exv10w5






Exhibit 10.5




 




$40,816,327.53




BRIDGE LOAN AGREEMENT




dated as of




December 30, 2008




Among




ION GEOPHYSICAL CORPORATION,




The Guarantors Party Hereto,




The Lenders Party Hereto,




JEFFERIES FINANCE LLC,

as Administrative Agent, Sole Bookrunner and Sole Lead Arranger



 




 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	 

	SECTION 1.01 Defined Terms
	 	 	1	 
	SECTION 1.02 Classification of Loans and Borrowings
	 	 	20	 
	SECTION 1.03 Terms Generally
	 	 	20	 
	SECTION 1.04 Accounting Terms; GAAP
	 	 	21	 
	 

	ARTICLE II THE CREDITS
	 	 	21	 
	 

	SECTION 2.01 Commitments; Funding of Loans
	 	 	21	 
	SECTION 2.02 Loans and Borrowings
	 	 	21	 
	SECTION 2.03 Request for Borrowing
	 	 	22	 
	SECTION 2.04 [Intentionally omitted]
	 	 	22	 
	SECTION 2.05 Funding of Borrowing
	 	 	22	 
	SECTION 2.06 Applicable Interest Period
	 	 	22	 
	SECTION 2.07 Termination of Commitments
	 	 	23	 
	SECTION 2.08 Repayment of Loans; Evidence of Debt
	 	 	23	 
	SECTION 2.09 Prepayment of Loans
	 	 	24	 
	SECTION 2.10 Fees
	 	 	25	 
	SECTION 2.11 Interest
	 	 	25	 
	SECTION 2.12 Alternate Rate of Interest
	 	 	26	 
	SECTION 2.13 Increased Costs
	 	 	27	 
	SECTION 2.14 Break Funding Payments
	 	 	28	 
	SECTION 2.15 Taxes
	 	 	28	 
	SECTION 2.16 Payments Generally; Pro Rata Treatment; Sharing of Set-offs
	 	 	29	 
	SECTION 2.17 Mitigation Obligations; Replacement of Lenders
	 	 	31	 
	 

	ARTICLE III REPRESENTATIONS AND WARRANTIES
	 	 	32	 
	 

	SECTION 3.01 Organization
	 	 	32	 
	SECTION 3.02 Authority Relative to this Agreement
	 	 	32	 
	SECTION 3.03 No Violation
	 	 	32	 
	SECTION 3.04 Financial Statements
	 	 	33	 
	SECTION 3.05 No Undisclosed Liabilities
	 	 	33	 
	SECTION 3.06 Litigation
	 	 	34	 






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(continued)





	 	 	 	 	 
	 	 	Page	 
	SECTION 3.07 Compliance with Law
	 	 	34	 
	SECTION 3.08 Material Contracts
	 	 	34	 
	SECTION 3.09 Properties
	 	 	34	 
	SECTION 3.10 Intellectual Property
	 	 	34	 
	SECTION 3.11 Taxes
	 	 	35	 
	SECTION 3.12 Environmental Compliance
	 	 	35	 
	SECTION 3.13 Labor Matters
	 	 	36	 
	SECTION 3.14 Investment Company Status
	 	 	36	 
	SECTION 3.15 Insurance
	 	 	36	 
	SECTION 3.16 Solvency
	 	 	36	 
	SECTION 3.17 ERISA
	 	 	36	 
	SECTION 3.18 Disclosure
	 	 	37	 
	SECTION 3.19 Subsidiaries
	 	 	37	 
	SECTION 3.20 Margin Stock
	 	 	37	 
	SECTION 3.21 Short Term Interim Junior Financing
	 	 	37	 
	 

	ARTICLE IV CONDITIONS
	 	 	37	 
	 

	SECTION 4.01 Effective Date
	 	 	37	 
	 

	ARTICLE V AFFIRMATIVE COVENANTS
	 	 	40	 
	 

	SECTION 5.01 Financial Statements
	 	 	40	 
	SECTION 5.02 Notices of Material Events
	 	 	41	 
	SECTION 5.03 Existence; Conduct of Business
	 	 	42	 
	SECTION 5.04 Payment of Obligations
	 	 	42	 
	SECTION 5.05 Maintenance of Properties; Insurance
	 	 	42	 
	SECTION 5.06 Books and Records; Inspection Rights
	 	 	42	 
	SECTION 5.07 Compliance with Laws
	 	 	43	 
	SECTION 5.08 Use of Proceeds
	 	 	43	 
	SECTION 5.09 Additional Guarantees
	 	 	43	 
	SECTION 5.10 Compliance with ERISA
	 	 	43	 
	SECTION 5.11 Compliance With Agreements
	 	 	43	 
	SECTION 5.12 Compliance with Environmental Laws; Environmental Reports
	 	 	44	 






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(continued)





	 	 	 	 	 
	 	 	Page	 
	SECTION 5.13 Maintain Business
	 	 	44	 
	SECTION 5.14 Further Assurances
	 	 	44	 
	 

	ARTICLE VI NEGATIVE COVENANTS
	 	 	44	 
	 

	SECTION 6.01 Indebtedness
	 	 	44	 
	SECTION 6.02 Liens
	 	 	46	 
	SECTION 6.03 Fundamental Changes
	 	 	46	 
	SECTION 6.04 Asset Sales
	 	 	47	 
	SECTION 6.05 Investments
	 	 	47	 
	SECTION 6.06 Swap Agreements
	 	 	49	 
	SECTION 6.07 Restricted Payments
	 	 	49	 
	SECTION 6.08 Transactions with Affiliates
	 	 	50	 
	SECTION 6.09 Restrictive Agreements
	 	 	51	 
	SECTION 6.10 Constitutive Documents
	 	 	51	 
	SECTION 6.11 Nature of Business
	 	 	51	 
	SECTION 6.12 Sales and Leasebacks
	 	 	52	 
	SECTION 6.13 Changes in Fiscal Year
	 	 	52	 
	SECTION 6.14 Minimum Fixed Charge Coverage Ratio
	 	 	52	 
	SECTION 6.15 Maximum Leverage Ratio
	 	 	52	 
	SECTION 6.16 Minimum Tangible Net Worth
	 	 	52	 
	 

	ARTICLE VII EVENTS OF DEFAULT AND REMEDIES
	 	 	52	 
	 

	SECTION 7.01 Events of Default
	 	 	52	 
	 

	ARTICLE VIII THE ADMINISTRATIVE AGENT
	 	 	55	 
	 

	ARTICLE IX GUARANTEE
	 	 	57	 
	 

	SECTION 9.01 The Guarantee
	 	 	57	 
	SECTION 9.02 Guarantee Unconditional
	 	 	58	 
	SECTION 9.03 Discharge Only upon Payment in Full; Reinstatement In Certain
Circumstances
	 	 	59	 
	SECTION 9.04 Waiver by Each Guarantor
	 	 	59	 
	SECTION 9.05 Right of Contribution
	 	 	59	 
	SECTION 9.06 Subrogation
	 	 	59	 
	SECTION 9.07 Stay of Acceleration
	 	 	60	 






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TABLE OF CONTENTS

(continued)





	 	 	 	 	 
	 	 	Page	 
	SECTION 9.08 Instrument for the Payment of Money
	 	 	60	 
	SECTION 9.09 Limit of Liability
	 	 	60	 
	SECTION 9.10 Release upon Sale
	 	 	60	 
	SECTION 9.11 Benefit to Guarantor
	 	 	60	 
	 

	ARTICLE X MISCELLANEOUS
	 	 	61	 
	 

	SECTION 10.01 Notices
	 	 	61	 
	SECTION 10.02 Waivers; Amendments
	 	 	62	 
	SECTION 10.03 Expenses; Indemnity; Damage Waiver
	 	 	63	 
	SECTION 10.04 Successors and Assigns
	 	 	64	 
	SECTION 10.05 Survival
	 	 	67	 
	SECTION 10.06 Counterparts; Integration; Effectiveness
	 	 	68	 
	SECTION 10.07 Severability
	 	 	68	 
	SECTION 10.08 Right of Setoff
	 	 	68	 
	SECTION 10.09 Governing Law; Jurisdiction; Consent to Service of Process
	 	 	68	 
	SECTION 10.10 WAIVER OF JURY TRIAL
	 	 	70	 
	SECTION 10.11 Headings
	 	 	70	 
	SECTION 10.12 Confidentiality
	 	 	70	 
	SECTION 10.13 Interest Rate Limitation
	 	 	71	 
	SECTION 10.14 USA Patriot Act
	 	 	72	 
	SECTION 10.15 Final Agreement of the Parties
	 	 	72	 






-iv-









 






TABLE OF CONTENTS

(continued)




SCHEDULES:




Schedule 1.01A — Existing Letters of Credit




Schedule 1.01B — Permitted Liens




Schedule 2.01 — Commitments




Schedule 3.01 — Organization




Schedule 3.03 — No Violations




Schedule 3.05 — No Undisclosed Liabilities




Schedule 3.06 — Litigation




Schedule 3.07 — Compliance with Law




Schedule 3.10 — Intellectual Property




Schedule 3.12 — Environmental Compliance




Schedule 3.15 — Insurance




Schedule 3.19 — Subsidiaries




Schedule 4.01(m) — Payoffs to Other Lenders




Schedule 6.01 — Existing Indebtedness




Schedule 6.05 — Permitted Investments




Schedule 6.08 — Affiliate Transactions




Schedule 6.09 — Restrictive Agreements




Schedule 6.12 — Sales and Leasebacks




Schedule 10.04 — Competitors




-v-









 








TABLE OF CONTENTS

(continued)




EXHIBITS:




	 	 	 	 	 
	Exhibit 1.01(A)

	 	—
	 	 Form of Assignment and Assumption
	 
	 	 	 	 
	Exhibit 1.01(C)

	 	—
	 	 Form of Joinder Agreement
	 
	 	 	 	 
	Exhibit 2.08(f)

	 	—
	 	 Form of Promissory Note





-vi-











 





          BRIDGE LOAN AGREEMENT (this “Agreement”) dated as of December 30, 2008 (the
“Effective Date”), among ION GEOPHYSICAL CORPORATION, a Delaware corporation (the
“Borrower”), the Guarantors party hereto, the Lenders party hereto, JEFFERIES FINANCE LLC
(“Jefferies”), as Administrative Agent, sole bookrunner and sole lead arranger.




PRELIMINARY STATEMENT:




          WHEREAS, the Borrower has previously issued that certain senior increasing rate note, dated
September 18, 2008 (the “Short-Term Bridge Note”), in the aggregate principal amount of
$40,816,327.53 in favor of Jefferies Finance CP Funding LLC, which Short-Term Bridge Note is
maturing on December 31, 2008; and




          WHEREAS, the Borrower has requested that the Lenders make loans to it to repay the outstanding
principal amount of the Short-Term Bridge Note, and the Lenders are willing, on the terms and
subject to the conditions hereinafter set forth (including Article IV), to extend the
Commitments and make the Loans described herein to the Borrower for such purpose.




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




ARTICLE I




Definitions




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



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




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




          “Administrative Agent” means Jefferies Finance LLC, in its capacity as administrative
agent for the Lenders hereunder.




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




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




          “Agreement” has the meaning set forth in the introductory paragraph hereof.




 









 








          “Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1% and (c) 2.75%. Any change in the Alternate Base Rate due to a change in the Prime
Rate or the Federal Funds Effective Rate shall be effective from and including the effective date
of such change in the Prime Rate or the Federal Funds Effective Rate, respectively, if applicable.




          “Applicable Margin” means, on any day, when used in reference to any Loan the rate of
interest of which is determined by reference to (i) the Adjusted LIBO Rate, a per annum percentage
equal to 13.25% and (ii) the Alternate Base Rate, a per annum percentage equal to 12.25%.




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




          “ARAM” means ARAM Systems Ltd., an Alberta corporation, and its permitted successors
and assigns.




          “ARAM Acquisition” means the acquisition of ARAM and certain of its subsidiaries or
Affiliates, including Canadian Seismic Rentals, Inc., an Alberta corporation, pursuant to the terms
of the ARAM Purchase Agreement.




          “ARAM Financial Statements” has the meaning set forth in Section 3.04(b).




          “ARAM Purchase Agreement” means that certain Amended and Restated Share Purchase
Agreement, dated as of September 18, 2008, by and among the Borrower, ARAM, Canadian Seismic
Rentals Inc. and the “Sellers” named therein, as amended, restated, or otherwise modified from time
to time.




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




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




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




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




2









 








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




          “Business Day” means any day that is not a Saturday, Sunday or other day on which
commercial banks in New York City, New York or Houston, Texas are authorized or required by Law to
remain closed; provided that, when used in connection with a Eurodollar Loan, the term
“Business Day” shall also exclude any day on which banks are not open for dealings in dollar
deposits in the London interbank market.




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




          “Change in Law” means (a) the adoption of any Law after the date of this Agreement,
(b) any change in any Law or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender (or, for purposes of
Section 2.13(b), by any lending office of such Lender or by such Lender’s holding company,
if any) with any request, guideline or directive (whether or not having the force of Law) of any
Governmental Authority made or issued after the date of this Agreement.




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




          “Change of Control Offer” has the meaning set forth in Section 2.09(b).




          “Change of Control Payment” has the meaning set forth in Section 2.09(b).




          “Change of Control Payment Date” has the meaning set forth in Section 2.09(b).




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




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




3









 








          “Commitment” means with respect to each Lender, the commitment of such Lender to make
its Loan. The amount of each Lender’s Commitment is set forth on Schedule 2.01, or in the
Assignment and Assumption pursuant to which such Lender shall have assumed its Commitment, as
applicable. The aggregate amount of the Lenders’ Commitments is $40,816,327.53.




          “Confidential Release and Termination Agreement” means the Release and Termination
Agreement, dated the date hereof, by and among the Borrower, Jefferies and Jefferies & Company,
Inc.




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




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




          “Consolidated EBITDA” means, for any period and for any Person, Consolidated Net
Income of such Person for such period plus, to the extent deducted in determining Consolidated Net
Income for such period, the aggregate of (i) Consolidated Interest Expense, (ii) income tax expense
and (iii) depreciation, amortization and other similar non-cash charges. The Consolidated EBITDA
of any Person acquired subsequent to July 3, 2008 shall be, as of the date of acquisition, without
duplication, said Person’s Consolidated EBITDA calculated for the most recently completed twelve
month period ended prior to such acquisition and, thereafter, its Consolidated EBITDA calculated on
a rolling four quarter basis.




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




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




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




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




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




4









 








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




          “Credit Exposure” means, with respect to any Lender at any time (i) prior to the
termination or expiration of the Commitments, such Lender’s Commitment at such time and (ii)
thereafter, the outstanding principal amount of such Lender’s Loans at such time.




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




          “Default Rate” means (a) with respect to the Loans, the per annum rate of interest
otherwise applicable to such Loans plus 4.00%, and (b) with respect to all other amounts, the per
annum rate of interest otherwise applicable to ABR Loans plus 4.00%.




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




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




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




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




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




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




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




5









 








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




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




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




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




          “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, Issuing
Lender or any other recipient of a payment to be made by or on account of any Obligation, (a) taxes
imposed on or measured by its overall net income, however denominated, and franchise taxes imposed
on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof)
under the laws of which such recipient is organized or in which its principal office is located or,
in the case of any Lender, in which its applicable lending office is located; and (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed by any other
jurisdiction in which a Lender is located.




          “Existing ARAM Sellers’ Note” means that certain unsecured promissory note, dated
September 18, 2008, in the aggregate principal amount of $35,000,000, issued by 3226509 Nova
Scotia Company, a Nova Scotia unlimited liability company and successor by assignment to the
Borrower under the ARAM Purchase Agreement, made to the favor of Maison Mazel Ltd. (formerly known
as 1236929 Alberta Ltd.), an Alberta corporation.




          “Existing ARAM Sellers’ Note Guaranty” means that certain guaranty, dated September
18, 2008, made by the Borrower to the favor of Maison Mazel Ltd. (formerly known as 1236929 Alberta
Ltd.), an Alberta corporation.




6









 








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




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




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




          “Financial Officer” means the chief financial officer, principal accounting officer,
treasurer or controller of the Borrower or any authorized signatory of the Borrower.




          “Fixed Charge Coverage Ratio” means, at any date, the ratio of (i) Consolidated EBITDA
less the sum of: (A) cash income tax expense, (B) non-financed Consolidated Capital Expenditures
(it being understood and agreed that Consolidated Capital Expenditures that are financed with loans
made under the Senior Credit Facility shall not constitute non-financed Consolidated Capital
Expenditures) and (C) capitalized research and development costs; to (ii) the sum of (A) scheduled
payments of (x) lease payments and (y) payments of principal Indebtedness, (B) Consolidated
Interest Expense actually paid and (C) dividends paid in cash, in each case for the period of four
consecutive fiscal quarters most recently ended on or prior to such date for which financial
information is available.




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




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




          “Fourth Amendment” means that certain Fourth Amendment to Amended and Restated Credit
Agreement and Foreign Security Agreement, Limited Waiver and Release, dated





7









 







the date hereof, by and among the Borrower, ION International S.à r.l., the guarantors party
thereto, the lenders party thereto and the Senior Credit Facility Administrative Agent.




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




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




          “Governmental Authority” means the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.




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




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




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




          “Hazardous Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law, and any petroleum,
petroleum products or petroleum distillates and associated oil or natural gas exploration,
production and development wastes that are not exempted or excluded from being
defined as “hazardous substances”, “hazardous materials”, “hazardous wastes” and “toxic
substances” under such Environmental Laws.




8









 








          “Indebtedness” of any Person means, without duplication, (a) all obligations of such
Person for borrowed money or with respect to deposits or advances of any kind (excluding deposits
from customers of the Borrower or its Subsidiaries in the ordinary course of business), (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (d) all obligations of such Person in respect of the deferred
purchase price of property or services (excluding current accounts payable incurred in the ordinary
course of business that are not more than ninety (90) days past due), (e) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or
not the Indebtedness secured thereby has been assumed, (f) all guarantees by such Person of
Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h) all obligations,
contingent or otherwise, of such Person as an account party in respect of letters of credit and
letters of guaranty, (i) all obligations, contingent or otherwise, of such Person in respect of
bankers’ acceptances and (j) any other items required to be listed as a liability under GAAP. The
Indebtedness of any Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person is liable therefor
as a result of such Person’s ownership interest in or other relationship with such entity, except
to the extent the terms of such Indebtedness provide that such Person is not liable therefor.




          “Indemnified Taxes” means Taxes other than Excluded Taxes.




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




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




          “Interest Payment Date” means (a) with respect to any ABR Loan, the last Business Day
of each calendar month, commencing with the last Business Day of January, 2009 and (b) with respect
to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which
such Loan is a part.




          “Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically corresponding day in the
calendar month that is one month thereafter; provided, that (i) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in the next calendar
month, in which case such Interest Period shall end on the next preceding Business Day; (ii) any
Interest Period pertaining to a Eurodollar Borrowing that commences on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding





9









 







day in the last calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period and (iii) if any Interest Period shall end on a
date that is subsequent to the Maturity Date, the last day of such Interest Period shall be deemed
to be the Maturity Date regardless of whether such Interest Period shall be for a period of less
than one month. For purposes hereof, the date of a Borrowing initially shall be the date on which
such Borrowing is made and thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.




          “ION Financial Statements” has the meaning set forth in Section 3.04(a).




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




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




          “Joinder Agreement” means a Joinder Agreement substantially in the form of Exhibit
1.01(C) or such other form as the Administrative Agent shall approve executed by any new
Material Domestic Subsidiary or any Domestic Subsidiary that previously was not is required under
Section 5.09 to become a Guarantor, in each case, making such Subsidiary a Guarantor.




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




          “Lenders” means the Persons listed on the signature pages hereto as “Lenders” and any
other Person that shall have become a Lender hereto pursuant to an Assignment and Assumption, other
than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.




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




          “LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period,
the greater of (i) 1.75% and (ii) the rate appearing on Reuters BBA Libor Rates Page 3750 (or on
any successor or substitute page of such service, or any successor to or substitute for such
service, providing rate quotations comparable to those currently provided on such page of such
service, as determined by the Administrative Agent from time to time for purposes of





10









 







providing quotations of interest rates applicable to deposits in the relevant currency in the
London interbank market) at approximately 11:00 a.m., London time, two (2) Business Days prior to
the commencement of such Interest Period, as the rate for deposits in Dollars with a maturity
comparable to such Interest Period. In the event that such rate referred to in clause (ii) of the
immediately preceding sentence is not available at such time for any reason, then the “LIBO Rate”
with respect to such Eurodollar Borrowing for such Interest Period shall be the greater of (i)
1.75% and (ii) the rate at which the Administrative Agent is offered deposits in Dollars in
immediately available funds in the London interbank market at approximately 11:00 a.m., London
time, two (2) Business Days prior to the commencement of such Interest Period for the number of
days comprised therein and in an amount comparable to its portion of the amount of such Eurodollar
Borrowing to be outstanding during such Interest Period.




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




          “Loan Documents” means this Agreement, any promissory notes executed in connection
herewith, any Joinder Agreements and any other agreements and documents executed and delivered in
connection with this Agreement.




          “Loan” means any Loan made pursuant to Section 2.01 hereof.




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




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




          “Material Contract” means any contract or agreement, written or oral, to which the
Borrower or any of its Subsidiaries is a party (other than the Loan Documents) that is listed as a
“Material Contract” in the most recently filed Annual Report of the Borrower on Form 10-K, or in
any Quarterly Report of the Borrower on Form 10-Q or Current Report of the Borrower on Form 8-K
filed thereafter (each as may be amended) until the Form 10-K for the immediately succeeding fiscal
year is filed, as each such contract or agreement may be amended, supplemented or otherwise
modified from time to time.




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




11









 








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




          “Maturity Date” means January 31, 2010.




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




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




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




          “New ARAM Sellers’ Note” means that certain amended and restated unsecured
subordinated promissory note, dated the Effective Date, in the aggregate principal amount of
$35,000,000, issued by 3226509 Nova Scotia Company, a Nova Scotia unlimited liability company and
successor by assignment to the Borrower under the ARAM Purchase Agreement, made to the favor of
Maison Mazel Ltd. (formerly known as 1236929 Alberta Ltd.), an Alberta corporation, as the same may
be amended, supplemented or otherwise modified from time to time in accordance with the terms
hereof.




          “New ARAM Sellers’ Note Documents” means, collectively, the New ARAM Sellers’ Note and
the New ARAM Sellers’ Note Guaranty.




          “New ARAM Sellers’ Note Guaranty” means that certain amended and restated subordinated
guaranty, dated the Effective Date, made by the Borrower to the favor of Maison Mazel Ltd.
(formerly known as 1236929 Alberta Ltd.), as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof.




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




          “Obligations” means all of the duties, obligations (including the payment of the
principal of or premium, if any, or interest on the Loans) and liabilities of any kind of the
Borrower and each Guarantor hereunder or under any of the Loan Documents.




          “Obligors” means the Borrower and each Guarantor.




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




12









 








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




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




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




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




          “Permitted Investments” means:




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




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




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




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




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




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




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




13









 








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




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




          (j) [Intentionally omitted];




          (k) any mutual funds or similar investment vehicles investing primarily in Investments of the
types set forth in the foregoing clauses (a) through (j), provided that ratings
requirements shall be applicable to the mutual fund rather than the underlying Investments, as
follows: such mutual funds shall, in each case, have a rating of “A-” or better from S&P or a
rating of “A3” from Moody’s or a rating satisfactory to the Administrative Agent from another
recognized rating agency satisfactory to the Administrative Agent, provided,
however, that it is agreed that (i) any Investment which when made complies with the
requirements of any of the foregoing clauses (e), (f), (g), (h), (i) or (j) may continue to be held
notwithstanding that such Investment if made thereafter would not comply with such requirements;
and (ii) no Investment otherwise permitted by clauses (j) or (k) shall be permitted to be made
directly or indirectly through a mutual fund if, immediately before or after giving effect thereto,
any Default shall have occurred and be continuing; and




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




          “Permitted Liens” means:




          (a) Liens that secure Indebtedness incurred under the Senior Credit Facility pursuant to
clause (e) of Section 6.01;




          (b) any Lien on any property or asset of the Borrower or any Subsidiary of the Borrower
existing on July 3, 2008 and identified on Schedule 1.01B hereto;




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




14









 








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




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




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




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




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




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




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




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




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




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




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




15









 








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




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




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




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




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




          (t) any Lien existing on any property or asset prior to the acquisition thereof by the
Borrower or any Subsidiary of the Borrower or existing on any property or asset of any Person that
becomes a Subsidiary after July 3, 2008 prior to the time such Person becomes a Subsidiary;
provided that (i) such Lien is not created in contemplation of or in connection with such
acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not
apply to any other Property or assets of the Borrower or any Subsidiary of the Borrower, (iii) such
Lien shall secure only those obligations which it secures on the date of such acquisition or the
date such Person becomes a Subsidiary, as the case may be, and (iv) such Lien, unless otherwise
permitted hereunder, is terminated within ninety (90) days of such Person’s becoming a Subsidiary;




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




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




16









 








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




          (x) any Liens securing purchase money indebtedness;




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




          (z) liens on Margin Stock.




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




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




          “Prime Rate” means the prime lending rate of interest per annum publicly announced
from time to time by HSBC Bank USA, N.A., as its prime rate in effect at its principal office
located in New York, New York as set forth on the British Bankers’ Association Telerate Page 5 for
such day (or such other page as may replace such page for the purpose of displaying such rate);
each change in the Prime Rate shall be effective from and including the date such change is
publicly announced as being effective.




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




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




          “Required Lenders” means, at any time, Lenders having Credit Exposures representing
more than 50.0% of the aggregate amount of all Credit Exposures at such time.




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




          “Restricted Payment” means: (i) any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the Borrower or any of its
Subsidiaries, or any payment (whether in cash, securities or other property), including any





17









 







sinking fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such Equity Interests in the Borrower, or any of
its Subsidiaries or any option, warrant or other right to acquire any such Equity Interests in the
Borrower or any of its Subsidiaries, or (ii) any principal repayment, defeasance, sinking fund or
similar deposit, whether in cash, securities or other property, of the New ARAM Sellers’ Note.




          “Sale/Leaseback Agreement” means a five-year amortizing equipment lease financing
facility in an original principal amount not exceeding $41,000,000, entered into by the Borrower or
one or more of its Subsidiaries, pursuant to which the Borrower or such Subsidiaries shall sell and
lease back equipment or inventory, primarily located in Canada, on terms reasonably satisfactory to
(i) if the Senior Credit Facility is then outstanding, the Senior Credit Facility Administrative
Agent or (ii) if the Senior Credit Facility is not then outstanding, the Administrative Agent.




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




          “Senior Credit Facility” means that certain Amended and Restated Credit Agreement,
dated as of July 3, 2008, among, inter alios, the Borrower, ION International S.à r.l., a
Luxembourg private limited company (société à responsabilité limitée), as the foreign borrower, the
other Subsidiaries of the Borrower that are party thereto, as guarantors, the lenders party
thereto, HSBC Bank USA, N.A., as administrative agent (in such capacity, the “Senior Credit
Facility Administrative Agent”), and the other agents party thereto, as amended by that certain
First Amendment to Amended and Restated Credit Agreement and Domestic Security Agreement, dated as
of September 17, 2008, that certain Second Amendment to Amended and Restated Credit Agreement,
dated as of October 17, 2008, the Third Amendment and the Fourth Amendment and the same as may be
further amended, supplemented or otherwise modified from time to time in accordance with the terms
thereof.




          “Senior Credit Facility Lender” means a Lender (as defined in the Senior Credit
Facility).




          “Senior Credit Facility Lender Swap Agreement” means a Lender Swap Agreement (as
defined in the Senior Credit Facility).




          “Senior Credit Facility Loan Documents” means the Senior Credit Facility and the Loan
Documents (as defined therein), in each case, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof.




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




          “Short-Term Bridge Note” has the meaning set forth in the recitals hereto.




          “Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of
which is the number one and the denominator of which is the number one minus






18









 







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




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




          “subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity the accounts of
which would be consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50% of the equity or
more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, Controlled or held, or (b) that is, as
of such date, otherwise Controlled by the parent or one or more subsidiaries of the parent or by
the parent and one or more subsidiaries of the parent.




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




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




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




19









 








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




          “Tax Deferred Asset Assignment Agreement” means that certain Assignment Agreement,
dated the date hereof, by and among 3226509 Nova Scotia Company, ARAM, Canadian Seismic Rentals
Inc., Maison Mazel Ltd. (formerly known as 1236929 Alberta Ltd.) and the Borrower, in form and
substance reasonably satisfactory to the Administrative Agent.




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




          “Third Amendment” means that certain Third Amendment to Amended and Restated Credit
Agreement, dated December 29, 2008, by and among the Borrower, ION International S.à r.l., the
guarantors party thereto, the lenders party thereto and the Senior Credit Facility Administrative
Agent.




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




          “Transactions” means the execution, delivery and performance by the Borrower and the
Guarantors of this Agreement and the other Loan Documents, the borrowing of the Loans and the use
of the proceeds thereof as provided in Section 5.08.




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




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




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



     SECTION 1.03 Terms Generally. The definitions of terms herein shall apply equally to
the singular and plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The
word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the
context requires otherwise (a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or other document as
from time to time amended, supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference herein to any Person
shall be construed to include such Person’s successors and permitted assigns, (c) the words
“herein”, “hereof” and



20









 




“hereunder”, and words of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and
Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights.




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



ARTICLE II




The Credits




     SECTION 2.01 Commitments; Funding of Loans. Subject to the terms and conditions set
forth herein, each Lender agrees to make term loans (with respect to such Lender, its
“Loans”) to the Borrower in a single Borrowing on the Effective Date in an aggregate
principal amount equal to such Lender’s Commitment. Once prepaid or repaid, no Loan may be
reborrowed.



     SECTION 2.02 Loans and Borrowings.



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




          (b) The Borrowing to be funded on the Effective Date shall be in Dollars and the interest rate
shall be based on the Adjusted LIBO Rate. Each Lender at its option may make any Eurodollar Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan;
provided that any exercise of such option shall not affect the obligation of the Borrower
to repay such Loan in accordance with the terms of this Agreement.




21









 








     SECTION 2.03 Request for Borrowing. By its execution hereof, the Borrower hereby
irrevocably requests that a Borrowing be made in accordance with Sections 2.01 and
2.02, which Borrowing shall have the following terms:




     (i) the aggregate amount of the requested Borrowing shall be $40,816,327.53 and
denominated in Dollars;




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




     (iii) such Borrowing is to be a Eurodollar Borrowing;




     (iv) the initial Interest Period to be applicable thereto is one month; and




     (v) the proceeds of the requested Borrowing shall be applied by the Administrative
Agent on behalf of the Borrower to the payment of all outstanding principal of the
Short-Term Bridge Note.



     SECTION 2.04 [Intentionally omitted].



     SECTION 2.05 Funding of Borrowing.



          (a) Each Lender shall make the Loan to be made by it hereunder on the Effective Date by wire
transfer of immediately available funds by 1:00 p.m., Eastern time, to the account of the
Administrative Agent most recently designated by it for such purpose by notice to the Lenders. The
Administrative Agent will promptly apply such Loans on behalf of the Borrower in the amounts so
received, in like funds, to the payment of all outstanding principal of the Short-Term Bridge Note.




          (b) The Administrative Agent may assume that each Lender will fund the Loans to be funded by
it on the Effective Date in accordance with paragraph (a) of this Section and may, in reliance upon
such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender
has not in fact made its share of the applicable Borrowing available to the Administrative Agent,
then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount with interest thereon, plus any customary charges
paid by the Administrative Agent to its correspondent bank, for each day from and including the
date such amount is made available to the Borrower to but excluding the date of payment to the
Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective
Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on
interbank compensation or (ii) in the case of the Borrower, the interest rate applicable to such
Borrowings. If such Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender’s Loan included in such Borrowing.




     SECTION 2.06 Applicable Interest Period.



          On the last day of the Interest Period applicable to each Borrowing, such Borrowing shall,
subject to Section 2.12, be continued as a Eurodollar Borrowing having an




22









 




Interest Period of one month; provided, however, that if pursuant to
Section 2.12, such Borrowing is converted into an ABR Borrowing, such Eurodollar Borrowing
shall be converted into an ABR Borrowing.




          If the Administrative Agent shall have given notice to the Borrower and the Lenders that the
circumstances described in clause (a) or (b) under Section 2.12, as the case may be, no
longer exist, then the ABR Borrowing then outstanding shall be converted on the day such notice is
given into a Eurodollar Borrowing having an Interest Period of one month’s duration;
provided that if such day is not a Business Day, such conversion shall occur on the first
Business Day following such day.




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




     SECTION 2.07 Termination of Commitments.



          The Commitments shall terminate at the earlier of (i) the making of the Loans and (ii) 5:00pm,
Eastern time, on the Effective Date.




     SECTION 2.08 Repayment of Loans; Evidence of Debt.



          (a) The Borrower hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Loan on the Maturity Date.




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




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




          (d) Repayments of any Loan or any Borrowing shall only be made in Dollars.




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




23









 








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




     SECTION 2.09 Prepayment of Loans.



          (a) Optional Prepayments. The Borrower shall have the right at any time and from time
to time to prepay the Loans in whole or in part, subject to prior notice in accordance with the
last sentence of this clause (a). Each prepayment pursuant to this clause (a) shall be made with
accrued and unpaid interest thereon to the date of such prepayment and applied to reduce pro rata
all of the Loans. The Borrower shall notify the Administrative Agent by telephone (confirmed by
telecopy) of any prepayment under this clause (a) not later than 1:00 p.m., Eastern time, three (3)
Business Days before the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date and the principal amount of each Borrowing or portion thereof to be
prepaid. Promptly following receipt of any such notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount of
at least $1,000,000 and increments of $1,000,000.




          (b) Change of Control Offer. (i) Upon the occurrence of a Change of Control, the
Borrower will make an irrevocable written offer (a “Change of Control Offer”) to each
Lender to prepay all or any part (equal to $1,000 or an integral multiple of $1,000) of the
principal of such Lender’s Loans in an amount equal to 100% of such principal amount to be prepaid
plus a premium of 1.00% thereon, together with accrued and unpaid interest on such principal amount
to the date of such prepayment purchase (the “Change of Control Payment”). Within two
Business Days following any Change of Control, the Company will mail a notice to each Lender and
the Administrative Agent describing the transaction or transactions that constitute the Change of
Control and stating:





          (A) that the Change of Control Offer is being made pursuant to this Section
2.09(b) and that all principal with respect to which any Lender designates for
prepayment will be prepaid;




          (B) the Change of Control Payment and the purchase date, which shall be no earlier than
15 days and no later than 30 days from the date such notice is mailed (the “Change of
Control Payment Date”);




          (C) that each Lender electing to have all or any part of the principal of its Loans
prepaid pursuant to a Change of Control Offer will be required to so notify the
Administrative Agent (with a copy to the Borrower) in writing of the principal amount of
such Loans to be prepaid in connection with the Change of Control Offer prior to the close
of business on the third Business Day preceding the Change of Control Payment Date; and



24









 






          (D) that each Lender who has given the written notice described in clause (D) above
will be entitled to withdraw its election if the Administrative Agent receives, not later
than the close of business on the second Business Day preceding the Change of Control
Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of
such Lender, the principal amount of its Loans with respect to which it has designated for
prepayment, and a statement that such Lender is withdrawing its election to have such
principal amount so prepaid. If the Administrative Agent receives any such withdrawal
notice, it shall promptly provide a copy of the same to the Borrower.




     (ii) On the Change of Control Payment Date, the Borrower will pay to the Administrative
Agent an amount equal to the Change of Control Payment in respect of the aggregate principal
amount of all Loans with respect to which the Lenders thereof have designated for prepayment
pursuant to written notices delivered in accordance with clause (i)(D) above (and with
respect to which no such Lender subsequently withdrew such written notice pursuant to a
withdrawal notice delivered in accordance with clause (i)(E) above). The Administrative
Agent shall, to the extent of the funds received by the Borrower, promptly deliver to each
such Lender the Change of Control Payment in respect of the aggregate principal amount of
all Loans with respect to which such Lender thereof had designated for prepayment pursuant
to a written notice delivered in accordance with clause (i)(D) above (and with respect to
which such Lender did not subsequently withdraw such written notice pursuant to a withdrawal
notice delivered in accordance with clause (i)(E) above).



     SECTION 2.10 Fees.



          (a) On the Effective Date, the Borrower shall pay to the Administrative Agent, for the account
of each Lender, an upfront fee equal to five percent (5.00%) on the aggregate principal amount of
the Loans to be made by such Lender on the Effective Date.




          (b) On June 30, 2009, the Borrower shall pay to the Administrative Agent, for the account of
each Lender, an initial duration fee in an amount equal to three percent (3.00%) of the aggregate
principal amount of the Loans of such Lender outstanding on such date.




          (c) On September 30, 2009, the Borrower shall pay to the Administrative Agent, for the account
of each Lender, an additional duration fee in an amount equal to two percent (2.00%) of the
aggregate principal amount of the Loans of such Lender outstanding on such date.




          (d) All fees payable hereunder shall be paid on the dates due, in immediately available funds,
to the Administrative Agent for distribution to the Lenders. Fees paid shall not be refundable
under any circumstances.




     SECTION 2.11 Interest.



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




25









 








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




          (c) Notwithstanding anything to the contrary in Section 2.11(a) or (b) but, in
any event, subject to Section 10.13, at no time will the per annum interest rates specified
in Sections 2.11(a) and (b) be less than the rate of 15.00% per annum or exceed the
rate of 17.00% per annum, provided, that such limitation on the maximum rate of interest
provided in this Section 2.11(c) shall not limit any increase in any rate of interest as a
result of the provisions contained in Section 2.11(d).




          (d) Notwithstanding the foregoing, but subject to Section 10.13, if any Default or
Event of Default shall have occurred, all outstanding principal of or unpaid premium, if any, or
accrued or unpaid interest on any Loan or any unpaid fee or other amount shall bear interest at the
Default Rate while such Default or Event of Default is continuing.




          (e) Subject to Section 10.13, accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan and on the Maturity Date; provided that
(i) interest accrued pursuant to paragraph (d) of this Section shall be payable on demand, (ii) in
the event of any repayment or prepayment of any Loan, accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the
event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period
therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.




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




     SECTION 2.12 Alternate Rate of Interest. If prior to the commencement of any Interest
Period for a Borrowing based on the Adjusted LIBO Rate:



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




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



then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by
telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent
notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer
exist, (i) any outstanding Eurodollar Borrowing shall be converted on the last day of the Interest


26









 






Period thereof into an ABR Borrowing, and (ii) no Eurodollar Borrowing may be continued as, nor may
any ABR Borrowing be converted into, a Eurodollar Borrowing.




     SECTION 2.13 Increased Costs.



          (a) If any Change in Law shall:





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




     (ii) impose on any Lender or the London interbank market any other condition affecting
this Agreement or Eurodollar Loans made by such Lender;


and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Loan or to reduce the amount of any sum received or receivable by such
Lender hereunder (whether of principal, premium, if any, interest or otherwise), then the Borrower
will pay to such Lender such additional amount or amounts as will compensate such Lender for such
additional costs incurred or reduction suffered in connection with the Loans made to the Borrower.




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




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




          (d) Failure or delay on the part of any Lender to demand compensation pursuant to this Section
shall not constitute a waiver of such Lender’s right to demand such compensation; provided
that the Borrower shall not be required to compensate a Lender pursuant to this Section for any
increased costs or reductions incurred more than 180 days prior to the date that such Lender
notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of
such Lender’s intention to claim compensation therefor; provided further that, if
the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180
day period referred to above shall be extended to include the period of retroactive effect thereof;
provided, further, that no Lender shall seek compensation from the Borrower unless
such Lender is actively seeking compensation from other similarly situated borrowers as well.




27









 








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



     SECTION 2.15 Taxes.



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




          (b) [Intentionally omitted].




          (c) The Borrower shall indemnify the Administrative Agent and each Lender, within ten (10)
days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
paid by the Administrative Agent or such Lender, as the case may be, on or with respect to any
payment by or on account of any obligation of the Borrower hereunder (including Indemnified Taxes
or Other Taxes imposed or asserted on or attributable to amounts payable under this
Section 2.15) and any penalties, interest and reasonable out-of-pocket expenses arising
therefrom or with respect thereto, except as a result of the finding by a court of competent
jurisdiction in a final, non-appealable order that said sums were imposed as a result of the
willful misconduct or gross negligence of the Administrative Agent or such Lender, whether or not
such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or liability delivered to
the Borrower by a Lender, or by the Administrative Agent on its own behalf or on behalf of a




28









 




Lender, shall be conclusive absent manifest error. No Administrative Agent or Lender shall be
entitled to receive any payment with respect to Indemnified Taxes or Other Taxes that are incurred
or accrued more than 180 days prior to the date the Administrative Agent or such Lender, as the
case may be, gives notice and demand thereof to the Borrower.




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




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




          (f) If the Administrative Agent or a Lender determines, in its sole discretion, that it has
received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower
or with respect to which the Borrower has paid additional amounts pursuant to this Section
2.15, it shall pay over such refund to the Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section 2.15 with
respect to the Taxes or Other Taxes giving rise to such refund), net of all reasonable
out-of-pocket expenses of the Administrative Agent or such Lender and without interest (other than
any interest paid by the relevant Governmental Authority with respect to such refund);
provided, that the Borrower, upon the request of the Administrative Agent or such Lender,
agree to repay the amount paid over to the Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the
event the Administrative Agent or such Lender is required to repay such refund to such Governmental
Authority. This Section shall not be construed to require the Administrative Agent or any Lender
to make available its tax returns (or any other information relating to its taxes that it deems
confidential) to the Borrower or any other Person.




          (g) Each Lender shall use its best efforts (consistent with its internal policies and legal
and regulatory restrictions) to select a jurisdiction for its applicable lending office or change
the jurisdiction of its applicable lending office, as the case may be, so as to avoid the
imposition of any Indemnified Taxes or Other Taxes or to eliminate or reduce the payment of any
additional sums under this Section 2.15; provided that no such selection or change
of the jurisdiction for its applicable lending office shall be made if, in the reasonable judgment
of such Lender, such selection or change would be materially disadvantageous to such Lender.




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



          (a) The Borrower shall make each payment required to be made by it hereunder on Loans
denominated in Dollars (whether of principal, premium, if any, interest or




29









 




fees, or of amounts payable under Section 2.13, 2.14 or 2.15, or
otherwise) prior to 1:00 p.m., Eastern time, on the date when due in Dollars, in immediately
available funds, without set-off or counterclaim. Any amounts received after such time on any date
may, in the discretion of the Administrative Agent, be deemed to have been received on the next
succeeding Business Day for purposes of calculating interest thereon. All such payments shall be
made to the Administrative Agent at its offices at 520 Madison Avenue, New York, New York 10022,
except that payments pursuant to Sections 2.13, 2.14, 2.15 and
10.03 shall be made directly to the Persons entitled thereto. The Administrative Agent
shall distribute any such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on
a day that is not a Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable
for the period of such extension.




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




          (c) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise,
obtain payment in respect of any principal of or premium, if any, or interest on any of its Loans
or fees due hereunder resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Loans or premium, if any, or accrued interest thereon or fees, as
applicable, than the proportion received by any other Lender, then the Lender receiving such
greater proportion shall purchase (for cash at face value) participations in the Loans of other
Lenders to the extent necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of or premium, if any, or
accrued interest on their respective Loans or fees, as applicable; provided that (i) if any
such participations are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price restored to the extent of
such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed
to apply to any payment made by the Borrower pursuant to and in accordance with the express terms
of this Agreement or any payment obtained by a Lender as consideration for the assignment of or
sale of a participation in any of its Loans to any assignee or participant, other than to the
Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall
apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so
under applicable Law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.




          (d) Unless the Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of the Lenders
hereunder that the Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in




30









 




accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the
amount due. In such event, if the Borrower has not in fact made such payment, then each of the
Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the Administrative Agent, at
the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation.




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




     SECTION 2.17 Mitigation Obligations; Replacement of Lenders.



          (a) If any Lender requests compensation under Section 2.13, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 2.15, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans hereunder or to assign its
rights and obligations hereunder to another of its offices, branches or affiliates, if, in the
reasonable judgment of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Sections 2.13 or 2.15, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. The Borrower shall pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation or assignment.




          (b) If any Lender requests compensation under Section 2.13, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 2.15, or if any Lender defaults in its obligation to fund
Loans hereunder, then the Borrower may, at its sole expense and effort, upon notice to such Lender
and the Administrative Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in Section 10.04), all its
interests, rights and obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such assignment);
provided that (i) the Borrower shall have received the prior written consent of the
Administrative Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall have
received payment of an amount equal to the outstanding principal of its Loans, premium, if any,
accrued interest thereon, unpaid fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal, premium, if any, and accrued interest and
fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such
assignment resulting from a claim for compensation under Section 2.13 or payments required
to be made pursuant to Section 2.15, such assignment will result in a reduction in such
compensation or payments. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation cease to apply.




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ARTICLE III




Representations and Warranties




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




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



     SECTION 3.02 Authority Relative to this Agreement. Each Obligor has the power and
authority to execute and deliver this Agreement and the other Loan Documents to which it is a party
and to perform its obligations hereunder and thereunder. The Transactions have been duly
authorized by all necessary corporate, limited liability company or partnership action on the part
of each Obligor that is a party thereto. This Agreement and the other Loan Documents have been
duly and validly executed and delivered by each Obligor party thereto and constitute the legal,
valid and binding obligations of such Obligor, enforceable against such Obligor in accordance with
their respective terms, subject to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar Laws affecting creditors’ rights and remedies generally and
to the effect of general principles of equity (regardless of whether enforcement is considered in a
proceeding at Law or in equity).



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



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




          (b) result in the imposition of any Lien on any of the Equity Interests of any Obligor or any
of its assets;




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




32









 








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




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




     SECTION 3.04 Financial Statements.



          (a) The Borrower has previously furnished to the Administrative Agent the consolidated balance
sheets and the related consolidated statements of operations, stockholders’ equity and
comprehensive income (loss) and cash flows of the Borrower and its Subsidiaries as of and for each
of (i) the three years ended December 31, 2007, the notes thereto and the related financial
statement schedule (all as contained in the Borrower’s Annual Report on Form 10-K for each of the
three years ended December 31, 2007) and (ii) the unaudited three, six and nine months ended March
31, June 30 and September 30, 2008 and the notes thereto (all as contained in the Borrower’s
Quarterly Reports on Form 10-Q for each of the three, six and nine months ended March 31, June 30
and September 30, 2008) (collectively, the “ION Financial Statements”). The Financial
Statements fairly present in all material respects the financial condition of the Borrower as of
their respective dates and the results of operations and cash flows of the Borrower for the periods
ended on such dates in accordance with GAAP applied on a consistent basis for the periods covered
thereby, subject, in the case of interim financial statements, to absence of footnotes and normal
year-end adjustments (the effect of which will not, individually or in the aggregate, have a
Material Adverse Effect). Since December 31, 2007, there has been no change that would have a
Material Adverse Effect.




          (b) The Borrower has previously furnished to the Administrative Agent the audited combined
balance sheets and the related audited combined statements of net income (loss), comprehensive
income (loss) and retained earnings (deficit) and cash flows of ARAM and Canadian Seismic Rentals,
Inc. as of and for (i) each of the three years ended December 31, 2007 and the notes thereto and
(ii) the unaudited three, six and approximately 81/2 months ended March 31, June 30 and September 18,
2008 (collectively, the “ARAM Financial Statements”). The ARAM Financial Statements fairly
present in all material respects the financial condition of ARAM and Canadian Seismic Rentals, Inc.
as of their respective dates and the results of operations and cash flows of ARAM for the periods
ended on such dates in accordance with Canadian generally accepted accounting principles applied on
a consistent basis for the periods covered thereby, subject, in the case of interim financial
statements, to absence of footnotes and normal year-end adjustments (the effect of which will not,
individually or in the aggregate, have a Material Adverse Effect).




     SECTION 3.05 No Undisclosed Liabilities. Except as set forth in
Schedule 3.05, none of the Obligors or any of their respective Subsidiaries has any
liabilities or obligations of any nature (whether known or unknown, and whether absolute, accrued,
contingent or otherwise)



33









 







except for (i) liabilities or obligations reflected or reserved against in the financial
statements most recently delivered by the Borrower pursuant to Section 5.01, as applicable,
(ii) current liabilities incurred in the ordinary course of business since the date of such
financial statements, (iii) liabilities or obligations that are not required to be included in
financial statements prepared in accordance with GAAP, (iv) liabilities or obligations arising
under Governmental Approvals or contracts to which any of the Obligor or any of its Subsidiaries is
a party or otherwise subject, and (v) other Indebtedness permitted under Section 6.01.



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



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



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



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



     SECTION 3.10 Intellectual Property.



          (a) None of the patents, patent applications, trademarks (whether registered or not),
trademark applications, trade names, service marks, and copyrights (the “Intellectual
Property”) owned by the Borrower or any of its Subsidiaries has been declared invalid or is the




34









 




subject of a pending or, to the knowledge of the Borrower, threatened action for cancellation
or a declaration of invalidity, and there is no pending judicial proceeding involving any claim,
and neither the Borrower nor any of its Subsidiaries has received any written notice or claim, of
any infringement, misuse or misappropriation of any patent, trademark, trade name, copyright,
license or similar intellectual property right owned by any third party that, in any case, would
reasonably be expected to cause a Material Adverse Effect. The rights of the Obligors and their
respective Subsidiaries in the Intellectual Property are free and clear of any Liens other than
Permitted Liens.




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




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



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



          (a) none of the Obligors or any of their respective Subsidiaries has failed to comply with any
Environmental Law or to obtain, maintain or comply with any Governmental Approval required under
any Environmental Law or has become subject to any Environmental Liability.




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




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




          (d) there is no proceeding pending against any of the Obligors or any of their respective
Subsidiaries by any Governmental Authority with respect to the presence on or release





35









 







of any Hazardous Material from any real property or facility owned or operated at any time by
the Borrower or any of its Subsidiaries or otherwise used in connection with their respective
businesses; and




          (e) Borrower does not have any knowledge that any Hazardous Material has been or is currently
being generated, processed, stored or released (or is subject to a threatened Release) from, on or
under any real property or facility owned or operated by any of the Obligors or any of their
respective Subsidiaries, or otherwise used in connection with their respective businesses in a
quantity or concentration that would require remedial action under any applicable Environmental Law
if reported to or discovered by the relevant Governmental Authority.




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



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



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



     SECTION 3.16 Solvency. With respect to the Borrower on a consolidated basis with its
Subsidiaries, immediately following the making of each Loan and after giving effect to the
application of the proceeds of such Loan, and with respect to each Guarantor, as of the Effective
Date, (a) the fair market value of its assets will exceed its debts and liabilities; (b) the
present fair saleable value of its property will be greater than the amount that will be required
to pay the probable liability of its debts and other liabilities; (c) it will be able to pay its
debts and liabilities as they become absolute and mature; and (d) it will not have unreasonably
small capital with which to conduct its business as such business is now conducted and is proposed
to be conducted following the Effective Date.



     SECTION 3.17 ERISA. No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other such ERISA Events for which liability is reasonably
expected to occur, could reasonably be expected to result in a Material Adverse Effect. The
present value of all accumulated benefit obligations under each Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the
most recent financial statements reflecting such amounts, exceed by more than $10,000,000 the fair
market value of the assets of such Plan, and the present value of all



36









 







accumulated benefit obligations of all underfunded Plans (based on the assumptions used for
purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed by more than $10,000,000 the fair
market value of the assets of all such underfunded Plans.



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



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



     SECTION 3.20 Margin Stock. No part of any Borrowing shall be used at any time, to
purchase or carry margin stock (within the meaning of Regulation U) or to extend credit to others
for the purpose of purchasing or carrying any margin stock. Neither the Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in the business of
extending credit for the purposes of purchasing or carrying any such margin stock. No part of the
proceeds of any Borrowing will be used for any purpose which violates, or which is inconsistent
with, any regulations promulgated by the Board.



     SECTION 3.21 Short Term Interim Junior Financing. This Agreement and the Obligations
incurred hereunder and under the Loan Documents constitute the “Short Term Interim Junior
Financing” (as defined in the Senior Credit Facility).



ARTICLE IV




Conditions




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



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




37









 








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




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




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




          (e) (i) The Lenders and the Administrative Agent shall have received all fees and other
amounts due and payable hereunder on or prior to the Effective Date, including reimbursement or
payment of all reasonable out-of-pocket expenses required to be reimbursed or paid by the Borrower
hereunder to the extent that invoices have been provided to the Borrower in advance of the
Effective Date, and (ii) Jefferies and its Affiliates shall have received all fees and other
amounts due and payable or reimbursable under the Commitment Letter, dated September 18, 2008,
between Jefferies and the Borrower or any other Debt Financing Letter (as defined therein,
collectively, the “Debt Financing Letters”).




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




          (g) The Administrative Agent shall have received evidence that the parties to the Debt
Financing Letters shall have entered into the Confidential Release and Termination Agreement.




          (h) The Administrative Agent shall have received evidence that (i) the Existing ARAM Sellers’
Note has been amended and restated in the form of the New ARAM Sellers’ Note and (ii) the Existing
ARAM Sellers’ Note Guaranty has been amended and restated in the form of the New ARAM Sellers’ Note
Guaranty.




          (i) The Administrative Agent shall have received evidence satisfactory to it that on the
Effective Date, after giving effect to the Loans hereunder, the sum of (x) the aggregate amount of
the unrestricted cash and Permitted Investments of the Borrower and its Subsidiaries and (y)
unfunded availability under the Senior Credit Facility is at least $41,000,000.




38









 








          (j) [Intentionally omitted].




          (k) [Intentionally omitted].




          (l) [Intentionally omitted].




          (m) The Administrative Agent shall have received evidence satisfactory to the Administrative
Agent that substantially simultaneously with the Borrowing the Indebtedness identified on
Schedule 4.01(m) hereto will be paid in full or, pursuant to the Tax Deferred Asset
Assignment Agreement (which agreement shall be in full force and effect), cancelled, as applicable,
and the Borrower and its Subsidiaries shall have outstanding no Indebtedness (or, for the avoidance
of doubt, unfunded commitments in respect thereof) or preferred stock (or direct or indirect
guarantee or other credit support in respect thereof) other than (i) Indebtedness in respect of the
Senior Credit Facility in an aggregate principal amount not exceeding $235,000,000,
(ii) Indebtedness in respect of the New ARAM Sellers’ Note in an aggregate principal amount of
$35,000,000, (iii) Indebtedness in respect of the Loans, (iv) the other existing Indebtedness
permitted under Section 6.01 and (v) preferred stock of the Borrower outstanding as of
September 18, 2008 as well as any dividends and distributions declared and paid in kind thereon in
accordance with the terms thereof. The Senior Credit Facility and the New ARAM Sellers’ Note
Documents shall be in full force and effect. The terms and conditions of the Senior Credit
Facility and the New ARAM Sellers’ Note Documents (in each case, including terms and conditions
relating to interest rates, dividends, conversion rates, fees, amortization, maturity, terms of
subordination, covenants, events of default and remedies, as applicable) shall be reasonably
satisfactory in all respects to the Administrative Agent.




          (n) The Administrative Agent shall have received evidence of insurance coverage of the
Borrower and its Subsidiaries, which coverage shall be reasonably satisfactory to the
Administrative Agent in all respects.




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




          (p) The representations and warranties of the Borrower set forth in this Agreement or any
other Loan Document shall be deemed to have been made as a part of said request for the Borrowing
to be made on the Effective Date and shall be true and correct in all material respects on and as
of the date of the Borrowing.




          (q) No Material Adverse Effect shall have occurred since December 31, 2007.




          (r) At the time of, and immediately after giving effect to, such Borrowing, no (i) Default or
Event of Default hereunder or (ii) a Default or Event of Default (as each such term is defined in
the Senior Credit Facility) under the Senior Credit Facility shall have occurred and be continuing.




          (s) There shall not exist any claim, action, suit, investigation, litigation or proceeding
pending or threatened by or before any court, or any governmental, administrative or





39









 







regulatory agency or authority, domestic or foreign, that has had, or could reasonably be
expected to result in, a Material Adverse Effect.




          (t) The Administrative Agent shall have received a certificate, dated the Effective Date and
signed by the Financial Officer of each Obligor, as to the solvency of each Obligor after giving
effect to the Borrowing and the application of the proceeds thereof.




ARTICLE V




Affirmative Covenants




          Until the Commitments have expired or been terminated and the principal of and premium, if
any, and interest on each Loan and all fees payable hereunder shall have been paid in full, the
Borrower, for itself and its Subsidiaries, and each Guarantor, for itself, covenant and agree with
the Lenders that:




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



          (a) Within ten (10) days after the Borrower is required to file the same with the Commission,
copies of the annual reports, quarterly reports and current reports containing financial statements
and related financial information (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) that the Borrower may be
required to file with the Commission pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934; provided, however, that the foregoing shall not be deemed to
require the Borrower to furnish any current reports filed with the Commission that consist solely
or primarily of the Borrower’s public announcement that its quarterly financial results of
operations and related financial information each fiscal quarter have been filed. If the Borrower
is not required to file information, documents or reports pursuant to either of said Sections, then
such of the supplementary and periodic information, documents and reports which may be required
pursuant to Section 13(a) of the Securities Exchange Act of 1934 in respect of a security listed
and registered on a national securities exchange as may be prescribed from time to time in such
rules and regulations;




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




          (c) [Intentionally omitted];




40









 








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




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




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




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




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



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




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




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




41









 








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




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



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




     SECTION 5.03 Existence; Conduct of Business. The Borrower will, and will cause each
of its Subsidiaries to, do or cause to be done all things necessary to preserve and maintain its
legal existence and the rights, licenses, permits, privileges and franchises material to the
conduct of its business except where the failure to do so could not reasonably be expected to
result in a Material Adverse Effect; provided that the foregoing shall not allow or
prohibit any merger, consolidation, liquidation or dissolution to the extent same is or is not
permitted under Section 6.03.



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



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



     SECTION 5.06 Books and Records; Inspection Rights. The Borrower will, and will cause
each of its Subsidiaries to, keep proper books of record and account in which full, true and
correct entries are made of all dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each of its Subsidiaries to, permit any
representatives designated by the Administrative Agent, upon reasonable prior notice, to visit and
inspect its properties, to examine and make extracts from its books and records, and to discuss its
affairs, finances and condition with its officers and independent accountants, all at such
reasonable times and as often as reasonably requested. The Borrower will and will cause each of
its Subsidiaries to permit the Administrative Agent to engage a third party auditor (after
obtaining estimates from two auditors) to provide an audit of the audited consolidated financial



42









 







statements and/or unaudited interim financial statements of the Borrower and its Subsidiaries
if requested by the Administrative Agent at the expense of the Borrower; provided that such
audits will be limited to once per calendar year unless an Event of Default exists or any such
audit is not reasonably acceptable to Administrative Agent.



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



     SECTION 5.08 Use of Proceeds. The Borrower covenants and agrees that the proceeds of
the Loans will be used only to repay all of the outstanding principal amount of the Short-Term
Bridge Note. The Borrower covenants and agrees that no part of the proceeds of any Loan will be
used, whether directly or indirectly, for any other purpose, including any purpose that entails a
violation of any of the Regulations of the Board, including Regulations T, U and X.



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



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



     SECTION 5.11 Compliance With Agreements. The Borrower shall, and shall cause its
Subsidiaries to, comply in all respects with each material term, condition and provision of all
Material Contracts except where the failure to do so, individually or in the aggregate, could



43









 







not reasonably be expected to have a Material Adverse Effect; provided that the
Borrower or any such Subsidiary may contest any such lease, agreement or other instrument in good
faith through applicable proceedings so long as adequate reserves are maintained in accordance with
GAAP.



     SECTION 5.12 Compliance with Environmental Laws; Environmental Reports. In addition
to and without limiting the generality of Section 5.07, the Borrower shall, and shall cause
its Subsidiaries to, (i) comply in all respects with all Environmental Laws applicable to its
operations and real property except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect; (ii) obtain and renew all
material Governmental Approvals required under Environmental Laws applicable to its operations and
real property except where the failure to do so could not reasonably be expected to have a Material
Adverse Effect; and (iii) conduct any legally required Response in accordance with applicable
Environmental Laws except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect; provided that neither the Borrower nor any of its Subsidiaries
shall be required to undertake any Response to the extent that its obligation to do so is being
contested in good faith and by proper proceedings and appropriate reserves are being maintained
with respect to such circumstances in accordance with GAAP.



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



     SECTION 5.14 Further Assurances. Each Obligor will, at its own cost and expense,
execute, acknowledge and deliver all such further acts, documents and assurances as may from time
to time be reasonably necessary or as the Required Lenders may from time to time reasonably request
in order to carry out the intent and purposes of the Loan Documents and the Transactions.



ARTICLE VI




Negative Covenants




          Until the Commitments have expired or terminated and the principal of and premium, if any, and
interest on each Loan and all fees payable hereunder shall have been paid in full, the Borrower and
each Guarantor, for itself, covenants and agrees with the Administrative Agent and the Lenders
that:




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



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




          (b) Indebtedness existing on July 3, 2008 and set forth in Schedule 6.01;




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




44









 








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




          (e) subject to the provisions of Section 6.01(t), Indebtedness of the Borrower or any
of its Subsidiaries under the Senior Credit Facility in an aggregate principal amount at any time
outstanding not to exceed $275,000,000 less the aggregate amount of all scheduled amortization
payments made thereunder on or after December 31, 2008;




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




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




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




          (i) subject to the provisions of Section 6.01(r), Indebtedness of any Person that
becomes a Subsidiary after July 3, 2008; provided that (i) such Indebtedness exists at the
time such Person becomes a Subsidiary and is not created in contemplation of or in connection with
such Person becoming a Subsidiary, (ii) none of the properties of the Borrower or any of its other
Subsidiaries is bound with respect to such Indebtedness, and (iii) the aggregate principal amount
of Indebtedness permitted by this clause (i) shall not exceed the greater of (i) $40,000,000 or
(ii) ten percent (10%) of Net Worth;




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




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




          (l) Subordinated Indebtedness, provided, so long as the New ARAM Sellers’ Note is outstanding,
such Subordinated Indebtedness shall be limited to a maximum of $25,000,000;




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




          (n) any financed insurance premiums;




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




45









 








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




          (q) subordinated Indebtedness of the Borrower or any Subsidiary under the New ARAM Sellers’
Note in a principal amount not to exceed $35,000,000 and any guarantee thereof;




          (r) anything herein to the contrary notwithstanding, the Indebtedness permitted in clauses
(g), (i), (j) and (p) of this Section 6.01 shall not in the aggregate exceed $350,000,000
at any time outstanding;




          (s) subject to the provisions of Section 6.01(t), Indebtedness under the
Sale/Leaseback Agreement in an original principal amount not exceeding $41,000,000; and




          (t) anything herein to the contrary notwithstanding, the Indebtedness permitted in clauses (e)
and (s) of this Section 6.01 shall not in the aggregate exceed $275,000,000 at any time
outstanding.




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



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



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




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




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




          (d) the Borrower or any Subsidiary may merge or consolidate with any other Person if in the
case of a merger or consolidation of the Borrower, the Borrower is the surviving





46









 







corporation, and, in any other case, the surviving corporation is a wholly-owned Subsidiary
and such Subsidiary (x) has complied with the requirements of Section 5.09 and (y) shall
have assumed and ratified all obligations of any Subsidiary involved in such merger pursuant to
documentation in form and substance reasonably satisfactory to the Administrative Agent.




     SECTION 6.04 Asset Sales. Subject to the provisions of Section 6.04(h), the
Borrower will not, and will not permit any of its Subsidiaries to, make any Asset Sale except for:



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




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




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




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




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




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




          (g) any sale, transfer, lease or other disposition of assets pursuant to, and in accordance
with, the terms of the Sale/Leaseback Agreement; and




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




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



          (a) Permitted Investments;




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




          (c) guarantees constituting Indebtedness permitted by Section 6.01;




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




47









 








          (e) Subject to the provisions of Section 6.05(m), so long as there is at least
$25,000,000 in unused Revolving Loan Commitments (as defined in the Senior Credit Facility),
exclusive of outstanding Letters of Credit (as defined in the Senior Credit Facility), prior to
giving effect to such Investment, Investments in Subsidiaries in the same or similar line of
business as the Borrower and its Subsidiaries, or in other entities that do not constitute
Subsidiaries, so long as such Investments do not exceed in any twelve (12) month period the lesser
of twenty five percent (25%) of Net Worth and $200,000,000 (exclusive of the ARAM Acquisition);
provided, if such additional amount is funded by new equity issuances in Borrower, such
Investments do not exceed in any twelve (12) month period fifty percent (50%) of Net Worth;




          (f) Investments existing on July 3, 2008 and described in Schedule 6.05;




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




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




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




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




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




          (l) [Intentionally omitted];




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




48









 








          (n) Investments by the Borrower in Equity Interests in ARAM and Canadian Seismic Rentals Inc.
as contemplated by the ARAM Acquisition.




     SECTION 6.06 Swap Agreements. The Borrower will not, and will not permit any of its
Subsidiaries to, enter into any Swap Agreement, except Swap Agreements entered into to: (a) hedge
or mitigate raw material and supply cost risks to which the Borrower or any or its Subsidiaries has
actual exposure in the conduct of its business or the management of its liabilities (other than
those in respect of Equity Interests of the Borrower or any of its Subsidiaries), (b) cap, collar
or exchange interest rates (from fixed to floating rates, from one floating rate to another
floating rate or otherwise) with respect to any interest-bearing liability or investment of the
Borrower or any or its Subsidiaries, or (c) mitigate foreign exchange or currency risk in
connection with any obligation of any Obligor incurred in connection with the operation of its
business in each case, in connection with the management of risk in the ordinary course of the
Borrower’s business and not for speculative purposes.



     SECTION 6.07 Restricted Payments. The Borrower will not, and will not permit any of
its Subsidiaries to, declare or make, or agree to pay or make, any Restricted Payment or make any
principal payments on any Subordinated Indebtedness, except:



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




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




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




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




          (e) [Intentionally omitted];




          (f) any and all repurchases or acquisitions by the Borrower, from time to time and at any
time, of shares of its outstanding common stock for cash, so long as the amount of cash used for
any such repurchase or acquisition does not exceed an amount equal to thirty percent (30%) of
Consolidated Net Income of the Borrower for the Borrower’s most recently





49









 







completed fiscal year, and no Event of Default exists at the time of such repurchase or
acquisition or would exist after giving effect thereto (except with respect to the acquisition or
“withholding” by the Borrower of shares of its common stock upon and in connection with the
exercise of outstanding stock options, or the lapse of restrictions on outstanding shares of
restricted stock);




          (g) so long as no Event of Default would result therefrom after giving effect thereto,
regularly scheduled payments of interest on the Subordinated Indebtedness and the New ARAM Sellers’
Note;




          (h) the Borrower shall be permitted to (1) declare, issue and distribute to the holders of the
Borrower’s Equity Interest rights to purchase shares of Borrower’s Series A Junior Participating
Preferred Stock (or shares of Borrower’s, or its successor’s, common stock issued upon occurrence
of a “Triggering Event” pursuant to the Rights Agreement) issued in accordance with the terms of
that certain Rights Agreement dated as of the date hereof (the “Rights Agreement”), (2)
make Restricted Payments in cash (A) in connection with any redemption of such rights in accordance
with the term of the Rights Agreement or (B) in lieu of the issuance of fractional interests, in
each case, to the extent required pursuant to the terms of the Senior A Junior Participating
Preferred Stock or such Rights Agreement, provided that such case Restricted Payments shall not
exceed $500,000 in the aggregate in the case of both clauses (2)(A) and (B) above, and (3) make any
and all non-cash Restricted Payments, required pursuant to the terms of the Series A Junior
Participating Preferred Stock or such Rights Agreement; and




          (i) 32666509 Nova Scotia Company may, as long as no Event of Default has occurred and is
continuing or would exist after giving effect thereto, pay interest payments pursuant to the terms
and conditions of the New ARAM Sellers’ Note.




          Anything herein to the contrary notwithstanding, in no event shall the dividends, repurchases
or acquisitions permitted in clauses (a) or (f) of this Section 6.07 in the aggregate
exceed an amount equal to the excess of (x) thirty percent (30%) of Consolidated Net Income of the
Borrower for the Borrower’s most recently completed fiscal year over (y) $15,000,000.




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



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




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




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




50









 








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




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




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




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




          (h) transactions described on Schedule 6.08; and




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




     SECTION 6.09 Restrictive Agreements. The Borrower will not, and will not permit any
of its Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any agreement
or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the
Borrower or any of its Subsidiaries to create, incur or permit to exist any Lien upon any of its
property or assets, or (b) the ability of any Obligor to pay dividends or other distributions with
respect to any shares of its capital stock (to the extent the holder of such shares is an Obligor)
or to make or repay loans or advances to the Borrower or any Guarantor or to guarantee Indebtedness
of the Borrower or any Guarantor; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by Law or by this Agreement, (ii) the foregoing shall not apply
to restrictions and conditions existing on July 3, 2008 identified on Schedule 6.09 (but
shall apply to any extension or renewal of, or any amendment or modification expanding the scope
of, any such restriction or condition), (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a Subsidiary of the
Borrower pending such sale, provided such restrictions and conditions apply only to the Subsidiary
that is to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not
apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness
permitted by this Agreement if such restrictions or conditions apply only to the property or assets
securing such Indebtedness, (v) clause (a) of the foregoing shall not apply to customary provisions
in leases and other contracts restricting the assignment thereof, and (vi) the foregoing shall not
apply to any restriction or condition contained in the agreements related to the Senior Credit
Facility or the New ARAM Sellers’ Note or any guarantee thereof.



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



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



51









 





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



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



     SECTION 6.14 Minimum Fixed Charge Coverage Ratio. The Borrower and its Subsidiaries
shall not permit the Fixed Charge Coverage Ratio to be less than 1.25 to 1.0 for the fiscal quarter
ending December 31, 2008, and 1.50 to 1.0 for the fiscal quarter ending March 31, 2009 and
thereafter.



     SECTION 6.15 Maximum Leverage Ratio. The Borrower and its Subsidiaries shall not
permit the Leverage Ratio to exceed 2.50 to 1.0 for the fiscal quarter ending December 31, 2008,
and 2.25 to 1.0 for the fiscal quarter ending March 31, 2009 and thereafter.



     SECTION 6.16 Minimum Tangible Net Worth. The Borrower and its Subsidiaries shall
maintain a minimum Tangible Net Worth of not less than 80% of the Tangible Net Worth as of
September 18, 2008 plus (i) 50% of the Consolidated Net Income of the Borrower and its Subsidiaries
(if positive) for each fiscal quarter thereafter and (ii) 80% of the net proceeds from any
mandatorily convertible notes and preferred and common stock issuances for each fiscal quarter
thereafter.



ARTICLE VII




Events of Default and Remedies




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



          (a) the Borrower shall fail to pay any principal of or premium, if any, on any Loan when and
as the same shall become due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or otherwise;




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




52









 








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




          (d) the Borrower shall fail to observe or perform any covenant, condition or agreement
contained in Sections 2.09(b), 5.01, 5.02, 5.03 (with respect to
the Borrower’s existence) or 5.08 or in Article VI;




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




          (f) the Borrower or any Subsidiary shall fail to make any payment (whether of principal or
interest and regardless of amount) in respect of any Material Indebtedness, including without
limitation the New ARAM Sellers’ Note, when and as the same shall become due and payable after
giving effect to any applicable grace period;




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




          (h) [Intentionally omitted];




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




          (j) the Borrower or any of its Subsidiaries shall (i) voluntarily commence any proceeding or
file any petition seeking liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in





53









 







effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate
manner, any proceeding or petition described in clause (i) of this Section 7.01, (iii)
apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any of its Subsidiaries or for a substantial
part of any of their assets, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors
or (vi) take any action for the purpose of effecting any of the foregoing;




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




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




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




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




          (o) [Intentionally omitted];




          (p) [Intentionally omitted]; or




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



then, and in every such event (other than an event with respect to the Borrower described in clause
(i) or (j) of this Section 7.01), and at any time thereafter during the continuance of such
event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to
the Borrower, take any or all of the following actions, at the same or different times: (i)
terminate the Commitments, and thereupon the Commitments shall terminate immediately, (ii) declare
the Loans then outstanding to be due and payable in whole or in part (in which case any principal
not so declared to be due and payable may thereafter be declared to be due and


54









 






payable), and thereupon the principal of the Loans so declared to be due and payable, together with
premium, if any, and accrued interest thereon and all fees and other Obligations of the Borrower
accrued hereunder, shall become due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any
event described in clause (i) or (j) of this Section 7.01, the Commitments shall
automatically terminate and the principal of the Loans then outstanding, together with premium, if
any, and accrued interest thereon and all fees and other Obligations of the Borrower accrued
hereunder, shall automatically become due and payable, without presentment, demand, protest notice
of acceleration or the intent to accelerate or any other notice of any kind, all of which are
hereby waived by the Borrower, (iii) if not theretofore increased, increase the rate of interest
charged on all Loans to the Default Rate (after the acceleration thereof), and (iv) exercise any or
all of the remedies available to it under any of the Loan Documents, at Law or in equity.




ARTICLE VIII




The Administrative Agent




          Each of the Lenders hereby irrevocably appoints the Administrative Agent as its agent under
the Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and
to exercise such powers as are delegated to the Administrative Agent by the terms hereof, together
with such actions and powers as are reasonably incidental thereto.




          Jefferies and any entity successor thereto in its capacity as the Administrative Agent shall
have the same rights and powers in its capacity as a Lender as any other Lender and may exercise
the same as though it were not the Administrative Agent, and it and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of business with the Borrower or
other Affiliate thereof as if it were not the Administrative Agent hereunder.




          The Administrative Agent shall not have any duties or obligations except those expressly set
forth herein and in the other Loan Documents. Without limiting the generality of the foregoing,
(a) the Administrative Agent shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default or an Event of Default has occurred and is continuing, (b) the
Administrative Agent shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly contemplated hereby that the
Administrative Agent is required to exercise in writing as directed by the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 10.02), and (c) except as expressly set forth herein, the
Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure
to disclose, any information relating to the Borrower or any of its Subsidiaries that is
communicated to or obtained by the Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken by it with the
consent or at the request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section 10.02) or in
the absence of its own gross negligence or willful misconduct; PROVIDED, HOWEVER,
THAT IT IS THE INTENTION OF THE PARTIES HERETO THAT THE ADMINISTRATIVE AGENT BE INDEMNIFIED IN THE
CASE OF ITS OWN NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE), REGARDLESS OF WHETHER SUCH NEGLIGENCE




55









 




IS SOLE OR CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR TECHNICAL. The Administrative
Agent shall be deemed not to have knowledge of any Default or Event of Default unless and until
written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the
Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with this Agreement, (ii) the
contents of any certificate, report or other document delivered hereunder or in connection
herewith, (iii) the performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere herein, other than to confirm receipt of
items expressly required to be delivered to the Administrative Agent.




          The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument, document or other
writing believed by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any liability for relying
thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall not be liable for
any action taken or not taken by it in accordance with the advice of any such counsel, accountants
or experts.




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




          Subject to the appointment and acceptance of a successor Administrative Agent as provided in
this paragraph, the Administrative Agent may resign at any time by notifying the Lenders and the
Borrower. Upon any such resignation, the Required Lenders shall have the right, with the consent
of the Borrower unless a Default or Event of Default has occurred and is continuing, such consent
not to be unreasonably withheld, to appoint a successor. If no successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment within 30 days after the
retiring Administrative Agent gives notice of its resignation, then the retiring Administrative
Agent may, on behalf of the Lenders, appoint a successor Administrative Agent with the consent of
the Borrower unless a Default or Event of Default has occurred and is continuing, such consent not
to be unreasonably withheld, which shall be any Lender or a bank with an office in New York, New
York or Houston, Texas, or an Affiliate of any such bank. Upon the acceptance of its appointment
as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and obligations hereunder. The
fees




56









 




payable by the Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such successor. After the
Administrative Agent’s resignation hereunder, the provisions of this Article and Section
10.03 shall continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.




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




ARTICLE IX




Guarantee





SECTION 9.01 The Guarantee. (a) Each Guarantor the assets of which are not all or
substantially all comprised of stock or securities in one or more Foreign Subsidiary hereby
jointly, severally, unconditionally and irrevocably with every other such Guarantor
guarantees the full and punctual payment (whether at stated maturity, upon acceleration or
otherwise) of the principal of and interest on the Loans, and the full and punctual payment
of all other Obligations payable by the Borrower or any other Guarantor under the Loan
Documents. Upon failure by the Borrower or any other Guarantor to pay punctually any such
amount, each such Guarantor shall forthwith on demand pay the amount not so paid at the
place and in the manner specified in this Agreement or the other Loan Documents. The
Guarantee contained in this clause (a) is a guaranty of payment and not of collection. The
Lenders shall not be required to exhaust any right or remedy or take any action against, as
applicable, the Borrower, the Guarantors or any other Person. Each Guarantor agrees that,
as between such Guarantor and the Lenders, the Obligations of, as applicable, the Borrower
or the other Guarantors may be declared to be due and payable for the purposes of this
Guarantee notwithstanding any stay, injunction or other prohibition which may prevent, delay
or vitiate any declaration as regards the Borrower and that in the event of a declaration or
attempted declaration, the Obligations of, as applicable, the Borrower and the other
Guarantors shall immediately become due and payable by each Guarantor for the purposes of
this Guarantee.



          (b) For the avoidance of doubt, it is the express intention of the Borrower, the Guarantors,
the Administrative Agent and each Lender that nothing herein or in any other Loan Document shall
constitute or be deemed to constitute an investment by a Foreign Subsidiary in “United States
property” within the meaning of Section 956(c) of the Code. Accordingly, each party hereto
acknowledges and agrees that only the Guarantors the assets of which are not all or substantially
all comprised of stock or securities in one or more Foreign Subsidiary have




57









 




guaranteed the Obligations of the Borrower and the guarantees provided in this Article IX
shall be construed and limited to give effect to such intention. To the extent that any Guarantor
that has guaranteed the Obligations of the Borrower holds stock or securities in one or more
Foreign Subsidiaries, such Guarantor’s guarantee of the Borrower’s Obligations hereunder shall be
(and hereby is) limited at all times to an amount equal to the sum of the fair market value of its
domestic assets plus 100% of its non-voting Equity Interests and 65% of its voting Equity Interests
in such Foreign Subsidiary.




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



          (a) any extension, renewal, settlement, compromise, waiver or release in respect of any
Obligation of either the Borrower or any other Guarantor under the Loan Documents by operation of
law or otherwise;




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




          (c) any release, impairment, non-perfection or invalidity of any direct or indirect security
for any obligation of either the Borrower or any other Guarantor under the Loan Documents;




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




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




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




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




          Furthermore, notwithstanding that the Borrower may not be obligated to the Administrative
Agent and/or the Lenders for interest and/or attorneys’ fees and expenses on, or





58









 







in connection with, any Obligations from and after the Petition Date as a result of the
provisions of the federal bankruptcy law or otherwise, Obligations for which the Guarantors shall
be obligated shall include interest accruing on the Obligations at the Default Rate from and after
the date on which the Borrower files for protection under the federal bankruptcy laws or from and
after the date on which an involuntary proceeding is filed against the Borrower under the federal
bankruptcy laws (herein collectively referred to as the “Petition Date”) and all reasonable
attorneys’ fees and expenses incurred by the Administrative Agent and the Lenders from and after
the Petition Date in connection with the Obligations.




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



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



     SECTION 9.05 Right of Contribution. Each Guarantor hereby agrees that to the extent
that a Guarantor shall have paid more than its proportionate share of any payment made hereunder,
such Guarantor shall be entitled to seek and receive contribution from and against any other
Guarantor hereunder who has not paid its proportionate share of such payment. Each Guarantor’s
right of contribution shall be subject to the terms and conditions of Section 9.09. The
provisions of this Section 9.05 shall in no respect limit the obligations and liabilities
of any Guarantor to the Lender, and each Guarantor shall remain liable to the Lender for the full
amount of the Obligations of the Borrower and each other Guarantor guaranteed by such Guarantor
hereunder.



     SECTION 9.06 Subrogation. Each Guarantor under Section 9.01(a) shall be
subrogated to all rights of the Lenders, the Administrative Agent and the holders of the Loans
against the Borrower in respect of any amounts paid by such Guarantor pursuant to the provisions of
this Article IX; provided that no such Guarantor shall be entitled to enforce or to
receive any payments arising out of or based upon such right of subrogation until the principal of



59









 







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



     SECTION 9.07 Stay of Acceleration. If acceleration of the time for payment of any
amount payable by any Obligor under the Loan Documents is stayed upon insolvency, bankruptcy or
reorganization of the Borrower, all such amounts otherwise subject to acceleration under the terms
of this Agreement shall nonetheless be payable by each Guarantor under Section 9.01(a) for
its Obligations described in this Article IX promptly following demand by the
Administrative Agent made at the request of the requisite proportion of the Lenders specified in
Article X of this Agreement.



     SECTION 9.08 Instrument for the Payment of Money. Each Guarantor acknowledges that
the Guarantees in this Article IX constitutes an instrument for the payment of money and
consents and agrees that any Lender or the Administrative Agent, at its sole option, in the event
of a dispute by such Guarantor in the payment of any moneys due hereunder, shall have the right to
bring a motion-action under New York CPLR Section 3213.



     SECTION 9.09 Limit of Liability. The obligations of each of the Guarantors and the
Borrower hereunder shall be limited to an aggregate amount equal to the largest amount that would
not render its obligations hereunder subject to avoidance under Section 548 of the United States
Bankruptcy Code or any comparable provisions of any applicable state law.



     SECTION 9.10 Release upon Sale. Upon any sale of any Guarantor permitted by this
Agreement, and, if required hereunder, payment to the Administrative Agent, for the prorata benefit
of the applicable Lenders, of the proceeds of such sale, such Guarantor shall (a) be released from
its obligations as a Guarantor hereunder, (b) all Liens, if any, securing such Guarantee shall
automatically be terminated and released and (c) the Administrative Agent will, at the expense of
said Guarantor, execute and deliver such documents as are reasonably necessary to evidence said
releases and terminations, following written request from the Borrower and receipt by the
Administrative Agent of a certificate from the Borrower certifying no Default or Event of Default
exists.



     SECTION 9.11 Benefit to Guarantor. Each Guarantor acknowledges that the Loans made to
the Borrower will be, in part, re-loaned to, or used for the benefit of, such Guarantor and its
Affiliates, that each Guarantor, because of the utilization of the proceeds of the Loans, will
receive a direct benefit from the Loans and that, without the Loans, such Guarantor would not be
able to continue its operations and carry on its business as presently conducted.



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ARTICLE X




Miscellaneous




     SECTION 10.01 Notices.



          Except in the case of notices and other communications expressly permitted to be given by
telephone, or email (and subject to paragraph (b) below), all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy, as follows:





if to the Borrower, to:




ION Geophysical Corporation

2105 CityWest Blvd., Suite 400

Houston, Texas 77042

Attention: Chief Financial Officer

Telecopy No.: 281-879-3674

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




with a copy to:




Mayer Brown LLP

700 Louisiana St., Suite 3400

Houston, Texas 77002-2730

Attention: Marc Folladori

Telecopy No.: 713-238-4888

Telephone No.: 713-238-3000




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




if to the Administrative Agent, to:




Jefferies Finance LLC

520 Madison Avenue

New York, New York 10022

Attention: Account Officer – ION Geophysical Corporation

Telecopy No.: (212) 284-3444




with a copy to:




Jefferies Finance LLC

520 Madison Avenue

New York, New York 10022

Attention: General Counsel

Telecopy No.: (212) 284-3444




and



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Jefferies & Company, Inc.

520 Madison Avenue

New York, New York 10022

Attention: General Counsel

Telecopy No.: (212) 284-2280



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




          Notices and other communications to the Lenders hereunder may be delivered or furnished by
electronic communications pursuant to procedures approved by the Administrative Agent;
provided that the foregoing shall not apply to notices pursuant to Article II
unless otherwise agreed by the Administrative Agent and the applicable Lender. Each of the
Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to procedures approved by it;
provided that approval of such procedures may be limited to particular notices or
communications.




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




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



          (b) Except as otherwise provided herein, neither this Agreement nor the other Loan Documents
nor any provision hereof or thereof may be waived, amended or modified except pursuant to (x) an
agreement or agreements in writing entered into by the Borrower and the Required Lenders or by the
Borrower and the Administrative Agent with the consent of the Required Lenders or (y) an agreement
or agreements in writing entered into by the Borrower and the Super Majority Lenders for the
purpose of reducing the Default Rate (but in any event, to a rate not less than the rate of
interest that would otherwise be applicable if no Default or Event of Default was then
outstanding); provided that no such agreement shall (i) increase the Commitment of any
Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or
reduce the rate of interest thereon, or reduce any fees payable hereunder,




62









 




without the written consent of each Lender directly affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan, or any interest thereon, or any fees
payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written consent of each Lender directly
affected thereby, (iv) (A) change Section 2.10 or Sections 2.16(b) or (c),
in a manner that would alter the pro rata sharing of payments required thereby or (B) modify
Section 2.09(b) or the definition of the term “Change of Control” following the occurrence
of a Change of Control without the written consent of each Lender, (v) change any of the provisions
of this Section 10.02(b) or the definition of “Required Lenders” or any other provision
hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights
hereunder or make any determination or grant any consent hereunder, without the written consent of
each Lender, or (vi) release all or substantially all of the Guarantees (other than in connection
with any transactions permitted by this Agreement) without the written consent of each Lender;
provided further that no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent hereunder without the prior written consent of the
Administrative Agent.




     SECTION 10.03 Expenses; Indemnity; Damage Waiver.



          (a) The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the fees, charges and disbursements of one
primary law firm as counsel and consultants for the Administrative Agent, in connection with the
syndication of the credit facilities provided for herein, due diligence undertaken by the
Administrative Agent with respect to the financing contemplated by this Agreement, the preparation
and administration of this Agreement or any amendments, modifications or waivers of the provisions
hereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii)
[Intentionally omitted] and (iii) all reasonable out-of-pocket expenses incurred by the
Administrative Agent or any Lender for fees, charges and disbursements of one primary law firm as
counsel, local counsel as needed and consultants for the Administrative Agent or any Lender and all
other reasonable out-of-pocket expenses of the Administrative Agent or any Lender, in connection
with the enforcement or protection of its rights in connection with this Agreement during the
existence of a Default or an Event of Default (whether or not any waiver or forbearance has been
granted in respect thereof), including its rights under this Section, or in connection with the
Loans made, including all such out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans.




          (b) The Borrower shall indemnify the Administrative Agent and each Lender, and each Related
Party of any of the foregoing Persons (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities
and related expenses, including the fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or
as a result of (i) the execution or delivery of this Agreement or any agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective obligations
hereunder or the consummation of the Transactions or any other transactions contemplated hereby,
(ii) any Loan or the use of the proceeds therefrom, (iii) any actual or alleged presence or release
of Hazardous Materials on or from any property owned or operated by the Borrower or any of its
Subsidiaries, or any Environmental Liability related in




63









 




any way to the Borrower or any of its Subsidiaries, or (iv) any actual claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory and regardless of whether any Indemnitee is a party thereto; and whether or not
caused by the ordinary, sole or contributory negligence of any Indemnitee, provided
further that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee (IT BEING UNDERSTOOD THAT IT IS THE INTENTION
OF THE PARTIES HERETO THAT EACH OF THE INDEMNITEES BE INDEMNIFIED IN THE CASE OF ITS OWN NEGLIGENCE
(OTHER THAN GROSS NEGLIGENCE), REGARDLESS OF WHETHER SUCH NEGLIGENCE IS SOLE OR CONTRIBUTORY,
ACTIVE OR PASSIVE, IMPUTED, JOINT OR TECHNICAL). It is agreed by the parties hereto that the
indemnity obligations of the Borrower under the Commitment Letter are superseded to the extent
described in this Agreement.




          To the extent that the Borrower fails to pay any amount required to be paid by it to the
Administrative Agent under paragraph (a) or (b) of this Section, each Lender severally agrees to
pay to the Administrative Agent such Lender’s pro rata share (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against the Administrative Agent
in its capacity as such. For purposes hereof, a Lender’s “pro rata share” shall be determined
based upon its share of the sum of the total Credit Exposure and unused Commitments at the time.




          To the extent permitted by applicable Law, neither the Borrower nor any Guarantor shall
assert, and each of the Borrower and each Guarantor hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or as a result of,
this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan or
the use of the proceeds thereof.




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




     SECTION 10.04 Successors and Assigns.



          (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns permitted hereby, except that (i) the
Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void), and (ii) no Lender may assign or otherwise transfer
its rights or obligations hereunder except in accordance with this Section. Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person (other than the
parties hereto, their respective successors and assigns permitted hereby, Participants (to the
extent provided in paragraph (c) of this Section) and, to the extent expressly




64









 




contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this Agreement.




          (b) (i) Subject to Section 10.04(e) and the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment and the Loans at the
time owing to it) with the prior written consent (such consent not to be unreasonably withheld or
delayed) of the Administrative Agent (and for the avoidance of doubt, without the consent of the
Borrower); provided that (A) no such consent shall be required for an assignment of any
Commitment or Loan to an assignee that is a Lender, an Affiliate of a Lender or an Approved Fund
and (B) such assigning Lender shall give prompt prior written notice to the Borrower and if the
consent of the Administrative Agent is not required, the Administrative Agent of such assignment or
sale; and




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





          (A) except in the case of an assignment to a Lender or an Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans, the
amount of the Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $1,000,000 and after giving
effect to such assignment, the assigning Lender’s Commitment or Loans shall not be less than
$1,000,000 (which amount shall be in the aggregate in the event of simultaneous assignments
to or by two or more Approved Funds) unless the Borrower and the Administrative Agent
otherwise consent, provided that no such consent of the Borrower shall be required
if an Event of Default under clause (a), (b), (i) or (j) of Section 7.01 has
occurred and is continuing;




          (B) each partial assignment shall be made as an assignment of a proportionate part of
all the assigning Lender’s rights and obligations under this Agreement;




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




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



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



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     “Approved Fund” means any Person (other than a natural person) that is engaged in
making, purchasing, holding or investing in bank loans and similar extensions of credit in the
ordinary course of its business and that is owned, administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a
Lender.




     (iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this
Section, from and after the effective date specified in each Assignment and Assumption the
assignee thereunder shall be a party hereto and, to the extent of the interest assigned by
such Assignment and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned
by such Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a party hereto
but shall continue to be entitled to the benefits of Sections 2.13, 2.14,
2.15 and 10.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 10.04 shall
be treated for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with paragraph (c) of this Section.




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




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



          (c) (i) Subject to Section 10.04(e), any Lender may, without the consent of the
Borrower or the Administrative Agent, sell participations to one or more banks or other entities (a
“Participant”) in all or a portion of such Lender’s rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans owing to it);
provided that (A) [Intentionally omitted], (B) such Lender’s obligations under this
Agreement shall remain




66









 




unchanged, (C) such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (D) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or waiver of any
provision of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any amendment, modification
or waiver described in the first proviso to Section 10.02(b) that affects such Participant.
Subject to paragraph (c)(ii) of this Section, the Borrower agrees that each Participant shall be
entitled to the benefits of Sections 2.13, 2.14 and 2.15 to the same extent
as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section. To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 10.08 as though it were a Lender, provided such Participant agrees to
be subject to Section 2.16(c) as though it were a Lender.





     (ii) A Participant shall not be entitled to receive any greater payment under
Section 2.13 or 2.15 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 2.16 unless the Borrower is notified of the participation sold
to such Participant and such Participant agrees, for the benefit of the Borrower, to comply
with Section 2.16(e) as though it were a Lender.



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




          (e) Notwithstanding anything herein to the contrary, a Lender may not assign, or sell
participations in, any of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans owing to it) to (i) the Borrower or any of its Affiliates
and (ii) any Person listed on Schedule 10.04 hereto or any of their respective Controlled
Affiliates. Any such attempted assignment or transfer shall be null and void.




     SECTION 10.05 Survival. All covenants, agreements, representations and warranties
made by the Borrower and each Guarantor herein and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement shall be considered to have been relied
upon by the other parties hereto and shall survive the execution and delivery of this Agreement and
the making of any Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the



67









 







principal of or any accrued interest on any Loan or any fee or any other amount payable under
this Agreement is outstanding and unpaid and so long as the Commitments have not expired or
terminated. The provisions of Sections 2.13, 2.14, 2.15 and 10.03
and Article VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Commitments or the termination of this Agreement or any provision hereof.



     SECTION 10.06 Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts and may be delivered in original or facsimile form (and by different
parties hereto on different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement and the other Loan
Documents constitute the entire contract among the parties relating to the subject matter hereof
and supersede any and all previous agreements and understandings, oral or written, relating to the
subject matter hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when the Administrative
Agent shall have received counterparts hereof which, when taken together, bear the signatures of
each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement.



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



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



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



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




          THE BORROWER AND EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMIT, FOR ITSELF AND
ITS




68









 




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




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




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




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CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY MANNER
PROVIDED BY LAW.




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




     SECTION 10.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.



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



     SECTION 10.12 Confidentiality. Each of the Administrative Agent and the Lenders
agrees to maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and
agents, including accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the extent requested by
any regulatory authority, (c) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with
the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations under this Agreement,
or (ii) any actual or prospective counterparty (or its advisors) to any Swap Agreement, (g) with
the consent of the Borrower or (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes available to the Administrative
Agent or any Lender on a nonconfidential basis from a source other than the Borrower. For the
purposes of this Section, “Information” means all information received from the Borrower or
its Affiliates relating to the Borrower and its Subsidiaries or their business, other than any such
information that is available to the Administrative Agent or any Lender on a non-confidential basis
prior to disclosure by the Borrower or any of its Affiliates; provided that, in the case of
information received from the Borrower after the Effective Date,



70









 







such information is clearly identified at the time of delivery as confidential. Any Person
required to maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Information as such Person would accord to
its own confidential information.



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



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




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




          (c) all sums paid, or agreed to be paid, to such Lender or the Administrative Agent for the
use, forbearance and detention of the indebtedness of the Borrower to such Lender or the
Administrative Agent hereunder or under any Loan Document shall, to the extent permitted by laws
applicable to such Lender or the Administrative Agent, as the case may be, be amortized, prorated,
allocated and spread throughout the full term of such indebtedness until payment in full so that
the actual rate of interest is uniform throughout the full term thereof;




          (d) if at any time the interest provided pursuant to this Section or any other clause of this
Agreement or any other Loan Document, together with any other fees or compensation payable pursuant
to this Agreement or any other Loan Document and deemed interest under laws applicable to such
Lender or the Administrative Agent, exceeds that amount which would have accrued at the Highest
Lawful Rate, the amount of interest and any such fees or compensation to accrue to such Lender or
the Administrative Agent pursuant to this Agreement or such other Loan Document shall be limited,
notwithstanding anything to the contrary in this Agreement or any other Loan Document, to that
amount which would have





71









 







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




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




     SECTION 10.14 USA Patriot Act. Each Lender hereby notifies the Borrower that pursuant
to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law
October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender to identify the Borrower in accordance
with the Patriot Act.



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



[Signature pages to follow]




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




	 	 	 	 	 
	 	BORROWER:

ION GEOPHYSICAL CORPORATION

 	 
	 	By  	/s/ David L. Roland 	 
	 	 	Name:  	David L. Roland 	 
	 	 	Title:  	Senior Vice President, General Counsel and Corporate Secretary 	 
	 
	 	GUARANTORS:

ION EXPLORATION PRODUCTS (U.S.A.), INC.,
    a Delaware
corporation
 	 
	 

	 	By  	/s/ David L. Roland 	 
	 	 	Name:  	David L. Roland 	 
	 	 	Title:  	Vice President 	 
	 
	 	I/O MARINE SYSTEMS, INC., a Louisiana corporation

 	 
	 	By  	/s/ David L. Roland 	 
	 	 	Name:  	David L. Roland 	 
	 	 	Title:  	Vice President 	 
	 
	 	GX TECHNOLOGY CORPORATION, a Texas
    corporation
 	 
	 

	 	By  	/s/ David L. Roland 	 
	 	 	Name:  	David L. Roland 	 
	 	 	Title:  	Vice President 	 
	 



Bridge Loan Agreement





 









 





	 	 	 	 	 
	 	ADMINISTRATIVE AGENT:

JEFFERIES FINANCE LLC, as Administrative Agent

 	 
	 	By  	/s/ Carl A. Toriello 	 
	 	 	Name:  	Carl A. Toriello 	 
	 	 	Title:  	Executive Vice President 	 
	 
	 
	 	LENDERS:

JEFFERIES FINANCE LLC

 	 
	 	By  	/s/ Carl A. Toriello 	 
	 	 	Name:  	Carl A. Toriello 	 
	 	 	Title:  	Executive Vice President 	 
	 



Bridge Loan Agreement