts and obligations, except those listed on Schedule 7.8, and Agent shall have received
evidence of these payoffs in form and substance satisfactory to Agent. All liens against Borrowers
shall have been released, except those listed on Schedule 1.2.




          (dd) RBC Intercreditor Agreement. Indenture Trustee, Borrowers and Agent shall have
entered into the RBC Intercreditor Agreement, in form and substance satisfactory to Agent in its
sole discretion.




          (ee) Other. All corporate and other proceedings, all background and reference checks,
examinations and other investigations, and all documents, instruments and other legal matters in
connection with this Agreement and the Other Documents (including, but not limited to, those
relating to the corporate and capital structures of Borrowers) shall be satisfactory in form and
substance to Agent and its counsel.




     8.2. Conditions to Each Advance. The agreement of Lenders to make any Advance requested to be made on any date (including
the initial Advance), is subject to the satisfaction of the following conditions precedent as of
the date such Advance is made:



          (a) Representations and Warranties. Each of the representations and warranties made
by any Borrower in or pursuant to this Agreement, the Other Documents and any related agreements to
which it is a party, and each of the representations and warranties contained in any certificate,
document or financial or other statement furnished at any time under or in connection with this
Agreement, the Other Documents or any related agreement shall be true and correct in all material
respects on and as of such date as if made on and as of such date;



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          (b) No Default. No Event of Default or Default shall have occurred and be continuing
on such date, or would exist after giving effect to the Advances requested to be made, on such
date; provided, however that Agent, in its sole discretion, may continue to make Advances
notwithstanding the existence of an Event of Default or Default and that any Advances so made shall
not be deemed a waiver of any such Event of Default or Default; and




          (c) Maximum Advances. In the case of any type of Advance requested to be made, after
giving effect thereto, the aggregate amount of such type of Advance shall not exceed the maximum
amount of such type of Advance permitted under this Agreement.




     Each request for an Advance by any Borrower hereunder shall constitute a representation and
warranty by each Borrower as of the date of such Advance that the conditions contained in this
subsection shall have been satisfied.



     8.3. Conditions to Each CapEx Loan. The agreement of Lenders to make any CapEx Loan
is subject to satisfaction of the following conditions precedent: (a) receipt by Agent of (i) a
copy of the invoice relating to the Equipment being purchased, (ii) evidence that such Equipment
has been shipped to the applicable Borrower, (iii) evidence that the requested CapEx Loan does not
exceed ninety percent (90%) of the net invoice cost of such Equipment purchased by such Borrower
(which shall be exclusive of shipping, delivery, handling, taxes, overhead, installation and all
other “soft” costs), and (iv) such other documentation and evidence that Agent may request; and (b)
after giving effect thereto, the aggregate outstanding principal amount of CapEx Loans shall not
exceed the Maximum CapEx Loan Amount.



IX INFORMATION AS TO BORROWERS.




     Each Borrower shall, or (except with respect to Section 9.12) shall cause Borrowing Agent on
its behalf to, until satisfaction in full of the Obligations and the termination of this Agreement:



     9.1. Disclosure of Material Matters. Immediately upon learning thereof, report to
Agent all matters materially affecting the value, enforceability or collectability of any portion
of the Collateral, including any Borrower’s
reclamation or repossession of, or the return to any Borrower of, a material amount of goods
or claims or disputes asserted by any Customer or other obligor.



     9.2. Schedules. Deliver to Agent on or before the fifteenth (15th) day of each month
as and for the prior month (a) accounts receivable ageings and reconciliations to the general
ledger, (b) accounts payable schedules inclusive of reconciliations to the general ledger,
inclusive of all subcontractor balances and (c) Inventory reports. In addition, each Borrower will
deliver to Agent at such intervals as Agent may require: (i) confirmatory assignment schedules,
(ii) copies of Customer’s invoices, (iii) evidence of shipment or delivery, if applicable, and (iv)
such further schedules, documents and/or information regarding the Collateral as Agent may require
including trial balances and test verifications. Agent shall have the right to confirm and verify
all Receivables by any manner and through any medium it considers advisable and do whatever it may
deem reasonably necessary to protect its interests hereunder. The items to be provided under this
Section are to be in form satisfactory to Agent and executed by each



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Borrower and delivered to
Agent from time to time solely for Agent’s convenience in maintaining records of the Collateral,
and any Borrower’s failure to deliver any of such items to Agent shall not affect, terminate,
modify or otherwise limit Agent’s Lien with respect to the Collateral.




     9.3. Environmental Reports. Furnish Agent, concurrently with the delivery of the
financial statements referred to in Sections 9.7 and 9.8, with a certification in the Compliance
Certificate, stating, to the best of his knowledge, that each Borrower is in compliance in all
material respects with all federal, state and local Environmental Laws. To the extent any Borrower
is not in compliance with the foregoing laws, the certificate shall set forth with specificity all
areas of non-compliance and the proposed action such Borrower will implement in order to achieve
full compliance.



     9.4. Litigation. Promptly notify Agent in writing of any claim, litigation, suit or
administrative proceeding affecting any Borrower or any Guarantor, whether or not the claim is
covered by insurance, and of any litigation, suit or administrative proceeding, which in any such
case affects the Collateral or which could reasonably be expected to have a Material Adverse
Effect.



     9.5. Material Occurrences. Promptly notify Agent in writing upon the occurrence of
(a) any Event of Default or Default; (b) any event which with the giving of notice or lapse of
time, or both, would constitute an Event of Default; (c) any event, development or circumstance
whereby any financial statements or other reports furnished to Agent fail in any material respect
to present fairly, in accordance with GAAP consistently applied, the financial condition or
operating results of any Borrower as of the date of such statements; (d) any accumulated retirement
plan funding deficiency which, if such deficiency continued for two plan years and was not
corrected as provided in Section 4971 of the Code, could subject any Borrower to a tax imposed by
Section 4971 of the Code or any accumulated retirement plan funding deficiency which could subject
any Borrower to a tax imposed by Applicable Law with respect to a Canadian Plan; (e) each and
every default by any Borrower which might result in the acceleration of the maturity of any
Indebtedness, including the names and addresses of the holders of such Indebtedness with respect to
which there is a default existing or with respect to which the maturity has been or could be
accelerated, and the amount of such Indebtedness; and (f) any other development in the business or
affairs of any Borrower or any Guarantor which could reasonably be expected to have a Material
Adverse Effect; in each case describing the nature thereof and the action Borrowers propose to take
with respect thereto.



     9.6. Government Receivables. Notify Agent promptly, but in any event within five (5)
Business Days, if any of its Receivables arise out of contracts between any Borrower and the United
States, any state, or any department, agency or instrumentality of any of them.



     9.7. Annual Financial Statements. Furnish Agent within one hundred twenty (120) days
after the end of each fiscal year of Borrowers, financial statements of Borrowers on a
consolidating and consolidated basis including, but not limited to, audited statements of income
and stockholders’ equity, retained earnings and cash flow from the beginning of the current fiscal
year to the end of such fiscal year and the audited balance sheet as at the end of such fiscal
year, all prepared in accordance with GAAP applied on a basis consistent with prior practices, and
in



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reasonable detail and reported upon without qualification by an independent certified public
accounting firm selected by Borrowers and satisfactory to Agent (the “Accountants”). The report of
the Accountants shall be accompanied by a statement of the Accountants certifying that (i) they
have caused this Agreement to be reviewed, (ii) in making the examination upon which such report
was based either no information came to their attention which to their knowledge constituted an
Event of Default or a Default under this Agreement or any related agreement or, if such information
came to their attention, specifying any such Default or Event of Default, its nature, when it
occurred and whether it is continuing, and such report shall contain or have appended thereto
calculations which set forth Borrowers’ compliance with the requirements or restrictions imposed by
Sections 6.5, 7.4, 7.5, 7.6, 7.7, 7.8 and 7.11 hereof. In addition, the reports shall be
accompanied by (x) copies of any management letters of the Accountants addressed to any Borrower
and (y) a Compliance Certificate, including calculations of all financial covenants required by
this Agreement, prepared and executed by the Borrowers’ auditor and the Chief Executive Officer,
President or Chief Financial Officer of the Borrowing Agent.




     9.8. Quarterly Financial Statements. Furnish Agent within forty-five (45) days after
the end of each fiscal quarter (or within fifty (50) days after the end of such fiscal quarter if,
and only if, Borrowers have been granted an extension by the SEC for Borrowers’ 10Q report for such
fiscal quarter), an unaudited balance sheet of Borrowers on a consolidated and consolidating basis
and unaudited statements of income and stockholders’ equity and cash flow of Borrowers on a
consolidated and consolidating basis reflecting results of operations from the beginning of the
fiscal year to the end of such quarter and for such quarter, prepared on a basis consistent with
prior practices and complete and correct in all material respects, subject to normal and recurring
year end adjustments that
individually and in the aggregate are not material to Borrowers’ business. The reports shall
be accompanied by a Compliance Certificate.



     9.9. Monthly Financial Statements. Furnish Agent within (i) forty-five (45) days
after the end of each month for the months of December, March, June and September (or within fifty
(50) days after the end of such fiscal quarter if, and only if, Borrowers have been granted an
extension by the SEC for Borrowers’ 10Q report for such fiscal quarter) and (ii) thirty (30) days
after the end of each month for each other month, an unaudited balance sheet of Borrowers on a
consolidated and consolidating basis and unaudited statements of income and stockholders’ equity,
retained earnings and cash flow of Borrowers on a consolidated and consolidating basis reflecting
results of operations from the beginning of the fiscal year to the end of such month and for such
month, prepared on a basis consistent with prior practices and complete and correct in all material
respects, subject to normal and recurring year end adjustments that individually and in the
aggregate are not material to Borrowers’ business. The reports shall be accompanied by a
Compliance Certificate and shall contain a backlog report that includes projects per Customer and a
summary of all material variances from budgets submitted by Borrowers pursuant to Section 9.13 and,
at Agent’s request, a discussion and analysis by management with respect to such variances.



     9.10. Borrowing Base Certificate. Deliver to Agent on or before the last Business Day
of (i) each month, if Undrawn Availability is at least $6,000,000 at such time or (ii) each week,
if Undrawn Availability is below $6,000,000 at such time, as and for the prior month or week, as
applicable, a Borrowing Base Certificate in form and substance satisfactory to Agent (which



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shall
be calculated as of the last day of the prior month or prior week, as applicable and which shall
not be binding upon Agent or restrictive of Agent’s rights under this Agreement), including
reporting of sales, collections and credits.




     9.11. Other Reports. Furnish Agent as soon as available, but in any event within ten
(10) days after the issuance thereof, with copies of such financial statements, reports and returns
as each Borrower shall send to its stockholders.



     9.12. Additional Information. Furnish Agent with such additional information as Agent
shall reasonably request in order to enable Agent to determine whether the terms, covenants,
provisions and conditions of this Agreement and the Notes have been complied with by Borrowers
including, without the necessity of any request by Agent, (a) copies of all environmental audits
and reviews, (b) at least thirty (30) days prior thereto, notice of any Borrower’s opening of any
new office or place of business or any Borrower’s closing of any existing office or place of
business, and (c) promptly upon any Borrower’s learning thereof, notice of any labor dispute to
which any Borrower may become a party, any strikes or walkouts relating to any of its plants or
other facilities, and the expiration of any labor contract to which any Borrower is a party or by
which any Borrower is bound.



     9.13. Projected Operating Budget. Furnish Agent, within thirty (30) days after the
end of each fiscal year of Borrowers, commencing with fiscal year 2006, a month by month projected
operating budget and cash flow of Borrowers on a consolidated and consolidating basis, approved by
the board of directors of Borrowers, for the following fiscal year (including (i) an income
statement for each month, (ii) a balance sheet as at the end of each month, (iii) cash flow
statements for each month and (iv) key assumptions, including capital spending plans), such
projections to be accompanied by a certificate signed by the President or Chief Financial Officer
of each Borrower to the effect that such projections have been prepared on the basis of sound
financial planning practice consistent with past budgets and financial statements and that such
officer has no reason to question the reasonableness of any material assumptions on which such
projections were prepared.



     9.14. [Reserved].



     9.15. Notice of Suits, Adverse Events. Furnish Agent with prompt written notice of
(i) any lapse or other termination of any Consent issued to any Borrower by any Governmental Body
or any other Person that is material to the operation of any Borrower’s business, (ii) any refusal
by any Governmental Body or any other Person to renew or extend any such Consent; and (iii) copies
of any periodic or special reports filed by any Borrower or any Guarantor with any Governmental
Body or Person, if such reports indicate any material change in the business, operations, affairs
or condition of any Borrower or any Guarantor, or if copies thereof are requested by Lender, and
(iv) copies of any material notices and other communications from any Governmental Body or Person
which specifically relate to any Borrower or any Guarantor.



     9.16. ERISA Notices and Requests. Furnish Agent with immediate written notice in the
event that (i) any Borrower or any member of the Controlled Group knows or has reason to know that
a Termination Event has occurred, together with a written statement describing such Termination
Event and the action, if any, which such Borrower or any member of the Controlled



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Group has taken,
is taking, or proposes to take with respect thereto and, when known, any action taken or threatened
by the Internal Revenue Service, Department of Labor or PBGC with respect thereto, (ii) any
Borrower or any member of the Controlled Group knows or has reason to know that a prohibited
transaction (as defined in Sections 406 of ERISA and 4975 of the Code) has occurred together with a
written statement describing such transaction and the action which such Borrower or any member of
the Controlled Group has taken, is taking or proposes to take with respect thereto, (iii) a funding
waiver request has been filed with respect to any Plan together with all communications received by
any Borrower or any member of the Controlled Group with respect to such request, (iv) any increase
in the benefits of any existing Plan or the establishment of any new Plan or the commencement of
contributions to any Plan to which any Borrower or any member of the Controlled Group was not
previously contributing shall occur, (v) any Borrower or any member of the Controlled Group shall
receive from the PBGC a notice of intention to
terminate a Plan or to have a trustee appointed to administer a Plan, together with copies of
each such notice, (vi) any Borrower or any member of the Controlled Group shall receive any
favorable or unfavorable determination letter from the Internal Revenue Service regarding the
qualification of a Plan under Section 401(a) of the Code, together with copies of each such letter;
(vii) any Borrower or any member of the Controlled Group shall receive a notice regarding the
imposition of withdrawal liability, together with copies of each such notice; (viii) any Borrower
or any member of the Controlled Group shall fail to make a required installment or any other
required payment under Section 412 of the Code on or before the due date for such installment or
payment; (ix) any Borrower or any member of the Controlled Group knows that (a) a Multiemployer
Plan has been terminated, (b) the administrator or plan sponsor of a Multiemployer Plan intends to
terminate a Multiemployer Plan, or (c) the PBGC has instituted or will institute proceedings under
Section 4042 of ERISA to terminate a Multiemployer Plan.




     9.17. Additional Documents. Execute and deliver to Agent, upon request, such
documents and agreements as Agent may, from time to time, reasonably request to carry out the
purposes, terms or conditions of this Agreement.



     9.18. SEC Information. Promptly upon their becoming available, copies of: (i) all
financial statements, reports, notices and proxy statements made publicly available by any Borrower
to its security holders; (ii) all regular and periodic reports and all registration statements and
prospectuses, if any, filed by any Borrower with any securities exchange or with the SEC or any
governmental or private regulatory authority; and (iii) all press releases and other statements
made available by any Borrower to the public concerning material changes or developments in the
business of any such Person.



     9.19. Appraisals. Permit Agent or Agent’s representatives to perform appraisals as
Agent deems appropriate in Agent’s sole discretion; provided, however, that only one appraisal per
year shall be at Borrowers’ cost and expense, so long as no Default has occurred and is continuing
(all appraisals during the continuance of a Default shall be at Borrowers’ sole cost and expense).



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X EVENTS OF DEFAULT.




     The occurrence of any one or more of the following events shall constitute an “Event of
Default”:



     10.1. Nonpayment. Failure by any Borrower to pay any principal or interest on the
Obligations when due, whether at maturity or by reason of acceleration pursuant to the terms of
this Agreement or by notice of intention to prepay, or by required prepayment or failure to pay any
other liabilities or make any other payment, fee or charge provided for herein (including the
failure to make any Gross-Up Payment) when due or in any Other Document;



     10.2. Breach of Representation. Any representation or warranty made or deemed made by
any Borrower or any Guarantor in this Agreement, any Other Document or any related agreement or in
any certificate, document or financial or other statement furnished at any time in connection
herewith or therewith shall prove to have been misleading in any material respect on the date when
made or deemed to have been made;



     10.3. Financial Information. Failure by any Borrower to (i) furnish financial
information when due or when requested or (ii) permit the inspection of its books or records;



     10.4. Judicial Actions. Issuance of a notice of Lien, levy, assessment, injunction or
attachment against any Borrower’s Inventory or Receivables or against a material portion of any
Borrower’s other property;



     10.5. Noncompliance. Except as otherwise provided for in Sections 10.1, 10.3 and
10.5(ii), (i) failure or neglect of any Borrower or any Guarantor to perform, keep or observe any
term, provision, condition, covenant herein contained, or contained in any Other Document or any
other agreement or arrangement, now or hereafter entered into between any Borrower or any
Guarantor, and Agent or any Lender, or (ii) failure or neglect of any Borrower to perform, keep or
observe any term, provision, condition or covenant, contained in Sections 4.6, 4.7, 4.9, 4.14, 6.1,
6.3, 6.4, 9.4 or 9.6 hereof which is not cured within ten (10) days from the occurrence of such
failure or neglect;



     10.6. Judgments. Any judgment or judgments are rendered against any Borrower or any
Guarantor for an aggregate amount in excess of $250,000 or against all Borrowers or Guarantors for
an aggregate amount in excess of $500,000 and (i) enforcement proceedings shall have been commenced
by a creditor upon such judgment, (ii) there shall be any period of thirty (30) consecutive days
during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise,
shall not be in effect, or (iii) any such judgment results in the creation of a Lien upon any of
the Collateral (other than a Permitted Encumbrance);



     10.7. Bankruptcy. Any Borrower or any Guarantor shall (i) apply for, consent to or
suffer the appointment of, or the taking of possession by, a receiver, custodian, trustee,
liquidator or similar fiduciary of itself or of all or a substantial part of its property, (ii)
make a general assignment for the benefit of creditors, (iii) commence a voluntary case under any
state or federal bankruptcy laws (as now or hereafter in effect), (iv) be adjudicated a bankrupt or
insolvent, (v) file a petition seeking to take advantage of any other law providing for the relief
of debtors, (vi) acquiesce to, or fail to
have dismissed, within sixty (60) days, any petition filed against it in



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any involuntary case
under such bankruptcy laws, or (vii) take any action for the purpose of effecting any of the
foregoing;




     10.8. Inability to Pay. Any Borrower or any Guarantor shall admit in writing its
inability, or be generally unable, to pay its debts as they become due or cease operations of its
present business;



     10.9. Affiliate Bankruptcy. Any Affiliate or any Subsidiary of any Borrower, or any
Guarantor, shall (i) apply for, consent to or suffer the appointment of, or the taking of
possession by, a receiver, custodian, trustee, liquidator or similar fiduciary of itself or of all
or a substantial part of its property, (ii) admit in writing its inability, or be generally unable,
to pay its debts as they become due or cease operations of its present business, (iii) make a
general assignment for the benefit of creditors, (iv) commence a voluntary case under any state or
federal bankruptcy laws (as now or hereafter in effect), (v) be adjudicated a bankrupt or
insolvent, (vi) file a petition seeking to take advantage of any other law providing for the relief
of debtors, (vii) acquiesce to, or fail to have dismissed, within sixty (60) days, any petition
filed against it in any involuntary case under such bankruptcy laws, or (viii) take any action for
the purpose of effecting any of the foregoing;



     10.10. Material Adverse Effect. Any change in any Borrower’s or any Guarantor’s
results of operations or condition (financial or otherwise) which in Agent’s opinion has a Material
Adverse Effect;



     10.11. Lien Priority. Any Lien created hereunder or provided for hereby or under any
related agreement for any reason ceases to be or is not a valid and perfected Lien having a first
priority interest;



     10.12. Permitted Capital Lease Facility Default. An event of default has occurred
under the Permitted Capital Lease Facility or the CIT Intercreditor Agreement, which default shall
not have been cured or waived within any applicable grace period;



     10.13. Cross Default. A default of the obligations of any Borrower under any other
agreement to which it is a party shall occur which materially adversely affects its condition,
affairs or prospects (financial or otherwise) which default is not cured within any applicable
grace period;



     10.14. Breach of Guaranty. Termination or breach of any Guaranty or Guaranty Security
Agreement or similar agreement executed and delivered to Agent in connection with the Obligations
of any Borrower,
or if any Guarantor attempts to terminate, challenges the validity of, or its liability under,
any such Guaranty or Guaranty Security Agreement or similar agreement;



10.15. Change of Ownership. Any Change of Ownership or Change of Control shall occur;




     10.16. Invalidity. Any material provision of this Agreement or any Other Document
shall, for any reason, cease to be valid and binding on Borrower or any Guarantor, or any Borrower
or any Guarantor shall so claim in writing to Agent or any Lender;



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     10.17. Licenses. (i) Any Governmental Body shall (A) revoke, terminate, suspend or
adversely modify any license, permit, patent trademark or tradename of any Borrower or any
Guarantor, or (B) commence proceedings to suspend, revoke, terminate or adversely modify any such
license, permit, trademark, tradename or patent and such proceedings shall not be dismissed or
discharged within sixty (60) days, or (C) schedule or conduct a hearing on the renewal of any
license, permit, trademark, tradename or patent necessary for the continuation of any Borrower’s or
any Guarantor’s business and the staff of such Governmental Body issues a report recommending the
termination, revocation, suspension or material, adverse modification of such license, permit,
trademark, tradename or patent; (ii) any agreement which is necessary or material to the operation
of any Borrower’s or any Guarantor’s business shall be revoked or terminated and not replaced by a
substitute acceptable to Agent within thirty (30) days after the date of such revocation or
termination, and such revocation or termination and non-replacement would reasonably be expected to
have a Material Adverse Effect;



     10.18. Seizures. Any portion of the Collateral shall be seized or taken by a
Governmental Body, or any Borrower or any Guarantor or the title and rights of any Borrower, any
Guarantor or any owner which is the owner of any material portion of the Collateral shall have
become the subject matter of claim, litigation, suit or other proceeding which might, in the
opinion of Agent, upon final determination, result in impairment or loss of the security provided
by this Agreement or the Other Documents;



     10.19. Operations. The business operations of any Borrower or any Guarantor are
interrupted at any time for more than five (5) consecutive days, unless such Borrower shall (i) be
entitled to receive for such period of interruption, proceeds of any business interruption
insurance sufficient to assure that its per diem cash needs during such period is at least equal to
its average per diem cash needs for the consecutive three month period immediately preceding the
initial date of interruption and (ii) receive any such proceeds in the amount described in clause
(i) preceding not later than thirty (30) days following the initial date of any such interruption;
provided, however, that notwithstanding the provisions of clauses (i) and (ii) of this section, an
Event of
Default shall be deemed to have occurred if such Borrower shall be receiving the proceeds of
any business interruption insurance for a period of thirty (30) consecutive days;



     10.20. Pension Plans. An event or condition specified in Sections 7.16 or 9.16 hereof
shall occur or exist with respect to any Plan and, as a result of such event or condition, together
with all other such events or conditions, any Borrower or any member of the Controlled Group shall
incur, or in the opinion of Agent be reasonably likely to incur, a liability to a Plan (including
any Canadian Plan) or the PBGC (or both) which, in the reasonable judgment of Agent, would have a
Material Adverse Effect; or



     10.21. Permitted Investor Notes Facility Default. An event of default has occurred
under the Notes Documents or the RBC Intercreditor Agreement, which default shall not have been
cured or waived within any applicable grace period.



XI            LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT.




     11.1. Rights and Remedies.



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          (a) Upon the occurrence of (i) an Event of Default pursuant to Section 10.7 all Obligations
shall be immediately due and payable and this Agreement and the obligation of Lenders to make
Advances shall be deemed terminated; and, (ii) any of the other Events of Default and at any time
thereafter (such default not having previously been cured), at the option of Required Lenders all
Obligations shall be immediately due and payable and Lenders shall have the right to terminate this
Agreement and to terminate the obligation of Lenders to make Advances and (iii) a filing of a
petition against any Borrower in any involuntary case under any state or federal bankruptcy laws,
all Obligations shall be immediately due and payable and the obligation of Lenders to make Advances
hereunder shall be terminated other than as may be required by an appropriate order of the
bankruptcy court having jurisdiction over such Borrower. Upon the occurrence of any Event of
Default, Agent shall have the right to exercise any and all rights and remedies provided for
herein, under the Other Documents, under the Uniform Commercial Code and at law or equity
generally, including the right to foreclose the security interests granted herein and to realize
upon any Collateral by any available judicial procedure and/or to take possession of and sell any
or all of the Collateral with or without judicial process. Agent may enter any of any Borrower’s
premises or other premises without legal process and without incurring liability to any Borrower
therefor, and Agent may thereupon, or at any time thereafter, in its discretion without notice or
demand, take the Collateral and remove the same to such place as Agent may deem advisable and Agent
may require Borrowers to make the Collateral available to Agent at a convenient place. With or
without having the Collateral at the time or place of sale, Agent may sell the Collateral, or any
part thereof, at public or private sale, at any time or place, in one or more sales, at such price
or prices, and upon such terms, either for cash, credit or future delivery, as Agent may elect.
Except as to that part of the Collateral which is perishable or threatens to decline speedily in
value or is of a type customarily sold on a
recognized market, Agent shall give Borrowers reasonable notification of such sale or sales,
it being agreed that in all events written notice mailed to Borrowing Agent at least ten (10) days
prior to such sale or sales is reasonable notification. At any public sale Agent or any Lender may
bid for and become the purchaser, and Agent, any Lender or any other purchaser at any such sale
thereafter shall hold the Collateral sold absolutely free from any claim or right of whatsoever
kind, including any equity of redemption and all such claims, rights and equities are hereby
expressly waived and released by each Borrower. In connection with the exercise of the foregoing
remedies, including the sale of Inventory, Agent is granted a perpetual nonrevocable, royalty free,
nonexclusive license and Agent is granted permission to use all of each Borrower’s (a) trademarks,
trade styles, trade names, patents, patent applications, copyrights, service marks, licenses,
franchises and other proprietary rights which are used or useful in connection with Inventory for
the purpose of marketing, advertising for sale and selling or otherwise disposing of such Inventory
and (b) Equipment for the purpose of completing any unfinished job, contract, project or assignment
as deemed necessary by Agent. The cash proceeds realized from the sale of any Collateral shall be
applied to the Obligations in the order set forth in Section 11.5 hereof. Noncash proceeds will
only be applied to the Obligations as they are converted into cash. If any deficiency shall arise,
Borrowers shall remain liable to Agent and Lenders therefor.




          (b) To the extent that Applicable Law imposes duties on the Agent to exercise remedies in a
commercially reasonable manner, each Borrower acknowledges and agrees that it is not commercially
unreasonable for the Agent (i) to fail to incur expenses reasonably deemed significant by the Agent
to prepare Collateral for disposition or otherwise to complete raw material or work in process into
finished goods or other finished products for disposition, (ii) to




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fail to obtain third party
consents for access to Collateral to be disposed of, or to obtain or, if not required by other law,
to fail to obtain governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against
Customers or other Persons obligated on Collateral or to remove Liens on or any adverse claims
against Collateral, (iv) to exercise collection remedies against Customers and other Persons
obligated on Collateral directly or through the use of collection agencies and other collection
specialists, (v) to advertise dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other
Persons, whether or not in the same business as any Borrower, for expressions of interest in
acquiring all or any portion of such Collateral, (vii) to hire one or more professional auctioneers
to assist in the disposition of Collateral, whether or not the Collateral is of a specialized
nature, (viii) to dispose of Collateral by utilizing internet sites that provide for the auction of
assets of the types included in the Collateral or that have the reasonable capacity of doing so, or
that match buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail
markets, (x) to disclaim disposition warranties, such as title, possession or quiet enjoyment, (xi)
to purchase insurance or credit enhancements to insure the Agent against risks of loss, collection
or disposition of Collateral or to provide to the Agent a guaranteed return from the collection or
disposition of Collateral, or (xii) to the extent deemed appropriate by the Agent, to obtain the
services of other brokers, investment bankers, consultants and other professionals to assist the
Agent in the collection or disposition of any of the Collateral. Each Borrower acknowledges that
the purpose of this Section 11.1(b) is to provide non-exhaustive indications of what actions or
omissions by the Agent would not be commercially unreasonable in the Agent’s exercise of remedies
against the Collateral and that other actions or omissions by the Agent shall not be deemed
commercially unreasonable solely on account of not being indicated in this
Section 11.1(b). Without limitation upon the foregoing, nothing contained in this Section
11.1(b) shall be construed to grant any rights to any Borrower or to impose any duties on Agent
that would not have been granted or imposed by this Agreement or by Applicable Law in the absence
of this Section 11.1(b).




          (c) With respect to Exploration and any Collateral held or owned by it, upon the occurrence of
and during the continuance of any Event of Default, Agent may appoint or reappoint by instrument in
writing, any Person or Persons, whether an officer or officers or an employee or employees of Agent
or not, to be an interim receiver, receiver or receivers (hereinafter called a “Receiver”,
which term when used herein shall include a receiver and manager) of Collateral (including any
interest, income or profits therefrom) and may remove any Receiver so appointed and appoint another
in his/her/its stead. Any such Receiver shall, so far as concerns responsibility for his/her/its
acts, be deemed the agent of Exploration and not Agent and Agent shall not be in any way
responsible for any misconduct, negligence or non-feasance on the part of any such Receiver or
his/her/its servants, agents or employees. Subject to the provisions of the instrument appointing
him/her/it, any such Receiver shall have power to take possession of Collateral, to preserve
Collateral or its value, to carry on or concur in carrying on all or any part of the business of
Exploration and to sell, lease, license or otherwise dispose of or concur in selling, leasing,
licensing or otherwise disposing of Collateral. To facilitate the foregoing powers, any such
Receiver may, to the exclusion of all others, including Agent, enter upon, use and occupy all
premises owned or occupied by Agent wherein Collateral may be situate, maintain Collateral upon
such premises, borrow money on a secured or unsecured basis and use Collateral directly in carrying
on the business of Exploration or as security for loans or




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advances to enable the Receiver to carry
on the business or Exploration or otherwise, as such Receiver shall, in its discretion, determine.
Except as may be otherwise directed by Agent, all money received from time to time by such Receiver
in carrying out his/her/its appointment shall be received in trust for and be paid over to Agent.
Every such Receiver may, in the discretion of Agent, be vested with all or any of the rights and
powers of Agent.




     11.2. Agent’s Discretion. Agent shall have the right in its sole discretion to
determine which rights, Liens, security interests or remedies Agent may at any time pursue,
relinquish, subordinate, or modify or to take any other action with respect thereto and such
determination will not in any way modify or affect any of Agent’s or Lenders’ rights hereunder.



     11.3. Setoff. Subject to Section 14.12, in addition to any other rights which Agent
or any Lender may have under Applicable Law, upon the occurrence of an Event of Default hereunder,
Agent and such Lender shall have a right, immediately and without notice of any kind, to apply any
Borrower’s property held by Agent and such Lender to reduce the Obligations.



     11.4. Rights and Remedies not Exclusive. The enumeration of the foregoing rights and
remedies is not intended to be exhaustive and the exercise of any rights or remedy shall not
preclude the exercise of any other right or
remedies provided for herein or otherwise provided by law, all of which shall be cumulative
and not alternative.



     11.5. Allocation of Payments After Event of Default. Notwithstanding any other
provisions of this Agreement to the contrary, after the occurrence and during the continuance of an
Event of Default, all amounts collected or received by the Agent on account of the Obligations or
any other amounts outstanding under any of the Other Documents or in respect of the Collateral may,
at Agent’s discretion, be paid over or delivered as follows:



     FIRST, to the payment of all reasonable out-of-pocket costs and expenses (including reasonable
attorneys’ fees) of the Agent in connection with enforcing its rights and the rights of the Lenders
under this Agreement and the Other Documents and any protective advances made by the Agent with
respect to the Collateral under or pursuant to the terms of this Document;



     SECOND, to payment of any fees owed to the Agent;



     THIRD, to the payment of all reasonable out-of-pocket costs and expenses (including reasonable
attorneys’ fees) of each of the Lenders in connection with enforcing its rights under this
Agreement and the Other Documents or otherwise with respect to the Obligations owing to such
Lender;



     FOURTH, to the payment of all of the Obligations consisting of accrued fees and interest;



     FIFTH, to the payment of the outstanding principal amount of the Obligations (including the
payment or cash collateralization of any outstanding Letters of Credit);



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     SIXTH, to all other Obligations and other obligations which shall have become due and payable
under the Other Documents or otherwise and not repaid pursuant to clauses “FIRST” through “FIFTH”
above; and



     SEVENTH, to the payment of the surplus, if any, to whoever may be lawfully entitled to receive
such surplus.



     In carrying out the foregoing, (i) amounts received shall be applied in the numerical order
provided until exhausted prior to application to the next succeeding category; (ii) each of the
Lenders shall receive (so long as it is not a Defaulting Lender) an amount equal to its pro rata
share (based on the proportion that the then outstanding Advances held by such Lender bears to the
aggregate then outstanding Advances) of amounts available to be applied pursuant to clauses
“FOURTH”, “FIFTH” and “SIXTH” above; and (iii) to the extent that any amounts available for
distribution pursuant to clause “FIFTH” above are attributable to the issued but undrawn amount of
outstanding Letters of Credit, such amounts shall be held by the Agent in a cash collateral account
and applied (A) first, to reimburse the Issuer from time to time for any drawings under such
Letters of Credit and (B) then, following the expiration of all Letters of Credit, to all other
obligations of the types described in clauses “FIFTH” and “SIXTH” above in the manner provided in
this Section 11.5.



     XII WAIVERS AND JUDICIAL PROCEEDINGS.



12.1. Waiver of Notice. Each Borrower hereby waives notice of intent to accelerate,
notice of acceleration, notice of non-payment of any of the Receivables, demand, presentment,
protest and notice thereof with respect to any and all instruments, notice of acceptance hereof,
notice of intent to accelerate, notice of acceleration, notice of loans or advances made, credit
extended, Collateral received or delivered, or any other action taken in reliance hereon, and all
other demands and notices of any description, except such as are expressly provided for herein.




     12.2. Delay. No delay or omission on Agent’s or any Lender’s part in exercising any
right, remedy or option shall operate as a waiver of such or any other right, remedy or option or
of any Default or Event of Default.



     12.3. Jury Waiver. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT OR
ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (B) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF
THEM WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE
AND EACH PARTY HEREBY CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENTS OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.



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     12.4. Waiver of Rights Under Texas Deceptive Trade Practices Act. BORROWERS HEREBY
WAIVE THEIR RIGHTS UNDER THE DECEPTIVE TRADE PRACTICES—CONSUMER PROTECTION ACT, SECTION 17.41 ET
SEQ., TEXAS BUSINESS & COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS.
AFTER CONSULTATION WITH AN ATTORNEY OF BORROWERS’ OWN SELECTION, BORROWERS VOLUNTARILY CONSENT TO
THIS WAIVER. BORROWERS EXPRESSLY WARRANT AND REPRESENT THAT BORROWERS (A) RE NOT IN A
SIGNIFICANTLY DISPARATE BARGAINING POSITION RELATIVE TO AGENT AND/OR ANY LENDER, AND (B) HAVE BEEN
REPRESENTED BY LEGAL COUNSEL IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.



XIII EFFECTIVE DATE AND TERMINATION.




     13.1. Term. This Agreement, which shall inure to the benefit of and shall be binding
upon the respective successors and permitted assigns of each Borrower, Agent and each Lender, shall
become effective on the date hereof and shall continue in full force and effect until December 15,
2011 (the “Term”) unless sooner terminated as herein provided. Borrowers may terminate this
Agreement at any time upon ninety (90) days’ prior written notice upon payment in full of the
Obligations. In the event the Obligations are prepaid in full and all commitments to lend
hereunder are terminated prior to the last day of the Term (the date of such prepayment hereinafter
referred to as the “Early Termination Date”), Borrowers shall pay to Agent for the benefit of
Lenders an early termination fee in an amount equal to (x) $600,000.00 if the Early Termination
Date occurs on or after the Restated Closing Date to and including the date immediately preceding
the first anniversary of the Restated Closing Date, (y) $450,000.00 if the Early Termination Date
occurs on or after the first anniversary of the Restated Closing Date to and including the date
immediately preceding the second anniversary of the Restated Closing Date or (z) $150,000.00 if the
Early Termination Date occurs on or after the second anniversary of the Restated Closing Date, but
before the date that is thirty (30) days prior to the end of the Term; provided,
however that such early termination fees shall not apply to new financing arranged by
Agent.



     13.2. Termination. The termination of the Agreement shall not affect any Borrower’s,
Agent’s or any Lender’s rights, or any of the Obligations having their inception prior to the
effective date of such termination, and the provisions hereof shall continue to be fully operative
until all transactions entered into, rights or interests created or Obligations have been fully and
indefeasibly paid, disposed of, concluded or liquidated. The security interests, Liens and rights
granted to Agent and Lenders hereunder and the financing statements filed hereunder shall continue
in full force and effect, notwithstanding the termination of this Agreement or the fact that
Borrowers’ Account may from time to time be temporarily in a zero or credit position, until all of
the Obligations of each Borrower have been indefeasibly paid and performed in full after the
termination of this Agreement or each Borrower has furnished Agent and Lenders with an
indemnification satisfactory to Agent and Lenders with respect thereto. Accordingly, each Borrower
waives any rights which it may have under the Uniform Commercial Code
to demand



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the filing of
termination statements with respect to the Collateral, and Agent shall not be required to send such
termination statements to each Borrower, or to file them with any filing office, unless and until
this Agreement shall have been terminated in accordance with its terms and all Obligations have
been indefeasibly paid in full in immediately available funds. All representations, warranties,
covenants, waivers and agreements contained herein shall survive termination hereof until all
Obligations are indefeasibly paid and performed in full.




XIV            REGARDING AGENT.




     14.1. Appointment. Each Lender hereby designates PNC to act as Agent for such Lender under this Agreement and
the Other Documents. Each Lender hereby irrevocably authorizes Agent to take such action on its
behalf under the provisions of this Agreement and the Other Documents and to exercise such powers
and to perform such duties hereunder and thereunder as are specifically delegated to or required of
Agent by the terms hereof and thereof and such other powers as are reasonably incidental thereto
and Agent shall hold all Collateral, payments of principal and interest, fees (except the fees set
forth in Sections 3.3(a) and 3.4), charges and collections (without giving effect to any collection
days) received pursuant to this Agreement, for the ratable benefit of Lenders. Agent may perform
any of its duties hereunder by or through its agents or employees. As to any matters not expressly
provided for by this Agreement (including collection of the Note) Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to refrain from acting
(and shall be fully protected in so acting or refraining from acting) upon the instructions of the
Required Lenders, and such instructions shall be binding; provided, however, that Agent shall not
be required to take any action which exposes Agent to liability or which is contrary to this
Agreement or the Other Documents or Applicable Law unless Agent is furnished with an
indemnification reasonably satisfactory to Agent with respect thereto.



     14.2. Nature of Duties. Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and the Other Documents. Neither Agent nor any of its
officers, directors, employees or agents shall be (i) liable for any action taken or omitted by
them as such hereunder or in connection herewith, unless caused by their gross (not mere)
negligence or willful misconduct (as determined by a court of competent jurisdiction in a final
non-appealable judgment), or (ii) responsible in any manner for any recitals, statements,
representations or warranties made by any Borrower or any officer thereof contained in this
Agreement, or in any of the Other Documents or in any certificate, report, statement or other
document referred to or provided for in, or received by Agent under or in connection with, this
Agreement or any of the Other Documents or for the value, validity, effectiveness, genuineness, due
execution, enforceability or sufficiency of this Agreement, or any of the Other Documents or for
any failure of any Borrower to perform its obligations hereunder. Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any of the Other Documents, or to
inspect the properties, books or records of any Borrower. The duties of Agent as respects the
Advances to Borrowers shall be mechanical and administrative in nature; Agent shall not have by
reason of this Agreement a fiduciary relationship in respect of any Lender; and nothing in this
Agreement, expressed or implied, is intended to or shall be so construed as to impose upon Agent
any obligations in respect of this Agreement except as expressly set forth herein.



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     14.3. Lack of Reliance on Agent and Resignation. Independently and without reliance
upon Agent or any other Lender, each Lender has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of each Borrower and any Guarantor
in connection with the making and the continuance of the Advances hereunder and the taking or not
taking of any action in connection herewith, and (ii) its own appraisal of the creditworthiness of
each Borrower and any Guarantor.
Agent shall have no duty or responsibility, either initially or on a continuing basis, to
provide any Lender with any credit or other information with respect thereto, whether coming into
its possession before making of the Advances or at any time or times thereafter except as shall be
provided by any Borrower pursuant to the terms hereof. Agent shall not be responsible to any
Lender for any recitals, statements, information, representations or warranties herein or in any
agreement, document, certificate or a statement delivered in connection with or for the execution,
effectiveness, genuineness, validity, enforceability, collectability or sufficiency of this
Agreement or any Other Document, or of the financial condition of any Borrower or any Guarantor, or
be required to make any inquiry concerning either the performance or observance of any of the
terms, provisions or conditions of this Agreement, the Note, the Other Documents or the financial
condition of any Borrower, or the existence of any Event of Default or any Default.



     Agent may resign on sixty (60) days’ written notice to each of Lenders and Borrowing Agent and
upon such resignation, the Required Lenders will promptly designate a successor Agent reasonably
satisfactory to Borrowers.



     Any such successor Agent shall succeed to the rights, powers and duties of Agent, and the term
“Agent” shall mean such successor agent effective upon its appointment, and the former Agent’s
rights, powers and duties as Agent shall be terminated, without any other or further act or deed on
the part of such former Agent. After any Agent’s resignation as Agent, the provisions of this
Article XIV shall inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement.



     14.4. Certain Rights of Agent. If Agent shall request instructions from Lenders with
respect to any act or action (including failure to act) in connection with this Agreement or any
Other Document, Agent shall be entitled to refrain from such act or taking such action unless and
until Agent shall have received instructions from the Required Lenders; and Agent shall not incur
liability to any Person by reason of so refraining. Without limiting the foregoing, Lenders shall
not have any right of action whatsoever against Agent as a result of its acting or refraining from
acting hereunder in accordance with the instructions of the Required Lenders.



     14.5. Reliance. Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, statement, certificate, telex, teletype or
telecopier message, cablegram, order or other document or telephone message believed by it to be
genuine and correct and to have been signed, sent or made by the proper person or entity, and, with
respect to all legal matters pertaining to this Agreement and the Other Documents and its duties
hereunder, upon advice of counsel selected by it. Agent may employ agents and attorneys-in-fact
and shall not be liable for the default or misconduct of any such agents or attorneys-in-fact
selected by Agent with reasonable care.



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     14.6. Notice of Default. Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or
Event of Default hereunder or under the Other Documents, unless Agent has received notice from a
Lender or Borrowing Agent referring to this Agreement or the Other Documents, describing such
Default or Event of Default and stating that such notice is a “NOTICE OF DEFAULT”. In the event
that Agent receives such a notice, Agent shall give notice thereof to Lenders. Agent shall take
such action with respect to such Default or Event of Default as shall be reasonably directed by the
Required Lenders; provided, that, unless and until Agent shall have received such directions, Agent
may (but shall not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the best interests of
Lenders.



     14.7. Indemnification. To the extent Agent is not reimbursed and indemnified by
Borrowers, each Lender will reimburse and indemnify Agent in proportion to its respective portion
of the Advances (or, if no Advances are outstanding, according to its Commitment Percentage), from
and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against Agent in performing its duties hereunder, or in any way relating to
or arising out of this Agreement or any Other Document (INCLUDING, WITHOUT LIMITATION, WITH RESPECT
TO ANY OTHERWISE INDEMNIFIED MATTER ARISING FROM AGENT’S NEGLIGENCE OR STRICT LIABILITY BUT NOT
AGENT’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT); provided that, Lenders shall not be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from Agent’s gross (not mere) negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final non-appealable judgment).



     14.8. Agent in its Individual Capacity. With respect to the obligation of Agent to
lend under this Agreement, the Advances made by it shall have the same rights and powers hereunder
as any other Lender and as if it were not performing the duties as Agent specified herein; and the
term “Lender” or any similar term shall, unless the context clearly otherwise indicates, include
Agent in its individual capacity as a Lender. Agent may engage in business with any Borrower as if
it were not performing the duties specified herein, and may accept fees and other consideration
from any Borrower for services in connection with this Agreement or otherwise without having to
account for the same to Lenders.



     14.9. Delivery of Documents. To the extent Agent receives financial statements
required under Sections 9.7, 9.8, 9.9, 9.13 and 9.14 or Borrowing Base Certificates from any
Borrower pursuant to the terms of this Agreement which any Borrower is not obligated to deliver to
each Lender, Agent will promptly furnish such documents and information to Lenders.



     14.10. Borrowers’ Undertaking to Agent. Without prejudice to their respective obligations to Lenders under the other provisions of
this Agreement, each Borrower hereby undertakes with Agent to pay to Agent from time to time on
demand all amounts from time to time due and payable by it for the account of Agent or Lenders or
any of them pursuant to this Agreement to the extent not already paid. Any payment made pursuant
to any such demand shall pro tanto satisfy the relevant Borrower’s obligations to make payments for
the account of Lenders or the relevant one or more of them pursuant to this Agreement.



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     14.11. No Reliance on Agent’s Customer Identification Program. Each Lender
acknowledges and agrees that neither such Lender, nor any of its Affiliates, participants or
assignees, may rely on the Agent to carry out such Lender’s, Affiliate’s, participant’s or
assignee’s customer identification program, or other obligations required or imposed under or
pursuant to the USA PATRIOT Act or the regulations thereunder, including the regulations contained
in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), or any other
Anti-Terrorism Law, including any programs involving any of the following items relating to or in
connection with any Borrower, its Affiliates or its agents, this Agreement, the Other Documents or
the transactions hereunder or contemplated hereby: (1) any identity verification procedures, (2)
any record-keeping, (3) comparisons with government lists, (4) customer notices or (5) other
procedures required under the CIP Regulations or such other laws.



     14.12. Other Agreements. Each of the Lenders agrees that it shall not, without the
express consent of Agent, and that it shall, to the extent it is lawfully entitled to do so, upon
the request of Agent, set off against the Obligations, any amounts owing by such Lender to any
Borrower or any deposit accounts of any Borrower now or hereafter maintained with such Lender.
Anything in this Agreement to the contrary notwithstanding, each of the Lenders further agrees that
it shall not, unless specifically requested to do so by Agent, take any action to protect or
enforce its rights arising out of this Agreement or the Other Documents, it being the intent of
Lenders that any such action to protect or enforce rights under this Agreement and the Other
Documents shall be taken in concert and at the direction or with the consent of Agent or Required
Lenders.



XV BORROWING AGENCY.




     15.1. Borrowing Agency Provisions.



          (a) Each Borrower hereby irrevocably designates Borrowing Agent to be its attorney and agent
and in such capacity to borrow, sign and endorse notes, and execute and deliver all instruments,
documents, writings and further assurances now or hereafter required hereunder, on behalf of such
Borrower or Borrowers, and hereby authorizes Agent to pay over or credit all loan proceeds
hereunder in accordance with the request of Borrowing Agent.




          (b) The handling of this credit facility as a co-borrowing facility with a borrowing agent in
the manner set forth in this Agreement is solely as an accommodation to
Borrowers and at their request. Neither Agent nor any Lender shall incur liability to
Borrowers as a result thereof. To induce Agent and Lenders to do so and in consideration thereof,
each Borrower hereby indemnifies Agent and each Lender and holds Agent and each Lender harmless
from and against any and all liabilities, expenses, losses, damages and claims of damage or injury
asserted against Agent or any Lender by any Person arising from or incurred by reason of the
handling of the financing arrangements of Borrowers as provided herein, reliance by Agent or any
Lender on any request or instruction from Borrowing Agent or any other action taken by Agent or any
Lender with respect to this Section 15.1 except due to willful misconduct or gross (not mere)
negligence by the indemnified party (as determined by a court of competent jurisdiction in a final
and non-appealable judgment).




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          (c) All Obligations shall be joint and several, and each Borrower shall make payment upon the
maturity of the Obligations by acceleration or otherwise, and such obligation and liability on the
part of each Borrower shall in no way be affected by any extensions, renewals and forbearance
granted to Agent or any Lender to any Borrower, failure of Agent or any Lender to give any Borrower
notice of borrowing or any other notice, any failure of Agent or any Lender to pursue or preserve
its rights against any Borrower, the release by Agent or any Lender of any Collateral now or
thereafter acquired from any Borrower, and such agreement by each Borrower to pay upon any notice
issued pursuant thereto is unconditional and unaffected by prior recourse by Agent or any Lender to
the other Borrowers or any Collateral for such Borrower’s Obligations or the lack thereof. Each
Borrower waives all suretyship defenses.




     15.2. Waiver of Subrogation. Each Borrower expressly waives any and all rights of
subrogation, reimbursement, indemnity, exoneration, contribution of any other claim which such
Borrower may now or hereafter have against the other Borrowers or other Person directly or
contingently liable for the Obligations hereunder, or against or with respect to the other
Borrowers’ property (including, without limitation, any property which is Collateral for the
Obligations), arising from the existence or performance of this Agreement, until termination of
this Agreement and repayment in full of the Obligations.



XVI MISCELLANEOUS.




     16.1. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas applied to contracts to be performed wholly within the State of
Texas. Any judicial proceeding brought by or against any Borrower with respect to any of the
Obligations, this Agreement, the Other Documents or any related agreement may be brought in any
court of competent jurisdiction in the State of Texas, United States of America, and, by execution
and delivery of this Agreement, each Borrower accepts for itself and in connection with its
properties, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts,
and irrevocably agrees to be bound by any judgment rendered thereby in connection with this
Agreement. Each Borrower hereby waives personal service of any and all process upon it and
consents that all such service of process may be made by registered mail (return receipt requested)
directed to Borrowing Agent at its address set forth in Section 16.6 and service so
made shall be deemed completed five (5) days after the same shall have been so deposited in
the mails of the United States of America, or, at the Agent’s option, by service upon Borrowing
Agent which each Borrower irrevocably appoints as such Borrower’s Agent for the purpose of
accepting service within the State of Texas. Nothing herein shall affect the right to serve
process in any manner permitted by law or shall limit the right of Agent or any Lender to bring
proceedings against any Borrower in the courts of any other jurisdiction. Each Borrower waives any
objection to jurisdiction and venue of any action instituted hereunder and shall not assert any
defense based on lack of jurisdiction or venue or based upon forum non conveniens. Each Borrower
waives the right to remove any judicial proceeding brought against such Borrower in any state court
to any federal court. Any judicial proceeding by any Borrower against Agent or any Lender
involving, directly or indirectly, any matter or claim in any way arising out of, related to or
connected with this Agreement or any related agreement, shall be brought only in a federal or state
court located in the County of Dallas, State of Texas.



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     16.2. Entire Understanding.



          (a) THIS AGREEMENT AND THE DOCUMENTS EXECUTED CONCURRENTLY HEREWITH CONTAIN THE ENTIRE
UNDERSTANDING AMONG BORROWER, AGENT AND EACH LENDER AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES AND SUPERSEDES ALL PRIOR
AGREEMENTS AND UNDERSTANDINGS, IF ANY, RELATING TO THE SUBJECT MATTER HEREOF. THERE ARE NO
UNWRITTEN AGREEMENTS AMONG THE PARTIES. Any promises, representations, warranties or guarantees
not herein contained and hereinafter made shall have no force and effect unless in writing, signed
by each Borrower’s, Agent’s and each Lender’s respective officers. Neither this Agreement nor any
portion or provisions hereof may be changed, modified, amended, waived, supplemented, discharged,
cancelled or terminated orally or by any course of dealing, or in any manner other than by an
agreement in writing, signed by the party to be charged. Each Borrower acknowledges that it has
been advised by counsel in connection with the execution of this Agreement and Other Documents and
is not relying upon oral representations or statements inconsistent with the terms and provisions
of this Agreement.




          (b) The Required Lenders, Agent with the consent in writing of the Required Lenders, and
Borrowers may, subject to the provisions of this Section 16.2 (b), from time to time enter into
written supplemental agreements to this Agreement or the Other Documents executed by Borrowers, for
the purpose of adding or deleting any provisions or otherwise changing, varying or waiving in any
manner the rights of Lenders, Agent or Borrowers thereunder or the conditions, provisions or terms
thereof of waiving any Event of Default thereunder, but only to the extent specified in such
written agreements; provided, however, that no such supplemental agreement shall, without the
consent of all Lenders:




               (i) increase the Commitment Percentage, the maximum dollar commitment of any Lender or the
Maximum Loan Amount.



               (ii) extend the maturity of any Note or the due date for any amount payable hereunder, or
decrease the rate of interest or reduce any fee payable by Borrowers to Lenders pursuant to this
Agreement.



               (iii) alter the definition of the term Required Lenders or alter, amend or modify this Section
16.2(b).



               (iv) release any Collateral during any calendar year (other than in accordance with the
provisions of this Agreement) having an aggregate value in excess of $1,000,000.



               (v) change the rights and duties of Agent.



               (vi) permit any Revolving Advance to be made if after giving effect thereto the total of
Revolving Advances outstanding hereunder would exceed the Formula Amount for more than sixty (30)
consecutive Business Days or exceed one hundred and five percent (105%) of the Formula Amount.



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               (vii) increase the Advance Rates above the Advance Rates in effect on the Restated Closing
Date.



               (viii) release any Guarantor.



     Any such supplemental agreement shall apply equally to each Lender and shall be binding upon
Borrowers, Lenders and Agent and all future holders of the Obligations. In the case of any waiver,
Borrowers, Agent and Lenders shall be restored to their former positions and rights, and any Event
of Default waived shall be deemed to be cured and not continuing, but no waiver of a specific Event
of Default shall extend to any subsequent Event of Default (whether or not the subsequent Event of
Default is the same as the Event of Default which was waived), or impair any right consequent
thereon.



     In the event that Agent requests the consent of a Lender pursuant to this Section 16.2 and
such Lender shall not respond or reply to Agent in writing within five (5) days of delivery of such
request, such Lender shall be deemed to have consented to the matter that was the subject of the
request. In the event that Agent requests the consent of a Lender pursuant to this Section 16.2
and such consent is denied, then PNC may, at its option, require such Lender to assign its interest
in the Advances to PNC or to another Lender or to any other Person designated by the Agent (the
“Designated Lender”), for a price equal to (i) the then outstanding principal amount thereof plus
(ii) accrued and unpaid interest and fees (but not including any fees payable with respect to the
termination of this Agreement before the expiration of the Term) then due such Lender, which
interest and fees shall be paid when collected from Borrowers. In the event PNC elects to require
any Lender to assign its interest to PNC or to the Designated Lender, PNC will so notify such
Lender in writing within forty five (45) days following such Lender’s denial, and such Lender will
assign its interest to PNC or the Designated Lender no later than five (5) days following receipt
of such notice pursuant to a Commitment Transfer Supplement executed by such Lender, PNC or the
Designated Lender, as appropriate, and Agent.



     Notwithstanding (a) the existence of a Default or an Event of Default, (b) that any of the
other applicable conditions precedent set forth in Section 8.2 hereof have not been satisfied or
(c) any other provision of this Agreement, Agent may at its discretion and without the consent of
the Required Lenders, voluntarily permit the outstanding Revolving Advances at any time to exceed
an amount equal to the Formula Amount by up to ten percent (10%) for up to thirty (30) consecutive
Business Days (the “Out-of-Formula Loans”). If Agent is willing in its sole and absolute
discretion to make such Out-of-Formula Loans, such Out-of-Formula Loans shall be payable on demand
and shall bear interest at the Default Rate; provided that, if Lenders do make Out-of-Formula
Loans, neither Agent nor Lenders shall be deemed thereby to have changed the limits of Section
2.1(a). For purposes of this paragraph, the discretion granted to Agent hereunder shall not
preclude involuntary overadvances that may result from time to time due to the fact that the
Formula Amount was unintentionally exceeded for any reason, including, but not limited to,
Collateral previously deemed to be “Eligible Receivables,” becomes ineligible, collections of
Receivables applied to reduce outstanding Revolving Advances are thereafter returned for
insufficient funds or overadvances are made to protect or preserve the Collateral. In the event
Agent involuntarily permits the outstanding Revolving Advances to exceed the Formula Amount by more
than ten percent (10%), Agent shall use its efforts to have Borrowers decrease such excess in as
expeditious a manner as is practicable under the circumstances and



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not inconsistent with the reason
for such excess. Revolving Advances made after Agent has determined the existence of involuntary
overadvances shall be deemed to be involuntary overadvances and shall be decreased in accordance
with the preceding sentence.




     In addition to (and not in substitution of) the discretionary Revolving Advances permitted
above in this Section 16.2, the Agent is hereby authorized by Borrowers and the Lenders, from time
to time in the Agent’s sole discretion, (A) after the occurrence and during the continuation of a
Default or an Event of Default, or (B) at any time that any of the other applicable conditions
precedent set forth in Section 8.2 hereof have not been satisfied, to make Revolving Advances to
Borrowers on behalf of the Lenders which the Agent, in its reasonable business judgment, deems
necessary or desirable (a) to preserve or protect the Collateral, or any portion thereof, (b) to
enhance the likelihood of, or maximize the amount of, repayment of the Advances and other
Obligations, or (c) to pay any other amount chargeable to Borrowers pursuant to the terms of this
Agreement; provided, that at any time after giving effect to any such Revolving Advances the
outstanding Revolving Advances do not exceed one hundred and ten percent (110%) of the Formula
Amount.



     16.3. Successors and Assigns; Participations; New Lenders.



          (a) This Agreement shall be binding upon and inure to the benefit of Borrowers, Agent, each
Lender, all future holders of the Obligations and their respective successors and assigns, except
that no Borrower may assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of Agent and each Lender.




          (b) Each Borrower acknowledges that in the regular course of commercial banking business one
or more Lenders may at any time and from time to time sell participating interests in the Advances
to other financial institutions (each such transferee or purchaser of a
participating interest, a “Participant”). Each Participant may exercise all rights of payment
(including rights of set-off) with respect to the portion of such Advances held by it or other
Obligations payable hereunder as fully as if such Participant were the direct holder thereof
provided that Borrowers shall not be required to pay to any Participant more than the amount which
it would have been required to pay to Lender which granted an interest in its Advances or other
Obligations payable hereunder to such Participant had such Lender retained such interest in the
Advances hereunder or other Obligations payable hereunder and in no event shall Borrowers be
required to pay any such amount arising from the same circumstances and with respect to the same
Advances or other Obligations payable hereunder to both such Lender and such Participant. Each
Borrower hereby grants to any Participant a continuing security interest in any deposits, moneys or
other property actually or constructively held by such Participant as security for the
Participant’s interest in the Advances.




          (c) Any Lender may, with the consent of Agent and the Borrowing Agent, on behalf of the
Borrowers, which consent shall not be unreasonably withheld or delayed, sell, assign or transfer
all or any part of its rights under this Agreement and the Other Documents to one or more
additional banks or financial institutions and one or more additional banks or financial
institutions may commit to make Advances hereunder (each a “Purchasing Lender”), in minimum amounts
of not less than $5,000,000, pursuant to a Commitment Transfer Supplement, executed by a Purchasing
Lender, the transferor Lender, and Agent and delivered to Agent for




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recording; provided, however,
that if any Event of Default has occurred and is continuing, no consent by Borrowing Agent or
Borrowers shall be required for such sale, assignment or transfer. Upon such execution, delivery,
acceptance and recording, from and after the transfer effective date determined pursuant to such
Commitment Transfer Supplement, (i) Purchasing Lender thereunder shall be a party hereto and, to
the extent provided in such Commitment Transfer Supplement, have the rights and obligations of a
Lender thereunder with a Commitment Percentage as set forth therein, and (ii) the transferor Lender
thereunder shall, to the extent provided in such Commitment Transfer Supplement, be released from
its obligations under this Agreement, the Commitment Transfer Supplement creating a novation for
that purpose. Such Commitment Transfer Supplement shall be deemed to amend this Agreement to the
extent, and only to the extent, necessary to reflect the addition of such Purchasing Lender and the
resulting adjustment of the Commitment Percentages arising from the purchase by such Purchasing
Lender of all or a portion of the rights and obligations of such transferor Lender under this
Agreement and the Other Documents. Each Borrower hereby consents to the addition of such
Purchasing Lender and the resulting adjustment of the Commitment Percentages arising from the
purchase by such Purchasing Lender of all or a portion of the rights and obligations of such
transferor Lender under this Agreement and the Other Documents. Borrowers shall execute and
deliver such further documents and do such further acts and things in order to effectuate the
foregoing.




          (d) Any Lender, with the consent of Agent and of Borrowing Agent, on behalf of the Borrowers,
which consent shall not be unreasonably withheld or delayed, may directly or indirectly sell,
assign or transfer all or any portion of its rights and obligations under or relating to Revolving
Advances and/or CapEx Loans under this Agreement and the Other Documents to an entity, whether a
corporation, partnership, trust, limited liability company or other entity that (i) is engaged in
making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit
in the ordinary course of its business and (ii) is administered, serviced or
managed by the assigning Lender or an Affiliate of such Lender (a “Purchasing CLO” and
together with each Participant and Purchasing Lender, each a “Transferee” and collectively the
“Transferees”), in minimum amounts of $5,000,000, pursuant to a Commitment Transfer Supplement
modified as appropriate to reflect the interest being assigned (“Modified Commitment Transfer
Supplement”), executed by any intermediate purchaser, the Purchasing CLO, the transferor Lender,
and Agent as appropriate and delivered to Agent for recording; provided, however, that if any
Event of Default has occurred and is continuing, no consent by Borrowing Agent or Borrowers shall
be required for such sale, assignment or transfer. Upon such execution and delivery, from and after
the transfer effective date determined pursuant to such Modified Commitment Transfer Supplement,
(i) Purchasing CLO thereunder shall be a party hereto and, to the extent provided in such Modified
Commitment Transfer Supplement, have the rights and obligations of a Lender thereunder and (ii) the
transferor Lender thereunder shall, to the extent provided in such Modified Commitment Transfer
Supplement, be released from its obligations under this Agreement, the Modified Commitment Transfer
Supplement creating a novation for that purpose. Such Modified Commitment Transfer Supplement
shall be deemed to amend this Agreement to the extent, and only to the extent, necessary to reflect
the addition of such Purchasing CLO. Each Borrower hereby consents to the addition of such
Purchasing CLO. Borrowers shall execute and deliver such further documents and do such further
acts and things in order to effectuate the foregoing.




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          (e) Agent shall maintain at its address a copy of each Commitment Transfer Supplement and
Modified Commitment Transfer Supplement delivered to it and a register (the “Register”) for the
recordation of the names and addresses of each Lender and the outstanding principal, accrued and
unpaid interest and other fees due hereunder. The entries in the Register shall be conclusive, in
the absence of manifest error, and each Borrower, Agent and Lenders may treat each Person whose
name is recorded in the Register as the owner of the Advance recorded therein for the purposes of
this Agreement. The Register shall be available for inspection by Borrowers or any Lender at any
reasonable time and from time to time upon reasonable prior notice. Agent shall receive a fee in
the amount of $5,000 payable by the applicable Purchasing Lender and/or Purchasing CLO upon the
effective date of each transfer or assignment (other than to an intermediate purchaser) to such
Purchasing Lender and/or Purchasing CLO.




          (f) Each Borrower authorizes each Lender to disclose to any Transferee and any prospective
Transferee any and all financial information in such Lender’s possession concerning such Borrower
which has been delivered to such Lender by or on behalf of such Borrower pursuant to this Agreement
or in connection with such Lender’s credit evaluation of such Borrower.




     16.4. Application of Payments. Agent shall have the continuing and exclusive right to
apply or reverse and re-apply any payment and any and all proceeds of Collateral to any portion of
the Obligations. To the extent that any Borrower makes a payment or Agent or any Lender receives
any payment or proceeds of the Collateral for any Borrower’s benefit, which are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a
trustee, debtor in possession, receiver, custodian or any other party under any bankruptcy law,
common law or equitable cause, then, to such extent, the Obligations or part thereof intended to be
satisfied shall
be revived and continue as if such payment or proceeds had not been received by Agent or such
Lender.



     16.5. Indemnity. Each Borrower shall indemnify and defend Agent, each Lender and each
of their respective officers, directors, Affiliates, attorneys, employees and agents from and
against any and all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses and disbursements of any kind or nature whatsoever (including fees and
disbursements of counsel) which may be imposed on, incurred by, or asserted against Agent or any
Lender in any claim, litigation, proceeding or investigation instituted or conducted by any
Governmental Body or instrumentality or any other Person with respect to any aspect of, or any
transaction contemplated by, or referred to in, or any matter related to, this Agreement or the
Other Documents, whether or not Agent or any Lender is a party thereto, except to the extent that
any of the foregoing arises out of the willful misconduct of the party being indemnified (as
determined by a court of competent jurisdiction in a final and non-appealable judgment). WITHOUT
LIMITING THE FOREGOING, (i) IT IS THE INTENTION OF BORROWERS, AND BORROWERS AGREE, THAT THE
INDEMNITY PROVISIONS AND EXCULPATORY PROVISIONS CONTAINED IN THIS AGREEMENT SHALL APPLY WITH
RESPECT TO LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SETTLEMENTS,
SUITS, COSTS, EXPENSES AND DISBURSEMENTS OF ANY KIND WHATSOEVER (INCLUDING, WITHOUT LIMITATION,
FEES AND DISBURSEMENTS OF COUNSEL), WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE
NEGLIGENCE OF ANY



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PARTY TO BE INDEMNIFIED, AND (ii) this indemnity shall extend to any liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and
disbursements of any kind or nature whatsoever (including fees and disbursements of counsel)
asserted against or incurred by any of the indemnitees described above in this Section 16.5 by any
Person under any Environmental Laws or similar laws by reason of any Borrower’s or any other
Person’s failure to comply with laws applicable to solid or hazardous waste materials, including
Hazardous Substances and Hazardous Waste, or other Toxic Substances. Additionally, if any taxes
(excluding taxes imposed upon or measured solely by the net income of Agent and Lenders, but
including any intangibles taxes, stamp tax, recording tax or franchise tax) shall be payable by
Agent, Lenders or Borrowers on account of the execution or delivery of this Agreement, or the
execution, delivery, issuance or recording of any of the Other Documents, or the creation or
repayment of any of the Obligations hereunder, by reason of any Applicable Law now or hereafter in
effect, Borrowers will pay (or will promptly reimburse Agent and Lenders for payment of) all such
taxes, including interest and penalties thereon, and will indemnify and hold the indemnitees
described above in this Section 16.5 harmless from and against all liability in connection
therewith.




     16.6. Notice. Any notice or request hereunder may be given to Borrowing Agent or any
Borrower or to Agent or any Lender at their respective addresses set forth below or at such other
address as may hereafter be specified in a notice designated as a notice of change of address under
this Section. Any notice, request, demand, direction or other communication (for purposes of this
Section 16.6 only, a “Notice”) to be given to or made upon any party hereto under any
provision of this Loan Agreement shall be given or made by telephone or in writing (which includes
by means of electronic transmission (i.e., “e-mail”) or facsimile transmission or by setting forth
such Notice on a site on the World Wide Web (a “Website Posting”) if Notice of such Website Posting
(including the information necessary to access such site) has previously been delivered to the
applicable parties hereto by another means set forth in this Section 16.6) in accordance with this
Section 16.6. Any such Notice must be delivered to the applicable parties hereto at the addresses
and numbers set forth under their respective names on Section 16.6 hereof or in accordance with any
subsequent unrevoked Notice from any such party that is given in accordance with this Section 16.6.
Any Notice shall be effective:



          (a) In the case of hand-delivery, when delivered;




          (b) If given by mail, four days after such Notice is deposited with the United States Postal
Service, with first-class postage prepaid, return receipt requested;




          (c) In the case of a telephonic Notice, when a party is contacted by telephone, if delivery of
such telephonic Notice is confirmed no later than the next Business Day by hand delivery, a
facsimile or electronic transmission, a Website Posting or an overnight courier delivery of a
confirmatory Notice (received at or before noon on such next Business Day);




          (d) In the case of a facsimile transmission, when sent to the applicable party’s facsimile
machine’s telephone number, if the party sending such Notice receives confirmation of the delivery
thereof from its own facsimile machine;




          (e) In the case of electronic transmission, when actually received;




Amended & Restated Credit Agreement




 









 








          (f) In the case of a Website Posting, upon delivery of a Notice of such posting (including the
information necessary to access such site) by another means set forth in this Section 16.6; and




          (g) If given by any other means (including by overnight courier), when actually received.




     Any Lender giving a Notice to Borrowing Agent or any Borrower shall concurrently send a copy
thereof to the Agent, and the Agent shall promptly notify the other Lenders of its receipt of such
Notice.




	 	(A)	 	If to Agent or PNC at:




PNC Bank, National Association

2100 Ross Avenue, Suite 1850

Dallas, TX 75201

Attention: Relationship Manager (Geokinetics)

Telephone: (214) 871-1218

Facsimile: (214) 871-2015



with a copy to



PNC Bank, National Association

Two Tower Center Boulevard

East Brunswick, New Jersey 08816

Attention: Josephine Griffin

Telephone: (732) 220-4388

Facsimile: (732) 220-4394



with an additional copy to:



Patton Boggs LLP

2001 Ross Avenue, Suite 3000

Dallas, Texas 75201

Attention: Michelle W. Suarez

Telephone: (214) 758-1500

Facsimile: (214) 758-1550





	 	(B)	 	If to a Lender other than Agent, as specified on the signature
pages hereof





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	 	(C)	 	If to Borrowing Agent or any Borrower:




Geokinetics Inc.

One Riverway, Suite 2100

Houston, Texas 77056

Attention:Thomas J. Concannon

Telephone:(713) 840-3313

Facsimile:(713) 850-7330



with a copy to:



Chamberlain, Hrdlicka, White, Williams & Martin

1200 Smith Street, 14th Floor

Houston, Texas 77002

Attention: James J. Spring, III

Telephone: (713) 658-1818

Facsimile: (713) 658-2553




     16.7. Survival. The obligations of Borrowers under Sections 2.2(f), 3.7, 3.8, 3.9,
4.18(h), and 16.5 and the obligations of Lenders under Section 14.7, shall survive termination of
this Agreement and the Other Documents and payment in full of the Obligations.



     16.8. Severability. If any part of this Agreement is contrary to, prohibited by, or
deemed invalid under Applicable Laws or regulations, such provision shall be inapplicable and
deemed omitted to the
extent so contrary, prohibited or invalid, but the remainder hereof shall not be invalidated
thereby and shall be given effect so far as possible.



     16.9. Expenses. All costs and expenses including, without limitation, all search,
accounting, audit, appraisal, recording, professional and filing fees and expenses and reasonable
attorneys’ fees (including the allocated costs of in-house counsel) and all other expenses and
disbursements incurred by Agent on its behalf or on behalf of Lenders and Lenders (a) in all
efforts made to enforce payment of any Obligation or effect collection of any Collateral, or (b) in
connection with the entering into, documenting, negotiating, structuring, reviewing and closing
this Agreement and the modification, amendment, administration, monitoring, and enforcement of this
Agreement or any consents or waivers hereunder and all related agreements, documents and
instruments, or (c) in instituting, monitoring, maintaining, preserving, enforcing and foreclosing
on Agent’s security interest in or Lien on any of the Collateral, or monitoring, maintaining,
preserving or enforcing any of Agent’s or any Lender’s rights hereunder and under all related
agreements, documents and instruments, whether through judicial proceedings or otherwise, or (d) in
defending or prosecuting any actions or proceedings arising out of or relating to Agent’s or any
Lender’s transactions with any Borrower, or (e) in connection with any advice given to Agent or any
Lender with respect to its rights and obligations under this Agreement and all related agreements,
documents and instruments, may be charged to Borrowers’ Account and shall be part of the
Obligations.



     16.10. Injunctive Relief. Each Borrower recognizes that, in the event any Borrower
fails to perform, observe or discharge any of its obligations or liabilities under this Agreement,
or



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threatens to fail to perform, observe or discharge such obligations or liabilities, any remedy
at law may prove to be inadequate relief to Lenders; therefore, Agent, if Agent so requests, shall
be entitled to temporary and permanent injunctive relief in any such case without the necessity of
proving that actual damages are not an adequate remedy.




     16.11. Consequential Damages. Neither Agent nor any Lender, nor any agent or attorney
for any of them, shall be liable to any Borrower or any Guarantor (or any Affiliate of any such
Person) for indirect, punitive, exemplary or consequential damages arising from any breach of
contract, tort or other wrong relating to the establishment, administration or collection of the
Obligations or as a result of any transaction contemplated under this Agreement or any Other
Document.



     16.12. Captions. The captions at various places in this Agreement are intended for
convenience only and do not constitute and shall not be interpreted as part of this Agreement.



     16.13. Counterparts; Facsimile Signatures. This Agreement may be executed in any number of and by different parties hereto on separate
counterparts, all of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute one and the same agreement. Any signature delivered by a party by
facsimile transmission shall be deemed to be an original signature hereto.



     16.14. Construction. The parties acknowledge that each party and its counsel have
reviewed this Agreement and that the normal rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shall not be employed in the interpretation of this
Agreement or any amendments, schedules or exhibits thereto.



     16.15. Confidentiality; Sharing Information. Agent, each Lender and each Transferee
shall hold all non-public information obtained by Agent, such Lender or such Transferee pursuant to
the requirements of this Agreement in accordance with Agent’s, such Lender’s and such Transferee’s
customary procedures for handling confidential information of this nature; provided, however,
Agent, each Lender and each Transferee may disclose such confidential information (a) to its
examiners, Affiliates, outside auditors, counsel and other professional advisors, (b) to Agent, any
Lender or to any prospective Transferees, and (c) as required or requested by any Governmental Body
or representative thereof or pursuant to legal process; provided, further that (i) unless
specifically prohibited by Applicable Law or court order, Agent, each Lender and each Transferee
shall use its reasonable best efforts prior to disclosure thereof, to notify the applicable
Borrower of the applicable request for disclosure of such non-public information (A) by a
Governmental Body or representative thereof (other than any such request in connection with an
examination of the financial condition of a Lender or a Transferee by such Governmental Body) or
(B) pursuant to legal process and (ii) in no event shall Agent, any Lender or any Transferee be
obligated to return any materials furnished by any Borrower other than those documents and
instruments in possession of Agent or any Lender in order to perfect its Lien on the Collateral
once the Obligations have been paid in full and this Agreement has been terminated. Each Borrower
acknowledges that from time to time financial advisory, investment banking and other services may
be offered or provided to such Borrower or one or more of its Affiliates (in connection with this
Agreement or otherwise) by any Lender or by one or more Subsidiaries or Affiliates of such Lender
and each Borrower hereby authorizes each



Amended & Restated Credit Agreement




 









 







Lender to share any information delivered to such Lender
by such Borrower and its Subsidiaries pursuant to this Agreement, or in connection with the
decision of such Lender to enter into this Agreement, to any such Subsidiary or Affiliate of such
Lender, it being understood that any such Subsidiary or Affiliate of any Lender receiving such
information shall be bound by the provisions of this Section 16.15 as if it were a Lender
hereunder. Such authorization shall survive the repayment of the other Obligations and the
termination of this Agreement.




     16.16. Publicity. Each Borrower and each Lender hereby authorizes Agent to make
appropriate announcements of the financial arrangement entered into among Borrowers, Agent and
Lenders,
including announcements which are commonly known as tombstones, in such publications and to
such selected parties as Agent shall in its sole and absolute discretion deem appropriate.



     16.17. Non-Applicability of Chapter 346. Borrowers, Agent and each Lender hereby
agree that, except for the opt-out provisions of Section 346.004 thereof, the provisions of Chapter
346 of the Texas Finance Code (regulating certain revolving credit loans and revolving tri-party
accounts) shall not apply to this Agreement or any of the Other Documents.



     16.18. Certifications From Banks and Participants; US PATRIOT Act. Each Lender or
assignee or participant of a Lender that is not incorporated under the Laws of the United States of
America or a state thereof (and is not excepted from the certification requirement contained in
Section 313 of the USA PATRIOT Act and the applicable regulations because it is both (i) an
affiliate of a depository institution or foreign bank that maintains a physical presence in the
United States or foreign country, and (ii) subject to supervision by a banking authority regulating
such affiliated depository institution or foreign bank) shall deliver to the Agent the
certification, or, if applicable, recertification, certifying that such Lender is not a “shell” and
certifying to other matters as required by Section 313 of the USA PATRIOT Act and the applicable
regulations: (1) within 10 days after the Restated Closing Date, and (2) as such other times as are
required under the USA PATRIOT Act.



     16.19. Amendment and Restatement. This Agreement and the Notes are given in
amendment, consolidation, restatement, renewal and extension (but not in novation, extinguishment
or satisfaction) of the Original Agreement and the promissory notes issued in connection therewith.
All Liens and security interests securing payment of the obligations under the Original Agreement
and such promissory notes are hereby collectively renewed, extended, rearranged, ratified and
brought forward as security for the payment and performance of the Obligations. With respect to
matters relating to the period prior to the date hereof, all of the provisions of the Original
Agreement (as amended hereby), and the security agreements and other documents, instruments or
agreements executed in connection therewith, are each hereby ratified and confirmed and shall
remain in force and effect. This Agreement shall not constitute a waiver by Agent and Lenders of
any Default or Event of Default (each such term as defined in the Original Agreement) under the
Original Agreement and the Loan Documents (as defined therein) that existed on or prior to the
Restated Closing Date (and not otherwise expressly waived in writing by the Lenders (as defined in
the Original Agreement)) immediately prior to the effectiveness hereof.



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[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGES FOLLOW.]




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     Each of the parties has signed this Agreement as of the day and year first above written.



	 	 	 	 	 
	ATTEST:	 	GEOKINETICS INC.,

as Borrowing Agent and as a Borrower
	 
	 	 	 	 
	/s/ Chin Yu 

	 	By:	 	/s/ Scott A. McCurdy 
	 

	 	 	 	 
	 	 	Name: Scott A. McCurdy

Title: Vice President
	 
	 	 	 	 
	ATTEST:	 	GEOPHYSICAL DEVELOPMENT CORPORATION,

as a Borrower
	 
	 	 	 	 
	/s/ Chin Yu 

	 	By:	 	/s/ Scott A. McCurdy 
	 

	 	 	 	 
	 	 	Name: Scott A. McCurdy

Title: Vice President
	 
	 	 	 	 
	ATTEST:	 	QUANTUM GEOPHYSICAL, INC.,

as a Borrower
	 
	 	 	 	 
	/s/ Chin Yu

	 	By:	 	/s/ Scott A. McCurdy 
	 

	 	 	 	 
	 	 	Name: Scott A. McCurdy

Title: Vice President
	 
	 	 	 	 
	ATTEST:	 	GEOKINETICS EXPLORATION INC.

(f/k/a Trace Energy Services Ltd.),

as a Borrower
	 
	 	 	 	 
	/s/ Chin Yu

	 	By:	 	/s/ Scott A. McCurdy 
	 

	 	 	 	 
	 	 	Name: Scott A. McCurdy

Title: Vice President






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	ATTEST:	 	TRACE ENERGY SERVICES, INC.,

as a Borrower
	 
	 	 	 	 
	/s/ Chin Yu 

	 	By:	 	/s/ Scott A. McCurdy 
	 

	 	 	 	 
	 	 	Name: Scott A. McCurdy

Title: Vice President
	 
	 	 	 	 
	ATTEST:	 	GEOKINETICS HOLDINGS, INC.,

as a Borrower
	 
	 	 	 	 
	/s/ Chin Yu 

	 	By:	 	/s/ Scott A. McCurdy 
	 

	 	 	 	 
	 	 	Name: Scott A. McCurdy

Title: Vice President
	 
	 	 	 	 
	ATTEST:	 	GRANT GEOPHYSICAL, INC.,

as a Borrower
	 
	 	 	 	 
	/s/ Chin Yu 

	 	By:	 	/s/ Scott A. McCurdy 
	 

	 	 	 	 
	 	 	Name: Scott A. McCurdy

Title: Vice President
	 
	 	 	 	 
	ATTEST:	 	GRANT GEOPHYSICAL (INT’L), INC.,

as a Borrower
	 
	 	 	 	 
	/s/ Chin Yu 

	 	By:	 	/s/ Scott A. McCurdy 
	 

	 	 	 	 
	 	 	Name: Scott A. McCurdy

Title: Vice President
	 
	 	 	 	 
	ATTEST:	 	GRANT GEOPHYSICAL CORP.,

as a Borrower
	 
	 	 	 	 
	/s/ Chin Yu 

	 	By:	 	/s/ Scott A. McCurdy 
	 

	 	 	 	 
	 	 	Name: Scott A. McCurdy

Title: Vice President
	 
	 	 	 	 





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	ATTEST:	 	ADVANCED SEISMIC TECHNOLOGY, INC.,

as a Borrower
	 
	 	 	 	 
	/s/ Chin Yu 

	 	By:	 	/s/ Scott A. McCurdy 
	 

	 	 	 	 
	 	 	Name: Scott A. McCurdy

Title: Vice President






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	 	 	PNC BANK, NATIONAL ASSOCIATION,

as Lender and as Agent
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 	 	Terrance O. McKinney

Vice President
	 
	 	 	 	 
	 	 	Commitment Percentage: 100%






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LIST OF EXHIBITS AND SCHEDULES




	 	 	 
	Exhibits
	 	 
	 
	 	 
	Exhibit 1.2

	 	Borrowing Base Certificate
	Exhibit 2.1(a)

	 	Revolving Credit Note
	Exhibit 2.4(a)

	 	CapEx Note
	Exhibit 5.5(b)

	 	Financial Projections
	Exhibit 8.1(k)

	 	Financial Condition Certificate
	Exhibit 16.3

	 	Commitment Transfer Supplement
	 
	 	 
	Schedules
	 	 
	 
	 	 
	Schedule 1.2

	 	Permitted Encumbrances
	Schedule 4.5

	 	Equipment and Inventory Locations
	Schedule 4.15(c)

	 	Chief Executive Office Locations
	Schedule 4.15(h)

	 	Deposit and Investment Accounts
	Schedule 4.19

	 	Real Property
	Schedule 5.1

	 	Consents
	Schedule 5.2(a)

	 	States of Qualification and Good Standing
	Schedule 5.2(b)

	 	Subsidiaries
	Schedule 5.4

	 	Federal Tax Identification Number
	Schedule 5.6

	 	Prior Names
	Schedule 5.7

	 	Environmental
	Schedule 5.8(b) 

Schedule 5.8(d)

	 	Litigation

Plans
	Schedule 5.9

	 	Intellectual Property, Source Code Escrow Agreements
	Schedule 5.10

	 	Licenses and Permits
	Schedule 5.14

	 	Labor Disputes
	Schedule 7.3

	 	Guarantees
	Schedule 7.8

	 	Permitted Indebtedness






Amended & Restated Credit Agreement