Document:

QuickLinks
 -- Click here to rapidly navigate through this document

Exhibit 10.4  

 
 

SECOND SUPPLEMENTAL FACILITY AGREEMENT    
    
    between    
    
    PARADIGM GEOTECHNOLOGY BV
  and others as Borrowers    
    
    and    
    

THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND

as Agent, Arranger, Issuing Bank, Security Trustee and Lender  

THIS SECOND SUPPLEMENTAL FACILITY AGREEMENT is made the            day of June 2006 between:- 

	

	

 
 
    (1)
   PARADIGM GEOTECHNOLOGY BV, a limited liability company registered in the Netherlands (the
"Parent"); 

	

	

 
 
    (2)
   THE COMPANIES listed in Schedule 1; 

	

	

 
 
    (3)
   THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND of The Mound, Edinburgh EH1 1YZ as agent (the
"Agent") for and on behalf of the Lenders (as hereinafter defined); 

	

	

 
 
    (4)
   THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND of the address aforesaid (in this capacity the "Issuing
Bank"); 

	

	

 
 
    (5)
   THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND of the address aforesaid as security trustee of the other Finance Parties (in this
capacity the "Security Trustee"); 

	

	

 
 
    (6)
   THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND of the address aforesaid (in this capacity the
"Arranger"); 

	

	

 
 
    (7)
   THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND of the address aforesaid (in this capacity the
"Lender"). 

WHEREAS:  

 
 
 (A)

	The
	Parent,
 the Companies, the Agent, the Arranger, the Issuing Bank, the Ancillary Lender and the Lenders entered into a facility agreement dated 12th June 2003 as amended and 

restated
by a supplemental facility agreement dated 24 November 2004 among the same parties (as supplemented, varied, novated, restated or amended from time to time the
"Facility Agreement") in terms of which certain facilities were made available to the Borrowers (as defined therein); 

	

	

 
 
    (B)
  the parties wish to amend and restate the Facility Agreement in accordance with the terms of this Second Supplemental Facility Agreement. 

NOW
IT IS HEREBY AGREED AND DECLARED as follows:- 

 
 

1.     DEFINITIONS AND INTERPRETATION         

 
 
 1.1.

	In
	this
 Second Supplemental Facility Agreement a term defined in the Facility Agreement has the same meaning when used in this Second Supplemental Facility Agreement and Clause 1 

of
the Facility Agreement shall apply hereto. 

	

	

 
 
    1.2.
  This Second Supplemental Facility Agreement is supplemental to the Facility Agreement and is a Finance Document in terms of the Facility Agreement. 

	

	

 
 
    1.3.
  Any references in the Facility Agreement to "this Agreement" and similar expressions shall be deemed to be references to the Facility
Agreement as amended by this Second Supplemental Facility Agreement. 

	

	

 
 
    1.4.
  A person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or enjoy the benefit of any term of this Second Supplemental Facility
Agreement. 

 
 

2.     CONDITIONS PRECEDENT AND SUBSEQUENT         

 
 
 2.1.

	This
	Second
 Supplemental Facility Agreement and the amendments to the Facility Agreement referred to herein shall only come into effect if the Agent confirms to the Parent that: 

	(i)
	the
Agent has received a duly signed copy of this Second Supplemental Facility Agreement;

	(ii)
	save
as may be subject to the waivers set out in Clause 8 (Waiver) below, no Default has occurred and is continuing unremedied or unwaived; 

 

	(iii)
	save
as may be subject to the waivers set out in Clause 8 (Waivers) below, the Agent is satisfied that the representations and warranties given by the Parent on the date
hereof in terms of this Second Supplemental Facility Agreement are true and correct in all material respects; and

	(iv)
	the
Agent has received all of the documents and evidence referred to in Schedule 2 to this Second Supplemental Facility Agreement, in each case in a form and substance
acceptable to the Agent. 

	

	

 
 
    2.2.
  If the conditions referred to in Clause 2.1 have not been satisfied on or prior to 30 June 2006 (or such other date as may be agreed from time to time) then this Second
Supplemental Facility Agreement will lapse and the amendments to be made in terms hereof will be of no effect. 

	

	

 
 
    2.3.
  The Parent shall procure that within 30 days of the Restatement Date each of Paradigm BV and the Company shall open a Cash Account (as such term is defined in each of the
amendment agreements listed in paragraphs (a) and (b) of Clause 4 of Schedule 2 to this Second Supplemental Facility Agreement) with a bank carrying on business in France
which is acceptable to the Agent. 

	

	

 
 
    2.4.
  The Parent shall, if requested by the Agent, within 14 days of such request, arrange for the following documents to be re-executed by the Company together with any
statutory forms required to be signed by the Company in connection with their registration at the Israeli Companies Registry in order that the records of the Israeli Companies Registry may be updated: 

	(a)
	the
pledge agreement dated 12 June 2003 granted by the Company in favour of the Security Trustee in respect of its shares in Paradigm Geophysical, Corp.;

	(b)
	the
amended and restated grant of patent security interest dated 24 November 2004 granted by the Company in favour of the Security Trustee;

	(c)
	the
amended and restated grant of trademark security interest dated 24 November 2004 granted by the Company in favour of the Security Trustee; and

	(d)
	the
amended and restated grant of copyright security interest dated 24 November 2004 granted by the Company in favour of the Security Trustee. 

 
 

3.     ADMINISTRATION         

 
 
 3.1.

	As
	at
 the date of this Second Supplemental Facility Agreement the parties acknowledge that the following Advances and Letters of Credit are outstanding under the Facility Agreement: 

	Facility
 
	 	Type of Utilisation
	 	Amount

	Facility A	 	Loan	 	$	60,500,000
	Facility B	 	Letters of Credit	 	$	3,806,515

	

	

 
 
    3.2.
  Subject to the terms of this Second Supplemental Facility Agreement and with effect from the Agent's confirmation pursuant to Clause 2.1, the terms applicable to the existing
Utilisations provided by the Lenders shall be those set out in the Facility Agreement (as amended in terms of this Second Supplemental Facility Agreement). 

 
 

4.     AMENDMENTS TO THE FACILITY AGREEMENT         

 
 
 4.1.

	Subject
	to
 the terms of this Second Supplemental Facility Agreement, the Facility Agreement shall be amended and restated in the form set out as Schedule 3 to this Second 

Supplemental
Facility Agreement. 

	

	

 
 
    4.2.
  Subject to the terms of this Second Supplemental Facility Agreement, the Facility Agreement shall remain in full force and effect. This Second Supplemental Facility Agreement and the
Facility 

2

 

Agreement
shall be treated as one document so that, upon the Facility Agreement being amended and restated as mentioned above, all references to the Facility Agreement shall be treated as references
to the Facility Agreement set out as Schedule 3 to this Second Supplemental Facility Agreement. 

	

	

 
 
    4.3.
  Save to the extent expressly provided in this Second Supplemental Facility Agreement, the Finance Documents shall remain in full force and effect. 

 
 

5.     REPRESENTATIONS AND WARRANTIES         

 
 
 5.1.

	The
	Parent
 represents and warrants to the Agent and the Lenders on the date hereof in terms of Clause 21 (Representations) other than those set out in Clause 21.10, 21.12 

and
21.13. 

	

	

 
 
    5.2.
  The Parent represents and warrants to the Agent and the Lenders on the date hereof that:- 

	(i)
	all
information and statements of belief made by or on behalf of any Obligor or the Original Investor for the purpose of the preparation of the Presentation Pack were made after due
and careful consideration and all forecasts and projections supplied by such persons for such purpose were prepared on the basis of recent historic information and assumptions which were reasonable in
all material respects at the date such forecasts and projections were supplied;

	(ii)
	the
Presentation Pack did not fail to disclose any matter which, if disclosed to a reasonable person considering whether or not to provide or continue to provide finance to the
Borrowers on the basis of the transactions contemplated in the Transaction Documents, would materially and adversely influence such person's assessment of such transaction;

	(iii)
	nothing
has occurred or come to the attention of the Parent since the date on which the Presentation Pack was delivered to the Agent which, if included in the Presentation Pack,
would, when taken as a whole, when presented to a reasonable person considering whether or not to provide or continue to provide finance to the Borrowers on the basis of the transactions contemplated
in the Transaction Documents, materially and adversely influence such person's assessment of such transaction. 

 
 

6.     FEES AND EXPENSES         

 
 
 6.1.

	The
	Parent
 shall pay to the Agent for the account of the Lenders the arrangement fee in accordance with the terms of the Fees Letter. 

	

	

 
 
    6.2.
  The Parent shall pay to the Agent the amount of all costs and expenses (together with any VAT or similar taxes thereon) incurred by the Agent and the Lenders in connection with this
Second Supplemental Facility Agreement and the documents contemplated hereby (including, without limitation, the fees and expenses of the Agent's legal advisers) in accordance with the terms of a
letter from the Parent to The Governor and Company of the Bank of Scotland dated on or around the Restatement Date or as otherwise agreed by the Parent and the Agent. 

 
 

7.     PRESERVATION OF GUARANTEES AND SECURITY         

Each
of the Parent and the Borrowers confirms that the Security Documents granted by each member of the Group on or prior to the date hereof and the security rights constituted or evidenced thereby
are and remain in full force and effect and apply as from the date hereof to, inter alia, the Facility Agreement and the guarantees included in the Security Documents will validly guarantee all of the
obligations of each other member of the Group to the Agent and the Lenders. 

3

 

 
 

8.     WAIVER         

The
Parent and the Agent hereby acknowledge that the Parent was in breach of some of the financial covenants set out in Clause 23.1 (Financial Covenants) of the Facility Agreement on the Test
Dates on or prior to the date of this Second Supplemental Facility Agreement of each such covenant (the "Financial Covenant Breach"). The Parent and the Agent hereby further acknowledges that the
Financial Covenant Breach constituted an Event of Default pursuant to Clause 25.2 (Key Covenants) of the Facility Agreement (the "Financial Covenant Event of Default"). The Agent hereby waives
the Financial Covenant Event of Default in respect of the Financial Covenant Breach. 

 
 

9.     GENERAL         

 
 
 9.1.

	Clauses
	36
 (Remedies and Waivers), 35 (Partial Invalidity), 33 (Notices), 39 (Governing Law) and 40 (Enforcement) of the Facility Agreement shall be deemed to be incorporated in this 

Second
Supplemental Facility Agreement (with such conforming amendments as the context requires) as if set out herein. 

	

	

 
 
    9.2.
  Save as expressly referred to in Clause 8 (Waiver) above, neither the execution of this Second Supplemental Facility Agreement nor the making of any amount available under the
Facility Agreement amounts to a waiver of any outstanding Event of Default. 

 
 

10.   COUNTERPARTS         

This
Second Supplemental Facility Agreement may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same agreement. 

 
 

11.   NOTICES         

The
parties to this Second Supplemental Facility Agreement acknowledge that the address and fax number for any communication under or in connection with the Finance Documents to the Agent, the
Arranger, the Issuing Bank, the Security Trustee, the Original Lender, the Parent or the Original Borrowers are as set out with their names on the signature pages to this Second Supplemental Facility
Agreement. 

 
 

12.   GOVERNING LAW         

This
Second Supplemental Facility Agreement shall be governed by and construed in accordance with the laws of England. 

IN WITNESS WHEREOF this Agreement has been signed by a duly authorised representative of each of the parties hereto on the date first written above. 

4

  

 
 

SCHEDULE 1    
    
    THE COMPANIES    
    

	Name
 
	 	Country of incorporation and

registration number (or

equivalent, if any)

	Paradigm Geotechnology BV	 	Netherlands, 23092424
	

Paradigm Geophysical Limited	
 	

Israel, 52-004351-4
	

Paradigm Geophysical Pty Ltd	
 	

Australia, ACN 082174 249
	

Paradigm Geophysical LLC	
 	

Russia
	

Paradigm Geophysical (UK) Limited	
 	

UK, 02831267
	

Paradigm Geophysical Corp.	
 	

Delaware, USA

5

 
 
 

SCHEDULE 2    
    
    CONDITIONS PRECEDENT    
    

 
 

1.     General         

	(a)
	A
copy of a resolution of the board of directors (and, where relevant, the shareholders and the board of supervisory directors) of each Obligor which is a party to this Second
Supplemental Facility Agreement or to the Security Documents referred to in this Schedule 2 in form and substance acceptable to the Agent.

	(b)
	A
formalities certificate from each Obligor which is a party to this Second Supplemental Facility Agreement or to the Security Documents referred to in this Schedule 2 in form
and substance acceptable to the Agent.

	(c)
	An
updated Operating Budget for the period to 31 December 2006.

	(d)
	A
copy of the audited consolidated financial statements of the Group for the financial year ended 31 December 2005.

	(e)
	The
Presentation Pack. 

 
 

2.     Australia         

A
legal opinion of Minter Ellison, Australian legal advisers to the Arranger and the Agent, substantially in the form distributed to the Original Lenders prior to signing this Second Supplemental
Facility Agreement. 

 
 

3.     Canada         

	(a)
	A
pledge over shares by Paradigm Geotechnology BV in respect of its shares in Paradigm Geophysical Canada Ltd in favour of the Security Trustee.

	(b)
	A
legal opinion of Blake, Cassels & Graydon LLP, Canadian legal advisers to the Arranger and the Agent, substantially in the form distributed to the Original Lenders prior to
signing this Second Supplemental Facility Agreement.

	(c)
	A
legal opinion of Fraser Milner Casgrain LLP, Canadian legal advisers to the Parent, substantially in the form distributed to the Original Lenders prior to signing this Second
Supplemental Facility Agreement. 

 
 

4.     France         

	(a)
	An
amendment agreement between Paradigm Geophysical Limited and the Beneficiary (as defined therein) relating to the pledge agreement by Paradigm Geophysical Limited in favour of the
Beneficiary (as defined therein) dated 24 November 2004 in respect of its shares in Paradigm Geophysical Holdings SAS.

	(b)
	An
amendment agreement between Paradigm Geophysical BV in favour of the Beneficiary (as defined therein) relating to the pledge agreement by Paradigm Geophysical BV in favour of the
Beneficiary (as defined therein) dated 24 November 2004 in respect of its shares in Paradigm Geophysical Holdings SAS.

	(c)
	A
certified copy of the minutes of a meeting of the shareholders of Paradigm Geophysical Holdings SAS approving the execution of the shares pledge set out above. 

6

 

	(d)
	A
declaration of pledge by each of Paradigm Geophysical Limited and Paradigm Geophysical BV to Paradigm Geophysical Holdings SAS.

	(e)
	A
certificate of pledge issued by Paradigm Geophysical Holdings SAS in respect of each of the pledges (mentioned in paragraphs (a) and (b) above) confirming that each of
the pledges are validly registered in the share accounts of Paradigm Geophysical Holdings SAS.

	(f)
	A
legal opinion of Sokolow, Carreras & Associes, French legal advisers to the Arranger and the Agent, substantially in the form distributed to the Original Lenders prior to
signing this Second Supplemental Facility Agreement. 

 
 

5.     Israel         

	(a)
	A
legal opinion of Herzog Fox & Neeman, Israeli legal advisers to the Arranger and the Agent, substantially in the form distributed to the Original Lenders prior to signing
this Second Supplemental Facility Agreement.

	(b)
	Evidence
satisfactory to the Agent that the Office of the Chief Scientist has confirmed to the Company that no additional consent is required in relation to the Company entering into
this Second Supplemental Facility Agreement and certain security documents in favour of the Security Trustee. 

 
 

6.     Netherlands         

A
legal opinion of Van Doorne, legal advisers in The Netherlands to the Arranger and the Agent, substantially in the form distributed to the Original Lenders prior to signing this Second Supplemental
Facility Agreement. 

 
 

7.     USA         

	(a)
	A
ratification agreement to be entered into by each of Paradigm Geophysical Limited, Paradigm Geophysical Corp. and Paradigm Geophysical (R&D) Corp. in favour of the Security Trustee.

	(b)
	A
legal opinion of Andrews Kurth LLP legal advisers in the USA to the Arranger and the Agent, substantially in the form distributed to the Original Lenders prior to signing this
Second Supplemental Facility Agreement. 

 
 

8.     Cayman Islands         

	(a)
	The
Investor Guarantee.

	(b)
	The
Investor Counter-Indemnity.

	(c)
	A
legal opinion of Walkers, substantially in the form distributed to the Original Lenders prior to signing this Second Supplemental Facility Agreement. 

7

 

 
 

SCHEDULE 3    
    
    FORM OF AMENDED AND
  RESTATED FACILITY AGREEMENT    
    

           

   

$77,750,000  

 FACILITY AGREEMENT  

 originally dated 12th June 2003  

 for  

 PARADIGM GEOTECHNOLOGY BV  

 arranged by  

 THE GOVERNOR AND COMPANY OF THE BANK OF

SCOTLAND

with  

 THE GOVERNOR AND COMPANY OF THE BANK OF

SCOTLAND

acting as Agent, Issuing Bank and as Security Trustee  

8

  

 
 

CONTENTS    
    

	CLAUSE
 
	 
	 	PAGE

	SECTION 1 INTERPRETATION
	

1.	

Definitions and interpretation	
 	

1
	
SECTION 2 THE FACILITIES
	

2.	

The Facilities	
 	

33
	3.	Purpose	 	34
	4.	Conditions of Utilisation	 	34
	
SECTION 3 UTILISATION
	

5.	

Utilisation—Loans	
 	

37
	6.	Utilisation—Letters of Credit	 	38
	7.	Letters of Credit	 	42
	8.	Ancillary Facilities	 	47
	9.	Optional currencies	 	57
	
SECTION 4 REPAYMENT, PREPAYMENT AND

CANCELLATION
	

10.	

Repayment	
 	

52
	11.	Prepayment and cancellation	 	52
	
SECTION 5 COSTS OF UTILISATION
	

12.	

Interest	
 	

60
	13.	Interest Periods	 	61
	14.	Changes to the calculation of interest	 	62
	15.	Fees	 	63
	
SECTION 6 ADDITIONAL PAYMENT OBLIGATIONS
	

16.	

Tax gross up and indemnities	
 	

65
	17.	Increased costs	 	70
	18.	Other indemnities	 	71
	19.	Mitigation by the Lenders	 	72
	20.	Costs and expenses	 	73
	
SECTION 7 REPRESENTATIONS, UNDERTAKINGS

AND EVENTS OF DEFAULT
	

21.	

Representations	
 	

74
	22.	Information undertakings	 	81
	23.	Financial covenants	 	85
	24.	General undertakings	 	87
	25.	Events of Default	 	99
	
SECTION 8 CHANGES TO PARTIES
	

26.	

Changes to the Lenders	
 	

105
	27.	Changes to the Obligors and Further Security	 	109
	
SECTION 9 THE FINANCE PARTIES
	

28.	

Role of the Agent, the Security Trustee and the Arranger	
 	

113
	 	 	 	 

i

 

	29.	Conduct of business by the Finance Parties	 	119
	30.	Sharing among the Finance Parties	 	120
	
SECTION 10 ADMINISTRATION
	

31.	

Payment mechanics	
 	

122
	32.	Set-off	 	125
	33.	Notices	 	125
	34.	Calculations and certificates	 	127
	35.	Partial invalidity	 	127
	36.	Remedies and waivers	 	127
	37.	Amendments and waivers	 	128
	38.	Counterparts	 	129
	
SECTION 11 GOVERNING LAW AND ENFORCEMENT
	

39.	

Governing law	
 	

130
	40.	Enforcement	 	130
	
THE SCHEDULES
	

SCHEDULE 1:	

The Original Parties	
 	

131
	SCHEDULE 2:	Conditions Precedent	 	133
	SCHEDULE 3:	Requests	 	140
	SCHEDULE 4:	Repayment Schedule	 	143
	SCHEDULE 5:	Mandatory Cost Formulae	 	144
	SCHEDULE 6:	Form of Transfer Certificate	 	147
	SCHEDULE 7:	Form of Compliance Certificate	 	149
	SCHEDULE 8:	Existing Security	 	150
	SCHEDULE 9:	LMA Form of Confidentiality Undertaking	 	151
	SCHEDULE 10:	Timetables	 	156
	SCHEDULE 11:	Group Structure Chart	 	159
	SCHEDULE 12:	Form of Accession Letter	 	160
	SCHEDULE 13:	Form of Resignation Letter	 	161
	SCHEDULE 14:	Form of Letter of Credit	 	162

ii

  

THIS AGREEMENT is an amended and restated agreement which sets out the terms on which the facility agreement originally dated 12th June 2003 is
amended and in its amended and restated form is made between: 

	

	

 
 
    (1)
   PARADIGM GEOTECHNOLOGY BV a limited liability company registered in the Netherlands (the "Parent"); 

	

	

 
 
    (2)
   EACH COMPANY listed in Part I of Schedule 1 as original borrowers (the "Original Borrowers"); 

	

	

 
 
    (3)
   THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND as arranger (the "Arranger"); 

	

	

 
 
    (4)
   THE FINANCIAL INSTITUTIONS listed in Part III of Schedule 1 as lenders (the "Original Lenders"); 

	

	

 
 
    (5)
   THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND as issuing bank (the "Issuing Bank"); 

	

	

 
 
    (6)
   THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND as agent of the other Finance Parties (the "Agent"); and 

	

	

 
 
    (7)
   THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND as security trustee of the other Finance Parties (the "Security Trustee"). 

IT IS AGREED as follows: 

 
 

SECTION 1
  
    INTERPRETATION    
    

 
 

1.     DEFINITIONS AND INTERPRETATION         

 
 

1.1.  Definitions        

In
this Agreement: 

"Accession Letter" means a document substantially in the form set out in Schedule 12 (Form of Accession Letter). 

"Accountants' Report" means the report dated 13 January 2003 prepared by Ernst & Young relating to the Group addressed, among others, to
the Finance Parties. 

"Accounting Period" means each of the four periods in any year for which the Parent is to prepare consolidated quarterly management accounts for the
purposes of this Agreement. 

"Accounting Principles" means the accounting principles and practices used in the preparation of the Original Annual Accounts. 

"Acquisition" means the acquisition by the Parent of the entire issued share capital of the Company on or around 13 August 2002 in accordance
with the terms of the Merger Agreement. 

"Acquisition Costs" means all fees, commissions, costs and expenses properly incurred by the Parent in relation to the Acquisition, the Core Labs
Acquisition, the Baker Hughes Acquisition and/or any other acquisition permitted in terms of Clause 24.20 (Acquisitions). 

"Acquisition Goodwill" means the goodwill, value attributable to Intangible Assets and in process R&D, in each case arising on (i) the
acquisition of the Company, (ii) the Core Labs Acquisition or (iii) the Baker Hughes Acquisition. 

"Additional Borrower" means a company which becomes an Additional Borrower in accordance with Clause 27 (Changes to the Obligors and Further
Security). 

1

 

"Additional Cost Rate" has the meaning given to it in Schedule 5 (Mandatory Cost formulae). 

"Additional Obligor" means an Additional Borrower or a member of the Group which, after the date of this Agreement, enters into a Security Document (or
Documents) granting valid and enforceable first ranking security rights in respect of all or substantially all of its assets and a guarantee of the obligations of the Borrowers under the Finance
Documents. 

"Affiliate" means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding
Company. 

"Agent's Spot Rate of Exchange" means the Agent's spot rate of exchange for the purchase of the relevant currency with the Base Currency in the London
foreign exchange market at or about 11.00 a.m. on a particular day. 

"Ancillary Base Currency Amount" means, in relation to a utilisation of an Ancillary Facility or to the commitment of an Ancillary Lender under an
Ancillary Facility, the amount of such utilisation or commitment as calculated in accordance with the Ancillary Facility Document setting out the terms of that Ancillary Facility. Each such amount
shall be translated into Dollars at the relevant date using the Agent's Spot Rate of Exchange. 

"Ancillary Commitment" means, with respect to any Ancillary Lender and an Ancillary Facility, the Ancillary Base Currency Amount of the maximum amount
(determined on the first day on which that Ancillary Facility becomes available) which that Ancillary Lender has agreed (whether or not subject to satisfaction of conditions precedent) to make
available from time to time under an Ancillary Facility and which has been authorised as such under Clause 8 (Ancillary Facilities), to the extent not cancelled, transferred or reduced under
this Agreement. 

"Ancillary Facility" means any facility or financial accommodation (including, without limitation, any overdraft, foreign exchange, guarantee, bonding,
credit card or automated payments facility) established by a Lender (or an Affiliate thereof) under Clause 8 (Ancillary Facilities) in place of all or part of its Facility B Commitment. 

"Ancillary Facility Document" means any letter, document, form (whether pre-printed or otherwise) or written agreement constituting or
evidencing any Ancillary Facility (or any part or element thereof). 

"Ancillary Lender" means a Lender (or an Affiliate thereof) which is making available an Ancillary Facility. 

"Ancillary Outstandings" means, at any time and with respect to any Ancillary Lender, the Ancillary Base Currency Amount on such date (as calculated by
that Ancillary Lender) of the aggregate of all of the following amounts outstanding at that time under the Ancillary Facility of that Ancillary Lender then in force: 

	(a)
	all
amounts of principal then outstanding under any overdraft, cheque drawing or other account facilities determined on the same basis (whether net or gross) as that for determination
of any limit on such facilities imposed by the terms thereof;

	(b)
	the
maximum potential liability (excluding amounts stated to be in respect of interest and fees) under all guarantees, bonds and letters of credit then outstanding under any
guarantee, bond or letter of credit comprised in the Ancillary Facility; and 

2

 

	(c)
	in
respect of any other facility or financial accommodation, such other amount as fairly represents the aggregate exposure (excluding interest, fees and similar charges) of that
Ancillary Lender with respect thereto under its Ancillary Facility as reasonably determined by that Ancillary Lender from time to time in accordance with the relevant Ancillary Facility Document or
its usual banking practice for facilities or financial accommodations of the relevant type. 

"Annual Accounts" means the audited consolidated annual accounts of the Group or an Obligor (as the case may be) delivered or to be delivered in terms
of Clause 22.1 (Financial Statements). 

"Approved Bank" means a bank approved by the Parent and Agent pursuant to the terms of an Approved Bank Letter. 

"Approved Bank Letter" means a letter signed by the Parent and the Agent in terms of which: 

	(a)
	the
Parent and the Agent (acting reasonably) agree that a bank shall be designated as an Approved Bank for the purposes of this Agreement; and

	(b)
	the
Parent undertakes to provide to the Agent on a monthly basis details of the accounts operated by each member of the Group with an Approved Bank, such details to include account
balances (it being acknowledged that (save with the prior written consent of the Agent) such accounts may be operated only on a credit basis). 

"Authorisation" means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration. 

"Availability Period" means: 

	(a)
	in
relation to Facility A, the period from and including the date of this Agreement to and including close of business on 31 December 2004;

	(b)
	in
relation to Facility B, the period from and including the date of this Agreement to and including the date falling one month before the Termination Date for Facility B. 

"Available Commitment" means, in relation to a Facility, a Lender's Commitment under that Facility minus: 

	(a)
	the
Base Currency Amount of its participation in any outstanding Utilisations under that Facility; and

	(b)
	(in
relation to Facility B) in the case of any Lender which is also an Ancillary Lender, its Ancillary Commitment; and

	(c)
	in
relation to any proposed Utilisation, the Base Currency Amount of its participation in any Utilisations that are due to be made under that Facility on or before the proposed
Utilisation Date, 

other
than, in relation to any proposed Utilisation under Facility B only, that Lender's participation in any Facility B Utilisations that are due to be repaid or prepaid on or before the proposed
Utilisation Date. 

"Available Facility" means, in relation to a Facility, the aggregate for the time being of each Lender's Available Commitment in respect of that
Facility. 

"Baker Hughes Acquisition" means the acquisition by Paradigm Geophysical Corporation of the Workbench line of products from Barker Hughes Incorporated
on 30 June 2004. 

"Banking Disclosure Letters" means the letters from the Parent to the Agent dated on or around 12 June 2003, 24 November 2004 and the
Restatement Date, each in the agreed form. 

3

 

"Base Case Model" means the flat services 2003 quarterly model dated 30 January 2003 and prepared by Fox Paine & Company LLC in the agreed
form as amended by agreement between the Agent and the Parent and/or Fox Paine & Company, LLC on or around 24 November 2004. 

"Base Currency" means Dollars. 

"Base Currency Amount" means, in relation to a Utilisation, the amount specified in the Utilisation Request delivered by a Borrower for that Utilisation
(or, if the amount requested is not denominated in the Base Currency, that amount converted into the Base Currency at the Agent's Spot Rate of Exchange on the date which is three Business Days before
the Utilisation Date or, if earlier, on the date the Agent receives the Utilisation Request and, in the case of a Letter of Credit, as adjusted under Clause 6.8 (Revaluation of Letters of
Credit) at three-monthly intervals) adjusted to reflect any repayment, prepayment, consolidation or division of the Utilisation. 

"Borrower" means the Original Borrowers and each Additional Borrower. 

"BoS Group" means HBOS plc, The Governor and Company of the Bank of Scotland and any Affiliate of either of them. 

"Break Costs" means the amount (if any) by which: 

	(a)
	the
interest which a Lender should have received for the period from the date of receipt of all or any part of its participation in a Loan or Unpaid Sum to the last day of the current
Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period; 

exceeds:

	(b)
	the
amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Relevant
Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period. 

"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in London and New York and: 

	(a)
	(in
relation to any date for payment or purchase of a currency other than euro) the principal financial centre of the country of that currency; or

	(b)
	(in
relation to any date for payment or purchase of euro) any TARGET Day. 

"Business Plan" means: 

	(a)
	the
information memorandum for the Group describing the nature and extent of, and prospects for, the business and operations of the Group dated July 2002 and prepared by Fox
Paine & Company LLC in the agreed form; and

	(b)
	the
Base Case Model. 

"Capital Expenditure" has the meaning given to that term by GAAP. 

"Cash Collateral Account" means an account in the name of an Obligor with the Agent or the Security Trustee (bearing interest at the rate offered by it
to corporate customers generally for comparable amounts held by it on like terms) which is subject to the terms of the Security Documents. 

4

 

"Cashflow" means, in respect of the Group in relation to any period, the aggregate of EBITDA for that period: 

	(a)
	plus,
to the extent not already taken account of in EBITDA, the net proceeds of fixed assets disposed of during that period;

	(b)
	plus
any decrease, or minus any increase, in Net Working Capital during that period including, without limitation, an amount equal to any amount drawndown under Facility B to the
extent not already taken into account in calculating Net Working Capital;

	(c)
	minus
the Retention Bonuses paid during the period to the extent that they are not included in Net Working Capital;

	(d)
	plus
any receipts by way of Extraordinary Items and minus any payments by way of Extraordinary Items, in each case, received or made during that period and to the extent not already
taken account of in EBITDA;

	(e)
	minus
any dividends paid in cash in respect of minority interests for that period;

	(f)
	plus
any dividends received in cash from other investments during that period;

	(g)
	plus
income from participating interests in associated undertakings to the extent received in cash and minus any payment made to associated undertakings during that period;

	(h)
	plus
any increase or minus any decrease in provisions for liabilities and charges made in respect of that period to the extent not included in Net Working Capital in respect of that
period;

	(i)
	minus
Capital Expenditure in respect of that period paid or to be paid during that period (including, for the avoidance of doubt, the cost of any acquisition of any company or
business in that period but excluding any Finance Lease Expenditure in that period);

	(j)
	plus
realised exchange gains and minus realised exchange losses charged during that period to the extent not already taken account of in EBITDA for that period;

	(k)
	minus
the aggregate of all corporation or other similar Tax paid during that period and plus all corporation or other similar Tax rebates received during that period; and

	(l)
	minus
the amount of all payments under any Finance Lease by any member of the Group in that period. 

"Caymanco" means Paradigm Geotechnology Holdings Ltd a limited liability company incorporated in the Cayman Islands. 

"Change of Control" means a situation where: 

	(a)
	the
Parent ceases to hold legal and beneficial ownership of 100% of the issued share capital and voting rights of the Company; or

	(b)
	the
Original Investors shall, together, cease (A) to hold (directly or indirectly) legally and beneficially all of the voting rights and the issued share capital of Caymanco or
(B) to hold the right or ability to determine the composition of a majority of the board of directors (or equivalent) of Caymanco (in each case by virtue of ownership of share capital, contract
or otherwise); or

	(c)
	Dutchco
shall cease to control Dutch Foundation 1, Dutch Foundation 2 or Dutch Foundation 3; or 

5

 

	(d)
	Caymanco
ceases (A) to hold legal and beneficial ownership of all of the issued share capital and voting rights of Luxco or (B) to hold the right or ability to determine
the composition of a majority of the board of directors (or equivalent) of Luxco; or

	(e)
	Luxco
ceases (A) to hold legal and beneficial ownership of all of the issued share capital and voting rights of Dutchco or (B) to hold the right or ability to determine
the composition of a majority of the board of managing directors (or equivalent) of Dutchco; or

	(f)
	Dutchco
and the Dutch Foundations cease (A) to hold in aggregate legal and beneficial ownership of shares in the issued share capital of the Parent representing not less than
50.01% of the voting rights attaching to the shares in the Parent or (B) to hold in aggregate the right or ability to determine the composition of a majority of the board of managing directors
and of the board of supervisory directors (or equivalent) of the Parent or (C) to hold in aggregate (directly or indirectly) legally and beneficially at least 50.01% of the Subordinated Notes. 

"Commercial Report" means the reports dated February 2002 and January 2003 by Spear & Associates Inc. in relation to the
market in which the Group operates addressed, among others, to the Finance Parties. 

"Commitment" means a Facility A Commitment, a Facility B Commitment or an Ancillary Commitment. 

"Company" means Paradigm Geophysical Limited a limited liability company registered in Israel. 

"Completion Date" means 12 June 2003 and "Completion" shall be construed accordingly. 

"Compliance Certificate" means a certificate substantially in the form set out in Schedule 7 (Form of Compliance Certificate). 

"Confidentiality Undertaking" means a confidentiality undertaking substantially in a recommended form of the LMA as set out in Schedule 9 (LMA
Form of Confidentiality Undertaking) or in any other form agreed between the Parent and the Agent. 

"Convertible Loan Agreement" means the convertible loan agreement dated 13 August 2002 between the Parent (the original party being Luxco) and
the Company. 

"Constitutional Documents" means the articles of association of the Parent in the agreed form as in force at the Restatement Date. 

"Core Labs Acquisition" means the acquisition by Paradigm Geophysical Corporation, the Company and the Parent of the reservoir technology division from
Core Laboratories N.V. on 22 April 2004. 

"Core Labs Financial Due Diligence Report" means the financial due diligence report by Ernst & Young in respect of the reservoir technology
division of Core Laboratories N.V.. 

"Core Labs Legal Due Diligence Report" means the preliminary legal due diligence report prepared by Skadden, Arps, Slate, Meagher & Flom LLP
dated 13 April 2004 in respect of the reservoir technology division of Core Laboratories N.V.. 

"Current Assets" means, in relation to the Group, the aggregate value of its assets which are treated as current assets in accordance with GAAP. 

"Current Liabilities" means, in relation to the Group, the aggregate value of its liabilities which are treated as current liabilities in accordance
with GAAP. 

6

 

"Default" means an Event of Default or any event or circumstance specified in Clause 25 (Events of Default) which would (with the expiry of a
grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default. 

"Depreciation" has the meaning given to that term by GAAP. 

"Dollars" and "$" means the lawful currency for the time being of the United States of America. 

"Due Diligence Reports" means: 

	(a)
	the
Accountants Report;

	(b)
	the
Legal Due Diligence Report;

	(c)
	the
Insurance Report;

	(d)
	the
Commercial Report. 

"Dutch Banking Act" means the Dutch Act on the Supervision of the Credit System 1992 (Wet toezicht kredietwezen
1992). 

"Dutch Banking Act Exemption Regulation" means the Dutch Banking Act Exemption Regulation 1992 (Vrijstellingsregeling Wtk
1992), dated 26 June 2002, as amended from time to time. 

"Dutch Borrower" means a Borrower incorporated or established under the laws of The Netherlands. 

"Dutchco" means Paradigm Geotechnology Holdings BV a limited liability company registered in The Netherlands. 

"Dutch Foundation 1" means Stichting AdministratieKantoor Paradigm Geotechnology I a foundation incorporated and registered in the Netherlands. 

"Dutch Foundation 2" means Stichting AdministratieKantoor Paradigm Geotechnology II a foundation incorporated and registered in the Netherlands. 

"Dutch Foundation 3" means Stichting AdministratieKantoor Paradigm Geotechnology III a foundation incorporated and registered in the Netherlands. 

"Dutch Foundations" means Dutch Foundation 1, Dutch Foundation 2 and Dutch Foundation 3. 

"Dutch Policy Rule" means the policy rule issued by the Dutch Central Bank in relation to the Dutch Banking Exemption Regulation dated 10
July 2002 (Beleidsregel kernbegrippen markttoetreding en handhaving Wtk 1992) as amended from time to time. 

"EBITDA" means, in relation to any period, the consolidated profit of the Group for that period before Tax, Total Net Debt Costs and interest accruing
but not paid on the Subordinated Notes adding back: 

	(a)
	Depreciation
charged to the Group's profit and loss account;

	(b)
	amounts
attributed to Acquisition Goodwill written off and amortised during such period or charged to the Group's profit and loss account during such period;

	(c)
	any
amount amortised against, or charged to, the Group's profit and loss account during such period in respect of Acquisition Costs;

	(d)
	the
Management Fee accrued for in the profit and loss account of the Group during such period but deducting any Management Fee paid in that period; 

7

 

	(e)
	(i) any
amounts amortised on finance costs and issue costs arising from the Acquisition, the Core Labs Acquisition or the Baker Hughes Acquisition in that period (save to the
extent included in (c) above), and (ii) any amounts amortised on finance costs arising from the Finance Documents in that period (including, without limitation, all legal and other
professional fees) including to the extent not otherwise included the amount of all arrangement fees, underwriting fees and legal, accounting, valuation and diligence costs and expenses up to an
aggregate amount of $3,750,000 incurred by the Group in connection with the refinancing of the Facilities on or around 24 November 2004; and

	(f)
	the
amount of the Retention Bonuses paid or accrued in that period (to the extent deducted from EBITDA) up to in aggregate $2,050,000, 

for
the avoidance of doubt EBITDA for covenant calculations excludes the impact of: 

	(i)
	profit
attributable to minority interests;

	(ii)
	Extraordinary
Items;

	(iii)
	any
profit or loss arising on the disposal of fixed assets;

	(iv)
	amounts
written off the value of investments;

	(v)
	income
from participating interests in associated undertakings and income from any other investments; and

	(vi)
	realised
and unrealised exchange gains and losses. 

"Environmental Law" means any common, civil or criminal law, statute, regulation, rule, order, consent, decree or governmental requirement of any
country and any directive or regulation of any body having the force of law in any country, which relates to or otherwise imposes liability or standards of conduct concerning discharges or releases of
any Hazardous Substances into ambient air, water or land or otherwise relating to the manufacture, processing, generation, distribution, use, treatment, storage, disposal, clean-up,
transport or handling of Hazardous Substances. 

"Environmental Licence" means any Authorisation required by any Environmental Law. 

"Equity Documents" means the Constitutional Documents and the Subordinated Note Instrument in each case in the agreed form and all other agreements and
documents entered into under those documents. 

"Ernst & Young Report" means the report dated 11 November 2004 prepared by Ernst & Young relating to the projections of the Group
addressed to, among others, the Finance Parties. 

"EURIBOR" means, in relation to any Loan in euro: 

	(a)
	the
applicable Screen Rate; or

	(b)
	(if
no Screen Rate is available for the Interest Period of that Loan) the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request
quoted by the Reference Banks to leading banks in the European interbank market, 

as
of the Specified Time on the Quotation Day for the offering of deposits in euro for a period comparable to the Interest Period of the relevant Loan. 

"Event of Default" means any event or circumstance specified as such in Clause 25 (Events of Default). 

8

 

"Extraordinary Items" has the meaning given to that term by GAAP (but including, for the avoidance of any doubt, any expenses incurred in relation to
the closing of any offices of the Group and restructuring costs of the Group of up to, in aggregate, $600,000 in each financial year). 

"Facility" means Facility A or Facility B as described in Clause 2 (The Facilities) or an Ancillary Facility established pursuant to this
Agreement and "Facilities" means all or any of them. 

"Facility A" means the term loan facility made available under this Agreement as described in Clause 2.1(a) (The Facilities). 

"Facility A Commitment" means: 

	(a)
	in
relation to an Original Lender, the amount in the Base Currency set opposite its name under the heading "Facility A Commitment" in Part III of Schedule 1 (The
Original Parties) and the amount of any other Facility A Commitment transferred to it under this Agreement; and

	(b)
	in
relation to any other Lender, the amount in the Base Currency of any Facility A Commitment transferred to it under this Agreement, 

to
the extent not cancelled, reduced or transferred by it under this Agreement. 

"Facility A Loan" means a loan made or to be made under Facility A or the principal amount outstanding for the time being of that loan. 

"Facility A Repayment Date" means each of the dates set out in Column 1 of Schedule 4 (Repayment Schedule). 

"Facility A Repayment Installment" means each amount set out in Column 2 of Schedule 4 (Repayment Schedule). 

"Facility B" means the revolving credit facility made available under this Agreement as described in Clause 2.1(b) (The Facilities). 

"Facility B Commitment" means: 

	(a)
	in
relation to an Original Lender, the amount in the Base Currency set opposite its name under the heading "Facility B Commitment" in Part III of Schedule 1 (The
Original Parties) and the amount of any other Facility B Commitment transferred to it under this Agreement; and

	(b)
	in
relation to any other Lender, the amount in the Base Currency of any Facility B Commitment transferred to it under this Agreement, 

to
the extent not cancelled, reduced or transferred by it under this Agreement. 

"Facility B Loan" means a loan made or to be made under Facility B or the principal amount outstanding for the time being of that loan. 

"Facility B Utilisation" means a Facility B Loan or a Letter of Credit. 

"Facility Office" means (in the case of the Original Lender) the office set out against its name in the signing pages of this Agreement and (in the case
of any other Lender) the office or offices notified by a Lender to the Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five Business Days' written
notice) as the office or offices through which it will perform its obligations under this Agreement. 

9

 

"Fee Letter" means the fees letter dated 24 November 2004 from The Governor and Company of the Bank of Scotland to the Parent and any letter or
letters dated on or about the Restatement Date between the Arranger and the Parent (or the Agent and the Parent) setting out any of the fees referred to in Clause 15 (Fees) and
Clause 6.1 (Fees and Expenses) of the Second Supplemental Facility Agreement. 

"Finance Documents" means this Agreement, the Supplemental Facility Agreement, the Second Supplemental Facility Agreement, any Fee Letter, the Security
Documents, the Inter Creditor Deed, the Investor Guarantee, any Hedging Documents entered into between a Finance Party and a member of the Group, each Transfer Certificate, any Accession Letter, any
Resignation Letter, any Ancillary Facility Documents, any Letter of Credit and any other document designated in writing as such by the Agent and the Parent. 

"Finance Lease" means a contract or arrangement entered into between a lessor and a lessee and which is treated as a finance or capital lease in
accordance with GAAP. 

"Finance Lease Expenditure" means the capital value of any asset the, subject of a Finance Lease to which a member of the Group is a party. 

"Finance Party" means the Agent, the Arranger, the Security Trustee, the Issuing Bank, a Hedging Lender or a Lender. 

"Financial Indebtedness" means any indebtedness for or in respect of: 

	(a)
	moneys
borrowed;

	(b)
	any
amount raised by acceptance under any acceptance credit facility;

	(c)
	any
amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;

	(d)
	any
Finance Lease;

	(e)
	receivables
sold or discounted;

	(f)
	any
amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing;

	(g)
	any
derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative
transaction, only the marked to market value shall be taken into account);

	(h)
	any
counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution;
and

	(i)
	(without
double counting) the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above. 

"First Subordinated Note Instrument" means the debenture agreement between the Parent and Dutchco dated August 13, 2002 constituting the First
Subordinated Notes. 

"First Subordinated Notes" means the $51,059,000 convertible subordinated debentures of the Parent (or the amount thereof which is outstanding) issued
pursuant to the First Subordinated Note Instrument. 

"Funds Flow Statement" means the funds flow statement prepared by the Parent (including, without limitation, a statement of all costs and expenses
incurred in relation to the refinancing) in the agreed form. 

10

 

"GAAP" means generally accepted accounting principles in the United States of America. 

"Geoprocesados Receivable" means the amount payable by Geoprocesados S.A. de C.V. to AGI Mexicana and that was purchased by the Group pursuant to the
Core Labs Acquisition. 

"Gross Assets" means, in respect of any member of the Group, the aggregate of the trade receivables and the tangible fixed assets of that member of the
Group, in each case in accordance with GAAP but excluding all intra Group receivables or any investments in subsidiaries or associates. 

"Group" means the Parent and its Subsidiaries for the time being and "member of the Group" or "Group Company" shall be construed accordingly. 

"Hazardous Substances" means any noise, odour, pollutant, or any flammable, combustible, explosive, infectious, corrosive, caustic, irritant,
sensitising, carcinogenic or radioactive material or hazardous or toxic waste, substance or material which a reasonably prudent person would regard as being or being likely to be dangerous or
hazardous or likely to cause harm. 

"Hedging Document" means any agreement or document entered into by a member of the Group for the purpose of managing or hedging currency and/or interest
rate risk whether by way of forward exchange, cap, collar, swap, forward rate agreement or otherwise. 

"Hedging Lender" means any of the Lenders (or any Affiliate thereof) which is a party to the Inter Creditor Deed in such capacity. 

"Hedging Policy Letter" means the letter from the Parent to the Agent dated 24 November 2004 in relation to the hedging strategy of the Group. 

"Hedging Transaction" means any currency or interest rate, purchase, cap or collar agreement, forward rate agreement, interest rate or currency future
or option contract, foreign exchange or currency sale or purchase agreement, interest rate swap, currency swap or similar arrangements or any combination thereof whether on market or otherwise. 

"Holding Company" means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary. 

"Insurance Adequacy Letter" means the letter from McGriff, Siebels & Williams of Texas Inc. to the Finance Parties dated on or around 24
November 2004. 

"Insurance Report" means the report dated on or around the Completion Date by McGriff, Siebels and Williams of Texas Inc. in relation to the
insurance cover of the Group addressed to, among others, the Finance Parties. 

"Intangible Assets" has the meaning given to that term by GAAP. 

"Intellectual Property" means patents, trademarks, service marks, designs, business names, copyrights, confidential information, know-how,
computer software and all other intellectual property rights and any interest (including by way of licence) in any of the foregoing in each case whether registered or not and including all
applications for the same. 

"Inter Creditor Deed" means the priority agreement dated 13 June 2003 between inter alia the
Parent, the Finance Parties and the Original Investors as amended and restated by a supplemental priority agreement dated 22 July 2004 between, inter
alia, the Parent, the Finance Parties and the Dutch Foundations. 

"Interest Period" means, in relation to a Loan, each period determined in accordance with Clause 13 (Interest Periods) and, in relation to an
Unpaid Sum, each period determined in accordance with Clause 12.3 (Default interest). 

11

 

"Investor Counter-Indemnity" means the counter-indemnity granted by the Parent in favour of Fox Paine Capital Fund II International L.P. dated on or
around the Restatement Date in connection with the Investor Guarantee. 

"Investor Guarantee" means the guarantee granted by Fox Paine Capital Fund II International L.P. in favour of the Security Trustee dated on or around
the Restatement Date. 

"Investors" means the Original Investors and any of their successors or assigns permitted in terms of the Transaction Documents. 

"Legal Due Diligence Report" means: 

	(a)
	the
overview legal review report dated 19 and 26 March 2002 by Wachtell Lipton Rosen & Katz;

	(b)
	the
legal review report dated 12 April 2002 by Freshfields;

	(c)
	the
legal review report dated 27 March 2002 by Meitar Liqornik Geva & Co;

	(d)
	the
IP review dated 10 September 2002 by Darby & Darby, 

in
relation to the legal affairs of the Group addressed to, among others, the Finance Parties but with no right of recourse by the Finance Parties against the authors of such reports. 

"Lender" means: 

	(a)
	any
Original Lender; and

	(b)
	any
bank, financial institution, trust, fund or other entity which has become a Party in accordance with Clause 26 (Changes to the Lenders), 

which
in each case has not ceased to be a Party in accordance with the terms of this Agreement. 

"Letter of Credit" means a letter of credit, substantially in the form set out in Schedule 14 (Form of Letter of Credit) or in any other form
requested by a Borrower and agreed with the Agent (with the prior written consent of the Majority Lenders) and the Issuing Bank. 

"LIBOR" means, in relation to any Loan: 

	(a)
	the
applicable Screen Rate; or

	(b)
	(if
no Screen Rate is available for the relevant currency for the Interest Period of that Loan) the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied
to the Agent at its request quoted by the Reference Banks to leading banks in the London interbank market, 

as
of the Specified Time on the Quotation Day for the offering of deposits in the currency of that Loan and for a period comparable to the Interest Period for that Loan. 

"Listing" means a listing of all or any of the shares of the Parent (or any other member of the Group or any new holding company of the Parent (or any
holding company of the Parent) of which the Parent is a direct Subsidiary) on any official list or an admission to trading of all or any of the shares of the Parent (or any other member of the Group
or any new holding company of the Parent (or any holding company of the Parent) of which the Parent is a direct Subsidiary) on any recognised investment exchange or market of any country (or the sale
or issue of any such shares on any such exchange or market). 

"LMA" means the Loan Market Association. 

"Loan" means the Facility A Loan or a Facility B Loan. 

12

 

"Luxco" means Paradigm Geotechnology S.A.R.L. a limited liability company registered in Luxembourg. 

"Majority Lenders" means: 

	(a)
	if
there are no Utilisations or Ancillary Outstandings then outstanding, a Lender or Lenders whose Commitments aggregate more than 662/3% of the Total Commitments (or,
if the Total Commitments have been reduced to zero, aggregate more than 662/3% of the Total Commitments immediately prior to the reduction); or

	(b)
	at
any other time, a Lender or Lenders whose participations in the Utilisations and Ancillary Outstandings then outstanding aggregate more than 662/3% of all the
Utilisations and Ancillary Outstandings then outstanding. 

"Management Accounts" means, in respect of an Accounting Period, the unaudited consolidated management accounts of the Group or the unaudited
consolidated management accounts of an Obligor (as the case may be). 

"Management Agreement" means the letter dated 13 August 2002 between Fox Paine & Company, LLC and the Company as amended by Fox
Paine & Company, LLC and the Company. 

"Management Fee" means the fees payable to Fox Paine & Company, LLC in terms of Management Agreement. 

"Management Team" means John Gibson, Jorge Machnizh, Elijio Serrano, David Verdun and Orit Leitman or, in the event that any other finance director or
chief financial officer of the Group is appointed after the date of this Agreement (any such appointment being made following consultation between the Company and the Agent), such other finance
director or chief financial officer. 

"Mandatory Cost" means the percentage rate per annum calculated by the Agent in accordance with Schedule 5 (Mandatory Cost formulae). 

"Margin" means in relation to: 

	(a)
	Facility
A, 2.50% per annum;

	(b)
	Facility
B, 2.00% per annum, 

provided
that for each Interest Period in respect of Facility A commencing on or after the Restatement Date but on or prior to the date falling 6 months after the Restatement Date the margin in
relation to the amount of the Facility A Loan in excess of US$51,000,000 shall be 4.00% per annum. 

"Material Adverse Effect" means any event or circumstances which has, or is reasonably likely to have, a material adverse effect on: 

	(a)
	the
business or financial condition of any Obligor or the Group as a whole; or

	(b)
	the
ability of any of the Obligors to perform any of their payment obligations under any of the Finance Documents or to comply with their obligations under Clause 23 (Financial
Covenants); or

	(c)
	the
validity or enforceability of any Finance Document. 

"Material Company" means the Parent, each Obligor and each other Material Subsidiary. 

"Material Subsidiary" means at any time, a Subsidiary of the Parent whose Gross Assets or Total Revenues then equal or exceed 7.5% of the aggregate
Gross Assets or aggregate Total Revenues of the Group. 

13

 

For
this purpose: 

	(a)
	the
Gross Assets or Total Revenues of a Subsidiary of the Parent will be determined from its financial statements upon which the latest audited financial statements of the Group have
been based;

	(b)
	if
a Subsidiary of the Parent becomes a member of the Group after the date on which the latest audited financial statements of the Group have been prepared, the Gross Assets or Total
Revenues of that Subsidiary will be determined from its latest financial statements;

	(c)
	the
aggregate Gross Assets or aggregate Total Revenues of the Group will be determined from its latest audited financial statements, adjusted (where appropriate) to reflect the Gross
Assets or Total Revenues of any company or business subsequently acquired or disposed of; and

	(d)
	if
a Material Subsidiary disposes of all or substantially all of its assets to another Subsidiary of the Parent, it will immediately cease to be a Material Subsidiary and the other
Subsidiary (if it is not already) will immediately become a Material Subsidiary; the subsequent financial statements of those Subsidiaries and the Group will be used to determine whether those
Subsidiaries are Material Subsidiaries or not. 

"Merger Agreement" means the agreement for merger dated 21 May 2002 between the Parent (then called Talamantes BV), FP Acquisition Ltd and
the Company in relation to the acquisition of the Company. 

"Month" means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that: 

	(a)
	if
the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if
there is not, on the immediately preceding Business Day;

	(b)
	if
there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and

	(c)
	if
an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period
is to end. 

The
above rules will only apply to the last Month of any period. 

"Net Proceeds" means, in relation to any disposal, the gross consideration received by the members of the Group in relation to the relevant disposal
(including, without limitation, the amount of any intercompany loan repaid in connection with the disposal) less all Taxes, costs and expenses directly incurred in respect of that disposal. 

"Net Working Capital" means the aggregate of Current Assets (excluding all cash at bank and cash in hand, all assets in relation to Tax and accrued
interest receivable) less the aggregate of Current Liabilities (excluding any current Financial Indebtedness which is repayable within one year and liabilities in relation to Tax, Extraordinary Items
and dividends payable). 

"Obligor" means each Original Obligor and each Additional Obligor. 

14

  

"Operating Budget" means in relation to the Group and the period starting not later than the date of this Agreement and ended on 31
December 2003, the Business Plan and in relation to each successive 12 month period thereafter: 

	(a)
	a
projected balance sheet;

	(b)
	a
projected profit and loss account;

	(c)
	a
projected cash flow statement; and

	(d)
	projected
calculations relating to each financial covenant contained in Clause 23 (Financial Covenants), 

relating
to each such period and on a quarterly basis and containing a commentary by the chief financial officer of the Group on the previous period's performance and the forecast market conditions. 

"Optional Currency" means a currency (other than the Base Currency) which complies with the conditions set out in Clause 4.3 (Conditions relating
to Optional Currencies). 

"Original Annual Accounts" means the audited consolidated financial statements of the Group for the financial year ended 31 December 2002. 

"Original Financial Statements" means the Original Annual Accounts and the Original Management Accounts. 

"Original Management Accounts" means the unaudited management accounts of the Group for the period ended 31 March 2003. 

"Original Investors" means Fox Paine Capital Fund II International LP, Fox Paine Capital Fund II Co-Investors International LP, FPC
Investment GP and E And A "J" Trust. 

"Original Obligor" means each member of the Group which, on or prior to the Restatement Date, has entered into a Security Document (or Documents)
granting valid and enforceable first ranking security rights in respect of all or substantially all of its assets and a guarantee of the obligations of the Borrowers under the Finance Documents, as
set out in Part II of Schedule 1. 

"Paradigm BV" means Paradigm Geophysical BV, a limited liability company registered in the Netherlands. 

"Partial Refinancing Bond Issue" means the issue of high yield bonds by a company of which the Parent is a wholly owned Subsidiary on terms which are
(in the opinion of the Lenders (acting reasonably)) fully subordinated to amounts due under the Finance Documents and in circumstances in which the bonds do not constitute a secured or unsecured
liability (actual, contingent or otherwise) of any member of the Group. 

"Participating Member State" means any member state of the European Communities that adopts or has adopted the euro as its lawful currency in accordance
with legislation of the European Community relating to Economic and Monetary Union. 

"Party" means a party to this Agreement. 

"Permitted Acquisition" means any acquisition of a business or company by a member of the Group approved in writing by the Agent. 

15

 

"Permitted Financial Indebtedness" means: 

	(a)
	indebtedness
under any Finance Document, the First Subordinated Note Instrument, the Second Subordinated Note Instrument or subordinated indebtedness not exceeding $5,000,000 incurred
in order to satisfy the Group's obligations under Clause 11.9 (Financial Covenant Breach) on terms reasonably acceptable to the Agent;

	(b)
	indebtedness
between any Obligor and another member of the Group if and to the extent permitted by Clause 24.19 (Loans);

	(c)
	indebtedness
under any Finance Lease to the extent permitted under Clause 24.22 (Capital Expenditure);

	(d)
	indebtedness
outstanding under any bank facility which is the subject of a Letter of Credit;

	(e)
	indebtedness
permitted pursuant to Clause 24.18 (Guarantees) or to Clause 24.31 (Hedging Transactions);

	(f)
	any
indebtedness under the Investor Counter-Indemnity;

	(g)
	any
indebtedness entered into with the prior written consent of the Agent (not to be unreasonably withheld or delayed); and

	(h)
	indebtedness
not otherwise referred to in paragraphs (a) to (g) above (inclusive) in an aggregate principal amount not exceeding $100,000 for the Group taken as a whole. 

"Permitted Hedging Transaction" means: 

	(a)
	the
Hedging Transactions entered into in accordance with the terms of the Hedging Policy Letter;

	(b)
	any
other foreign exchange transactions for spot or forward delivery entered into in the ordinary course of business (and not for investment or speculative purposes) to hedge currency
expenses incurred by the Group. 

"Permitted Security Interest" means: 

	(a)
	any
Security Interest listed in Schedule 8 (Existing Security) except to the extent the principal amount secured by those Security Interests exceeds the amount stated in that
Schedule;

	(b)
	any
netting or set-off arrangement entered into by any member of the Group either (i) in the ordinary course of its banking arrangements for the purpose of netting
debit and credit balances or (ii) by way of market standard terms in relation to Hedging Documents permitted by this Agreement and the Inter Creditor Deed;

	(c)
	any
lien arising by operation of law and in the ordinary course of business;

	(d)
	any
Security Interest over or affecting any asset acquired by a member of the Group after the date of this Agreement if:

	(A)
	the
Security Interest was not created in contemplation of the acquisition of that asset by a member of the Group;

	(B)
	the
principal amount secured has not been increased in contemplation of, or since, the acquisition of that asset by a member of the Group; and

	(C)
	the
Security Interest is removed or discharged within three months of the date of acquisition of such asset; 

16

 

	(e)
	any
Security Interest over or affecting any asset of any company which becomes a member of the Group after the date of this Agreement, where the Security Interest is created prior to
the date on which that company becomes a member of the Group, if:

	(A)
	the
Security Interest was not created in contemplation of the acquisition of that company;

	(B)
	the
principal amount secured has not increased in contemplation of or since the acquisition of that company; and

	(C)
	the
Security Interest is removed or discharged within three months of that company becoming a member of the Group;

	(f)
	any
Security Interest entered into pursuant to any Finance Document;

	(g)
	any
Security Interest arising out of the retention provisions in suppliers conditions of supply of goods acquired in the ordinary course of trading;

	(h)
	any
Security Interest over goods and documents of title thereto arising under documents credit transactions entered into in the ordinary course of trade and on terms customary in that
trade;

	(i)
	any
Security Interest entered into with the prior written consent of the Agent; and

	(j)
	any
Security Interest securing indebtedness the principal amount of which (when aggregated with the principal amount of any other indebtedness which has the benefit of any Security
Interest given by any member of the Group other than any permitted under paragraphs (a) to (i) above) does not exceed $100,000 (or its equivalent in another currency or currencies). 

"PMP" means a professional market party (professionele marktpartij) as defined in the Dutch Banking Act
Exemption Regulation, which includes, among others: 

	(a)
	any
person or entity who or which is subject to supervision by Netherlands Authority for the Financial Markets (Autoriteit Financiële
Markten) or the Dutch Central Bank (De Nederlandsche Bank) or by a supervisory authority in any other country to operate
lawfully on the financial markets;

	(b)
	persons
or entities otherwise engaged in regulated activities on the financial markets;

	(c)
	central
governments, central banks, regional and other decentralised governmental bodies, international treaty organisations and supranational organisations;

	(d)
	entities
meeting at least two of the following criteria according to their most recent consolidated or non-consolidated annual accounts: (i) an average of at least
250 employees during the financial year, (ii) total assets of at least EUR 43 million according to its balance sheet, and (iii) annual net turnover of at least EUR
50 million;

	(e)
	entities
with their registered office in The Netherlands which at their request to be considered as qualified investors (within the meaning of Directive 2003/71/EC) have been entered
in the register of qualified investors maintained by the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten);

	(f)
	natural
persons resident in The Netherlands meeting at least two of the following criteria who at their request to be considered as qualified investors have been entered in the
register of qualified investors: (i) they have carried out at least 10 sizeable transactions on the financial markets in each of the preceding four calendar quarters, (ii) the size of
their securities portfolio is at least EUR 500,000, and (iii) they have worked for at least a year in the financial sector in a position which requires knowledge of investment in securities;

	(g)
	entities
which sole corporate purpose is to invest in securities (e.g. hedge funds); 

17

 

	(h)
	entities
which have been specially incorporated to enter into transactions and acquire assets as referred to in Section 2:364 Dutch Civil Code for the purpose of security for
securities which have been or will be offered, to the extent such entities enter into such transactions;

	(i)
	enterprises
or institutions with total assets of at least EUR 500 million according to their balance sheet at the end of the year preceding the year in which they become a
Lender or participate in any Commitment to a Dutch Borrower hereunder;

	(j)
	enterprises,
institutions or natural persons with a net equity (eigen vermogen) of at least EUR 10 million as of the end of the
year preceding the year in which they become a Lender or participate in any Commitment to a Dutch Borrower hereunder, and who have been active on the financial markets on average at least twice per
month during the preceding two consecutive years;

	(k)
	subsidiaries
of enterprises or institutions referred to under a) to h) inclusive, hereinabove, the supervision of which is included in the consolidated supervision of
such enterprises or institutions; and

	(l)
	enterprises
or institutions which (i) are rated by a rating agency which is considered by the Dutch Central Bank having expert knowledge or (ii) offer securities rated
by a rating agency which is considered by the Dutch Central Bank having expert knowledge. 

"Presentation Pack" means the presentation document dated 23 September 2005 and subsequent submissions of information prepared by the Original
Investor and delivered to the Agent on or after 23 September 2005 up to the Restatement Date in relation to the matters covered by the presentation document (in each case save to the extent
superseded by such subsequent information). 

"Qualifying Lender" has the meaning given to it in Clause 16 (Tax gross up and indemnities). 

"Quotation Day" means, in relation to any period for which an interest rate is to be determined: 

	(a)
	(if
the currency is Sterling) the first day of that period;

	(b)
	(if
the currency is euro) two TARGET Days before the first day of that period; or

	(c)
	(for
any other currency) two Business Days before the first day of that period, 

unless
market practice differs in the Relevant Interbank Market for a currency, in which case the Quotation Day for that currency will be determined by the Agent in accordance with market practice in
the Relevant Interbank Market (and if quotations would normally be given by leading banks in the Relevant Interbank Market on more than one day, the Quotation Day will be the last of those days). 

"Reference Banks" means, in relation to LIBOR, EURIBOR and Mandatory Cost, the principal London offices of The Governor and Company of the Bank of
Scotland, The Royal Bank of Scotland plc and Barclays Bank plc or such other banks as may be appointed by the Agent in consultation with the Parent. 

"Relevant Interbank Market" means, in relation to euro, the European interbank market and, in relation to any other currency, the London interbank
market. 

"Repeating Representations" means each of the representations set out in Clauses 21 other than those set out in Clause 21.7 (Deduction of Tax),
21.9 (No Default), 21.10 (Original Financial Statements), 21.12 (Transaction Information), 21.13 (Base Case Model), 21.15 (Disclosure), 21.24 (Group Structure), 21.25 (Ownership of Parent) and 21.27
(Office of Chief Scientist and Approved Enterprise Status from the Investment Centre). 

18

 

"Reservations" means: 

	(a)
	the
principle that equitable remedies are remedies which may be granted or refused at the discretion of the court, limitations on enforcement by laws relating to bankruptcy,
insolvency, liquidation, reorganisation, court schemes, moratoria, administration, examination, court protection or other laws generally affecting the rights of creditors, the time-barring
of claims, the possibility that an undertaking to assume liability for or to indemnify a person against non-payment of stamp duty may be void, defences of set-off or counter
claim and similar principles; and

	(b)
	the
legal reservations set out in any legal opinion delivered to the Agent pursuant to this Agreement. 

"Resignation Letter" means a letter substantially in the form set out in Schedule 13 (Form of Resignation Letter). 

"Restatement Date" means the date on which the Second Supplemental Facility Agreement becomes effective. 

"Retention Bonuses" means bonus payments by the Company (or any other member of the Group) to certain executive officers of the Group Companies in terms
of letters from the Company to such executives. 

"Rollover Loan" means one or more Facility B Loans: 

	(a)
	made
or to be made on the same day that a maturing Facility B Loan is due to be repaid;

	(b)
	the
aggregate amount of which is equal to or less than the maturing Facility B Loan;

	(c)
	in
the same currency as the maturing Facility B Loan (unless it arose as a result of the operation of Clause 9.2 (Unavailability of a currency)); and

	(d)
	made
or to be made to the same Borrower for the purpose of refinancing a maturing Facility B Loan. 

"Sale" means a disposal (whether in a single transaction or a series of related transactions) of all or substantially all of the business and assets of
the Group. 

"Screen Rate" means: 

	(a)
	in
relation to LIBOR, the British Bankers Association Interest Settlement Rate for the relevant currency and period; and

	(b)
	in
relation to EURIBOR, the percentage rate per annum determined by the Banking Federation of the European Union for the relevant period, 

displayed
on the appropriate page of the Telerate screen. If the agreed page is replaced or service ceases to be available, the Agent may specify another page or service displaying the appropriate
rate after consultation with the Parent and the Lenders. 

"Second Subordinated Note Instrument" means the debenture agreement between the Parent and Dutchco dated 22 April 2004 constituting the Second
Subordinated Notes. 

"Second Subordinated Notes" means the $20,200,000 convertible subordinated debentures of the Parent (or the amount thereof which is outstanding) issued
pursuant to the Second Subordinated Note Instrument. 

"Second Supplemental Facility Agreement" means the second supplemental facility agreement dated on or around the Restatement Date between the Parent,
the Agent, the Lenders and others and expressed to be supplemental to this Agreement. 

19

 

"Security Documents" means each of the security documents and/or agreements referred to in Schedule 2 (Conditions Precedent), each of the
security documents and/or agreements referred to in Schedule 2 (Conditions Precedent) in the Supplemental Facility Agreement, each of the security documents and/or agreements referred to in
Schedule 2 (Conditions Precedent) in the Second Supplemental Facility Agreement, and all other documents creating, evidencing or granting security in favour of the Finance Parties (or any of
them) in respect of the obligations of the Obligors under the Finance Documents. 

"Security Interest" means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or
arrangement having a similar effect. 

"Security Period" means the period starting on the date of this Agreement and ending on the date on which all of the obligations and liabilities of the
members of the Group under each Finance Document are discharged in full and none of the Finance Parties has any continuing obligations in relation to the Facilities. 

"Selection Notice" means a notice substantially in the form set out in Part II of Schedule 3 (Requests) given in accordance with
Clause 13 (Interest Periods). 

"Service Contracts" means the service contract dated 3 February 1999 between the Company and Orit Leitman and the service contracts of each other
member of the Management Team with a member of the Group. 

"Specified Time" means a time determined in accordance with Schedule 10 (Timetables). 

"Sterling" and "£" means the lawful currency for the time being of the United Kingdom. 

"Subordinated Notes" means the First Subordinated Notes and the Second Subordinated Notes. 

"Subsidiary" means, in relation to any company or corporation, any company or corporation: 

	(a)
	which
is controlled, directly or indirectly, by the first-mentioned company or corporation; or

	(b)
	more
than half the issued share capital of which is beneficially owned, directly or indirectly, by the first mentioned company or corporation; or

	(c)
	which
is the subsidiary of another subsidiary of the first mentioned company or corporation, 

and
for these purposes, a company or corporation shall be treated as being controlled by another if that other company or corporation is able to direct its affairs and/or to control the composition of
its board of directors or equivalent body. 

"Supplemental Facility Agreement" means the supplemental facility agreement dated 24 November 2004 between the Parent, the Agent, the Lenders and
others and expressed to be supplemental to this Agreement. 

20

 

"Surplus Cash" means, in relation to any period of 12 months preceding the date to which any calculation is to be made, the amount by which
Cashflow as shown in the latest Annual Accounts of the Group exceeds 125% of Total Funding Costs as shown in such accounts (provided that for this purpose (a) any Net Proceeds applied in
accordance with the terms of this Agreement will be deducted from Cashflow (to the extent included therein), (b) any voluntary prepayments in terms of Clause 11.3 (Voluntary Prepayment
of Facility A Loan) will be deducted from Cashflow (to the extent included therein) to the extent applied in accordance with the terms of this Agreement, (c) any proceeds of making a claim
under any policy of insurance applied in accordance with this Agreement will be deducted from Cashflow (to the extent included therein), (d) any proceeds of a Listing applied in accordance with
this Agreement will be deducted from Cashflow (to the extent included therein), (e) any proceeds of any equity investment in the Parent (made in accordance with the terms of this Agreement),
Dutchco, the Dutch Foundations, the Original Investors, Caymanco or Luxco (to the extent that each such equity investment is invested by Dutchco, the Dutch Foundations, the Original Investors,
Caymanco or Luxco (as appropriate) in the Parent) will be deducted from Cashflow (to the extent included therein) and (f) the amount of Surplus Cash for any financial year will be deemed to be
nil unless Cashflow is in excess of 125% of Total Funding Costs. 

"Syndication Date" means the date (as determined by the Arranger and notified to the Parent) on which primary syndication of the Facilities has been
completed or, if earlier, the date falling 9 months after the 24 November 2004. 

"Tangible Net Worth" means on any date the aggregate of:- 

	(a)
	the
amount paid up or credited as paid up on the issued share capital of the Parent on such date;

	(b)
	the
amount standing to the credit or debit of the consolidated capital and revenue reserves of the Group on such date; and

	(c)
	the
principal amount of the Subordinated Notes outstanding on such date. 

"TARGET" means Trans-European Automated Real-time Gross Settlement Express Transfer payment system. 

"TARGET Day" means any day on which TARGET is open for the settlement of payments in euro. 

"Tax" or "Taxes" means any tax, levy, impost, duty or other charge or withholding of a similar nature
(including any indexation, penalty or interest payable in connection with any failure to pay or any delay in paying any of the same). 

"Taxes Act" means the Income and Corporation Taxes Act 1988. 

"Termination Date" means: 

	(a)
	in
relation to Facility A, 31 December 2011;

	(b)
	in
relation to Facility B, 31 December 2011. 

"Test Date" means (in the case of Clause 23.1(a) and Clause 23.1(b)) 31 March, 30 June, 30 September and 31 December in each year,
commencing 31 March 2006 in the case of Clause 23.1(a) and 31 December 2006 in the case of Clause 23.1(b) and (in the case of Clause 23.1(c)) 31 December in each
year, commencing 31 December 2006. 

"Test Period" means a period of 4 Accounting Periods ending on a Test Date. 

21

 

"Total Commitments" means the aggregate of the Total Facility A Commitments and the Total Facility B Commitments being $77,750,000 at the date of the
Second Supplemental Facility Agreement. 

"Total Facility A Commitments" means the aggregate of the Facility A Commitments, being $60,500,000 at the date of the Second Supplemental Facility
Agreement. 

"Total Facility B Commitments" means the aggregate of the Facility B Commitments, being $17,250,000 at the date of the Second Supplemental Facility
Agreement. 

"Total Funding Costs" means, in relation to any period, the aggregate of: 

	(a)
	Total
Net Debt Costs for that period;

	(b)
	all
scheduled repayments of the Loans falling due during that period (excluding any voluntary prepayments and any amounts falling due under Facility B or under any overdraft facility
available under or pursuant to any Ancillary Facility and which was (in any such case) available for simultaneous re-drawing in accordance with the terms of the relevant facility); and

	(c)
	the
amount of any dividend or other distribution made by the Parent in such period. 

"Total Net Debt" means (without double counting) the aggregate of: 

	(a)
	that
part of the Financial Indebtedness of members of the Group which relates to obligations for the payment or repayment of money in respect of principal incurred in respect of
(i) moneys borrowed or raised, (ii) any bond, note, loan stock, debenture or similar instrument, or (iii) any acceptance credit, bill discounting, note purchase, factoring or
documentary credit facility (including, for the avoidance of doubt, any indebtedness under this Agreement but excluding all amounts of principal and interest outstanding under the Subordinated Notes
and any amounts outstanding under any Ancillary Facilities); and

	(b)
	the
capital element of all rentals or, as the case may be, other payments payable under any Finance Lease entered into by any members of the Group; 

less
all cash at bank and cash in hand of the members of the Group. 

"Total Net Debt Costs" means, in relation to any period, the aggregate of (a) all interest, commission, periodic fees and other financing charges
payable by the members of the Group during that period (including the interest element payable under any Finance Lease) and (b) all interest payable in cash on the Subordinated Notes accruing
during that period (but excluding, for the avoidance of doubt, any interest discharged from a Utilisation of Facility A in accordance with this Agreement) less any interest receivable in respect of
cash balances, less any sums receivable or plus any sums payable by any Group Company under any interest rate protection agreement of whatever description during that period, and, for the avoidance of
doubt, excluding (a) any fees and commissions paid in relation to the acquisition of the Company, (b) any amounts amortised on finance costs and issue costs arising from the acquisition
of the Company and (c) any amounts amortised on finance costs arising from the Finance Documents (including, without limitation, all legal and other professional fees). 

"Total Refinancing Bond Issue" means the issue of high yield bonds by a company of which the Parent is a wholly owned Subsidiary or which is a member of
the Group which are issued in circumstances in which the bonds do not constitute a secured liability of any member of the Group. 

"Total Revenues" shall have the meaning attributed to that term by GAAP (but shall exclude intra Group revenues). 

22

 

"Transaction Documents" means the Equity Documents and the Finance Documents. 

"Transfer Certificate" means a certificate substantially in the form set out in Schedule 6 (Form of Transfer Certificate) or any other form
agreed between the Agent and the Parent. 

"Transfer Date" means, in relation to a transfer, the later of: 

	(a)
	the
proposed Transfer Date specified in the Transfer Certificate; and

	(b)
	the
date on which the Agent executes the Transfer Certificate. 

"Unpaid Sum" means any sum due and payable but unpaid by an Obligor under the Finance Documents. 

"Utilisation" means a Loan or a Letter of Credit. 

"Utilisation Date" means the date on which a Utilisation is made. 

"Utilisation Request" means a notice substantially in one of the forms set out in Part I of Schedule 3 (Requests). 

"VAT" means value added tax as provided for in the Value Added Tax Act 1994 and any other tax of a similar nature in any other jurisdiction. 

 
 

1.2.  Construction        

	(a)
	Unless
a contrary indication appears, any reference in this Agreement to:

	(i)
	the
"Agent", the "Arranger", the "Security
Trustee", any "Finance Party", any "Lender", any
"Obligor" or any "Party" shall be construed so as to include its successors in title, permitted assigns
and permitted transferees;

	(ii)
	a
document being in the "agreed form" means in a form agreed between the Parent and the Agent;

	(iii)
	"assets" includes present and future properties, revenues and rights of every description;

	(iv)
	the
"European interbank market" means the interbank market for euro operating in Participating Member States;

	(v)
	a
"Finance Document" or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as
amended, restated, supplemented or novated;

	(vi)
	"indebtedness" includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether
present or future, actual or contingent;

	(vii)
	a
"person" includes any person, firm, company, corporation, government, state or agency of a state or any association, trust or
partnership (whether or not having separate legal personality) of two or more of the foregoing;

	(viii)
	a
"regulation" includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but,
if not having the force of law, being of a type with which any person to which it applies is accustomed to comply) of any governmental, intergovernmental or supranational body, agency, department or
regulatory, self-regulatory or other authority or organisation;

	(ix)
	a
provision of law is a reference to that provision as amended or re-enacted;

	(x)
	a
time of day is a reference to London time; and 

23

 

	(xi)
	a
Section, Clause or Schedule is to a section or clause of, or schedule to, this Agreement.

	(b)
	Section,
Clause and Schedule headings are for ease of reference only.

	(c)
	Unless
a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that
Finance Document or notice as in this Agreement.

	(d)
	A
Default (other than an Event of Default) is "continuing" if it has not been remedied or waived and an Event of Default is
"continuing" if it has not been waived.

	(e)
	Where
there is any reference in this Agreement to any amount or limit specified in Dollars, in ascertaining whether or not that amount or limit has been attained, breached or achieved
(as the case may be) an amount not denominated in Dollars shall be counted on the basis of the equivalent in Dollars of that amount at the relevant date using the Agent's Spot Rate of Exchange. 

 
 

1.3.  Third party rights        

	(a)
	Unless
expressly provided to the contrary in a Finance Document, a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the
"Third Parties Act") or any other applicable law to enforce or to enjoy the benefit of any term of this Agreement.

	(b)
	Notwithstanding
any terms of any Finance Document, the consent of any person who is not a Party is not required to rescind or vary this Agreement at any time. 

24

  

 
 

SECTION 2
  
    THE FACILITIES    
    

 
 

2.     THE FACILITIES         

 
 

2.1.  The Facilities        

Subject
to the terms of this Agreement, the Lenders make available: 

	(a)
	to
the Parent, a Dollar term loan facility in an aggregate amount equal to the Total Facility A Commitments; and

	(b)
	to
the Borrowers, a multicurrency revolving credit facility in an aggregate amount equal to the Total Facility B Commitments. 

 
 

2.2.  Finance Parties' rights and obligations        

	(a)
	The
obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the
obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.

	(b)
	The
rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance
Party from an Obligor shall be a separate and independent debt.

	(c)
	A
Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents. 

 
 

2.3.  Ancillary Facilities        

Subject
to the terms of this Agreement, provision may be made for the establishment of Ancillary Facilities in place of all or any part of the Total Facility B Commitments. 

 
 

2.4.  Amount of Facilities        

Subject
to the Inter Creditor Deed, the amount of the Facilities (or any of them) may be increased or reduced at any time with the agreement of each Party to this Agreement. Any such increase or
reduction will be documented by way of an agreement which is supplemental to this Agreement. 

 
 

3.     PURPOSE         

3.1.  Purpose

	(a)
	The
Parent shall apply all amounts borrowed by it under Facility A towards the refinancing of existing indebtedness and (i) the payment of interest and/or repayment of
principal on or after the Restatement Date of the First Subordinated Notes (ii) a repayment of share premium on the shares in the Parent in accordance with and subject to the rules,
requirements and restrictions under or pursuant to Dutch corporate law and/or (iii) a repurchase by the Parent of new shares in its capital that the Parent will issue to Dutch Foundation 2 and
Dutch Foundation 3 out of its share premium in accordance with and subject to the rules, requirements and restrictions under or pursuant to Dutch corporate law on or after the Restatement Date and
(iv) the payment of all costs and expenses in relation thereto in accordance with, in each case, the Funds Flow Statement (and, in connection with the Agent grants any necessary consents for
the purposes of the Finance Documents) and provided that the aggregate of (i), (ii) and (iii) shall not exceed $35,000,000. 

25

 

	(b)
	The
Borrowers shall apply all amounts borrowed by them under Facility B (or under any Ancillary Facility) towards the working capital purposes of the Group but, for the avoidance of
doubt, shall not apply any amounts borrowed by them under Facility B (or under any Ancillary Facility) towards the purposes referred to in paragraph (a) above. 

 
 

3.2.  Monitoring        

No
Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement. 

 
 

4.     CONDITIONS OF UTILISATION         

 
 

4.1.  Initial conditions precedent        

Deleted. 

 
 

4.2.  Further conditions precedent        

The
Lenders will only be obliged to comply with Clause 5.4 (Lenders' participation) if on the date of the Utilisation Request and on the proposed Utilisation Date: 

	(i)
	in
the case of a Rollover Loan, no Event of Default is continuing or would result from the proposed Loan and, in the case of any other Loan, no Default is continuing or would result
from the proposed Loan; and

	(ii)
	the
Repeating Representations to be made by each Borrower are true in all material respects. 

 
 

4.3.  Conditions relating to Optional Currencies        

	(a)
	A
currency will constitute an Optional Currency in relation to a Facility B Utilisation if:

	(i)
	it
is readily available in the amount required and freely convertible into the Base Currency in the Relevant Interbank Market on the Quotation Day and the Utilisation Date for that
Utilisation; and

	(ii)
	it
is Sterling or euros or has been approved by the Agent (acting on the instructions of all the Lenders) on or prior to receipt by the Agent of the relevant Utilisation Request or
Selection Notice for that Utilisation.

	(b)
	If
by the Specified Time the Agent has received a written request from the Parent for a currency to be approved under paragraph (a)(ii) above, the Agent will confirm to
the Parent by the Specified Time:

	(i)
	whether
or not the Lenders have granted their approval; and

	(ii)
	if
approval has been granted, the minimum amount (and, if required, integral multiples) for any subsequent Utilisation in that currency.

	(c)
	If
the euro constitutes an Optional Currency at any time and the Parent has specified in a Utilisation Request that the euro is the currency of the proposed Utilisation, that
Utilisation will only be made available in the euro unit. 

 
 

4.4.  Maximum number of Utilisations        

	(a)
	No
Borrower may deliver a Utilisation Request if as a result of the proposed Utilisation:

	(i)
	more
than one Facility A Loan would be outstanding; or

	(ii)
	twenty
or more Facility B Utilisations would be outstanding. 

26

 

	(b)
	The
Parent may not request that the Facility A Loan be divided.

	(c)
	Any
Loan made by a single Lender under Clause 9.2 (Unavailability of currency) shall not be taken into account in this Clause 4.4. 

 
 

4.5.  Limitations on Utilisation        

	(a)
	The
Parent acknowledges and agrees that Paradigm Geophysical LLC may only utilise Facility 13 and the Ancillary Facility in order to request the issue of a Letter of Credit for
$250,000 (or such other amount as the Agent may agree) in favour of RaiffeisenBank Austria, Moscow.

	(b)
	Only
the Parent may borrow under Facility A.

	(c)
	Notwithstanding
any other provision of this Agreement, the Borrowers acknowledge and agree that the aggregate amount of the Loans made and Letters of Credit issued under Facility B
will not exceed $10,000,000 at any time without the prior written consent of the Lenders. 

27

  

 
 

SECTION 3    
    
    UTILISATION    
    

 
 

5.     UTILISATION—LOANS         

 
 

5.1.  Delivery of a Utilisation Request        

The
relevant Borrower may utilise a Facility by way of Loan by delivery to the Agent of a duly completed Utilisation Request not later than the Specified Time. 

 
 

5.2.  Completion of a Utilisation Request        

	(a)
	Each
Utilisation Request for a Loan is irrevocable and will not be regarded as having been duly completed unless:

	(i)
	it
identifies the Facility to be utilised;

	(ii)
	the
proposed Utilisation Date is a Business Day within the Availability Period applicable to that Facility;

	(iii)
	the
currency and amount of the Utilisation comply with Clause 5.3 (Currency and amount); and

	(iv)
	the
proposed Interest Period complies with Clause 13 (Interest Periods).

	(b)
	Only
one Loan may be requested in each Utilisation Request. 

 
 

5.3.  Currency and amount        

	(a)
	The
currency specified in a Utilisation Request must be the Base Currency or, in the case of a Facility B Loan, an Optional Currency.

	(b)
	The
amount of the proposed Loan must be:

	(i)
	a
minimum amount (and integral multiple) of $100,000 in the case of Facility B Loan in the Base Currency or in any case, if less, the Available Facility; or

	(ii)
	if
the currency selected is an Optional Currency under Facility B, the minimum amount (and, if required, integral multiple) specified by the Agent pursuant to
paragraph (b)(ii) of Clause 4.3 (Conditions relating to Optional Currencies) or, if less, the Available Facility; and

	(iii)
	in
any event such that its Base Currency Amount is less than or equal to the Available Facility.

	(c)
	No
Facility B Loan may be requested until Facility A has been fully drawn in terms of Clause 5.3(b)(i) above. 

 
 

5.4.  Lenders' participation        

	(a)
	If
the conditions set out in this Agreement have been met, each Lender shall make its participation in each Loan available by the Utilisation Date through its Facility Office.

	(b)
	The
amount of each Lender's participation in each Loan will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to making the
Loan. 

28

 

	(c)
	The
Agent shall determine the Base Currency Amount of each Loan which is to be made in an Optional Currency and shall notify each Lender of the amount, currency and the Base Currency
Amount of each Loan and the amount of its participation in that Loan, in each case by the Specified Time. 

 
 

6.     UTILISATION—LETTERS OF CREDIT         

 
 

6.1.  General        

	(a)
	In
this Clause 6 and Clause 7 (Letters of Credit):

	(i)
	"Expiry
Date" means, for a Letter of Credit, the last day of its Term;

	(ii)
	"L/C
Proportion" means, in relation to a Lender in respect of any Letter of Credit, the proportion (expressed as a percentage) borne by that Lender's Available Commitment to the
Available Facility immediately prior to the issue of that Letter of Credit, adjusted to reflect any assignment or transfer under this Agreement to or by that Lender;

	(iii)
	"Renewal
Request" means a written notice delivered to the Agent in accordance with Clause 6.7 (Renewal of a Letter of Credit); and

	(iv)
	"Term"
means each period determined under this Agreement for which the Issuing Bank is under a liability under a Letter of Credit.

	(b)
	Any
reference in this Agreement to:

	(i)
	a
"Finance Party" includes the Issuing Bank;

	(ii)
	the
Interest Period of a Letter of Credit will be construed as a reference to the Term of that Letter of Credit;

	(iii)
	an
amount borrowed includes any amount utilised by way of Letter of Credit;

	(iv)
	a
Utilisation made or to be made to a Borrower includes a Letter of Credit issued on its behalf;

	(v)
	a
Lender funding its participation in a Utilisation includes a Lender participating in a Letter of Credit;

	(vi)
	amounts
outstanding under this Agreement include amounts outstanding under any Letter of Credit;

	(vii)
	an
outstanding amount of a Letter of Credit at any time is the maximum amount that is or may be payable by the Borrower in respect of that Letter of Credit at that time;

	(viii)
	a
Borrower "repaying" or "prepaying" a Letter of Credit means:

	(A)
	that
Borrower providing cash cover for that Letter of Credit;

	(B)
	the
maximum amount payable under the Letter of Credit being reduced in accordance with its terms; or

	(C)
	the
Issuing Bank being satisfied that it has no further liability under that Letter of Credit, 

and
the amount by which a Letter of Credit is repaid or prepaid under sub-paragraphs (viii)(A) and (viii)(B) above is the amount of the relevant cash cover or reduction; and 

	(ix)
	a
Borrower providing "cash cover" for a Letter of Credit means the Borrower or (with the prior written consent of the Issuing Bank) any other member of the Group paying an amount in
the currency of the Letter of Credit to an interest bearing account (bearing 

29

 

interest
at the rate offered by the Agent to corporate customers generally for comparable amounts held by it on like terms) in the name of the Borrower and the following conditions are met 

	(A)
	the
account is with the Agent (if the cash cover is to be provided for all the Lenders) or with a Lender (if the cash cover is to be provided for that Lender);

	(B)
	withdrawals
from the account may only be made to pay a Finance Party amounts due and payable to it under this Agreement in respect of that Letter of Credit until no amount is or may
be outstanding under that Letter of Credit; and

	(C)
	the
Borrower has executed a security document over that account, in form and substance satisfactory to the Agent or the Finance Party with which that account is held, creating a first
ranking security interest over that account. 

	(c)
	Clause 5
(Utilisation—Loans) does not apply to a Utilisation by way of Letter of Credit. 

 
 

6.2.  Facility B        

Facility
B may be utilised by way of Letters of Credit. 

 
 

6.3.  Delivery of a Utilisation Request for Letters of Credit        

A
Borrower may request a Letter of Credit to be issued by delivery to the Agent of a duly completed Utilisation Request in the form of Part 1B of Schedule 3 (Utilisation
Request—Letters of Credit) not later than the Specified Time. 

 
 

6.4.  Completion of a Utilisation Request for Letters of Credit        

Each
Utilisation Request for a Letter of Credit is irrevocable and will not be regarded as having been duly completed unless: 

	(a)
	it
specifies that it is for a Letter of Credit;

	(b)
	the
proposed Utilisation Date is a Business Day within the Availability Period;

	(c)
	the
currency and amount of the Letter of Credit comply with Clause 6.5 (Currency and amount);

	(d)
	the
form of Letter of Credit is attached;

	(e)
	the
Expiry Date of the Letter of Credit falls on or before the Termination Date;

	(f)
	the
delivery instructions for the Letter of Credit are specified; and

	(g)
	the
identity of the beneficiary of the Letter of Credit is specified. 

 
 

6.5.  Currency and amount        

	(a)
	The
currency specified in a Utilisation Request must be the Base Currency or an Optional Currency.

	(b)
	The
amount of the proposed Letter of Credit must be an amount whose Base Currency Amount is not more than the Available Facility and which is:

	(i)
	if
the currency selected is the Base Currency, a minimum of $100,000 or, if less, the Available Facility; or 

30

 

	(ii)
	if
the currency selected is an Optional Currency, the minimum amount (and if required, integral multiple) specified by the Agent pursuant to paragraph (b)(ii) of
Clause 4.3 (Conditions relating to Optional Currencies) or, if less, the Available Facility. 

	(c)
	The
aggregate Base Currency Amount of Letters of Credit must not at any time exceed the Total Facility B Commitments less the aggregate of the Ancillary Commitments and the Base
Currency Amount of the Facility B Loans. 

 
  6.6.  Issue of Letters of Credit        

	(a)
	If
the conditions set out in this Agreement have been met, the Issuing Bank shall issue the Letter of Credit on the Utilisation Date.

	(b)
	The
Issuing Bank will only be obliged to comply with paragraph (a) above if on the date of the Utilisation Request or Renewal Request and on the proposed Utilisation Date:

	(i)
	in
the case of a Letter of Credit renewed in accordance with Clause 6.7 (Renewal of a Letter of Credit), no Event of Default is continuing or would result from the proposed
Utilisation and, in the case of any other Utilisation, no Default is continuing or would result from the proposed Utilisation; and

	(ii)
	the
Repeating Representations to be made by each Borrower are true in all material respects.

	(c)
	The
amount of each Lender's participation in each Letter of Credit will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to the
issue of the Letter of Credit.

	(d)
	The
Agent shall determine the Base Currency Amount of each Letter of Credit which is to be issued in an Optional Currency and shall notify the Issuing Bank and each Lender of the
details of the requested Letter of Credit and its participation in that Letter of Credit by the Specified Time. 

 
 

6.7.  Renewal of a Letter of Credit        

	(a)
	A
Borrower may request any Letter of Credit issued on its behalf be renewed by delivery to the Agent of a Renewal Request by the Specified Time.

	(b)
	The
Finance Parties shall treat any Renewal Request in the same way as a Utilisation Request for a Letter of Credit except that the conditions set out in paragraphs (d) and
(g) of Clause 6.4 (Completion of a Utilisation Request for Letters of Credit) shall not apply.

	(c)
	The
terms of each renewed Letter of Credit shall be the same as those of the relevant Letter of Credit immediately prior to its renewal, except that

	(i)
	its
amount may be less than the amount of the Letter of Credit immediately prior to its renewal; and

	(ii)
	its
Term shall start on the date which was the Expiry Date of the Letter of Credit immediately prior to its renewal, and shall end on the proposed Expiry Date specified in the
Renewal Request.

	(d)
	If
the conditions set out in this Agreement have been met, the Issuing Bank shall amend and re-issue any Letter of Credit pursuant to a Renewal Request. 

 
 

6.8.  Revaluation of Letters of Credit        

	(a)
	If
any Letter of Credit is denominated in an Optional Currency, the Agent shall at three monthly intervals after the date of this Agreement, recalculate the Base Currency Amount of 

31

 

that
Letter of Credit by notionally converting into the Base Currency the outstanding amount of that Letter of Credit on the basis of the Agent's Spot Rate of Exchange on the date of calculation. 

	(b)
	A
Borrower shall, if requested by the Agent within 14 days of any calculation under paragraph (a) above, ensure that within three Business Days sufficient Facility B
Utilisations are prepaid to prevent the Base Currency Amount of the Facility B Utilisation exceeding the Total Facility B Commitments following any adjustment to a Base Currency Amount under
paragraph (a) above. 

 
 

7.     LETTERS OF CREDIT         

 
 

7.1.  Immediately payable        

If
a Letter of Credit or any amount outstanding under a Letter of Credit is expressed to be immediately payable, the Borrower that requested the issue of that Letter of Credit shall repay or prepay
that amount immediately. 

 
 

7.2.  Assignments and transfers        

If
the conditions and procedure for transfer specified in Clause 26 (Changes to the Lenders) are satisfied, then on the Transfer Date the Issuing Bank and the New Lender shall acquire the same
obligations between themselves as they would have acquired and assumed had the New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the
transfer and to that extent the Issuing Bank and the Existing Lender shall each be released from further obligations to each other under this Agreement. 

 
 

7.3.  Fee payable in respect of Letters of Credit        

	(a)
	Each
Borrower shall pay to the Issuing Bank a fronting fee in respect of each Letter of Credit requested by it in the amount and at the times agreed in the letter dated on or about
the date of this Agreement between the Issuing Bank and the Parent. A reference in this Agreement to a Fee Letter shall include the letter referred to in this paragraph.

	(b)
	Each
Borrower shall pay to the Agent (for the account of each Lender) a letter of credit fee in the Base Currency computed at the rate per annum equal to the Margin (in respect of
Facility B) on the outstanding amount of each Letter of Credit requested by it for the period from the issue of that Letter of Credit until its Expiry Date. This fee shall be distributed
according to each Lender's L/C Proportion of that Letter of Credit.

	(c)
	The
accrued letter of credit fee on a Letter of Credit shall be payable on the last day of each successive period of three months on such dates as the Issuing Bank notifies to the
Parent from time to time. Accrued letter of credit fee is also payable to the Agent on the cancelled amount of any Lender's Facility B Commitment at the time the cancellation is effective if that
Commitment is cancelled in full and the Letters of Credit prepaid or repaid in full. 

 
 

7.4.  Claims under a Letter of Credit        

	(a)
	Each
Borrower irrevocably and unconditionally authorises the Issuing Bank to pay any claim made or purported to be made under a Letter of Credit requested by it and which appears on
its face to be in order (a "claim").

	(b)
	Each
Borrower shall immediately on demand pay to the Agent for the Issuing Bank an amount equal to the amount of any claim. 

32

 

	(c)
	Each
Borrower acknowledges that the Issuing Bank:

	(i)
	is
not obliged to carry out any investigation or seek any confirmation from any other person before paying a claim; and

	(ii)
	deals
in documents only and will not be concerned with the legality of a claim or any underlying transaction or any available set-off, counterclaim or other defence of
any person.

	(d)
	The
obligations of a Borrower under this Clause will not be affected by:

	(i)
	the
sufficiency, accuracy or genuineness of any claim or any other document; or

	(ii)
	any
incapacity of, or limitation on the powers of, any person signing a claim or other document. 

 
 

7.5.  Indemnities        

	(a)
	Each
Borrower shall immediately on demand indemnify the Issuing Bank against any cost, loss or liability incurred by the Issuing Bank (otherwise than by reason of the Issuing Bank's
gross negligence or wilful misconduct) in acting as the Issuing Bank under any Letter of Credit requested by that Borrower.

	(b)
	Each
Lender shall (according to its L/C Proportion) immediately on demand indemnify the Issuing Bank against any cost, loss or liability incurred by the Issuing Bank (otherwise than
by reason of the Issuing Bank's gross negligence or wilful misconduct) in acting as the Issuing Bank under any Letter of Credit (unless the Issuing Bank has been reimbursed by an Obligor pursuant to a
Finance Document).

	(c)
	If
any Lender is not permitted (by its constitutional documents or any applicable law) to comply with paragraph (b) above), then that Lender will not be obliged to comply with
paragraph (b) and shall instead be deemed to have taken, on the date the Letter of Credit is issued (or if later, on the date the Lender's participation in the Letter of Credit is transferred
or assigned to the Lender in accordance with the terms of this Agreement), an undivided interest and participation in the Letter of Credit in an amount equal to its L/C Proportion of that Letter of
Credit. On receipt of a demand from the Agent, that Lender shall pay to the Agent (for the account of the Issuing Bank) an amount equal to its L/C Proportion of the amount demanded under
paragraph (b) above.

	(d)
	The
Borrower which requested a Letter of Credit shall immediately on demand reimburse any Lender for any payment it makes to the Issuing Bank under this Clause 7.5
(Indemnities) in respect of that Letter of Credit.

	(e)
	The
obligations of each Lender under this Clause are continuing obligations and will extend to the ultimate balance of sums payable by that Lender in respect of any Letter of Credit,
regardless of any intermediate payment or discharge in whole or in part.

	(f)
	The
obligations of any Lender under this Clause will not be affected by any act, omission, matter or thing which, but for this Clause, would reduce, release or prejudice any of its
obligations under this Clause (without limitation and whether or not known to it or any other person) including:

	(i)
	any
time, waiver or consent granted to, or composition with, any Obligor, any beneficiary under a Letter of Credit or other person;

	(ii)
	the
release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor or any member of the Group; 

33

 

	(iii)
	the
taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any
Obligor, any beneficiary under a Letter of Credit or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument
or any failure to realise the full value of any security;

	(iv)
	any
incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor, any beneficiary under a Letter of Credit or any
other person;

	(v)
	any
amendment (however fundamental) or replacement of a Finance Document, any Letter of Credit or any other document or security;

	(vi)
	any
unenforceability, illegality or invalidity of any obligation of any person under any Finance Document, any Letter of Credit or any other document or security; or

	(vii)
	any
insolvency or similar proceedings. 

 
 

7.6.  Rights of contribution        

No
Obligor will be entitled to any right of contribution or indemnity from any Finance Party in respect of any payment it may make under this Clause 7. 

 
 

7.7.  Role of the Issuing Bank        

	(a)
	Nothing
in this Agreement constitutes the Issuing Bank as a trustee or fiduciary of any other person.

	(b)
	The
Issuing Bank shall not be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account.

	(c)
	The
Issuing Bank may accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of the Group.

	(d)
	The
Issuing Bank may rely on:

	(i)
	any
representation, notice or document believed by it to be genuine, correct and appropriately authorised; and

	(ii)
	any
statement made by a director, authorised signatory or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power
to verify.

	(e)
	The
Issuing Bank may engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts.

	(f)
	The
Issuing Bank may act in relation to the Finance Documents through its personnel and agents.

	(g)
	The
Issuing Bank is not responsible for:

	(i)
	the
adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Issuing Bank, the Agent, the Arranger, an Obligor, the Security Trustee or any
other person given in or in connection with any Finance Document; or

	(ii)
	the
legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement, arrangement or document entered into, made or executed in
anticipation of or in connection with any Finance Document. 

34

 

7.8.  Exclusion of liability

	(a)
	Without
limiting paragraph (b) below, the Issuing Bank will not be liable for any action taken by it under or in connection with any Finance Document, unless directly caused by
its gross negligence or wilful misconduct.

	(b)
	No
Party (other than the Issuing Bank) may take any proceedings against any officer, employee or agent of the Issuing Bank in respect of any claim it might have against the Issuing
Bank or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document and any officer, employee or agent of the Issuing Bank may rely on this
Clause subject to Clause 1.3 (Third Party Rights) and the provisions of the Third Parties Act (as defined in Clause 1.3(a)). 

7.9.  Credit appraisal by the Lenders

Without
affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms to the Issuing Bank that it has been,
and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document, including but not limited
to, those listed in paragraphs (a) to (d) of Clause 28.15 (Credit appraisal by the Lenders). 

7.10. Address for notices

The
address, fax number and telex number (and the department or officer, if any, for whose attention the communication is to be made) of the Issuing Bank for any communication or document to be made
or delivered under or in connection with the Finance Documents is that notified in writing to the Agent prior to the date of this Agreement or any substitute address, fax number, telex number or
department or officer as the Issuing Bank may notify to the Agent by not less than five Business Days' notice. 

7.11. Amendments and Waivers

Notwithstanding
any other provision of this Agreement, an amendment or waiver which relates to the rights or obligations of the Issuing Bank may not be effected without the consent of the Issuing
Bank. 

 
 

8.     ANCILLARY FACILITIES         

8.1.  Availability

	(a)
	Subject
to the terms of this Agreement, the Parent and a Lender may agree that that Lender may provide an Ancillary Facility on a bilateral basis to a Borrower incorporated in any
part of the United Kingdom or the Parent or the Company to the extent such Ancillary Facilities are utilised within the United Kingdom (or, subject to paragraph (a) of Clause 4.5
(Limitations on Utilisation), Paradigm Geophysical LLC or as the Agent may otherwise agree) in place of all or part of that Lender's Facility B Commitment. The aggregate Ancillary Commitments of the
Lenders shall not at any time exceed $10,250,000 (or its equivalent in other currencies). 

35

 

	(b)
	No
Ancillary Facility may be made available unless the Agent has first received from the Parent:

	(i)
	a
notice in writing requesting the establishment of an Ancillary Facility by conversion of any Lender's undrawn Facility B Commitment (or any part thereof) into an Ancillary
Commitment specifying:

	(A)
	the
members of the Group (being Borrowers incorporated in any part of the United Kingdom, the Parent or the Company to the extent such Ancillary Facilities are utilised within the
United Kingdom or, subject to paragraph (a) of Clause 4.5 (Limitations on Utilisation), Paradigm Geophysical LLC) which may use the Ancillary Facility;

	(B)
	the
commencement and expiry dates of the Ancillary Facility;

	(C)
	the
type of Ancillary Facility being provided;

	(D)
	the
identity of the Ancillary Lender; and

	(E)
	the
applicable Ancillary Commitment;

	(ii)
	a
copy of the relevant Ancillary Facility Document; and

	(iii)
	any
other information which the Agent may reasonably require in connection with the Ancillary Facility.

	(c)
	Subject
to compliance with paragraph (b) above, then:

	(i)
	the
Lender concerned shall become an Ancillary Lender; and

	(ii)
	the
Ancillary Facility will be available to the relevant Borrowers, with effect from the date agreed by the Parent and the Ancillary Lender.

	(d)
	The
Agent must promptly notify the other Lenders of the matters referred to in paragraph (b) above.

	(e)
	No
amendment or waiver of a term of an Ancillary Facility shall require the consent of any Finance Party other than the relevant Ancillary Lender unless such amendment or waiver
itself relates to or gives rise to a matter which would require an amendment or waiver of or under any other Finance Document (including for the avoidance of doubt under this provision) in which case
the provisions of the relevant Finance Document with regard to amendments and waivers will apply. 

 
 

8.2.  Terms of Ancillary Facilities        

	(a)
	Except
as provided below, the terms of an Ancillary Facility will be those agreed by the Ancillary Lender and the Parent.

	(b)
	The
terms of any Ancillary Facility:

	(i)
	must
be based on normal commercial terms at that time;

	(ii)
	must
only allow the Ancillary Facility to be used by (subject to Clause 8.1(b)(i)(A)) Borrowers;

	(iii)
	must
not allow the Ancillary Outstandings to exceed the Ancillary Commitments;

	(iv)
	must
not allow the Ancillary Commitment of a Lender to exceed the Facility B Commitment of that Lender (before reduction on account of the Ancillary Commitment); and 

36

 

	(v)
	must
ensure that the Ancillary Commitment is reduced to nil, and that all Ancillary Outstandings are repaid or the subject of cash cover in full, not later than the Termination Date
in relation to Facility B. 

	(c)
	In
the event of any conflict between the terms of an Ancillary Facility Document and any of the other Finance Documents, the terms of the relevant other Finance Document shall
prevail. 

 
 

8.3.  Facility B Commitment        

An
Ancillary Lender's Facility B Commitment at any time shall be reduced by the amount of its Ancillary Commitment in force at that time and increased by the amount of its Ancillary Commitment
cancelled from time to time. 

 
 

8.4.  Refinancing of Ancillary Facility        

	(a)
	Save
to the extent specified to the contrary in any Ancillary Facility Document, no Ancillary Lender may demand repayment or prepayment of any amounts or demand cash cover for any
liabilities made available or incurred by it under an Ancillary Facility unless:

	(i)
	the
Total Facility B Commitments have been cancelled in full or the Agent has declared all outstanding Utilisations under Facility B immediately due and payable in accordance with the
terms of this Agreement; or

	(ii)
	the
Ancillary Outstandings under that Ancillary Facility can be refinanced by a Facility B Utilisation and the Ancillary Lender gives sufficient notice to the Parent to enable a
Facility B Utilisation to be made to refinance those Ancillary Outstandings.

	(b)
	For
the purposes of determining whether or not the Ancillary Outstandings under that Ancillary Facility can be refinanced by a Facility B Utilisation:

	(i)
	the
Facility B Commitment of the Ancillary Lender will be increased by the amount of its Ancillary Commitment; and

	(ii)
	the
Facility B Utilisation may (provided that sub-paragraph (i) of paragraph (a) above does not apply) be made irrespective of whether a Default is
outstanding or any other applicable condition is not satisfied (but only to the extent that the proceeds are applied in refinancing those Ancillary Outstandings) and irrespective of whether
paragraph (b) of Clause 5.3 (Currency and amount) or paragraph (b) of Clause 6.5 (Currency and amount) applies.

	(c)
	On
the making of a Facility B Utilisation made to refinance Ancillary Outstandings:

	(i)
	each
Lender will participate in the Facility B Utilisation in such amount (as determined by the Agent) as will result as nearly as possible in the aggregate amount of its
participation in the Facility B Utilisations then outstanding bearing the same proportion to the aggregate amount of the Facility B Utilisations then outstanding as its Facility B Commitment bears to
the aggregate of the Facility B Commitments; and

	(ii)
	the
relevant Ancillary Facility shall be cancelled. 

 
 

8.5.  Information        

Each
Borrower and each Ancillary Lender must, promptly upon request by the Agent, supply the Agent with any information relating to the operation of an Ancillary Facility (including the Ancillary
Outstandings) as the Agent may reasonably request from time to time. 

37

 

 
 

8.6.  Affiliates of Lenders as Ancillary Lenders        

	(a)
	Subject
to the terms of this Agreement, an Affiliate of a Lender may become an Ancillary Lender. In such case, the Lender and its Affiliate shall be treated as a single Lender whose
Facility B Commitment is the amount set out opposite the relevant Lender's name in Part III of Schedule 1 (The Original Parties). For the purposes of calculating the Lender's Available
Commitment with respect to Facility B, the Lender's Commitment shall be reduced to the extent of the aggregate of the Ancillary Commitments of its Affiliates.

	(b)
	The
Parent shall specify any relevant Affiliate of a Lender in any notice delivered by the Parent to the Agent pursuant to paragraph (b)(i) of Clause 8.1
(Availability).

	(c)
	If
required by the Agent an Affiliate of a Lender which becomes an Ancillary Lender shall accede to this Agreement and the Inter Creditor Deed.

	(d)
	If
a Lender assigns all of its rights and benefits or transfers all of its rights and obligations to a New Lender (as defined in Clause 26 (Changes to the Lenders)), its
Affiliate shall cease to have any obligations under this Agreement.

	(e)
	Where
this Agreement or any other Finance Document imposes an obligation on an Ancillary Lender and the relevant Ancillary Lender is an Affiliate of a Lender which is not a party to
that document, the relevant Lender shall ensure that the obligation is performed by its Affiliate. 

 
 

9.     OPTIONAL CURRENCIES         

 
 

9.1.  Selection of currency        

A
Borrower (or the Parent on behalf of a Borrower) shall select the currency of a Facility B Utilisation in a Utilisation Request. 

 
 

9.2.  Unavailability of a currency        

If
before the Specified Time on any Quotation Day: 

	(a)
	a
Lender notifies the Agent that the Optional Currency requested is not readily available to it in the amount required; or

	(b)
	a
Lender notifies the Agent that compliance with its obligation to participate in a Utilisation in the proposed Optional Currency would contravene a law or regulation applicable to
it, 

the
Agent will give notice to the relevant Borrower to that effect by the Specified Time on that day. In this event, any Lender that gives notice pursuant to this Clause 9.2 will be required to
participate in the Loan in the Base Currency (in an amount equal to that Lender's proportion of the Base Currency Amount or, in respect of a Rollover Loan, an amount equal to that Lender's proportion
of the Base Currency Amount of the Rollover Loan that is due to be made) and its participation will be treated as a separate Loan denominated in the Base Currency during that Interest Period. 

 
 

9.3.  Participation in a Loan        

Each
Lender's participation in a Loan will be determined in accordance with paragraph (b) of Clause 5.4 (Lender's participation). 

38

  

 
 

SECTION 4    
    
    REPAYMENT, PREPAYMENT AND CANCELLATION    
    

 
 

 
 

10.   REPAYMENT         

 
 

10.1. Repayment of Facility A Loan        

	(a)
	The
Parent shall repay the Facility A Loan by payment to the Agent (for the account of the Lenders) on each Facility A Repayment Date of the amount set out in Column 2 of
Schedule 4 (Repayment Schedule) opposite the relevant Facility A Repayment Date (so that the Facility A Loan is repaid in full on or before the Termination Date).

	(b)
	The
Parent may not re-borrow any part of Facility A which is repaid. 

 
 

10.2. Repayment of Facility B Loans        

Each
Borrower shall repay any Facility B Loan it has drawn on the last day of its Interest Period. 

 
 

11.   PREPAYMENT AND CANCELLATION         

 
 

11.1. Illegality        

If
it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in any Utilisation: 

	(a)
	that
Lender shall promptly notify the Agent upon becoming aware of that event;

	(b)
	upon
the Agent notifying the Parent, the Commitment of that Lender will be immediately cancelled; and

	(c)
	the
Borrowers shall:

	(i)
	repay
that Lender's participation in the Loans made to the Borrowers on the last day of the Interest Period for each Loan occurring after the Agent has notified the Parent or, if
earlier, the date specified by the Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law); and

	(ii)
	provide
cash cover to that Lender in relation to that Lender's participation in any Letters of Credit; and

	(iii)
	repay
all Ancillary Outstandings owed to that Lender (or any Affiliate thereof). 

 
 

11.2. Voluntary cancellation        

The
Parent may, if it gives the Agent not less than five Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part (being a minimum amount of
$1,000,000) of an Available Facility. Any cancellation under this Clause 11.2 shall reduce the Commitments of the Lenders rateably under that Facility. 

 
 

11.3. Voluntary prepayment of Facility A Loan        

	(a)
	The
Parent may, if it gives the Agent not less than five Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, prepay the whole or any part of the
Facility A Loan (but, if in part, being an amount that reduces the amount of the Loan by a minimum amount of $250,000).

	(b)
	The
Facility A Loan may only be prepaid after the last day of the applicable Availability Period (or, if earlier, the day on which the applicable Available Facility is zero). 

39

 

	(c)
	Any
prepayment under this Clause 11.3 shall be applied in prepayment of the Facility A Loan and shall satisfy the obligations under Clause 10.1 (Repayment of Facility A
Loan) in inverse order of maturity. 

 
 

11.4. Voluntary Prepayment of Facility B Loans        

The
Borrower to which a Facility B Loan has been made may, if it gives the Agent not less than five Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, prepay the
whole or any part of a Facility B Loan (but, if in part, being an amount that reduces the Base Currency Amount of the Facility B Loan by a minimum amount of $250,000). 

 
 

11.5. Sale, Listing or Change of Control        

	(a)
	Subject
to Clause 11.5(b), if a Sale, Listing or Change of Control occurs then (unless the Majority Lenders otherwise agree):-

	(i)
	each
Borrower will immediately prepay all Loans made to it together with accrued interest thereon and all other sums payable under this Agreement and the other Finance Documents
(including, without limitation, the Ancillary Outstandings);

	(ii)
	any
unutilised element of the Facilities will be cancelled and the Commitment of each Lender in respect of each Facility shall be reduced to zero;

	(iii)
	save
as otherwise agreed with the relevant Hedging Lender or otherwise provided under the relevant Hedging Document, the relevant Obligor will (to the extent it is able) terminate
or sell the Hedging Transactions entered into pursuant to Clause 24.31 (Hedging Transactions) and (subject to the terms of the Inter Creditor Deed) will pay all amounts due under the Hedging
Transactions to such Hedging Lender (and each Lender which is a Hedging Lender will make any payments due thereunder to any Obligor as a result of any such termination);

	(iv)
	each
Borrower will immediately repay all sums outstanding under any Ancillary Facilities provided to it and provide cash cover in accordance with the terms of the Ancillary Facility
Documents in respect of any contingent liabilities outstanding in respect of any Ancillary Facilities;

	(v)
	each
Borrower will provide cash cover in respect of each Letter of Credit requested by it.

	(b)
	If
any Listing occurs then provided that, following such Listing, Dutchco and the Dutch Foundations continue to own in aggregate legally and beneficially shares in the issued share
capital of the Parent representing not less than 50.01% of the voting rights attaching to the shares in the Parent:

	(i)
	the
terms of paragraph (a) above shall not apply as a result of such Listing; and

	(ii)
	the
Parent shall ensure that all amounts raised by the Group as a consequence of such Listing (if any) (excluding for the avoidance of doubt, proceeds of sale which are received
(directly or indirectly) by Dutchco and the Dutch Foundations (and not by the Group) in consideration for the sale and/or re-purchase or similar disposal of part of their shares in the
Parent) shall (immediately upon receipt of such funds by or on behalf of a member of the Group) be applied in prepayment of the Facilities to the extent required to ensure that the principal amount
drawn (or available to be drawn) under the Facilities is not more than the amount of EBITDA for the Group shown by either (A) the latest audited financial statements of the Group delivered in
terms of Clause 22.1 (Financial Statements) or (B) by the proforma EBITDA figures produced by the Parent after 

40

 

conducting
financial due diligence to the satisfaction of the Agent, whichever produces the greater amount of EBITDA; and 

	(iii)
	the
Borrowers shall not be obliged to prepay all of the Facilities in terms of paragraph (a) above as a result of the occurrence of such Listing provided that the amount
outstanding under the Facilities is prepaid and reduced to not more than the level of EBITDA for the Group shown by (A) or (B) in paragraph (ii) above, whichever is applicable. 

 
  11.6. Asset Disposals        

	(a)
	Subject
to Clause 11.6(b), the Parent shall (except with the written consent of the Agent such consent not to be unreasonably withheld or delayed) procure that the Net Proceeds
of any disposal of any asset by a member of the Group (other than a disposal permitted by Clause 24.4 (Disposals)) to the extent that such Net Proceeds when aggregated with such other Net
Proceeds in the previous 12 months exceed $250,000 is applied in prepayment of the Facilities.

	(b)
	Net
Proceeds need not be so applied if:

	(i)
	they
are reinvested or applied within 90) days after receipt in assets for use in the business of the Group; and

	(ii)
	following
receipt and pending reinvestment they are held in a Cash Collateral Account. 

 
 

11.7. Insurance Claims        

	(a)
	Subject
to Clause 11.7(b), if any member of the Group receives any proceeds in excess of $250,000 as a result of making a claim under any insurance policy (other than
insurances in relation to third party liability), the Parent shall procure that an amount equal to those proceeds (net of any Tax, costs and expenses directly incurred in respect of that claim) is
applied in prepayment of the Facilities.

	(b)
	Any
such amount received or recovered under any insurance policy need not be so applied if:

	(i)
	it
is committed to be applied within 90 days (and is applied within 120 days) after receipt in reinstating, replacing, repairing or otherwise investing in assets having
a similar purpose to the assets in respect of which those monies were received; and

	(ii)
	following
receipt and pending that application it is held in a Cash Collateral Account. 

 
 

11.8. Cash Sweep        

	(a)
	Subject
to Clause 11.8(b), if the ratio of Total Net Debt as at 31 December in any financial year to EBITDA for the period of 4 Accounting Periods ending on 31 December in such
financial year is greater than or equal to 1.75:1, the Parent shall procure that, within 10 Business Days after delivery of the Annual Accounts of the Group in respect of such financial year
(commencing with those delivered for the financial year ending on or around 31 December 2006), an amount equal to the lesser of:

	(i)
	50%
of the Surplus Cash for that financial year; and

	(ii)
	the
amount which would need to be deducted from Total Net Debt as at the end of the relevant financial year to reduce the ratio of Total Net Debt (as at the end of the relevant
financial year) to EBITDA (for the period of 4 Accounting Periods ending on 31 December of the relevant financial year) to less than 1.75:1, 

is
applied in prepayment of the Facilities. 

41

 

	(b)
	The
Parent will procure that the auditors of the Parent will deliver, together with the relevant Annual Accounts, a written confirmation of the amount of the Surplus Cash (if any) for
the financial year to which those Annual Accounts relate, together with a calculation of how that amount has been determined. 

 
 

11.9. Financial Covenant Breach        

	(a)
	Without
limiting any other rights the Finance Parties may have under this Agreement and subject to Clause 11.9 (b), on the occurrence of a breach of the terms of any of the
provisions of Clause 23.1 (Financial Covenants) in respect of the Test Date falling after the Restatement Date but on or before 31 December 2006 (the "2006 Financial Covenants"), the
Parent shall procure that, within 1 Business Day of the Agent notifying the Parent that the Agent is satisfied that the Parent is in breach of the terms of the 2006 Financial Covenants following
delivery of the Management Accounts of the Group in terms of Clause 22.1(c) (Financial Statements) in respect of an Accounting Period ending on a Test Date in respect of the Test Date falling
after the Restatement Date but on or before 31 December 2006, an amount equal to $5,000,000 is applied in prepayment (and, to the extent that such amount is applied in prepayment of Facility B,
cancellation) of the Facilities.

	(b)
	The
Parent shall not be required to apply $5,000,000 in prepayment of the Facilities in accordance with paragraph (a) above if the Agent confirms in writing to the Parent that
it is satisfied that the Parent is in compliance with the Financial Covenants to the extent that such Financial Covenants are to be tested on 31 December 2006.

	(c)
	The
Parent's obligations under paragraph (a) above shall be satisfied if the Security Trustee receives $5,000,000 under the Investor Guarantee and such amount is applied in
prepayment of the Facilities in accordance with paragraph (a) above. 

 
 

11.10. Terms of Mandatory Prepayments        

	(a)
	Any
amount to be applied in prepayment of the Facilities under Clauses 11.5(b), 11.6 (Asset Disposals), 11.7. (Insurance Claims), 11.8 (Cash Sweep) or 11.9 (Financial Covenant Breach)
shall be applied in the following order:

	(i)
	first,
in prepayment of the Facility A Loan;

	(ii)
	second,
in permanent prepayment on a pro rata basis of the Facility B Utilisation; and

	(iii)
	third,
in payment of Ancillary Outstandings. 

Each
prepayment shall satisfy the obligations under Clause 10.1 (Repayment of Facility A Loan) in inverse order of maturity. 

	(b)
	Amounts
applied in repayment of the Facility A Loan may not be redrawn.

	(c)
	Amounts
applied in permanent prepayment of the Facility B Utilisation pursuant to Clause 11.10(a)(ii) may not be redrawn and, upon any such prepayment, each Lender's
Facility B Commitment shall be reduced proportionately.

	(d)
	Any
amount held in any Cash Collateral Account which is not applied within the relevant time period specified in Clauses 11.6(b), 11.7(b) or 11.8(b) (as the case may be), will be
applied in repayment of the Facilities in accordance with this Clause 11.10 (Terms of Mandatory Prepayments). 

42

 

 
 

11.11. Right of repayment and cancellation in relation to a single Lender        

	(a)
	If:

	(i)
	any
sum payable to any Lender by a Borrower is required to be increased under paragraph (c) of Clause 16.2 (Tax gross-up) (other than in relation to any
amount payable by a member of the Group incorporated in Israel or Australia or any other member of the Group incorporated in a jurisdiction which imposes withholding tax on payments of interest to the
UK at the date the Parent requests that such member of the Group is to become a Borrower); or

	(ii)
	any
Lender claims indemnification from a Borrower under Clause 16.3 (Tax indemnity) or Clause 17.1 (Increased Costs); 

the
Parent may, whilst the circumstance giving rise to the requirement or indemnification continues give the Agent notice of cancellation of the Commitment of that Lender and its intention to procure
the repayment of that Lender's participation in the Loans. 

	(b)
	On
receipt of a notice referred to in paragraph (a) above, the Commitment of that Lender shall immediately be reduced to zero.

	(c)
	On
the last day of each Interest Period which ends after the Parent has given notice under paragraph (a) above (or, if earlier, the date specified by the Parent in that
notice), the relevant Borrower shall repay that Lender's participation in that Loan. 

 
 

11.12. Restrictions        

	(a)
	Any
notice of cancellation or prepayment given by any Party under this Clause 11 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify
the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.

	(b)
	Any
prepayment or cancellation under this Agreement shall be made together with accrued interest (or commitment fee) on the amount prepaid and, subject to any Break Costs, without
premium or penalty except that an early payment or cancellation fee shall be payable by the Parent to the Agent (for account of the Lenders) of an amount equal to one per cent (1%) of the amount
prepaid and/or cancelled in the event that any amount is prepaid or cancelled as a result of or in connection with a refinancing of all or part of the Facilities by any banks or financial institutions
(other than (i) a refinancing of all or part of the Facilities by the Finance Parties, (ii) a refinancing of all of the Facilities from the proceeds of a Total Refinancing Bond Issue,
(iii) a refinancing of part of the Facilities from the proceeds of a Partial Refinancing Bond Issue or (iv) a refinancing of all or part of the Facilities from the proceeds of a Listing
but, for the avoidance of doubt, in relation to a Listing in which part of the Facilities are prepaid or cancelled from the proceeds of the Listing and part of the Facilities are prepaid or cancelled
from the proceeds of a refinancing by any bank or financial institutions (other than as referred to in (i), (ii) or (iii) above), the early payment or cancellation fee shall be payable
in respect of the part of the Facilities which are not prepaid from the proceeds of such Listing) on or prior to 24 November 2010. Such fee shall be payable on the date of such prepayment or
cancellation.

	(c)
	The
Parent may not reborrow any part of Facility A which is prepaid.

	(d)
	Unless
a contrary indication appears in this Agreement, any part of Facility B which is prepaid may be reborrowed in accordance with the terms of this Agreement. 

43

 

	(e)
	No
Borrower shall repay or prepay all or any part of any Utilisation or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this
Agreement.

	(f)
	No
amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.

	(g)
	If
the Agent receives a notice under this Clause 11 it shall promptly forward a copy of that notice to either the Parent or the affected Lender, as appropriate.

	(h)
	The
Borrowers shall ensure that the total principal amount of all Facility B Loans and all Ancillary Outstandings (to the extent they are cash drawings or overdraft utilisations under
an Ancillary Facility) shall be reduced to zero and that all Letters of Credit (and any utilisations of an Ancillary Facility by way of guarantee, letter of credit or other non-cash
utilisation in respect of which any Lender has an exposure) will be the subject of cash cover, in each case for not less than five consecutive Business Days in each financial year.

	(i)
	In
the event that any amount of Facility B is prepaid as a result of any payment under or pursuant to the Investor Guarantee, the Parent and the Agent agree that from the date of such
prepayment an equivalent amount of the Available Facility in respect of Facility B shall be cancelled. 

44

  

 
 

SECTION 5    
    
    COSTS OF UTILISATION    
    

 
 

12.   INTEREST         

 
 

12.1. Calculation of interest        

The
rate of interest on each Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable: 

	(a)
	Margin;

	(b)
	LIBOR
or, in relation to any Facility B Loan in euro, EURIBOR; and

	(c)
	Mandatory
Cost, if any. 

 
 

12.2. Payment of interest        

The
Borrower to which a Loan has been made shall pay accrued interest on each Loan on the last day of each Interest Period (and, if the Interest Period is longer than three Months, on the dates
falling at three monthly intervals after the first day of the Interest Period). 

 
 

12.3. Default interest        

	(a)
	If
an Obligor fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual
payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is two per cent (2%) higher than the rate which would have been payable if the overdue amount had,
during the period of non-payment, constituted a Loan in the currency of the overdue amount for successive Interest Periods, each of a duration selected by the Agent (acting reasonably).
Any interest accruing under this Clause 12.3 shall be immediately payable by the Obligor on demand by the Agent.

	(b)
	If
any overdue amount consists of all or part of a Loan which became due on a day which was not the last day of an Interest Period relating to that Loan:

	(i)
	the
first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to that Loan; and

	(ii)
	the
rate of interest applying to the overdue amount during that first Interest Period shall be the rate which is two per cent (2%) higher than the rate which would have applied if
the overdue amount had not become due.

	(c)
	Default
interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will
remain immediately due and payable. 

 
 

12.4. Notification of rates of interest        

The
Agent shall promptly notify the Lenders and the Parent of the determination of a rate of interest under this Agreement. 

45

 

 
 

13.   INTEREST PERIODS         

 
 

13.1. Selection of Interest Periods        

	(a)
	A
Borrower (or the Parent on behalf of a Borrower) may select an Interest Period for a Loan in the Utilisation Request for that Loan or (if the Loan has already been borrowed) in a
Selection Notice.

	(b)
	Each
Selection Notice for a Loan is irrevocable and must be delivered to the Agent by the Borrower (or the Parent on behalf of a Borrower) to which that Loan was made (or the Parent)
not later than the Specified Time.

	(c)
	If
a Borrower (or the Parent) fails to deliver a Selection Notice to the Agent in accordance with paragraph (b) above, the relevant Interest Period will, subject to
Clause 13.2 (Changes to Interest Periods), be three Months.

	(d)
	Subject
to this Clause 13, the Parent may select an Interest Period of 1, 3 or 6 Months or any other period agreed between the Parent and the Agent (acting on the instructions
of all the Lenders). In addition the Parent may select an Interest Period of (in relation to Facility A) a period of less than one Month, if necessary to ensure that the Facility A Loan has an
Interest Period ending on a Facility A Repayment Date.

	(e)
	An
Interest Period for a Loan shall not extend beyond the Termination Date applicable to its Facility.

	(f)
	Each
Interest Period for the Facility A Loan shall start on the Utilisation Date or (if already made) on the last day of its preceding Interest Period.

	(g)
	A
Facility B Loan has one Interest Period only.

	(h)
	With
effect from the expiry of each current Interest Period and prior to the Syndication Date, Interest Periods shall be one month or such other period as the Agent and the Parent may
agree and any Interest Period which would otherwise end during the month preceding or extend beyond the Syndication Date shall end on the Syndication Date. 

 
 

13.2. Changes to Interest Periods        

	(a)
	Prior
to determining the interest rate for the Facility A Loan, the Agent may shorten an Interest Period for any such Loan to ensure the Facility A Loan has an Interest Period ending
on a Facility A Repayment Date.

	(b)
	If
the Agent makes any of the changes to an Interest Period referred to in this Clause 13.2, it shall promptly notify the Parent and the Lenders. 

 
 

13.3. Non-Business Days        

If
an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding
Business Day (if there is not). 

 
 

14.   CHANGES TO THE CALCULATION OF INTEREST         

 
 

14.1. Absence of quotations        

Subject
to Clause 14.2 (Market disruption), if LIBOR or, if applicable, in the case of a Facility B Loan, EURIBOR is to be determined by reference to the Reference Banks but a Reference Bank
does not supply a quotation by the Specified Time on the Quotation Day, the applicable LIBOR 

46

 

or
EURIBOR shall be determined on the basis of the quotations of the remaining Reference Banks. 

 
 

14.2. Market disruption        

	(a)
	If
a Market Disruption Event occurs in relation to a Loan for any Interest Period, then the rate of interest on each Lender's share of that Loan for the Interest Period shall be the
rate per annum which is the sum of:

	(i)
	the
Margin;

	(ii)
	the
rate notified to the Agent by that Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses
as a percentage rate per annum the cost to that Lender of funding its participation in that Loan from whatever source it may reasonably select; and

	(iii)
	the
Mandatory Cost, if any, applicable to that Lender's participation in the Loan.

	(b)
	In
this Agreement "Market Disruption Event" means:

	(i)
	at
or about noon on the Quotation Day for the relevant Interest Period the Screen Rate is not available and none or only one of the Reference Banks supplies a rate to the Agent to
determine LIBOR or, if applicable in the case of a Facility B Loan, EURIBOR for the relevant currency and Interest Period; or

	(ii)
	before
close of business in London on the Quotation Day for the relevant Interest Period, the Agent receives notifications from a Lender or Lenders (whose participations in a Loan
exceed 30 per cent. of that Loan) that the cost to it or them of obtaining matching deposits in the Relevant Interbank Market would be in excess of LIBOR or, if applicable in the case of a Facility B
Loan, EURIBOR. 

 
 

14.3. Alternative basis of interest or funding        

	(a)
	If
a Market Disruption Event occurs and the Agent or the Parent so requires, the Agent and the Parent shall enter into negotiations (for a period of not more than thirty days) with a
view to agreeing a substitute basis for determining the rate of interest.

	(b)
	Any
alternative basis agreed pursuant to paragraph (a) above shall, with the prior consent of all the Lenders and the Parent, be binding on all Parties. 

 
 

14.4. Break Costs        

	(a)
	Each
Borrower shall, within three Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of a Loan or Unpaid Sum being
paid by that Borrower on a day other than the last day of an Interest Period for that Loan or Unpaid Sum.

	(b)
	Each
Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they
accrue. 

 
 

15.   FEES         

 
 

15.1. Commitment fee        

	(a)
	The
Parent shall pay to the Agent (for the account of each Lender) a fee in the Base Currency computed at the rate of 1.00 per cent, per annum on that Lender's Available 

47

 

Commitment
under Facility B for the Availability Period applicable to Facility B which is available for utilisation by way of Loans and Letters of Credit under the terms of this Agreement. 

	(b)
	For
the purposes of calculating the commitment fee payable by the Parent in accordance with paragraph (a) above, where a Lender (in its capacity as an Ancillary Lender)
provides Ancillary Facilities, such Lender's Available Commitment shall be deemed to be reduced by an amount equal to the limit applicable to such Ancillary Facilities from the date on which such
Ancillary Facilities are made available.

	(c)
	The
accrued commitment fee is payable on the last day of each successive period of three Months which ends during the relevant Availability Period, on the last day of the Availability
Period and, if cancelled in full, on the cancelled amount of the relevant Lender's Commitment at the time the cancellation is effective. 

 
 

15.2. Arrangement fee        

The
Parent shall pay to the Arranger an arrangement fee in the amount and at the times agreed in a Fee Letter. 

 
 

15.3. Agency fee        

The
Parent shall pay to the Agent (for its own account) an agency fee in the amount and at the times agreed in a Fee Letter. 

 
 

15.4. Monitoring fee        

The
Parent shall pay to the Agent (for its own account) a monitoring fee in the amount and at the times agreed in a Fee Letter. 

48

  

 
 

SECTION 6    
    
    ADDITIONAL PAYMENT OBLIGATIONS    
    

 
 

16.   TAX GROSS UP AND INDEMNITIES         

 
 

16.1. Definitions        

	(a)
	In
this Agreement: 

"Protected Party" means a Finance Party which is or will be subject to any liability, or required to make any payment, for or on account of Tax in
relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document. 

"Qualifying Lender" means a Lender which is beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document
and is: 

	(i)
	a
Lender:

	(A)
	which
is a bank (as defined for the purpose of section 349 of the Taxes Act) making an advance under a Finance Document; or

	(B)
	in
respect of an advance made under a Finance Document by a person that was a bank (as defined for the purpose of section 349 of the Taxes Act) at the time that that advance
was made, 

and
which is within the charge to United Kingdom corporation as respects any payments of interest made in respect of that advance; or 

	(ii)
	a
Lender which is:

	(A)
	a
company resident in the United Kingdom for United Kingdom tax purposes;

	(B)
	a
partnership each member of which is a company resident in the United Kingdom for United Kingdom tax purposes; or

	(C)
	a
company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a branch or agency and which brings into account interest payable in respect of
that advance in computing its chargeable profits (within the meaning given by section 11(2) of the Taxes Act). 

"Tax Confirmation" means a confirmation by a Lender that the person beneficially entitled to interest payable to that Lender in respect of an advance
under a Finance Document is either: 

	(i)
	a
company resident in the United Kingdom, or a partnership each member of which is a company resident in the United Kingdom, for United Kingdom tax purposes; or

	(ii)
	a
company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a branch or agency and that interest payable in respect of that advance falls
to be brought into account in computing the chargeable profits of that company for the purposes of section 11(2) of the Taxes Act. 

"Tax Credit" means a credit against, relief or remission for, or repayment of any Tax. 

"Tax Deduction" means a deduction or withholding for or on account of Tax from a payment under a Finance Document. 

"Tax Payment" means an increased payment made by a Borrower or the Parent to a Finance Party under Clause 16.2 (Tax gross-up) or a
payment under Clause 16.3 (Tax indemnity). 

49

 

"UK Non Bank Lender" means a Lender which gives a Tax Confirmation in the Transfer Certificate which it executes on becoming a party to this Agreement. 

	(b)
	Unless
a contrary indication appears, in this Clause 16 a reference to "determines" or "determined" means a determination made in the absolute discretion of the person making
the determination. 

 
 

16.2. Tax gross-up        

	(a)
	Each
Borrower shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.

	(b)
	The
Parent shall promptly upon becoming aware that a Borrower must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Agent
accordingly. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender it shall notify the
Parent.

	(c)
	Subject
to compliance by the relevant Lender with Clause 16.2(g) in respect of the payment of interest in question and to Clauses 16.2(d) and 26.2(h), if a Tax Deduction is
required by law to be made by a Borrower, the amount of the payment due from such Borrower shall be increased to an amount which (after making such Tax Deduction) leaves an amount equal to the payment
which would have been due if no Tax Deduction had been required.

	(d)
	No
Borrower is required to make an increased payment to a Lender under paragraph (c) above for a Tax Deduction in respect of tax imposed by the United Kingdom in respect of a
payment of interest on a Loan, if on the date on which the payment falls due:

	(i)
	the
payment could have been made to the relevant Lender without a Tax Deduction if it was a Qualifying Lender, but on that date that Lender is not or has ceased to be a Qualifying
Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or Treaty, or any published
practice or concession of any relevant taxing authority; or

	(ii)
	(A)    the
relevant Lender is a UK Non-Bank Lender, or would have been a UK Non-Bank Lender were it not for any change after the date it became a
Lender under this Agreement in (or in the interpretation, administration, or application of) any law or Treaty, or any published practice or concession of any relevant taxing authority; and

	(B)
	the
Board of the Inland Revenue has given (and not revoked) a direction under section 349C of the Taxes Act (as that provision has effect on the date on which the relevant
Lender became a party to this Agreement) which relates to that payment and that Borrower has notified that UK Non-Bank Lender of the precise terms of that notice.

	(e)
	If
a Borrower is required to make a Tax Deduction, it shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the
minimum amount required by law.

	(f)
	Within
thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Borrower making that Tax Deduction shall deliver to the Agent
for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the
relevant taxing authority. 

50

 

	(g)
	Each
Lender and the Borrower which makes a payment to which that Lender is entitled shall co-operate in completing any procedural formalities necessary under any double
tax agreement or treaty between the jurisdiction in which that Lender is resident and the jurisdiction in which the relevant Borrower is resident which makes provision for full or partial exemption
from withholding tax imposed by the tax authority of the Borrower's jurisdiction for the Borrower to obtain authorisation to make the payment without a Tax Deduction or with a reduced Tax Deduction
(as appropriate).

	(h)
	A
UK Non Bank Lender shall promptly notify the Parent and the Agent is there is any change in the status of such UK Non Bank Lender from that set out in the Tax Confirmation.

	(i)
	Each
of the Original Lenders warrants and represents to the Obligors that it is at the date of this Agreement a resident of the United Kingdom for the purposes of the double taxation
agreements between the United Kingdom and each of the jurisdictions in which the Original Borrowers are incorporated and that it does not at the date of this Agreement carry on a business in any of
those jurisdictions through a permanent establishment with which its participation in the Loans is effectively connected. 

 
 

16.3. Tax indemnity        

	(a)
	The
Parent shall (within three Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will
be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document.

	(b)
	Paragraph (a)
above shall not apply:

	(i)
	with
respect to any Tax assessed on a Finance Party:

	(A)
	under
the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident
for tax purposes; or

	(B)
	under
the law of the jurisdiction in which that Finance Party's Facility Office is located in respect of amounts received or receivable in that jurisdiction, 

if
that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party; or 

	(ii)
	to
the extent a loss, liability or cost:

	(A)
	is
compensated for by an increased payment under Clause 16.2 (Tax gross-up); or

	(B)
	would
have been compensated for by an increased payment under Clause 16.2 (Tax gross up) but was not so compensated solely because one of the exclusions in paragraph (d)
of Clause 16.2 (Tax gross up) applied. 

	(c)
	A
Protected Party making, or intending to make a claim under paragraph (a) above shall promptly notify the Agent of the event which will give, or has given, rise to the claim,
following which the Agent shall notify the Parent.

	(d)
	A
Protected Party shall, on receiving a payment from a Borrower under this Clause 16, notify the Agent. 

51

 

 
 

16.4. Tax Credit        

If
a Borrower or the Parent makes a Tax Payment and the relevant Finance Party determines that: 

	(a)
	a
Tax Credit is attributable to that Tax Payment; and

	(b)
	that
Finance Party has obtained, utilised and retained that Tax Credit, 

the
Finance Party shall pay an amount to the relevant Borrower which that Finance Party determines will leave that Finance Party (after that payment) in the same after-Tax position as it
would have been in had the Tax Payment not been made by that Borrower. 

 
 

16.5. Stamp taxes        

The
Parent covenants with each Finance Party to pay, within three Business Days of demand, to each Finance Party an amount equal to any cost, loss or liability that Finance Party incurs in relation to
all stamp duty, registration and other similar Taxes payable in respect of any Finance Document. 

 
 

16.6. Value added tax        

	(a)
	All
consideration expressed to be payable under a Finance Document by any Party to a Finance Party shall be deemed to be exclusive of any VAT. If VAT is chargeable on any supply made
by any Finance Party to any Party in connection with a Finance Document, that Party shall pay to the Finance Party (in addition to and at the same time as paying the consideration) an amount equal to
the amount of the VAT.

	(b)
	Where
a Finance Document requires any Party to reimburse a Finance Party for any costs or expenses, that Party shall also at the same time pay and indemnify the Finance Party against
all VAT incurred by the Finance Party in respect of the costs or expenses to the extent that the Finance Party reasonably determines that it is not entitled to credit or repayment of the VAT. 

 
 

17.   INCREASED COSTS         

17.1. Increased costs

	(a)
	Subject
to Clause 17.3 (Exceptions) the Parent shall, within three Business Days of a demand by the Agent, pay for the account of a Finance Party the amount of any Increased
Costs incurred by that Finance Party or any of its Affiliates as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or
regulation or (ii) compliance with any law or regulation made after the date of this Agreement.

	(b)
	In
this Agreement "Increased Costs" means:

	(i)
	a
reduction in the rate of return from the Facilities (or any part of them) or on a Finance Party's (or its Affiliate's) overall capital;

	(ii)
	an
additional or increased cost; or

	(iii)
	a
reduction of any amount due and payable under any Finance Document, 

which
is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its
obligations under any Finance Document. 

52

 

17.2. Increased cost claims

	(a)
	A
Finance Party intending to make a claim pursuant to Clause 17.1 (Increased costs) shall notify the Agent of the event giving rise to the claim, following which the Agent
shall promptly notify the Parent.

	(b)
	Each
Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs. 

17.3. Exceptions

	(a)
	Clause 17.1
(Increased costs) does not apply to the extent any Increased Cost is:

	(i)
	attributable
to a Tax Deduction required by law to be made by a Borrower;

	(ii)
	compensated
for by Clause 16.3 (Tax indemnity) (or would have been compensated for under Clause 16.3 (Tax indemnity) but was not so compensated solely because the
exclusion in paragraph (b) of Clause 16.3 (Tax indemnity) applied);

	(iii)
	compensated
for by the payment of the Mandatory Cost; or

	(iv)
	attributable
to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation.

	(b)
	In
this Clause 17.3, a reference to a "Tax Deduction" has the same meaning given to the term in Clause 16.1 (Definitions). 

 
 

18.   OTHER INDEMNITIES         

18.1. Currency indemnity

	(a)
	If
any sum due from an Obligor under the Finance Documents (a "Sum"), or any order, judgment or award given or made in relation to a
Sum, has to be converted from the currency (the "First Currency") in which that Sum is payable into another currency (the
"Second Currency") for the purpose of:

	(i)
	making
or filing a claim or proof against that Obligor;

	(ii)
	obtaining
or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings, 

that
Obligor shall as an independent obligation, within three Business Days of demand, indemnify each Finance Party to whom that Sum is due against any cost, loss or liability arising out of or as a
result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of
exchange available to that person at the time of its receipt of that Sum. 

	(b)
	Each
Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to
be payable. 

 
 

18.2. Other indemnities        

The
Parent shall (or shall procure that an Obligor will) within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability incurred by that Finance Party as a
result of: 

	(a)
	the
occurrence of any Event of Default; 

53

 

	(b)
	a
failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of
Clause 30 (Sharing among the Finance Parties);

	(c)
	funding,
or making arrangements to fund, its participation in a Utilisation requested by a Borrower in a Utilisation Request but not made by reason of the operation of any one or more
of the provisions of this Agreement (other than by reason of default or negligence by that Lender alone);

	(d)
	any
actual or alleged breach of any Environmental Law or any Environmental Licence (whether by any member of the Group or any other person) or the release or threatened release of, or
exposure to, any Hazardous Substance stored or handled upon, transported from, or otherwise associated with, the past or present business, properties or operations of any member of the Group; or

	(e)
	a
Loan (or part of a Loan) not being prepaid in accordance with a notice of prepayment given by a Borrower or the Parent (other than by reason of default or negligence of the relevant
Finance Party alone). 

 
 

18.3. Indemnity to the Agent        

The
Parent shall promptly indemnify the Agent against any cost, loss or liability incurred by the Agent (acting reasonably) as a result of: 

	(a)
	investigating
any event which it reasonably believes is a Default; or

	(b)
	acting
or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised. 

 
 

19.   MITIGATION BY THE LENDERS         

 
 

19.1. Mitigation        

	(a)
	Each
Finance Party shall, in consultation with the Parent, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable
under or pursuant to, or cancelled pursuant to, any of Clause 11.1 (Illegality), Clause 16 (Tax gross-up and indemnities), Clause 17 (Increased costs) or
paragraph 3 of Schedule 5 (Mandatory Cost formulae) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility
Office.

	(b)
	Paragraph (a)
above does not in any way limit the obligations of any Obligor under the Finance Documents. 

 
 

19.2. Limitation of liability        

	(a)
	The
Parent shall indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 19.1
(Mitigation).

	(b)
	A
Finance Party is not obliged to take any steps under Clause 19.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to
it. 

 
 

20.   COSTS AND EXPENSES         

 
 

20.1. Transaction expenses        

The
Parent shall promptly within five Business Days of demand pay the Agent, the Security Trustee and the Arranger the amount of all costs and expenses (including legal fees expressly 

54

 

agreed
between the Parent and The Governor and Company of the Bank of Scotland) properly incurred by any of them in connection with the negotiation, preparation, printing, execution and syndication
of: 

	(a)
	this
Agreement and any other Finance Document referred to in this Agreement; and

	(b)
	any
other Finance Documents executed after the date of this Agreement. 

 
 

20.2. Amendment costs        

If
(a) an Obligor requests an amendment, waiver or consent or (b) an amendment is required pursuant to Clause 31.9 (Change of currency), the Parent shall, within five Business
Days of demand, reimburse the Agent for the amount of all costs and expenses (including legal fees) properly incurred by the Agent in responding to, evaluating, negotiating or complying with that
request or requirement. 

 
 

20.3. Enforcement costs        

The
Parent shall, within five Business Days of demand, pay to each Finance Party the amount of all costs and expenses (including legal fees) properly incurred by that Finance Party in connection with
the enforcement of, or the preservation of any rights under, any Finance Document. 

55

  

 
 

SECTION 7    
    
    REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT    
    

 
 

21.   REPRESENTATIONS         

The
Parent and each other Borrower makes the representations and warranties set out in this Clause 21 to each Finance Party on the date of this Agreement and on the dates set out in
Clause 21.26 (Repetition). The representations and warranties are given by the Parent in respect of each of the Obligors and (in the case of Clauses 21.1, 21.2, 21.3, 21.4, 21.5 and 21.6 only)
Paradigm BV (or, in the case of any representation and warranty by reference to the Material Companies or the members of the Group, in respect of those companies) and by each other Borrower in respect
of itself. 

 
 

21.1. Status        

	(a)
	It
is a limited liability corporation, duly incorporated and validly existing under the law of its jurisdiction of incorporation.

	(b)
	It
has the power to own its assets and carry on its business in all material respects as it is being conducted. 

 
 

21.2. Binding obligations        

The
obligations expressed to be assumed by it in each Finance Document are, subject to the Reservations, legal, valid, binding and enforceable obligations. 

 
 

21.3. Non-conflict with other obligations        

The
entry into and performance by it of, and the transactions contemplated by, the Finance Documents do not and will not: 

	(a)
	conflict
with any law or regulation applicable to it;

	(b)
	conflict
with its constitutional documents;

	(c)
	conflict
with any agreement or instrument binding upon it or any of its assets; or

	(d)
	oblige
it to create any Security Interest or result in the creation of any Security Interest over any of its assets other than under the Security Documents. 

 
 

21.4. Power and authority        

It
has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Finance Documents to which it is a party and the
transactions contemplated by those Finance Documents. 

 
 

21.5. Validity and admissibility in evidence        

All
Authorisations required: 

	(a)
	to
enable it lawfully to enter into, exercise its rights and comply with its obligations in the Finance Documents to which it is a party;

	(b)
	to
make the Finance Documents admissible in evidence in its jurisdiction of incorporation; and

	(c)
	to
create the Security constituted by each of the Security Documents to which it is party and to ensure that such Security Interest has the ranking specified in that Security
Document, 

56

 

have
been obtained or effected and are in full force and effect or will be obtained or effected and in full force and effect as at the date legally required. 

 
 

21.6. Governing law and enforcement        

	(a)
	Save
to the extent referred to in any legal opinion delivered to the Agent pursuant to any Finance Document, the choice of the governing law of each Finance Document will be
recognised and enforced in the jurisdiction of incorporation of each Obligor which is a party thereto.

	(b)
	Save
to the extent referred to in any legal opinion delivered to the Agent pursuant to any Finance Document, any judgment obtained in any courts having jurisdiction in terms of the
governing law provisions of a Finance Document will be recognised and enforced in the jurisdiction of incorporation of each Obligor which is a party thereto. 

 
 

21.7. Deduction of Tax        

Save
to the extent referred to in the Banking Disclosure Letters or in any legal opinion delivered to the Agent pursuant to any Finance Document, it is not required under the law of its jurisdiction
of incorporation to make any deduction for or on account of Tax from any payment it may make under any Finance Document. 

 
 

21.8. No filing or stamp taxes        

Save
to the extent referred to in any legal opinion delivered to the Agent pursuant to any Finance Document, under the law of its jurisdiction of incorporation it is not necessary that the Finance
Documents entered into by it be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration or similar tax be paid on or in relation to the
Finance Documents or the transactions contemplated by the Finance Documents save for: 

	(a)
	the
satisfaction of the requirements of Chapter I and Chapter II of Part XII of the Companies Act 1985 in relation to the Security Documents referred to in paragraphs 6 (b),
(h), (i), (j), (k) and (l) of Part 1 of Schedule 2 (Conditions Precedent);

	(b)
	all
overseas filings or registrations referred to in any legal opinion referred to in Schedule 2 (Conditions Precedent), Schedule 2 (Conditions Precedent) to the
Supplemental Facility Agreement and Schedule 2 (Conditions Precedent) to the Second Supplemental Facility Agreement;

	(c)
	the
satisfaction of the requirements of the relevant legislation of each state and territory in Australia in relation to the stamping of this Agreement (if applicable) and the
Security Documents referred to in paragraph 6(b) (in relation to the share pledge over Paradigm Geophysical Pty Ltd) or paragraph 6(e) of Part I of Schedule 2
(Conditions Precedent);

	(d)
	all
filing fees payable in Texas or Delaware in relation to the Security Documents;

	(e)
	all
registration and filing requirements at the Israeli Companies Registry or with the Australian Securities and Investment Commission. 

 
 

21.9. No default        

Deleted.

 
 

21.10. Original Financial Statements        

Deleted. 

57

 

 
 

21.11. Financial Statements        

The
financial statements most recently delivered to the Agent in accordance with the terms of Clause 22.1 (Financial Statements): 

	(a)
	(in
the case of Annual Accounts) have been prepared in accordance with GAAP and give a true and fair view of the financial position of the Group as at the date to which they were
prepared and for the financial year of the Group in respect of which they were prepared; and

	(b)
	(in
the case of Management Accounts) fairly present the financial position of the Group in the period to which they relate. 

 
 

21.12. Transaction Information        

Deleted.

 
 

21.13. Base Case Model        

Deleted.

 
 

21.14. Other Information        

All
factual information provided from time to time by it to the Finance Parties was true in all material respects as at the date it was provided (save to the extent specified to the contrary at the
date such information was provided). 

 
 

21.15. Disclosure Deleted.        

 
 

21.16. Pari passu ranking        

	(a)
	Subject
to the Reservations, each Security Document creates (or once entered into will create) in favour of the Security Trustee for the benefit of the Finance Parties, the Security
Interests which (subject to the Permitted Security Interests) is expressed to create with the ranking and priority it is expressed to have.

	(b)
	Without
limiting paragraph (a) above, its payment obligations under the Finance Documents to which it is a party rank at least pari
passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally. 

 
 

21.17. No proceedings        

Except
to the extent disclosed to the Agent on or before the Restatement Date in the Banking Disclosure Letters or pursuant to Clause 225 (Information; Miscellaneous), no litigation,
arbitration or (except in relation to Tax which is being contested in good faith and by appropriate means) administrative proceedings of or before any court, arbitral body or agency which, if
adversely determined, might reasonably be expected to result in a liability for it (or, in the case of the Parent, any member of the Group) in excess of $500,000 or (in relation to any litigation,
arbitration or administrative proceedings to which no specific liability is attributed) have a Material Adverse Effect have been started or (to the best of its knowledge and belief) threatened against
it (or, in the case of the Parent, any member of the Group). 

 
 

21.18. Security Interests        

No
Security Interest (other than any Permitted Security Interest) exists over all or any part of its assets (or, in the case of the Parent, the assets of any member of the Group). 

58

 

 
 

21.19. Environment        

	(a)
	It
(and, in the case of the Parent, each Material Company) is and has at all times been in compliance with all Environmental Laws and all Environmental Licences necessary in
connection with the ownership and operation of its business (or, in the case of the Parent, the business of each Material Company) have been obtained and have been in full force and effect.

	(b)
	To
the best of its knowledge and belief having made due and diligent enquiry, no circumstances exist which would prevent it (or, in the case of the Parent, any member of the Group)
from complying with any Environmental Law or any Environmental Licence to the extent that such prevention would have a Material Adverse Effect.

	(c)
	To
the best of its knowledge and belief having made due and diligent enquiry, there has been no act or omission by it (or, in the case of the Parent, any member of the Group) and no
event or circumstance has arisen, in each case which has resulted in (or will result in) any third party taking any legal proceedings against or serving any notice on it (or, in the case of the
Parent, any member of the Group) under any Environmental Law or in the revocation, suspension, variation or non-renewal of, or in material expenditure being required in order to surrender,
any Environmental Licence if such proceedings or such action in relation to such licence is likely (if determined against it or such other member of the Group) to have a Material Adverse Effect.

	(d)
	It
has not (and, in the case of the Parent, no member of the Group has) received any statutory notice, written or oral, of any complaints, demands, civil claims, enforcement
proceedings, requests for information or of any action required by any regulatory authority and (as far as it is aware) there are no investigations pending, or as far as it is aware, threatened in
relation to any liability of it (or, in the case of the Parent any member of the Group) under any Environmental Law and/or the failure of it (or in the case of the Parent any member of the Group) to
obtain or comply with any Environmental Licence or comply with Environmental Law to the extent that such liability or failure would have a Material Adverse Effect.

	(e)
	It
has not (and, in the case of the Parent, no member of the Group has) given any warranty or indemnity or other contractual protection in respect of liability under Environmental Law
to any third party to whom it (or, in the case of the Parent, any other member of the Group) has sold any real or freehold property or other assets or from whom it (or, in the case of the Parent, any
other member of the Group) has bought real or freehold property or other assets in circumstances where if such third party were to enforce its rights under any such warranty, indemnity or other
contractual protection it would have a Material Adverse Effect. 

 
 

21.20. Intellectual Property        

	(a)
	Except
to the extent disclosed to the Agent on or before the Restatement Date in the Banking Disclosure Letters, the Intellectual Property required for it (or, in the case of the
Parent, each member of the Group) to conduct its business as presently conducted:

	(i)
	is
legally and beneficially owned by or licensed to it or such other member of the Group (and where registered or the subject of an application it is the registered proprietor) free
from any licences or obligation to assign to any third party (except to the extent that it is licensed to it or such other member of the Group by a third party) and from Security Interests (in each
case which are materially prejudicial to the use of that Intellectual Property) and will not be adversely affected by the transactions contemplated by the Finance Documents; and 

59

 

	(ii)
	has
not lapsed or been cancelled and all reasonable steps have been taken to protect and maintain that Intellectual Property including paying renewal fees.

	(b)
	Except
to the extent disclosed to the Agent on or before the Restatement Date in the Banking Disclosure Letters, in any case in which the Intellectual Property required for it (or, in
the case of the Parent, each member of the Group) to conduct its business as presently conducted is subject to any right, permission to use or licence granted to or by it or such other member of the
Group, that agreement has not been breached in any material respect or terminated by any party.

	(c)
	Except
to the extent disclosed to the Agent on or before the Restatement Date in the Banking Disclosure Letters, so far as it is aware, after due and diligent enquiry, it is not (and,
in the case of the Parent, no other member of the Group is) infringing any Intellectual Property of any third party and the Intellectual Property of it (or, in the case of the Parent, each other
member of the Group) is not being infringed by any third party. 

 
 

21.21. Ownership of Assets        

	(a)
	Except
to the extent disclosed to the Agent on or before the Restatement Date in the Banking Disclosure Letters, it has good title to all material assets necessary to conduct its
business other than leased assets which it has valid leases for, assets on hire purchase or other rental terms or assets the subject of retention of title clauses in favour of third party suppliers in
respect of supplies made in the ordinary course of business.

	(b)
	It
has, at the Completion Date, good and marketable, freehold and/or leasehold title or licences to occupy (as the case may be) the properties required by it to carry on its business. 

 
 

21.22. Financial Indebtedness        

It
has not (and, in the case of the Parent, no member of the Group has) incurred any Financial Indebtedness other than any Permitted Financial Indebtedness. 

 
 

21.23. No Obligation to Create Security        

Deleted. 

 
 

21.24. Group Structure        

The
group organisation chart set out in Schedule 11 (Group Structure Chart) is true, complete and accurate in all material respects and each member of the Group is a wholly owned subsidiary
(direct or indirect) of the Parent (subject to the minority shareholdings disclosed in the group organisation chart set out in Schedule 11 (Group Structure Chart)). 

 
 

21.25. Ownership of the Parent        

	(a)
	The
Original Investors together hold legally and beneficially all of the issued share capital and voting rights of Caymanco and hold the right to determine the composition of a
majority of the board of directors (or equivalent) of Caymanco.

	(b)
	Dutchco
is the sole director of Dutch Foundation 1, Dutch Foundation 2 and Dutch Foundation 3.

	(c)
	Caymanco
is the legal and beneficial owner of all of the issued share capital and voting rights of Luxco. 

60

 

	(d)
	Luxco
is the legal and beneficial owner of all of the issued share capital and voting rights of Dutchco.

	(e)
	Dutchco
is the legal and beneficial owner of not less than 92.65% of the issued share capital and voting rights of the Parent and the Dutch Foundations are together the legal and
beneficial owner of not less than 4.21% of the issued share capital and voting rights of the Parent. 

 
 

21.26. Compliance with Dutch Banking Act        

Subject
to the representations of the Lenders under Clause 28.18 (PMP) being true, each Dutch Borrower represents (i) that none of its financing activities bring it within the definition
of "credit institution" (kredietinstelling) within the meaning of Article 1 of the Dutch Banking Act and that it
complies with the Dutch Policy Rule, or (ii) to the extent that it does so qualify, that it has the benefit of the exemptive relief available pursuant to Article 2 of the Dutch Banking
Act Exemption Regulation and that it complies with Article 4 of the Dutch Banking Act Exemption Regulation and the Dutch Policy Rule. 

 
 

21.27. Office of Chief Scientist and Approved Enterprise Status from the Investment Centre         

	(a)
	The
Company has no grants, incentives and subsidies, and applications therefor from the government of the State of Israel or any agency thereof, granted to the Company, including,
without limitation, grants from the Office of the Chief Scientist (the "OCS") other than the grants received under approval numbers 10352 and 13885
(collectively, the "Grants") or as otherwise referred to in paragraph (c) below. The Company is in compliance, in all material respects, with the terms and conditions of the Grants and has duly
fulfilled, in all material respects, all the undertakings relating thereto.

	(b)
	The
execution and delivery of the Second Supplemental Facility Agreement and the Finance Documents referred to in Schedule 2 to the Second Supplemental Facility Agreement by
the Company and Parent does not, and the consummation of the transactions contemplated hereby and thereby will not require the consent or agreement of the government of the State of Israel or any
agency thereof, nor will it cause the Company or Parent to be in breach of any obligation with respect to the government of the State of Israel or any agency thereof.

	(c)
	The
Company was granted an Approved Enterprise status for five investment programs approved by the government of the state of Israeli under the Law for the Encouragement of Capital
Investments, 1959. The benefit periods have not yet commenced for any of the programs. The Company is in compliance, in all material respects, with the terms and conditions of the programs and has
duly fulfilled and continues to fulfil, in all material respects, all the undertakings relating thereto. 

 
 

21.28. Repetition        

The
representations and warranties set out in Clause 21 are made by the Parent and each other Borrower on, and by reference to the facts and circumstances then existing on, the date of this
Agreement and (if different) on the Completion Date provided that the Repeating Representations are deemed to be repeated on the date of each Utilisation Request and Utilisation Date. 

 
 

22.   INFORMATION UNDERTAKINGS         

The
undertakings in this Clause 22 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force. 

61

 

 
 

22.1. Financial statements        

The
Parent shall supply to the Agent in sufficient copies for all the Lenders: 

	(a)
	as
soon as the same become available, but in any event within 120 days after the end of each of its financial years:

	(i)
	its
audited consolidated financial statements for that financial year;

	(ii)
	draft
financial statements of each Obligor for that financial year;

	(iii)
	a
letter from the auditors of the Parent to the Finance Parties confirming that the results of the members of the Group have in their view been properly included in the consolidated
financial statements delivered under paragraph (a) above; and

	(iv)
	a
statement signed by the financial director or chief financial officer of the Group confirming (by reference to specific dates) that the Borrowers have complied with the terms of
Clause 11.11(h) in the financial year to which such financial statements relate;

	(b)
	as
soon as the same become available, but in any event within 270 days after the end of each of its financial years the audited financial statements of each Obligor for that
financial year;

	(c)
	as
soon as the same become available, but in any event within 30 days after the end of each Accounting Period:

	(i)
	the
Management Accounts of the Group as at the end of and for that Accounting Period; and

	(ii)
	the
Management Accounts of each Obligor as at the end of and for that Accounting Period. 

 
 

22.2. Operating Budget        

The
Parent shall supply to the Agent in sufficient copies for all the Lenders an Operating Budget for each of its financial years, not less than 15 days prior to the start of each financial
year. 

 
 

22.3. Compliance Certificates        

	(a)
	The
Parent shall supply to the Agent, with each set of financial statements delivered pursuant to paragraph (a)(i) or (in relation to any Accounting Period ending on or
around any Test Date) (c)(i) of Clause 22.1 (Financial statements), a Compliance Certificate setting out (in reasonable detail) computations as to compliance with Clause 23
(Financial covenants) as at the date as at which those financial statements were drawn up.

	(b)
	Each
Compliance Certificate shall be signed by two managing directors of the Parent and, if required to be delivered with the financial statements delivered pursuant to
paragraph (a)(i) of Clause 22.1 (Financial statements), shall be reported on by the Parent's auditors in a form acceptable to the Agent (acting reasonably). 

 
 

22.4. Requirements as to financial statements        

	(a)
	Each
set of financial statements delivered by the Parent pursuant to Clause 22.1 (Financial statements) shall be certified by the finance director or chief financial officer of
the relevant company (or of the Group) as fairly representing its financial condition as at the date as at which those financial statements were drawn up.

	(b)
	The
Parent shall procure that each set of Annual Accounts delivered pursuant to Clause 22.1(a) or (b) give a true and fair view of the financial condition of the Parent
or, as 

62

 

the
case may be, the relevant Obligor as at the date to which they were prepared and that each set of Management Accounts delivered pursuant to Clause 22.1(c) is in such a form as to disclose
with reasonable accuracy the financial position of the Group or, as the case may be, the relevant Obligor and shall include, in respect of each Accounting Period, a statement of profit and loss, a
balance sheet and a cash flow statement together with (i) a comparison, where appropriate, of all such information with the estimates, forecasts and projections in the relevant Operating Budget
(or any replacement or substitution made thereof) in relation to each Accounting Period including an analysis justifying any material variations therefrom and, if necessary, revised estimates,
forecasts and projections and (ii) a statement of the aggregate amount of receivables due to each member of the Group. 

	(c)
	The
Parent shall procure that each set of financial statements delivered pursuant to Clause 22.1 (Financial statements) is prepared using GAAP, accounting practices and
financial reference periods consistent with those applied in the preparation of the Original Financial Statements unless, in relation to any set of financial statements, it notifies the Agent that
there has been a change in GAAP, the accounting practices or reference periods and its auditors deliver to the Agent

	(i)
	a
description of any change necessary for those financial statements to reflect the GAAP, accounting practices and reference periods upon which the Original Financial Statements were
prepared; and

	(ii)
	sufficient
information, in form and substance as may be reasonably required by the Agent, to enable the Lenders to determine whether Clause 23 (Financial covenants) has been
complied with and make an accurate comparison between the financial position indicated in those financial statements and the Original Financial Statements. 

Any
reference in this Agreement to those financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial
Statements were prepared. 

	(d)
	If
an Event of Default has occurred, the Agent may notify the Parent that it believes (acting reasonably) that any financial information supplied to it in terms of this Agreement is
incorrect or incomplete in any material respect and, upon receipt of such notification, the Parent shall:

	(i)
	instruct
its auditors to provide such information to the Agent as it may reasonably request; and

	(ii)
	discuss
such matters with the Agent in relation to the financial position or information relating to the Group as the Agent may reasonably request. 

All
costs of the auditors of the Parent incurred in relation to this sub-clause (d) shall be for the account of the Parent provided that, if the Agent requires the auditors to
undertake any work on more than one occasion in any financial year and on each such subsequent occasion the information proves not to be materially inaccurate or incorrect, then the cost of the
auditors in relation to such matters shall be at the expense of the Lenders. 

 
 

22.5. Information: miscellaneous        

The
Parent shall supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests): 

	(a)
	all
formal documents dispatched by the Parent to its shareholders (or any class of them) generally or its creditors generally at the same time as they are dispatched; 

63

 

	(b)
	promptly
upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings in respect of a liability of a member of the Group in excess of $500,000
which are current or, so far as it is aware, threatened or pending against any member of the Group;

	(c)
	upon
receipt of the same by any Obligor, copies of any reports prepared in accordance with applicable laws in relation to any pension scheme operated by or for an Obligor;

	(d)
	promptly
upon becoming aware of these, details of any material breach of the provisions of any of the Transaction Documents (other than the Finance Documents) and the Service
Contracts and any breach of the provisions of any of the Finance Documents;

	(e)
	promptly
upon any such change taking effect, details of any changes in the corporate structure of the Group from that set out in Schedule 11 (Group Structure Chart); and

	(f)
	promptly,
such further information regarding the financial condition, business and operations of any member of the Group as any Finance Party (through the Agent) may reasonably
request. 

 
 

22.6. Notification of default        

	(a)
	Each
Borrower shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Borrower is aware
that a notification has already been provided by another member of the Group).

	(b)
	Promptly
upon a request by the Agent, the Parent shall supply to the Agent a certificate signed by two of its directors or senior officers on its behalf certifying that no Default is
continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it). 

 
 

23.   FINANCIAL COVENANTS         

 
 
 23.1.

	The
	Parent
 undertakes to ensure that unless the Agent (acting on the instructions of the Majority Lenders) otherwise agrees: 

	(a)
	Gearing  

on
each of the dates referred to in Column A below the ratio of Total Net Debt to Tangible Net Worth shall not be more than the ratio set out in Column B below opposite such date: 

	Column A

Test Date
	 	Column B

Ratio

	31 March 2006	 	1.20:1
	30 June 2006	 	1.20:1
	30 September 2006	 	1.20:1
	31 December 2006	 	0.90:1
	31 March 2007	 	0.75:1
	30 June 2007	 	0.75:1
	30 September 2007	 	0.75:1
	31 December 2007 and each Test Date thereafter	 	0.50:1

	(b)
	Interest Cover

the
ratio of EBITDA (less an amount equal to Capital Expenditure (excluding any Finance Lease Expenditure in that period) paid in the relevant period) to Total Net Debt Costs for the 

64

 

Test
Period ending on each Test Date referred to in Column A below shall not be less than the ratio set out in Column B below opposite that Test Date: 

	Column A

Test Date
	 	Column B

Ratio

	31 December 2006	 	3.50:1
	31 March 2007	 	3.50:1
	30 June 2007	 	3.50:1
	30 September 2007	 	3.50:1
	31 December 2007 and each Test Date thereafter	 	4.00:1

	(c)
	Cashflow to Total Funding Costs

the
ratio of Cashflow to Total Funding Costs (other than the interest element of any Finance Lease) for the Test Period ending on each Test Date referred to in Column A below shall not be less than
the ratio set out in Column B below opposite that Test Date: 

	Column A

Test Date
	 	Column B

Ratio

	31 December 2006 and each Test Date thereafter	 	1.0:1

	(d)
	Minimum EBITDA

for
each of the periods ending on the second of the dates referred to in Column A below the amount of EBITDA shall not be less than the amount set out in Column B below opposite that date: 

	Column A

Period
	 	Column B

EBITDA

	From 1 January 2006 to

31 March 2006	 	$	2,750,000
	From 1 January 2006 to

30 June 2006	 	$	7,000,000
	From 1 January 2006 to

30 September 2006	 	$	11,250,000

	

	

 
 
    23.2.
 If the Parent determines at any time during the Security Period that the financial year of any member of the Group has or should be changed or any of the accounting principles applied in
the preparation of any of financial statements delivered by the Parent pursuant to Clause 22.1 (Financial Statements) should be different from the Accounting Principles, or if as a result of
the introduction or implementation of any applicable accounting rules or any change in any of them or in any applicable law such accounting principles are required to be changed, the Parent shall
promptly give notice to the Agent of that change, determination or requirement. 

	

	

 
 
    23.3.
 If the Agent believes that the financial covenants set out in this Clause 23 need to be amended as a result of any such change, determination or requirement as is referred to in
Clause 23.2, the Parent shall negotiate with the Agent in good faith to amend the existing financial covenants so as to provide the Lenders with substantially the same protections as the
financial covenants set out in this Clause 23 (but which are not materially more onerous) as if such change, determination or requirement had not taken place or arisen and, if the Parent and
the Agent cannot agree such amended financial covenants within 30 days of that notice, the Parent and the Agent shall jointly nominate a firm of chartered accountants to settle the amended
financial undertakings, or in 

65

 

default
of such nomination the Agent shall request the President of the Institute of Chartered Accountants in England and Wales to nominate a firm of chartered accountants for that purpose. Such
accountants shall act as experts and not arbitrators and their decision shall be final and binding on the Parties. The costs of such accountants shall be paid by the Parent. 

	

	

 
 
    23.4.
 The calculation of ratios and other amounts under this Clause 23 shall be reviewed by the Agent by reference to the latest financial statements delivered by the Parent pursuant to
Clause 22.1 (Financial Statements) and other financial information of the Group for the financial year of the Parent, or other period in relation to which the calculation falls to be made. Each
determination of the Agent under this Clause 23 shall be conclusive and binding on the Parent except for any manifest error. Any calculation in relation to a financial year shall be made with
reference to the Management Accounts for that financial year and will then be re-tested by reference to the Annual Accounts for that financial year. 

 
 

24.   GENERAL UNDERTAKINGS         

Each
Borrower undertakes to each Finance Party in the terms of this Clause 24 from the date of this Agreement until all amounts under the Finance Documents have been discharged and no Finance
Party has any further Commitment or obligation under the Finance Documents. 

 
 

24.1. Authorisations        

Each
Borrower shall and, in the case of the Parent, shall procure that each other Obligor shall, promptly: 

	(a)
	obtain,
comply with and do all that is necessary to maintain in full force and effect; and

	(b)
	if
requested in writing by the Agent, supply certified copies to the Agent of, 

any
Authorisation required under any law or regulation of its jurisdiction of incorporation to enable it to perform its obligations under the Transaction Documents and to ensure the legality,
validity, enforceability or admissibility in evidence in its jurisdiction of incorporation of any Transaction Document. 

 
 

24.2. Compliance with laws        

Each
Borrower shall and, in the case of the Parent, shall procure that each other Obligor shall comply in all respects with all laws to which it may be subject, if failure so to comply would
materially impair its ability to perform its obligations under the Finance Documents. 

 
 

24.3. Negative pledge        

	(a)
	No
Borrower shall (and the Parent shall ensure that no other member of the Group will) create or permit to subsist any Security Interest over any of its assets.

	(b)
	No
Borrower shall (and the Parent shall ensure that no other member of the Group will):

	(i)
	sell,
transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by any other member of the Group;

	(ii)
	sell,
transfer or otherwise dispose of any of its receivables on recourse terms;

	(iii)
	enter
into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts (except with
any Approved Bank in circumstances in which the Agent has approved the existence of a debit balance in respect of such bank); or 

66

  

	(iv)
	enter
into any other preferential arrangement having a similar effect, 

in
circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset. 

	(c)
	Paragraphs
(a) and (b) above do not apply to any Permitted Security Interest. 

 
 

24.4. Disposals        

	(a)
	No
Borrower shall (and the Parent shall ensure that no other member of the Group will), enter into a single transaction or a series of transactions (whether related or not) and
whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset.

	(b)
	Subject
to paragraph (c), paragraph (a) above does not apply to any sale, lease, transfer or other disposal:

	(i)
	(other
than of any shares in any company) made on arm's length terms in the ordinary course of business of the disposing entity;

	(ii)
	(other
than of any shares in any company) of assets in exchange for other assets comparable or superior as to type, value and quality;

	(iii)
	of
obsolete equipment no longer required for the purposes of the business of the Group;

	(iv)
	of
cash for purposes not otherwise prohibited by the Finance Documents;

	(v)
	any
disposal made with the prior written consent of the Agent (such consent not to be unreasonably withheld or delayed); or

	(vi)
	where
the higher of the market value or consideration receivable (when aggregated with the higher of the market value or consideration receivable for any other sale, lease, transfer
or other disposal, other than any permitted under paragraphs (i) to (v) above) does not exceed $250,000 (or its equivalent in another currency or currencies) in any financial year.

	(c)
	The
Parent shall not and it shall procure that no member of the Group shall (i) sell, transfer or otherwise dispose of all or any shares (or equivalent) in any member of the
Group to any other person (including, for the avoidance of doubt, any other member of the Group) or (ii) make any other alteration to the corporate structure of the Group, in each case without
the prior written consent of the Agent (such consent not to be unreasonably withheld or delayed and it being acknowledged by the Agent that it will provide its consent if, in the reasonable opinion of
the Agent, the security position of the Lenders is not adversely affected by the proposed sale, transfer or other disposal of shares or alteration to the corporate structure). The Agent acknowledges
that it is aware that it is intended that there is to be a reorganisation of the Group and that, subject to the entering into by members of the Group in favour of the Security Trustee of such security
documents (including, without limitation, guarantees) as it may require, the Agent is not aware of any issue that may result in it refusing to grant its consent to all or any part of such
reorganisation. 

 
 

24.5. Merger        

No
Borrower shall (and the Parent shall ensure that no other member of the Group will) enter into any amalgamation, demerger, merger or corporate reconstruction without the prior written consent of
the Agent (such consent not to be unreasonably withheld or delayed). 

67

 

 
 

24.6. Change of business        

Save
as referred to in the Business Plan, the Parent shall procure that no material change is made to the general nature of the business of the Parent or the Group from that carried on at the date of
this Agreement without the prior written consent of the Agent. 

 
 

24.7. Compliance with Obligations        

The
Parent shall and shall procure that each other Obligor shall comply with all of the obligations and undertakings expressed to be assumed by it under the Transaction Documents in circumstances in
which failure to do so would have a material and adverse effect on the interests of the Lenders under the Finance Documents. 

 
 

24.8. Insurance        

The
Parent shall maintain (and procure that each other member of the Group maintains) insurances on and in relation to its business and assets with reputable underwriters or insurance companies
against such risks and to such extent as is reasonable and usual for companies carrying on a business such as that carried on by that member of the Group (provided that such cover is at least as
comprehensive as that recommended in the Insurance Report) and procure that the interest of the Finance Parties is noted on the policies and that such insurances (other than third party liability
policies) include a loss payee clause to the effect that all proceeds in excess of $250,000 will be paid to the Agent. 

 
 

24.9. Intellectual Property Rights        

The
Parent shall do (and shall procure that each other member of the Group does) all that is or may be reasonably necessary to preserve and protect (and refrain from doing, causing or permitting to be
done anything which would be reasonably expected to have a material adverse effect on or terminate) their respective rights to use, or the validity or enforceability of, any rights in relation to any
Intellectual Property which at any time is owned or used by or is the subject of any licence or permission in favour of any member of the Group, in circumstances in which failure to do so would have a
material and adverse effect on the interests of the Lenders under the Finance Documents. 

 
 

24.10. Access by Agent to Auditors        

The
Parent shall instruct its auditors to discuss the Group's financial position with the Agent and the Lenders (on request from the Agent) and to disclose to the Agent (and provide it with copies of)
such information as the Agent may reasonably request regarding the financial condition of the Group. 

 
 

24.11. Tax        

The
Parent shall (and procure that each other member of the Group shall) pay and discharge all Tax which is due for payment (other than Tax which is being contested in good faith and by appropriate
means) and all other lawful claims which would, if unpaid, by law become encumbrances on its assets or result in material penalties being incurred in circumstances where failure to do so would have a
Material Adverse Effect. 

 
 

24.12. Bank Transactions and Cash Balances        

	(a)
	Each
Borrower shall (and the Parent shall procure that each other Obligor shall) open and maintain such bank accounts as the Agent may reasonably request. 

68

 

	(b)
	Save
as referred to in (e) below, the Parent shall ensure that each member of the Group incorporated in any part of the United Kingdom will conduct all of its banking business
(and have all of its bank accounts) with such member of the BoS Group as is selected by such member of the Group and that (with effect from the date of this Agreement) each member of the Group
incorporated outside of the United Kingdom will conduct all of its banking business with either (i) such member of the BoS Group as is selected by such member of the Group or (ii) an
Approved Bank unless otherwise agreed with the Agent.

	(c)
	The
Parent shall procure that the amount of cash held by (or on behalf of) members of the Group which are not Obligors (other than with a member of the BoS Group in circumstances in
which such account is the subject of such set-off or security arrangements as the Agent requires) shall not at any time exceed $3,000,000 provided that if, for any reason, the amount of
cash held by such persons exceeds such level for more than 7 days the Parent shall procure that such excess amount is transferred to an account in the name of the relevant member (or members)
of the Group held in the United Kingdom with a member of BoS Group, such account being subject to such set-off or security arrangements as the Agent may require.

	(d)
	The
Parent shall procure that the amount of cash held by (or on behalf of) Obligors with banks appointed pursuant to the terms of Approved Bank Letters shall not at any time exceed
$3,000,000 in aggregate provided that if, for any reason, the amount of cash held by such persons exceeds such level for more than 7 days the Parent shall procure that such excess amount is
transferred to an account in the name of the relevant member (or members) of the Group held in the United Kingdom with a member of BoS Group, such account being subject to such set-off or
security arrangements as the Agent may require.

	(e)
	Paradigm
Geophysical (UK) Limited may retain its existing bank accounts with Barclays Bank PLC for a period up to and including 31 December 2006 only, in order to facilitate
the receipt of funds connected with the Group's operations in Russia The Parent shall procure that all amounts received from time to time while such accounts with Barclays Bank PLC remain operational
shall be transferred to accounts of the relevant members of the Group with a member of the BoS Group as soon as is reasonably practicable after receipt and in any event within 7 days of
receipt. 

 
  24.13. Compliance with Environmental Law        

The
Parent shall (and shall procure that each other member of the Group shall) comply with all Environmental Law and all Environmental Licences, in each case relating to the receiving, handling, use,
storage, accumulation, transportation, generations, spillage, migration, discharge, release and disposal of any Hazardous Substances in circumstances where failure to do so would have a Material
Adverse Effect. 

 
 

24.14. Storage of Hazardous Substances        

	(a)
	The
Parent shall not (and will procure that no other member of the Group will) cause or permit any Hazardous Substance to be brought upon or used in or about any property owned or
occupied by any member of the Group, other than Hazardous Substances used in the ordinary course of business in accordance with applicable Environmental Laws and/or Environmental Licences to the
extent that to do so would have a Material Adverse Effect.

	(b)
	The
Parent shall store in any mariner approved or prescribed by Environmental Law and/or any Environmental Licence, any and all Hazardous Substances permitted within any property
owned or occupied by any member of the Group in circumstances where failure to do so would have a Material Adverse Effect. 

69

 

 
 

24.15. Pensions and Severance Pay        

The
Parent shall (and shall procure that each member of the Group shall) ensure that all pension schemes and severance pay funds operated by or for it are fully funded (by a provision in the relevant
balance sheet or otherwise) based on reasonable actuarial assumptions and are administered and funded in accordance with all applicable laws and guidelines in circumstances in which failure to do so
would result in a liability of more than $500,000 for a member of the Group or have a Material Adverse Effect. 

 
 

24.16. Dividends        

The
Parent shall not (and shall procure that no other member of the Group shall (without the prior written consent of the Agent (such consent not to be unreasonably withheld or delayed)) pay any
dividend or other similar distribution or pay any interest on unpaid dividends or any other sums intended to act as similar distributions to any of its shareholders other than (i) any such
payment by a member of the Group (except the Parent) to its holding company and (ii) a payment by the Parent in accordance with Clause 3.1(a). For the avoidance of doubt the Parent may
recognise the accrual of dividends declared by it but which it is unable to pay to its shareholders as a result of the terms of the Finance Documents. 

 
 

24.17. Financial Indebtedness        

The
Parent shall not (and shall procure that no other member of the Group shall) incur or permit to subsist any Financial Indebtedness other than Permitted Financial Indebtedness. 

 
 

24.18. Guarantees        

The
Parent shall not (and shall procure that no other member of the Group shall) give or enter into or permit to subsist or agreed to give or enter into any guarantee (or indemnity or other legally
binding assurance against loss) except for: 

	(a)
	guarantees,
indemnities or other legally binding assurances against loss in, or given pursuant to the terms of, any of the Finance Documents;

	(b)
	guarantees,
indemnities or other legally binding assurances against loss given in relation to any netting or set-off arrangements entered into by any member of the Group
in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances;

	(c)
	guarantees
or bonds granted by a member of the Group in respect of the performance by an Obligor or by a member of the Group which is not an Obligor in respect of another member of
the Group which is not an Obligor in each case of any contract entered into in the ordinary course of business;

	(d)
	guarantees,
indemnities or other legally binding assurances against loss given by any member of the Group in respect of the obligations of any Obligor or by a member of the Group
which is not an Obligor in respect of another member of the Group which is not an Obligor in each case provided such obligations are incurred in the ordinary course of business; and

	(e)
	otherwise
(and in addition to any items referred to in paragraphs (a)-(d) inclusive) with the prior written consent of the Agent. 

 
 

24.19. Loans        

The
Parent will not (and shall procure that no other member of the Group shall) make any loans or grant any credit other than:- 

70

 

	(a)
	normal
trade credit in the ordinary course of business (including, for the avoidance of any doubt, credit or loans arising as a result of transfer pricing in the ordinary course of
intra Group trading);

	(b)
	loans
by any member of the Group to any Obligor provided that any such loans may not be repaid to any member of the Group which is not an Obligor without the prior written consent of
the Agent;

	(c)
	(in
addition to the loans referred to in paragraph (e) below) loans by Obligors to members of the Group (not being Obligors) of up to $750,000 in aggregate at any time;

	(d)
	loans
to employees or other persons made in the ordinary course of business provided the aggregate amount of such loans (including outstanding interest) does not exceed $150,000;

	(e)
	the
loans made by an Obligor to other members of the Group outstanding on the Restatement Date and disclosed to the Agent, being a loan of up to $600,000 to Paradigm Geophysical SA
(incorporated in Argentina) and a loan to Paradigm Geophysical Holdings SARL of not more than $1,280,000 (or the equivalent in the relevant currency);

	(f)
	a
loan made by the Parent to Paradigm Geophysical Canada Ltd of up to $5,000,000 prior to the Restatement Date;

	(g)
	credit
granted by Paradigm Geophysical Corp. to Baker Hughes Incorporated ("BHI") in connection with the purchase by BHI of the Group's products and services of not more than
$1,963,453 on 30 June 2004 and for a period of 3 years thereafter;

	(h)
	any
other loans (not referred to in paragraphs (a)-(g) inclusive above) made with the prior written consent of the Agent. 

 
 

24.20. Acquisitions        

	(a)
	The
Parent shall not (and shall procure that no other member of the Group shall) acquire any assets, business or body corporate or acquire or subscribe for shares or other securities
(or any interest therein) (excluding, for the avoidance of doubt, the incorporation of a new company which becomes a member of the Group).

	(b)
	Paragraph (a)
does not apply to:

	(i)
	the
Acquisition, the Baker Hughes Acquisition, the Core Labs Acquisition, or the acquisition of up to 12% of the issued share capital or share capital rights of Open
Spirit, Inc. for an amount not in excess of $1,000,000 or the acquisition of Earth Decision Sciences, S.A.;

	(ii)
	the
acquisition of a newly incorporated company which has not traded and which has no assets or liabilities (actual or contingent), the sole purpose of which is to make acquisitions
which are permitted in terms of the Agreement;

	(iii)
	the
acquisition of shares in a company which is a wholly owned subsidiary of a member of the Group by such member of the Group;

	(iv)
	any
other acquisition made with the prior written consent of the Agent (such consent not to be unreasonably withheld or delayed);

	(v)
	any
acquisition that is financed directly or indirectly by any of the Original Investors and is made with the prior written consent of the Agent (such consent not to be unreasonably
withheld or delayed); 

71

 

	(vi)
	subject
to compliance with Clause 27.5 (Further Security), any acquisition of any assets, business or body corporate or acquisition or subscription for shares or other
securities not otherwise permitted by paragraphs (i) to (v) above where the aggregate of the consideration payable for, and Financial Indebtedness assumed by members of the Group in
connection with, all such acquisitions in any financial year does not exceed $500,000. 

 
 

24.21. Joint Ventures        

The
Parent shall not (and shall procure that no other member of the Group shall) enter into any joint venture or partnership with any person other than:- 

	(a)
	any
joint venture or partnership that is financed directly or indirectly by any of the Original Investors and is made with the prior written consent of the Agent (such consent not to
be unreasonably withheld or delayed);

	(b)
	any
joint venture or partnership approved in writing by the Agent (acting reasonably); and

	(c)
	any
other joint venture or partnership (not referred to in paragraphs (a) and (b) above) where the aggregate consideration payable for and Financial Indebtedness assumed
by the Group in connection with all such joint ventures and partnerships in any financial year does not exceed $250,000. 

 
 

24.22. Capital Expenditure        

The
Parent shall procure that no member of the Group will incur Capital Expenditure (including, without limitation, Finance Lease Expenditure) in any financial year which together with all Capital
Expenditure incurred by all other members of the Group in such financial year exceeds 120% of the level of Capital Expenditure (including, without limitation, Finance Lease Expenditure) set out in the
Operating Budget for the Group for that financial year and approved by the Majority Lenders. If the amount of such Capital Expenditure set out in the Operating Budget for any financial year is not
fully utilised in that year, up to 100% of the amount not so utilised (the "Permitted Carry Forward Amount") may be carried forward to the next financial year (but no further). In any financial year,
it will be assumed that the Permitted Carry Forward Amount is spent before all of the Capital Expenditure permitted to be spent in such financial year is spent. 

 
 

24.23. Change in Accounts Date or Auditors        

The
Parent shall not (and shall procure that no other member of the Group shall) change its financial year or its auditors save to one of KPMG, PricewaterhouseCoopers, Deloitte & Touche or
Ernst & Young provided that the Group may continue to use Moore Stephens as its auditors in respect of members of the Group incorporated in Ecuador, Venezuela and Indonesia, to use Sim Guan
Seng as its auditors in respect of members of the Group incorporated in Singapore and to use Howarth Group as its auditors in respect of members of the Group incorporated in Malaysia. 

 
 

24.24. Change in Accounting Principles        

The
Parent shall not (and shall procure that no other member of the Group shall) change its accounting policies and principles from the Accounting Principles without the prior written consent of the
Agent unless required to do so in order to ensure that the Annual Accounts comply with GAAP from time to time. 

72

 

 
 

24.25. Status of Parent        

The
Parent shall not carry on any business other than the holding of shares in the Company, the provision of administrative services to other members of the Group and the making of intra group loans
to the Company in accordance with the Convertible Loan Agreement or to any other member of the Group subject to the terms of this Agreement. 

 
 

24.26. Issue of Shares        

The
Parent shall procure that no member of the Group shall issue any shares other than: 

	(a)
	to
another member of the Group of which it is a Subsidiary;

	(b)
	pursuant
to or in connection with a Listing;

	(c)
	by
the Parent to any of the Original Investors, Dutchco, the Dutch Foundations, Caymanco or Luxco;

	(d)
	in
accordance with the terms of any employee share scheme in respect of the Parent (up to in aggregate not more than 25% of the fully diluted equity share capital of the Parent at the
Completion Date);

	(e)
	otherwise
with the prior written consent of the Agent. 

 
 

24.27. Purchase or Redemption of Shares        

No
member of the Group shall purchase, retire, defease, redeem or acquire any of its own shares or stock (or equivalent) without the prior written consent of the Agent provided that:- 

	(a)
	any
member of the Group (other than the Parent) shall be permitted to purchase, retire, defease, redeem or acquire any of its own shares or stock (or equivalent) to the extent that
the aggregate amount of the consideration payable for all such actions in any financial year does not exceed $250,000;

	(b)
	the
Parent can purchase shares from Dutchco or the Dutch Foundations in connection with a Listing; or

	(c)
	the
Parent shall be permitted to purchase, retire, defease, redeem or acquire its own shares in accordance with Clause 3.1(a), 

and
provided that, at the date of such action, no Default is continuing or would arise as a result of such member of the Group taking such action. 

 
 

24.28. Amendment of Equity Documents        

The
Parent shall not amend or waive any provisions of the Equity Documents in any way which has, or would have, a material and adverse effect on the interests of the Agent and the Lenders under the
Finance Documents. 

 
 

24.29. Payment of Subordinated Debt/Shareholder Fees/Investor Counter-Indemnity        

	(a)
	The
Parent shall not repay, prepay, redeem, purchase or otherwise satisfy in any way or make any payment of or in respect of more than an aggregate amount of $35,000,000 in respect of
interest and the principal amount outstanding under the Subordinated Notes in accordance with the terms of the Funds Flow Statement, other than in accordance with the terms of the Inter Creditor Deed. 

73

 

	(b)
	The
Parent shall not (and shall procure that no other member of the Group shall) pay any fees or similar amounts or payments to any direct or indirect holder of shares in the Parent,
other than annual fees of up to $1,200,000 payable pursuant to the terms of the Management Agreement and (where applicable) such payments are made in accordance with paragraph (c) below.

	(c)
	The
Parent shall not pay the annual fees of up to $1,200,000 in respect of the period from 1 January 2006 to 31 December 2006 (the "2006 Management Fee") pursuant to the
terms of the Management Agreement until 31 December 2006 and provided that on 31 December 2006 the Parent is in compliance with the provisions of paragraphs (a) to
(c) (inclusive) of Clause 23.1 (Financial Covenants) however, if the Parent is not in compliance with the financial covenants set out in paragraphs (a) to (c) (inclusive)
of Clause 23.1 (Financial Covenants) on 31 December 2006, the Parent may only pay the 2006 Management Fee on or after the next Test Date on which the Parent is in compliance with such
financial covenants.

	(d)
	The
Parent shall not (and shall procure that no other member of the Group shall) pay any amount to Fox Paine Capital Fund II L.P. under or in connection with the Investor Counter
Indemnity until all amounts owed by the Obligors (or any of them) to the Finance Parties (or any of them) under or in connection with the Finance Documents have been irrevocably repaid in full. 

 
 

24.30. Off Balance Sheet Finance        

The
Parent shall not (and will procure that no other member of the Group shall) enter into any off balance sheet financing without the prior written consent of the Agent except as is expressly
permitted in accordance with the terms of this Agreement. 

 
 

24.31. Hedging Transactions        

The
Parent shall enter into the Hedging Transactions referred to in the Hedging Policy Letter within 30 days of the Restatement Date but shall not (and will procure that no other member of the
Group shall) enter into any Hedging Transaction other than in terms of any Permitted Hedging Transaction. 

 
 

24.32. Management Team        

The
Parent shall ensure that the Group has experienced and adequately skilled management at all times during the Security Period and that if any member of the Management Team resigns or ceases
(whether by reason of death, retirement at normal retirement age, ill health or otherwise) to act in the capacity he or she was appointed to in respect of the Group in accordance with the relevant
service
agreement, the Agent shall be promptly notified of such event and the Parent shall appoint a replacement within 6 months of such resignation or cessation to act unless the Agent (acting
reasonably) determines that no such appointment is required. 

 
 

24.33. Israeli Office of Chief Scientist        

The
Parent shall procure that each relevant member of the Group shall comply with its obligations under the rules implemented from time to time by the Israeli Office of Chief Scientist ("OCS") in
relation to intellectual property rights funded wholly or partly using funds provided by that organisation. The Parent shall ensure that each member of the Group will take all such action as the Agent
may reasonably require at any time in relation to the OCS subject to, and in accordance with, applicable Israeli law and the rules implemented by the OCS in order to give effect to the terms of any of
the Security Documents. 

74

 

 
 

24.34. Core Labs Receivable        

Deleted.

 
 

24.35. Paradigm Geophysical Holdings SAS        

The
Parent shall procure that the Company and Paradigm BV shall not transfer any of the shares held by either of them in Paradigm Geophysical Holdings SAS to any other member of the Group without the
prior written consent of the Agent. 

 
 

24.36. US Obligors        

The
Parent shall promptly notify the Agent of any (i) change of name of any Obligor incorporated in the USA or (ii) any change of the principal business office of any Obligor
incorporated in the USA. 

 
 

25.   EVENTS OF DEFAULT         

Each
of the events or circumstances set out in Clause 25 is an Event of Default. 

 
 

25.1. Non-payment        

An
Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the place at and in the currency in which it is expressed to be payable unless: 

	(a)
	its
failure to pay is caused by administrative or technical error; and

	(b)
	payment
is made within two Business Days of its due date. 

 
 

25.2. Key covenants        

Any
Obligor fails to comply with the terms of any of Clause 24.3 (Negative Pledge), 24.4 (Disposals), 24.5 (Merger), 24.16 (Dividends), 24.17 (Financial Indebtedness), 24.18 (Guarantees), 24.27
(Purchase or Redemption of Shares) or 24.29 (Payment of Subordinated Debt/Shareholder Fees/Investor Counter-Indemnity) or any requirement of Clause 23 (Financial covenants). 

 
 

25.3. Other obligations        

	(a)
	An
Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 25.1 (Non-payment) and Clause 25.2 (Key
covenants)).

	(b)
	No
Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within fifteen Business Days of the Agent giving notice
to the Parent or the Parent becoming aware of the failure to comply. 

 
 

25.4. Misrepresentation        

Any
representation or statement made or deemed to be made by an Obligor in the Finance Documents or any other document delivered by or on behalf of any Obligor under or in connection with any Finance
Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made and, if the relevant circumstance is capable of remedy, those circumstances are not
remedied within fifteen Business Days of the earlier of any Obligor becoming aware of such circumstances or the Agent notifying the Parent of such circumstances. 

75

 

 
 

25.5. Cross default        

	(a)
	Any
Financial Indebtedness of any Material Company is not paid when due nor within any originally applicable grace period.

	(b)
	Any
Financial Indebtedness of any Material Company is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however
described).

	(c)
	Any
commitment for any Financial Indebtedness of any Material Company is cancelled or suspended by a creditor of any Material Company as a result of an event of default (however
described).

	(d)
	Any
creditor of any Material Company becomes entitled to declare any Financial Indebtedness of any Material Company due and payable prior to its specified maturity as a result of an
event of default (however described).

	(e)
	No
Event of Default will occur under this Clause 25.5 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within paragraphs
(a) to (d) above is less than $250,000 (or its equivalent in any other currency or currencies). 

 
  25.6. Insolvency        

	(a)
	A
Material Company is unable or admits inability to pay its debts as they fall due, suspends making payments on any of its debts or, by reason of actual or anticipated financial
difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness.

	(b)
	A
moratorium is declared in respect of any indebtedness of any Material Company. 

 
 

25.7. Insolvency proceedings        

Any
corporate action, legal proceedings or other procedure or step is taken in relation to: 

	(a)
	the
suspension of payments, a bankruptcy, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement,
scheme of arrangement or otherwise) of any Material Company other than a solvent liquidation or reorganisation with the prior written consent of the Agent;

	(b)
	a
composition, assignment or similar arrangement with any creditor of any Material Company;

	(c)
	the
appointment of a liquidator (other than in respect of a solvent liquidation of a member of the Group which is not a Material Company or Obligor), receiver, administrator,
administrative receiver, compulsory manager or other similar officer in respect of any Material Company or any of its assets; or

	(d)
	enforcement
of any Security Interest over any material assets of any Material Company, 

or
any analogous procedure or step is taken in any jurisdiction. 

 
 

25.8. Creditors' process        

Any
expropriation, attachment, sequestration, distress or execution affects any asset or assets of a Material Company having an aggregate value of $100,000 and is not discharged within five Business
Days. 

76

 

 
 

25.9. Similar events elsewhere        

There
occurs in relation to any Material Company or any of its assets in any country or territory in which it is incorporated or carries on business or to the jurisdiction of whose courts it or any of
its property is subject, any event which appears to the Agent (acting reasonably) to correspond (in accordance with local laws and regulations) in that country or territory with any of those mentioned
in Clauses 25.6 (Insolvency) to 25.8 (Creditors' process) (inclusive) other than a solvent liquidation or reorganisation with the prior written consent of the Agent. 

 
 

25.10. Ownership of the Obligors        

An
Obligor (other than the Parent) or Paradigm BV is not or ceases to be a wholly owned Subsidiary of the Parent other than as referred to in Clause 21.24 (Group Structure) or as a result of a
solvent liquidation or reorganisation with the prior written consent of the Agent. 

 
 

25.11. Unlawfulness        

It
is or becomes unlawful for an Obligor to perform any of its obligations under the Finance Documents. 

 
 

25.12. Repudiation        

An
Obligor repudiates a Finance Document or evidences an intention to repudiate a Finance Document. 

 
 

25.13. Ceasing to Carry on Business        

Any
Material Company ceases or takes steps to cease to carry on all or a substantial part of its business other than (a) in terms of any disposal permitted under this Agreement or
(b) with the prior written consent of the Lenders or (c) as a result of a solvent liquidation or reorganisation with the prior written consent of the Agent. 

 
 

25.14. Government Intervention        

The
authority of any Material Company to conduct its business is wholly or substantially curtailed by any seizure or intervention by or on behalf of any governmental authority so that the ability of
any Obligor to comply with its obligations under any of the Finance Documents is (in the opinion of the Agent) materially and adversely affected. 

 
 

25.15. Qualified Audit Report        

The
Parent's auditors qualify their report to the audited consolidated accounts of the Parent in any way which is (in the opinion of the Agent (acting reasonably)) material in the context of the
Finance Documents. 

 
 

25.16. Litigation        

Except
as specifically disclosed to the Agent on or before the Restatement Date in the Banking Disclosure Letters, any litigation, arbitration or administrative proceedings are instituted against any
Material Company which if adversely determined would have a Material Adverse Effect (disregarding for this purpose any litigation or other proceedings which are, in the opinion of the Agent (acting
reasonably) frivolous, vexatious or which otherwise have no reasonable prospect of resulting in such a Material Adverse Effect). 

77

 

 
 

25.17. Inter Creditor Deed        

Any
person (other than a Finance Party) fails to comply with its obligations under the Inter Creditor Deed or the Inter Creditor Deed ceases to be binding upon any such person for whatever reason and
such failure or cessation has an adverse effect on the interests of the Lenders under the Inter Creditor Deed. 

 
 

25.18. Amendment of Constitution of the Parent        

The
Constitutional Documents are amended in any way which is (in the opinion of the Agent (acting reasonably)) materially adverse to the interests of the Agent or any of the Lenders. 

 
 

25.19. Material Adverse Effect        

Any
Material Adverse Effect occurs. 

 
 

25.20. Acceleration        

On
and at any time after the occurrence of an Event of Default which is confirming the Agent may, and shall if so directed by the Majority Lenders, by notice to the Parent: 

	(a)
	cancel
the Total Commitments whereupon they shall immediately be cancelled;

	(b)
	declare
that all or part of the Loans, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable,
whereupon they shall become immediately due and payable;

	(c)
	declare
that all or part of the Loans be payable on demand, whereupon they shall immediately become payable on demand by the Agent on the instructions of the Majority Lenders;

	(d)
	save
as otherwise agreed with the relevant Hedging Lender, the relevant Obligor will (to the extent it is able) terminate or sell the Hedging Transactions entered into pursuant to
Clause 24.31 (Hedging Transactions) and will pay all amounts due under the Hedging Transactions to such Hedging Lender (and each Lender which is a Hedging Lender will make any payments due
thereunder to any Obligor as a result of any such termination);

	(e)
	declare
that cash cover be provided to the Agent in respect of each Letter of Credit; and/or

	(f)
	declare
that all Ancillary Outstandings be repaid to the relevant Lender. 

78

  

 
 

SECTION 8    
    
    CHANGES TO PARTIES    
    

 
 

26.   CHANGES TO THE LENDERS         

 
 

26.1. Assignments and transfers by the Lenders        

Subject
to this Clause 26, a Lender (the "Existing Lender") may: 

	(a)
	assign
any of its rights; or

	(b)
	transfer
by novation any of its rights and obligations, 

to
another bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or
other financial assets and which qualifies as a PMP (the "New Lender"). 

 
 

26.2. Conditions of assignment or transfer        

	(a)
	The
consent of all of any of the Obligors is not required for an assignment or transfer by a Lender.

	(b)
	Each
Lender will consult in good faith with the Parent as to the identity of the proposed transferee in relation to any assignment or transfer and will not effect any assignment or
transfer prior to notifying the Parent of the identity of any assignee or transferee.

	(c)
	Notwithstanding
any other provision of this Agreement, the consent of the Issuing Bank is required for any assignment or transfer of any Lender's rights and/or obligations under
Facility B provided that such consent shall be automatically deemed to have been given where the proposed assignee or transferee (i) has a long term debt rating of at least A- by
Standard & Poor's Rating Group and A3 by Moody's Investor Service, Inc., or (ii) is a Lender.

	(d)
	An
assignment will only be effective on receipt by the Agent of written confirmation from the New Lender (in form and substance satisfactory to the Agent) that the New Lender will
assume the same obligations to the other Finance Parties as it would have been under if it was an Original Lender.

	(e)
	A
transfer will only be effective if the procedure set out in Clause 26.5 (Procedure for transfer) is complied with.

	(f)
	Any
assignment or transfer by an Existing Lender to a new Lender in relation to Facility A or Facility B will only be effective if it transfers or assigns the Existing Lender's shares
of such Facilities pro rata and is subject to a minimum aggregate equivalent amount being assigned or transferred thereunder of $5,000,000.

	(g)
	If:

	(i)
	a
Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and

	(ii)
	as
a result of circumstances existing at the date the assignment, transfer or change occurs, an Obligor would be obliged to make a payment to the New Lender or Lender acting through
its new Facility Office under Clause 16 (Tax gross-up and indemnities) or Clause 17 (Increased Costs), 

79

 

then
the New Lender or Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender or Lender acting through its
previous Facility Office would have been if the assignment, transfer or change had not occurred. 

 
 

26.3. Assignment or transfer fee        

The
New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Agent (for its own account) a fee of £1,000. 

 
 

26.4. Limitation of responsibility of Existing Lenders        

	(a)
	Unless
expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:

	(i)
	the
legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents;

	(ii)
	the
financial condition of the Group or any Obligor;

	(iii)
	the
performance and observance by any Obligor of its obligations under the Finance Documents or any other documents; or

	(iv)
	the
accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document, 

and
any representations or warranties implied by law are excluded. 

	(b)
	Each
New Lender confirms to the Existing Lender and the other Finance Parties that it:

	(i)
	has
made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor and its related entities in connection
with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender in connection with any Finance Document; and

	(ii)
	will
continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any amount is or may be outstanding under the Finance
Documents or any Commitment is in force.

	(c)
	Nothing
in any Finance Document obliges an Existing Lender to:

	(i)
	accept
a re-transfer from a New Lender of any of the rights and obligations assigned or transferred under this Clause 26; or

	(ii)
	support
any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Obligor of its obligations under the Finance Documents or
otherwise. 

 
 

26.5. Procedure for transfer        

	(a)
	Subject
to the conditions set out in Clause 26.2 (Conditions of assignment or transfer) a transfer is effected in accordance with paragraph (b) below when the Agent
executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender. The Agent shall, as soon as reasonably practicable after receipt by it of a duly
completed Transfer Certificate appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate. 

80

 

	(b)
	On
the Transfer Date:

	(i)
	to
the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents each of the Obligors and the
Existing Lender shall be released from further obligations towards one another under the Finance Documents and their respective rights against one another shall be cancelled (being the
"Discharged Rights and Obligations");

	(ii)
	each
of the Obligors and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations
only insofar as that Obligor and the New Lender have assumed and/or acquired the same in place of that Obligor and the Existing Lender;

	(iii)
	the
Agent, the Arranger, the Security Trustee, the New Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves as they would have
acquired and assumed had the New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Agent, the Arranger, the
Security Trustee and the Existing Lender shall each be released from further obligations to each other under this Agreement; and

	(iv)
	the
New Lender shall become a Party as a "Lender". 

 
 

26.6. Disclosure of information        

Any
Lender may disclose to any of its Affiliates and any other person: 

	(a)
	to
(or through) whom that Lender assigns or transfers (or may potentially assign or transfer) all or any of its rights and obligations under this Agreement;

	(b)
	with
(or through) whom that Lender enters into (or may potentially enter into) any sub participation in relation to, or any other transaction under which payments are to be made by
reference to, this Agreement or any Obligor; or

	(c)
	to
whom, and to the extent that, information is required to be disclosed by any applicable law or regulation, 

any
information about any Obligor, the Group and the Finance Documents as that Lender shall consider appropriate (acting reasonably) if, in relation to paragraphs (a) and (b) above, the
person to whom the information is to be given has entered into a Confidentiality Undertaking. 

 
 

26.7. Assistance with Syndication        

The
Parent covenants with the Finance Parties that it will co-operate with the Finance Parties in relation to the syndication of the Facilities and will assist such syndication in such
manner and to such extent as the Arranger may from time to time reasonably request including, without limitation, by:- 

	(i)
	assisting
the Arranger in the preparation of any information memorandum prepared for the purposes of syndication of the Facilities (in relation to the business, trading, prospects,
financial condition, assets and liabilities of the Group, the markets in which its operates and the terms of the Facilities);

	(ii)
	instructing
the preparation (or updating) of due diligence reports for the benefit of any proposed Lenders (at the cost of the Parent); 

81

 

	(iii)
	participating
in presentations to potential Lenders concerning the activities of the Group and arranging site visits to the key operating sites of the Group (as identified by the
Arranger); and

	(iv)
	approving,
executing and delivering any documents which the Arranger, on receiving legal advice from its foreign counsel, requires to be entered into by any member of the Group as a
consequence of the syndication of the Facilities to amend or supplement any of the Finance Documents to protect the Finance Parties' rights intended to be afforded all or any of them under such
Finance Documents. 

The
Arranger agrees to use all reasonable efforts to minimise the costs payable by the Parent in terms of this Clause 26.7. 

 
 

27.   CHANGES TO THE OBLIGORS AND FURTHER SECURITY         

 
 

27.1. Assignments and transfer by the Obligors        

No
Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents. 

 
 

27.2. Additional Borrowers        

	(a)
	The
Parent may request that any of its wholly owned Subsidiaries becomes an Additional Borrower in respect of Facility B. That Subsidiary shall become an Additional Borrower if

	(i)
	all
the Lenders approve the addition of that Subsidiary;

	(ii)
	the
Parent delivers to the Agent a duly completed and executed Accession Letter;

	(iii)
	the
Parent confirms that no Default is continuing or would occur as a result of that Subsidiary becoming an Additional Borrower; and

	(iv)
	the
Agent has received all of the documents and other evidence listed in Part II of Schedule 2 (Conditions precedent) in relation to that Additional Borrower, each in
form and substance satisfactory to the Agent.

	(b)
	The
Agent shall notify the Parent and the Lenders promptly upon being satisfied that it has received (in form and substance satisfactory to it) all the documents and other evidence
listed in Part II of Schedule 2 (Conditions precedent). 

 
 

27.3. Resignation of a Borrower        

	(a)
	The
Parent may request that any Borrower under Facility B ceases to be such a Borrower by delivering to the Agent a Resignation Letter.

	(b)
	The
Agent shall accept a Resignation Letter and notify the Parent and the Lenders of its acceptance if:

	(i)
	no
Default is continuing or would result from the acceptance of the Resignation Letter (and the Parent has confirmed this is the case); and

	(ii)
	the
Borrower is under no actual or contingent obligations as a Borrower under any Finance Documents (without prejudice to its obligations as an Obligor (other than as a Borrower)
under the Finance Documents), 

whereupon
that company shall cease to be a Borrower under Facility B and shall have no further rights or obligations under this Agreement (without prejudice to its obligations under 

82

 

this
Agreement in its capacity as an Obligor (other than as a Borrower) or its obligations under any of the other Finance Documents). 

 
 

27.4. Repetition of Representations        

Delivery
of an Accession Letter constitutes confirmation by the relevant Subsidiary that the Repeating Representations are true and correct in relation to it as at the date of delivery as if made by
reference to the facts and circumstances then existing. 

 
 

27.5. Further Security        

	(a)
	Each
Obligor shall execute and deliver to the Agent such further or additional Security Documents as the Security Trustee (acting reasonably) shall require in respect of:

	(i)
	any
assets acquired after the date of this Agreement by any Obligor that would not otherwise be effectively pledged or charged to the Security Trustee under the Security Documents but
which is of a type of asset which is charged (or intended to be charged) by the Security Documents; and

	(ii)
	(without
limitation to the generality of (i) above), any shares held by any Obligor in any entity which becomes a Material Company after the date of this Agreement. 

Each
such Security Document shall be in form and substance acceptable to the Security Trustee and on the same or a similar basis as the security contained in the Security Documents entered into
pursuant to this Agreement on or around the date of this Agreement. 

	(b)
	The
Parent shall procure that (if requested by the Agent) any entity which becomes a Material Company at any time shall execute such Security Documents as the Security Trustee (acting
reasonably) shall require on the same or a substantially similar basis as the security contained in the Security Documents entered into on or around the date of this Agreement and shall deliver the
same to the Security Trustee (together with such of the documents referred to in Part II of Schedule 2 (Conditions Precedent) as the Security Trustee may reasonably request) as soon as
is reasonably practicable and in any event within 5 days (or such longer period as the Security Trustee shall agree) of the Parent becoming aware that the entity has become a Material Company.
The Finance Parties agree that they will have regard to the possibility of any entity ceasing for any reason to be a Material Company shortly after becoming a Material Company and to the costs of
obtaining security, in deciding whether to require compliance by the Parent in terms of this Clause 27.5(b) at any time.

	(c)
	If
at any time the Agent determines and notifies the Parent that the aggregate contribution of the Obligors (for this purpose only on the basis that each of, Paradigm BV (but not any
of its Subsidiaries) and Paradigm Geophysical France SA (but not any of its Subsidiaries) is an Obligor) to either the aggregate Gross Assets or aggregate Total Revenues of the Group is less than 70%
of the aggregate Gross Assets or aggregate Total Revenues of the Group, the Parent shall procure that such members of the Group as the Agent may identify by notice to the Parent will execute and
deliver such Security Documents as the Agent may notify to the Parent under the laws of the jurisdiction of incorporation of that entity (together with, in any such case, such of the documents
referred to in Part II of Schedule 2 as the Security Trustee may reasonably request) as are necessary to ensure that, after delivering such Security Documents, the aggregate contribution
of the Obligors (for this purpose only on the basis that each of, Paradigm BV (but not any of its Subsidiaries) and Paradigm Geophysical France SA (but not any of its Subsidiaries) is an Obligor) to
the aggregate Gross Assets or aggregate Total Revenues of the Group is greater than 70% as soon as is reasonably practicable after 

83

 

the
giving of such notice and in any event within 15 Business Days of the giving of such notice to the Parent. 

	(d)
	The
Parent shall; and shall procure that each other relevant member of the Group which is an Obligor or a Material Subsidiary shall, at its own expense, execute and do all such
assurances, acts and things as the Agent or the Security Trustee may reasonably require for perfecting or protecting the security intended to be afforded by the Security Documents. 

 
  27.6. Release of Security        

The
Security Trustee shall (and is hereby authorised by the other Finance Parties to) release (at the cost and expense of the Parent) any assets from the Security Documents at the request of the
Parent in connection with a disposal of such assets, provided that: 

	(a)
	such
disposal is permitted in accordance with the terms of this Agreement; and

	(b)
	no
Default is continuing or would result from the disposal or the release of the assets from the Security Documents. 

84

  

 
 

SECTION 9    
    
    THE FINANCE PARTIES    
    

 
  28. 

	ROLE
	  OF THE AGENT, THE SECURITY TRUSTEE AND THE ARRANGER

 
 

28.1. Appointment of the Agent and the Security Trustee        

	(a)
	Each
other Finance Party appoints the Agent to act as its agent under and in connection with the Finance Documents.

	(b)
	Each
other Finance Party appoints the Security Trustee to act as security trustee under and in connection with the Finance Documents in accordance with the terms of this Agreement and
the Inter Creditor Deed.

	(c)
	Each
other Finance Party authorises each of the Agent and the Security Trustee to exercise the rights, powers, authorities and discretions specifically given to it under or in
connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions. 

 
  28.2. 

	Duties
	  of the Agent and the Security Trustee

	(a)
	The
Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Agent for that Party by any other Party.

	(b)
	Except
where a Finance Document specifically provides otherwise, the Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to
another Party.

	(c)
	If
the Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the
Finance Parties.

	(d)
	If
the Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Agent or the Arrangers) under
this Agreement it shall promptly notify the other Finance Parties.

	(e)
	The
Agent's and the Security Trustee's duties under the Finance Documents are solely mechanical and administrative in nature. 

 
 

28.3. Role of the Arranger        

Except
as specifically provided in the Finance Documents, the Arranger has no obligations of any kind to any other Party under or in connection with any Finance Document. 

 
 

28.4. Role of the Security Trustee        

The
Security Trustee shall not be an agent of any Finance Party or any Obligor under or in connection with any Finance Document. 

 
 

28.5. No fiduciary duties        

	(a)
	Nothing
in this Agreement constitutes the Agent, the Security Trustee or the Arranger as a trustee or fiduciary of any other person.

	(b)
	None
of the Agent, the Security Trustee or the Arranger shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account. 

85

 

 
 

28.6. Business with the Group        

The
Agent, the Security Trustee and the Arranger may accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of the Group. 

 
 

28.7. Rights and discretions of the Agent and the Security Trustee        

	(a)
	The
Agent and the Security Trustee may rely on:

	(i)
	any
representation, notice or document believed by it to be genuine, correct and appropriately authorised; and

	(ii)
	any
statement made by a director, authorised signatory or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power
to verify.

	(b)
	The
Agent and the Security Trustee may assume (unless it has received notice to the contrary in its capacity as agent or security trustee for the Lenders) that:

	(i)
	no
Default has occurred (unless it has actual knowledge of a Default arising under Clause 25.1 (Non-payment));

	(ii)
	any
right, power, authority or discretion vested in any Party or the Majority Lenders has not been exercised; and

	(iii)
	any
notice or request made by the Parent (other than a Utilisation Request or Selection Notice) is made on behalf of and with the consent and knowledge of all the Obligors.

	(c)
	Each
of the Agent and the Security Trustee may engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts.

	(d)
	Each
of the Agent and the Security Trustee may act in relation to the Finance Documents through its personnel and agents.

	(e)
	The
Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.

	(f)
	Notwithstanding
any other provision of any Finance Document to the contrary, none of the Agent, the Security Trustee or the Arranger is obliged to do or omit to do anything if it
would or might in its reasonable opinion constitute a breach of any law or a breach of a fiduciary duty or duty of confidentiality. 

 
 

28.8. Majority Lenders' instructions        

	(a)
	Unless
a contrary indication appears in a Finance Document, the Agent and the Security Trustee shall (i) exercise any right, power, authority or discretion vested in it as
Agent or as Security Trustee in accordance with any instructions given to it by the Majority Lenders (or, if so instructed by the Majority Lenders, refrain from exercising any right, power, authority
or discretion vested in it as Agent or as Security Trustee) and (ii) not be liable for any act (or omission) if it acts (or refrains from taking any action) in accordance with an instruction of
the Majority Lenders.

	(b)
	Unless
a contrary indication appears in a Finance Document, any instructions given by the Majority Lenders will be binding on all the Finance Parties.

	(c)
	The
Agent may refrain from acting in accordance with the instructions of the Majority Lenders (or, if appropriate, the Lenders) until it has received such security as it may require 

86

 

for
any cost, loss or liability (together with any associated VAT) which it may incur in complying with the instructions. 

	(d)
	In
the absence of instructions from the Majority Lenders, (or, if appropriate, the Lenders) the Agent may act (or refrain from taking action) as it considers to be in the best
interest of the Lenders.

	(e)
	The
Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender's consent) in any legal or arbitration proceedings relating to any Finance Document. 

 
 

28.9. Responsibility for documentation        

None
of the Agent, the Arrangers or the Security Trustee: 

	(a)
	is
responsible for the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Agent, the Arranger, the Security Trustee, an Obligor or any
other person given in or in connection with any Finance Document; or

	(b)
	is
responsible for the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement, arrangement or document entered into, made or
executed in anticipation of or in connection with any Finance Document. 

 
 

28.10. Exclusion of liability        

	(a)
	Without
limiting paragraph (b) below, neither the Agent nor the Security Trustee will be liable for any action taken by it under or in connection with any Finance Document,
unless directly caused by its gross negligence or wilful misconduct.

	(b)
	No
Party (other than the Agent) may take any proceedings against any officer, employee or agent of the Agent in respect of any claim it might have against the Agent or in respect of
any act or omission of any kind by that officer, employee or agent in relation to any Finance Document and any officer, employee or agent of the Agent may rely on this Clause. Any third party referred
to in this paragraph (b) may enjoy the benefit of or enforce the terms of this paragraph in accordance with the provisions of the Third Parties Act.

	(c)
	No
Party (other than the Security Trustee) may take any proceedings against any officer, employee or agent of the Security Trustee in respect of any claim it might have against the
Security Trustee or in respect of any act or omission of any kind by that officer, employee or agent in relation to any of the Finance Documents and any officer, employee or agent of the Security
Trustee may rely on this Clause. Any third party referred to in this paragraph (c) may enjoy the benefit of or enforce the terms of this paragraph in accordance with the provisions of the Third
Parties Act.

	(d)
	Neither
the Agent nor the Security Trustee will be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be
paid by the Agent or the Security Trustee if the Agent or the Security Trustee has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of
any recognised clearing or settlement system used by the Agent or the Security Trustee for that purpose. 

 
 

28.11. Lenders' Indemnity to the Agent        

Each
Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero)
indemnify the Agent, within three Business Days of demand, against any cost, loss or liability incurred by the Agent (otherwise than by reason of the Agent's gross negligence or 

87

 

wilful
misconduct) in acting as Agent under the Finance Documents (unless the Agent has been reimbursed by an Obligor pursuant to a Finance Document). 

 
 

28.12. Resignation of the Agent        

	(a)
	The
Agent may resign and appoint one of its Affiliates acting through an office in the United Kingdom as successor by giving notice to the other Finance Parties and the Parent.

	(b)
	Alternatively
the Agent may resign by giving notice to the other Finance Parties and the Parent, in which case the Majority Lenders (after consultation with the Parent) may appoint a
successor Agent.

	(c)
	If
the Majority Lenders have not appointed a successor Agent in accordance with paragraph (b) above within 30 days after notice of resignation was given, the Agent
(after consultation with the Parent) may appoint a successor Agent (acting through an office in the United Kingdom).

	(d)
	The
retiring Agent shall, at its own cost, make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request
for the purposes of performing its functions as Agent under the Finance Documents.

	(e)
	The
Agent's resignation notice shall only take effect upon the appointment of a successor.

	(f)
	Upon
the appointment of a successor, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of
this Clause 28. Its successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

	(g)
	After
consultation with the Parent, the Majority Lenders may, by notice to the Agent, require it to resign in accordance with paragraph (b) above. In this event, the Agent
shall resign in accordance with paragraph (b) above. 

 
 

28.13. Confidentiality        

	(a)
	In
acting as agent for the Finance Parties, the Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its
divisions or departments.

	(b)
	If
information is received by another division or department of the Agent, it may be treated as confidential to that division or department and the Agent shall not be deemed to have
notice of it 

 
 

28.14. Relationship with the Lenders        

	(a)
	The
Agent may treat each Lender as a Lender, entitled to payments under this Agreement and acting through its Facility Office unless it has received not less than five Business Days
prior notice from that Lender to the contrary in accordance with the terms of this Agreement.

	(b)
	Each
Lender shall supply the Agent with any information required by the Agent in order to calculate the Mandatory Cost in accordance with Schedule 5 (Mandatory Cost formulae). 

 
 

28.15. Credit appraisal by the Lenders        

Without
affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms to the Agent, the Arranger and the
Security Trustee that it has been, and will continue to be, solely responsible for making its own 

88

 

independent
appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to: 

	(a)
	the
financial condition, status and nature of each member of the Group;

	(b)
	the
legality, validity, effectiveness, adequacy or enforceability of any Finance Document and any other agreement, arrangement or document entered into, made or executed in
anticipation of, under or in connection with any Finance Document;

	(c)
	whether
that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the
transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;
and

	(d)
	the
adequacy, accuracy and/or completeness of any information provided by the Agent, the Arranger, the Security Trustee, any Party or by any other person under or in connection with
any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection
with any Finance Document. 

 
 

28.16. Reference Banks        

If
a Reference Bank (or, if a Reference Bank is not a Lender, the Lender of which it is an Affiliate) ceases to be a Lender, the Agent shall (in consultation with the Parent) appoint another Lender or
an Affiliate of a Lender to replace that Reference Bank. 

 
 

28.17. Deduction from amounts payable by the Agent        

If
any Party owes an amount to the Agent under the Finance Documents the Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which
the Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that
Party shall be regarded as having received any amount so deducted. 

 
 

28.18. PMP        

	(a)
	Each
Original Lender represents and warrants to the Dutch Borrowers as at the Restatement Date that it is a PMP and that it is aware that it does not benefit from (creditor)
protection offered by the Dutch Banking Act when lending monies to persons or entities which are exempted from the prohibition of Article 6 or excepted from the prohibition of Article 82
in each case of the Dutch Banking Act.

	(b)
	Each
Lender which becomes a Lender in accordance with Clause 26 (Changes to the Lender) represents and warrants to the Dutch Borrowers as at the date on which it becomes a
Lender that it is a PMP and that it is aware that it does not benefit from (creditor) protection offered by the Dutch Banking Act when lending monies to persons or entities which are exempted from the
prohibition of Article 6 or excepted from the prohibition of Article 82 in each case of the Dutch Banking Act. 

 
 

29.   CONDUCT OF BUSINESS BY THE FINANCE PARTIES         

No
provision of this Agreement will: 

	(a)
	interfere
with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit; 

89

 

	(b)
	oblige
any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or

	(c)
	oblige
any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax. 

 
 

30.   SHARING AMONG THE FINANCE PARTIES         

 
 

30.1. Payments to Finance Parties        

If
a Finance Party (a "Recovering Finance Party") receives or recovers any amount from an Obligor other than in accordance with Clause 31 (Payment mechanics) and applies that amount to a
payment due under the Finance Documents then: 

	(a)
	the
Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery, to the Agent;

	(b)
	the
Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or
made by the Agent and distributed in accordance with Clause 31 (Payment mechanics), without taking account of any Tax which would be imposed on the Agent in relation to the receipt, recovery or
distribution; and

	(c)
	the
Recovering Finance Party shall, within three Business Days of demand by the Agent, pay to the Agent an amount (the "Sharing Payment") equal to such receipt or recovery less any
amount which the Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 31.5 (Partial payments). 

 
  30.2. 

	Redistribution
	  of payments

The
Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor and distribute it between the Finance Parties (other than the Recovering Finance Party) in accordance with
Clause 31.5 (Partial payments). 

 
 

30.3. Recovering Finance Party's rights        

	(a)
	On
a distribution by the Agent under Clause 30.2 (Redistribution of payments), the Recovering Finance Party will be subrogated to the rights of the Finance Parties which have
shared in the redistribution.

	(b)
	If
and to the extent that the Recovering Finance Party is not able to rely on its rights under paragraph (a) above, the relevant Obligor shall be liable to the Recovering
Finance Party for a debt equal to the Sharing Payment which is immediately due and payable. 

 
 

30.4. Reversal of redistribution        

If
any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then: 

	(a)
	each
Finance Party which has received a share of the relevant Sharing Payment pursuant to Clause 30.2 (Redistribution of payments) shall, upon request of the Agent, pay to the
Agent for account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering
Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay); and 

90

 

	(b)
	that
Recovering Finance Party's rights of subrogation in respect of any reimbursement shall be cancelled and the relevant Obligor will be liable to the reimbursing Finance Party for
the amount so reimbursed. 

 
 

30.5. Exceptions        

	(a)
	This
Clause 30 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim
against the relevant Obligor.

	(b)
	A
Recovering Finance Party is not obliged to share with any other Lender any amount which the Recovering Finance Party has received or recovered as a result of taking legal or
arbitration proceedings, if:

	(i)
	it
notified that other Finance Party of the legal or arbitration proceedings; and

	(ii)
	the
other Lender had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not
take separate legal or arbitration proceedings. 

91

  

 
 

SECTION 10    
    
    ADMINISTRATION    
    

 
 

31.   PAYMENT MECHANICS         

 
 

31.1. Payments to the Agent        

	(a)
	On
each date on which an Obligor or a Lender is required to make a payment under a Finance Document, that Obligor or such Lender shall make the same available to the Agent (unless a
contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Agent as being customary at the time for settlement of transactions in the
relevant currency in the place of payment.

	(b)
	Payment
shall be made to such account in the principal financial centre of the country of that currency (or in relation to euro, in a principal financial centre in a Participating
Member State or London or, in relation to the Base Currency, London) with such bank as the Agent specifies. 

 
  31.2. Distributions by the Agent        

Each
payment received by the Agent under the Finance Documents for another Party shall, subject to Clause 31.3 (Distributions to an Obligor) and Clause 31.4 (Clawback) be made available
by the Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such
account as that Party may notify to the Agent by not less than five Business Days' notice with a bank in the principal financial centre of the country of that currency (or in relation to euro, in a
principal financial centre in a Participating Member State or London or, in relation to the Base Currency, London). 

 
 

31.3. Distributions to an Obligor        

The
Agent may (with the consent of the Obligor or in accordance with Clause 32 (Set-off)) apply any amount received by it for that Obligor in or towards payment (on the date and in
the currency and funds of receipt) of any amount due from that Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied. 

 
 

31.4. Clawback        

	(a)
	Where
a sum is to be paid to the Agent under the Finance Documents for another Party, the Agent is not obliged to pay that sum to that other Party (or to enter into or perform any
related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.

	(b)
	If
the Agent pays an amount to another Party and it proves to be the case that the Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of
any related exchange contract) was paid by the Agent shall on demand refund the same to the Agent together with interest on that amount from the date of payment to the date of receipt by the Agent,
calculated by the Agent to reflect its cost of funds. 

92

 

 
 

31.5. Partial payments        

	(a)
	If
the Agent receives a payment that is insufficient to discharge all the amounts then due and payable by an Obligor under the Finance Documents, the Agent shall apply that payment
towards the obligations of that Obligor under the Finance Documents in the following order:

	(i)
	first, in or towards payment pro rata of any unpaid fees, costs and expenses of the Agent, the Security Trustee and the Issuing Bank
under the Finance Documents;

	(ii)
	secondly, in or towards payment pro rata of any accrued interest, fee or commission due but unpaid under this Agreement;

	(iii)
	thirdly, in or towards payment pro rata of any principal due but unpaid under this Agreement and any amount due but unpaid under
Clauses 7.4 (Claims under a Letter of Credit) and 7.5 (Indemnities); and

	(iv)
	fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents.

	(b)
	The
Agent shall, if so directed by the Majority Lenders, vary the order set out in paragraphs (a)(ii) to (iv) above.

	(c)
	Paragraphs
(a) and (b) above will override any appropriation made by an Obligor. 

 
 

31.6. No set-off by Obligors        

All
payments to be made by an Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim. 

 
 

31.7. Business Days        

	(a)
	Any
payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business
Day (if there is not).

	(b)
	During
any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the
original due date. 

 
 

31.8. Currency of account        

	(a)
	Subject
to paragraphs (b) to (e) below, the Base Currency is the currency of account and payment for any sum due from an Obligor under any Finance Document.

	(b)
	A
repayment of a Loan or Unpaid Sum or a part of a Loan or Unpaid Sum shall be made in the currency in which that Loan or Unpaid Sum is denominated on its due date.

	(c)
	Each
payment of interest shall be made in the currency in which the sum in respect of which the interest is payable was denominated when that interest accrued.

	(d)
	Each
payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.

	(e)
	Any
amount expressed to be payable in a currency other than the Base Currency shall be paid in that other currency. 

93

 

31.9. Change of currency

	(a)
	Unless
otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that
country, then:

	(i)
	any
reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency
or currency unit of that country designated by the Agent (after consultation with the Parent); and

	(ii)
	any
translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency
unit into the other, rounded up or down by the Agent (acting reasonably).

	(b)
	If
a change in any currency of a country occurs, this Agreement will, to the extent the Agent (acting reasonably and after consultation with the Parent) specifies to be necessary, be
amended to comply with any generally accepted conventions and market practice in the Relevant Interbank Market and otherwise to reflect the change in currency. 

 
 

32.   SET-OFF         

A
Finance Party may set off any matured obligation due from an Obligor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any obligation (whether or not
matured) owed by that Finance Party to that Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance
Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off. 

 
 

33.   NOTICES         

 
 

33.1. Communications in writing        

Any
communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter. 

 
 

33.2. Addresses        

The
address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or
in connection with the Finance Documents is: 

	(a)
	in
the case of an Original Borrower, that identified with its name below;

	(b)
	in
the case of each Lender or any other Obligor, that notified in writing to the Agent on or prior to the date on which it becomes a Party; and

	(c)
	in
the case of the Agent, that identified with its name below, 

or
any substitute address, fax number or department or officer as the Party may notify to the Agent (or the Agent may notify to the other Parties, if a change is made by the Agent) by not less than
five Business Days' notice. 

94

 

 
 

33.3. Delivery        

	(a)
	Any
communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective:

	(i)
	if
by way of fax, when received in legible form; or

	(ii)
	if
by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid (by airmail if applicable) in an envelope
addressed to it at that address; 

and,
if a particular department or officer is specified as part of its address details provided under Clause 33.2 (Addresses), if addressed to that department or officer. 

	(b)
	Any
communication or document to be made or delivered to the Agent will be effective only when actually received by the Agent and then only if it is expressly marked for the attention
of the department or officer identified with the Agent's signature below (or any substitute department or officer as the Agent shall specify for this purpose).

	(c)
	All
notices from or to an Obligor shall be sent through the Agent.

	(d)
	Any
communication or document made or delivered to the Parent in accordance with this Clause will be deemed to have been made or delivered to each of the Obligors. 

 
 

33.4. Notification of address and fax number        

Promptly
upon receipt of notification of an address and fax number or change of address or fax number pursuant to Clause 33.2 (Addresses) or changing its own address or fax number, the Agent
shall notify the other Parties. 

 
 

33.5. Electronic communication        

Any
communication to be made between the Agent and a Lender under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Agent and the relevant
Lender: 

	(i)
	agree
that, unless and until notified to the contrary, this is to be an accepted form of communication;

	(ii)
	notify
each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and

	(iii)
	notify
each other of any change to their address or any other such information supplied by them. 

 
  33.6.

	Any
	electronic
 communication made between the Agent and a Lender will be effective only when actually received in readable form and in the case of any electronic communication made by a 

Lender
to the Agent only if it is addressed in such a manner as the Agent shall specify for this purpose. 

 
 

33.7. English language        

	(a)
	Any
notice given under or in connection with any Finance Document must be in English.

	(b)
	All
other documents provided under or in connection with any Finance Document must be:

	(i)
	in
English; or 

95

 

	(ii)
	if
not in English, and if so required by the Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a
constitutional, statutory or other official document. 

 
 

34.   CALCULATIONS AND CERTIFICATES         

 
 

34.1. Accounts        

In
any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence of the
matters to which they relate. 

 
 

34.2. Certificates and Determinations        

Any
certification or determination by a Finance Party of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates. 

 
 

34.3. Day count convention        

Any
interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and, in the case of a Sterling amount,
a year of 365 days and, in the case of any other currency, a year of 360 days or, in any case where the practice in the Relevant Interbank Market differs, in accordance with that market
practice. 

 
 

35.   PARTIAL INVALIDITY         

If,
at any time, any provision of the Finance Documents is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or
enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired. 

 
 

36.   REMEDIES AND WAIVERS         

No
failure to exercise, nor any delay in exercising, on the part of any Finance Party, any right or remedy under the Finance Documents shall operate as a waiver, nor shall any single or partial
exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive
of any rights or remedies provided by law. 

 
 

37.   AMENDMENTS AND WAIVERS         

 
 

37.1. Required consents        

	(a)
	Subject
to Clause 37.2 (Exceptions) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and the Obligors and any such
amendment or waiver will be binding on all Parties.

	(b)
	The
Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause. 

96

 

 
 

37.2. Exceptions        

	(a)
	An
amendment or waiver that has the effect of changing or which relates to:

	(i)
	the
definition of "Majority Lenders" in Clause 1.1 (Definitions);

	(ii)
	an
extension to the date of payment of any amount under the Finance Documents;

	(iii)
	a
reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable;

	(iv)
	an
increase in or an extension of any Commitment;

	(v)
	a
change to the identity of the Borrowers other than in accordance with Clause 27 (Changes to the Obligors and Further Security);

	(vi)
	any
provision which expressly requires the consent of all the Lenders;

	(vii)
	Clause 2.2
(Finance Parties' rights and obligations), Clause 16 (Tax Gross Up and Indemnities), Clause 26 (Changes to the Lenders), Clause 27 (Changes to
the Obligors and Further Security) or this Clause 37;

	(viii)
	save
to the extent expressly provided for in this Agreement, any release of any Security Interest in favour of the Security Trustee, or

	(ix)
	the
subordination provided for in the Inter Creditor Deed, shall not be made without the prior consent of all the Lenders.

	(b)
	An
amendment or waiver which relates to the rights or obligations of the Agent, the Security Trustee or the Arranger may not be effected without the consent of the Agent, the Security
Trustee or the Arranger. 

 
 

38.   COUNTERPARTS         

Each
Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document. 

97

  

 
 

SECTION 11    
    
    GOVERNING LAW AND ENFORCEMENT    
    

 
 

39.   GOVERNING LAW         This Agreement is governed by English law. 

 
 

40.   ENFORCEMENT         

 
 

40.1. Jurisdiction of English courts        

	(a)
	The
courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute regarding the existence, validity or
termination of this Agreement) (a "Dispute").

	(b)
	The
Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

	(c)
	This
Clause 40.1 is for the benefit of the Finance Parties only. As a result, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other
courts with jurisdiction. To the extent allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions. 

 
 

40.2. Service of Process        

Without
prejudice to any other mode of service allowed under any relevant law, each Borrower: 

	(a)
	irrevocably
appoints Paradigm Geophysical (UK) Limited as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance
Document; and

	(b)
	agrees
that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned. 

Each
Borrower expressly agrees and consents to the provisions of this Clause 40. 

This Agreement has been entered into on the date stated at the beginning of this Agreement.

98

  

 
 

SCHEDULE 1
  
    THE ORIGINAL PARTIES    
    

 
  Part I
  
    The Original Borrowers    
    

	Name of Original Borrowers
 
	 	Country of incorporation and

registration number (or

equivalent, if any)

	Paradigm Geotechnology BV	 	Netherlands
	

Paradigm Geophysical Limited	
 	

Israel
	

Paradigm Geophysical Pty Ltd	
 	

Australia
	

Paradigm Geophysical LLC	
 	

Russia
	

Paradigm Geophysical (UK) Limited	
 	

UK
	

Paradigm Geophysical Corp.	
 	

Delaware, USA

 
 

Part II
  
    The Original Obligors    
    

	Name of Original Obligors
 
	 	Country of incorporation and

registration number (or

equivalent, if any)

	Paradigm Geotechnology BV	 	Netherlands
	

Paradigm Geophysical Pty Ltd	
 	

Australia
	

Paradigm Geophysical (UK) Limited	
 	

UK
	

Sysdrill Limited	
 	

UK
	

Paradigm Geophysical Limited	
 	

Israel
	

Paradigm Geophysical Corp.	
 	

Delaware, USA
	

Paradigm Geophysical (R&D) Corp.	
 	

Delaware, USA

 
 

Part III
  
    The Original Lenders    
    

	Name of Original Lender
 
	 	Facility A

Commitment
	 	Facility B

Commitment

	The Governor and Company of the Bank of Scotland	 	$	60,500,000	 	$	17,250,000

99

  

 
 

SCHEDULE 2
  
    CONDITIONS PRECEDENT    
    

 
  PART I    
    

 
 

1.     Original Obligors         

	(a)
	A
copy of the constitutional documents of each Original Obligor and of Paradigm BV.

	(b)
	A
copy of a resolution of the board of directors and, where relevant, the board of supervisory directors of each Original Obligor and of Paradigm BV:

	(i)
	approving
the terms of, and the transactions contemplated by, the Finance Documents and resolving that it execute the Finance Documents;

	(ii)
	authorising
a specified person or persons to execute the Finance Documents on its behalf; and

	(iii)
	authorising
a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (including, if relevant, any Utilisation Request and Selection Notice) to
be signed and/or despatched by it under or in connection with the Finance Documents.

	(c)
	A
specimen of the signature of each person authorised by the resolution referred to in paragraph (b) above.

	(d)
	A
copy of a resolution signed by all the holders of the issued shares in the Original Obligors and in Paradigm BV, approving the terms of, and the transactions contemplated by, the
Finance Documents.

	(e)
	A
certificate of the Parent (signed by a managing director) confirming that borrowing or guaranteeing, as appropriate, the Total Commitments would not cause any borrowing,
guaranteeing or similar limit binding on any Original Obligor or on Paradigm BV to be exceeded.

	(f)
	A
certificate of an authorised signatory of the relevant Original Obligor and of Paradigm BV certifying that each copy document relating to it specified in this Part I of
Schedule 2 is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.

	(g)
	A
copy of the power of attorney (if any) of each Original Obligor and of Paradigm BV authorising a specified person or persons, on its behalf, to sign the relevant Finance Documents
to which it is a party and to sign and/or despatch all documents and notices (including, if relevant, any Utilisation Request) to be signed and/or despatched by it under or in connection with those
Finance Documents. 

 
 

2.     Legal opinions         

	(a)
	A
legal opinion of Dickson Minto, legal advisers to the Arranger and the Agent, substantially in the form distributed to the Original Lenders prior to signing this Agreement.

	(b)
	A
legal opinion of Andrews & Kurth LLP, US legal advisers to the Arranger and the Agent, substantially in the form distributed to the Original Lenders prior to signing this
Agreement.

	(c)
	A
legal opinion of Minter Ellison, Australian legal advisers to the Arranger and the Agent, substantially in the form distributed to the Original Lenders prior to signing this
Agreement. 

100

 

	(d)
	A
legal opinion of each of Herzog, Fox & Neeman, Israeli legal advisers to the Arranger and the Agent, substantially in the form distributed to the Original Lenders prior to
signing this Agreement and from Efrati Galili & Co, legal advisers to the Company.

	(e)
	A
legal opinion of Sokolow, Dunaud, Mercadier & Carreras, French legal advisers to the Arranger and the Agent, substantially in the form distributed to the Original Lenders
prior to signing this Agreement.

	(f)
	A
legal opinion of Van Doorne, Dutch legal advisers to the Arranger and the Agent, substantially in the form distributed to the Original Lenders prior to signing this Agreement. 

 
 

3.     Other documents and evidence         

	(a)
	Evidence
that any process agent referred to in Clause 40.2 (Service of process) has accepted its appointment.

	(b)
	The
Original Financial Statements (if any) of each Original Obligor.

	(c)
	Evidence
that the fees, costs and expenses then due from the Parent pursuant to Clause 15 (Fees) and Clause 20 (Costs and expenses) have been paid or will be paid by the
first Utilisation Date.

	(d)
	A
copy of the declaration by a director of the Parent addressed to the Security Trustee relating to its acquisition of the Company referring to Paradigm Geophysical Pty Ltd. 

 
 

4.     Shares /Subordinated Notes         

	(a)
	Written
evidence of the ownership of the Parent as at Completion.

	(b)
	A
certified true copy (certified by the Parent) of the duly executed Subordinated Note Instrument together with written evidence that not less than $51,095,000 has been subscribed for
First Subordinated Notes and remains outstanding.

	(c)
	Deleted.

 
 

5.     Acquisition         

A
certified true copy of the duly executed Merger Agreement (certified by the Parent) together with confirmation that the Merger Agreement has become unconditional and that all of the issued shares
and warrants of the Company are now held by the Parent subject to the matters disclosed in the Banking Disclosure Letter. 

 
 

6.     Security Documents         

	(a)
	A
pledge over shares by Paradigm Geotechnology B.V. in respect of its shares in Paradigm Geophysical Limited together with a notice of pledge and a guarantee of amounts outstanding
under the Finance Documents.

	(b)
	A
security agreement by Paradigm Geophysical Limited in respect of its assets together with a guarantee of amounts outstanding under the Finance Documents and a pledge over shares in
respect of its shares in Paradigm Geophysical Corp, Paradigm Geophysical Pty Limited, Paradigm Geophysical B.V (and Jonathan Keller's single share in that company), Sysdrill Limited, Paradigm
Geophysical (UK) Limited, Paradigm Geophysical (Europe) Limited and Paradigm Geophysical Services Limited. 

101

 

	(c)
	A
security agreement in respect of its assets by Paradigm Geophysical Corp together with a guarantee in respect of amounts outstanding under the Finance Documents incorporating a
pledge over shares in its Paradigm Geophysical (R&D) Corp.

	(d)
	A
security agreement over its assets by Paradigm Geophysical (R&D) Corp together with a guarantee of amounts outstanding under the Finance Documents.

	(e)
	A
security agreement over its assets by Paradigm Geophysical Pty Limited together with a guarantee of amounts outstanding under the Finance Documents.

	(f)
	A
pledge over shares by Paradigm Geophysical B.V. and Paradigm Geophysical Limited in respect of its shares in Paradigm Geophysical Holdings SAS, together with a guarantee of amounts
outstanding under the Finance Documents and the notice of service of the pledge agreement.

	(g)
	Minutes
of a meeting of the shareholders of Paradigm Geophysical Holdings SAS approving execution of a pledge and the Lenders (or agent thereof) as potential new shareholders.

	(h)
	A
debenture by Paradigm Geophysical (UK) Limited together with a guarantee of amounts outstanding under the Finance Documents.

	(i)
	Deleted.

	(j)
	Deleted.

	(k)
	A
floating charge by Sysdrill Limited together with a guarantee of amounts outstanding under the Finance Documents.

	(l)
	A
Western Australia stamp duty declaration executed by a director of Paradigm Geophysical Pty Ltd.

	(m)
	A
Queensland stamp duty form 5.3 executed by a director of Paradigm Geophysical Pty Ltd.

	(n)
	An
ASIC Form 309 signed and dated by the same authorised attorney of Paradigm Geophysical Pty Ltd that signed the security agreement referred to at (e) above.

	(o)
	An
undated ASIC Form 350 signed by an authorised signatory of Paradigm Geophysical Pty Ltd.

	(p)
	A
consent from the Office of Chief Scientist in Israel to the creation of the charges under the security documents referred to at (a) and (b) above. 

 
 

7.     Refinancing Documents         

	(a)
	A
letter to be filed with the Israeli Registrar of Companies requesting cancellation of charges in favour of Bank Hapoalim and Industrial Development Bank of Israel Limited.

	(b)
	Confirmation
from the Parent that as at the Completion Date (i) all Security Interests granted by any member of the Group (other than any Permitted Security Interests) have
been (or will be on and with effect from the Completion Date out of the proceeds of the Facilities) discharged and (ii) all Financial Indebtedness of the Group (other than Permitted Financial
Indebtedness) has been discharged. 

 
 

8.     Inter Creditor Deed         

The
Inter Creditor Deed duly executed by all the parties hereto. 

102

 

 
 

9.     Due Diligence Reports         

A
signed copy of each of the Due Diligence Reports addressed to the Finance Parties. 

 
 

10.   Business Plan.         

The
Business Plan. 

 
 

11.   Fees Letters         

A
copy of the fronting fee letter referred to in Clause 7.3 (Fee payable in respect of Letters of Credit) and of each of the letters referred to in Clause 15.2 (Arrangement Fee) and 15.3
(Agency Fee) respectively duly accepted on behalf of the Parent. 

 
 

12.   Interest Rate Hedging         

A
copy of the duly executed Hedging Policy Letter. 

 
 

13.   Miscellaneous         

	(a)
	A
letter from the Parent to the Agent confirming the nature of the fees and expenses incurred in connection with the Facilities.

	(b)
	Bank
mandates in respect of all accounts required in relation to the Facilities.

	(c)
	Such
evidence as the Lenders may require in relation to their anti-money laundering procedures in respect of the Group.

	(d)
	The
Insurance Adequacy Letter.

	(e)
	A
letter from the Original Lender to the Parent on the syndication of the Facilities.

	(f)
	A
certified true copy of the Management Agreement. 

 
 

Part II
  
    Conditions Precedent required to be delivered by an Additional Obligor    
    

 
 
 1.

	An
	Accession
 Letter, duly executed by the Additional Obligor and the Parent. 

	

	

 
 
    2.
     A copy of the constitutional documents of the Additional Obligor. 

	

	

 
 
    3.
     A copy of a resolution of the Board of directors of the Additional Obligor: 

	(a)
	approving
the terms of, and the transactions contemplated by, the Accession Letter and the Finance Documents and resolving that it execute the Accession Letter;

	(b)
	authorising
a specified person or persons to execute the Accession Letter on its behalf; and

	(c)
	authorising
a specified person or persons, on its behalf, to sign and/or despatch all other documents and notices (including, in relation to an Additional Borrower, any Utilisation
Request or Selection Notice) to be signed and/or despatched by it under or in connection with the Finance Documents. 

	

	

 
 
    4.
     A specimen of the signature of each person authorised by the resolution referred to in paragraph 3 above. 

	

	

 
 
    5.
     A certificate of the Additional Obligor (signed by a director) confirming that borrowing or guaranteeing, as appropriate, the Total Commitments would not cause any borrowing,
guaranteeing or similar limit binding on it to be exceeded. 

103

 
	

	

 
 
    6.
     A certificate of an authorised signatory of the Additional Obligor certifying that each copy document listed in this Part II of Schedule 2 is correct, complete and in full
force and effect as at a date no earlier than the date of the Accession Letter. 

	

	

 
 
    7.
     A copy of any other Authorisation or other document, opinion or assurance which the Agent considers to be necessary in connection with the entry into and performance of the transactions
contemplated by the Accession Letter or for the validity and enforceability of any Finance Document. 

	

	

 
 
    8.
     If available, the latest audited financial statements of the Additional Obligor. 

	

	

 
 
    9.
     Any Security Document (or deeds of accession thereto) required by the Agent to be granted by the Additional Obligor in terms of this Agreement. 

	

	

 
 
    10.
   A legal opinion of the legal advisers to the Arranger and the Agent in England. 

	

	

 
 
    11.
   If the Additional Obligor is incorporated in a jurisdiction other than England and Wales, a legal opinion of the legal advisers to the Arranger and the Agent in the jurisdiction in which
the Additional Obligor is incorporated. 

	

	

 
 
    12.
   If the proposed Additional Obligor is incorporated in a jurisdiction other than England and Wales, evidence that the process agent specified in Clause 40.2 (Service of process),
if not an Obligor, has accepted its appointment in relation to the proposed Additional Obligor. 

104

  

 
 

SCHEDULE 3    
    
    REQUESTS    
    

 
 

Part IA
  Utilisation Request—Loan    
    

	

	

 
 
    From:
 [Borrower] 

	

	

 
 
    To:
   [Agent] 

Dated: 

Dear
Sirs 

Paradigm Geotechnology BV—$77,750,000 Facility Agreement

dated [    •    ] (the "Agreement")  

 
 
 1.

	We
	refer
 to the Agreement. This is a Utilisation Request. Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this 

Utilisation
Request. 

	

	

 
 
    2.
     We wish to borrow a Loan on the following terms: 

	Proposed Utilisation Date:	 	[•] (or, if that is not a Business Day, the next Business Day)
	

Facility to be utilised:	
 	

[Facility A]/[Facility B]
	

Currency of loan:	
 	

[                                         
       ]
	

Amount	
 	

[•] or, if less, the Available Facility
	

Interest Period:	
 	

[•]

	

	

 
 
    3.
     We confirm that each condition specified in Clause 4.2 (Further conditions precedent) is satisfied on the date of this Utilisation Request 

	

	

 
 
    4.
     The proceeds of this Loan should be credited to [account]. 

	

	

 
 
    5.
     This Utilisation Request is irrevocable. 

	Yours faithfully	 	 	 
	

    	
 	

 	

 
	

    
 authorised signatory for

[the Parent/Borrower]	
 	

 	

 

105

 
 
 

Part 1B
  Utilisation Request—Letters of Credit    
    

	

	

 
 
    From:
 [Borrower] 

	

	

 
 
    To:
   [Agent] 

Dated:

Dear
Sirs 

Paradigm Geotechnology BV—$77,750,000 Facility Agreement

dated [                        ] (the "Facility Agreement")  

 
 
 1.

	We
	refer
 to the Agreement This is a Utilisation Request Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this 

Utilisation
Request 

	

	

 
 
    2.
     We wish to arrange for a Letter of Credit to be issued by the Issuing Bank on the following terms: 

	Proposed Utilisation Date:	 	[      ] (or if that us not a Business Day, the next Business Day)
	

Facility to be utilised:	
 	

Facility B
	

Amount	
 	

[      ] or, if less, the Available Facility
	

Term:	
 	

[                                         
       ]

	

	

 
 
    3.
     We confirm that each condition specified in Clause 6.6(b) (Issue of Letters of Credit) is satisfied on the date of this Utilisation Request. 

	

	

 
 
    4.
     We attach a copy of the proposed Letter of Credit. 

	

	

 
 
    5.
     This Utilisation Request is irrevocable. 

Yours
faithfully 

   

authorised
signatory for

[name of relevant Borrower] 

106

 
 
 

Part II
  Selection Notice    
    

	

	

 
 
    From:
 [Borrower] 

	

	

 
 
    To:
   [Agent] 

Dated: 

Dear
Sirs 

Paradigm Geotechnology BV—$77,750,000 Facility Agreement

dated [    •    ] (the "Agreement")  

 
 
 1.

	We
	refer
 to the Agreement. This is a Selection Notice. Terms defined in the Agreement have the same meaning in this Selection Notice unless given a different meaning in this Selection 

Notice. 

	

	

 
 
    2.
     We refer to the Facility A Loan with an Interest Period ending on [    •    ] 

	

	

 
 
    3.
     [We request that the next Interest Period for the Facility A Loan is [    •    ]]. 

	

	

 
 
    4.
     This Selection Notice is irrevocable. 

	Yours faithfully	 	 	 
	

    	
 	

 	

 
	

    
 authorised signatory for

[the Parent/Borrower]	
 	

 	

 

107

  

 
 

SCHEDULE 4    
    
    REPAYMENT SCHEDULE    
    
    FACILITY A REPAYMENT SCHEDULE    
    

	Column 1

Repayment Date
 
	 	Column 2

Repayment Instalment ($)

	30 June 2006	 	2,500,000
	31 December 2006	 	2,500,000
	30 June 2007	 	3,500,000
	31 December 2007	 	3,500,000
	30 June 2008	 	4,250,000
	31 December 2008	 	4,250,000
	30 June 2009	 	6,000,000
	31 December 2009	 	6,000,000
	30 June 2010	 	6,750,000
	31 December 2010	 	6,750,000
	30 June 2011	 	7,250,000
	31 December 2011	 	7,250,000

108

  

 
 

SCHEDULE 5    
    
    MANDATORY COST FORMULAE    
    

 
 
 1.

	The
	Mandatory
 Cost is an addition to the interest rate to compensate Lenders for the cost of compliance with (a) the requirements of the Bank of England and/or the Financial 

Services
Authority (or, in either case, any other authority which replaces all or any of its functions) or (b) the requirements of the European Central Bank. 

	

	

 
 
    2.
     On the first day of each Interest Period (or as soon as possible thereafter) the Agent shall calculate, as a percentage rate, a rate (the "Additional Cost Rate") for each Lender, in
accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Agent as a weighted average of the Lenders' Additional Cost Rates (weighted in proportion to the percentage
participation of each Lender in the relevant Loan) and will be expressed as a percentage rate per annum. 

	

	

 
 
    3.
     The Additional Cost Rate for any Lender lending from a Facility Office in a Participating Member State will be the percentage notified by that Lender to the Agent. This percentage will
be certified by that Lender in its notice to the Agent to be its reasonable determination of the cost (expressed as a percentage of that Lender's participation in all Loans made from that Facility
Office) of complying with the minimum reserve requirements of the European Central Bank in respect of loans made from that Facility Office. 

	

	

 
 
    4.
     The Additional Cost Rate for any Lender lending from a Facility Office in the United Kingdom will be calculated by the Agent as follows: 

	(a)
	in
relation to a Loan in Sterling 

	AB + C (B-D) + E × 0.01
 100- (A + C)	 	per cent. per annum	 	 

	(b)
	in
relation to a Loan in any currency other than Sterling 

	E × 0.01
 300	 	per annum.	 	 

Where:

	A
	is
the percentage of Eligible Liabilities (assuming these to be in excess of any stated minimum) which that Lender is from time to time required to maintain as an interest free cash
ratio deposit with the Bank of England to comply with cash ratio requirements.

	B
	is
the percentage rate of interest (excluding the Margin and the Mandatory Cost) and, if the Loan is an Unpaid Sum, the additional rate of interest specified in paragraph (a) of
Clause 12.3 (Default interest) payable for the relevant Interest Period on the Loan.

	C
	is
the percentage (if any) of Eligible Liabilities which that Lender is required from time to time to maintain as interest bearing Special Deposits with the Bank of England.

	D
	is
the percentage rate per annum payable by the Bank of England to the Agent on interest bearing Special Deposits.

	E
	is
designed to compensate Lenders for amounts payable under the Fees Rules and is calculated by the Agent as being the average of the most recent rates of charge supplied by the
Reference Banks to the Agent pursuant to paragraph 7 below and expressed in pounds per £1,000,000. 

109

 

	

	

 
 
    5.
     For the purposes of this Schedule: 

	(a)
	"Eligible
Liabilities" and "Special Deposits" have the meanings given to them from time to time under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the
Bank of England;

	(b)
	"Fees
Rules" means the rules on periodic fees contained in the FSA Supervision Manual or such other law or regulation as may be in force from time to time in respect of the payment of
fees for the acceptance of deposits;

	(c)
	"Fee
Tariffs" means the fee tariffs specified in the Fees Rules under the activity group Al Deposit acceptors (ignoring any minimum fee or zero rated fee required pursuant to the Fees
Rules but taking into account any applicable discount rate); and

	(d)
	"Tariff
Base" has the meaning given to it, and will be calculated in accordance with, the Fees Rules. 

	

	

 
 
    6.
     In application of the above formula, A, B, C and D will be included in the formula as percentages (i.e. 5 per cent will be included in the formula as 5 and not as 0.05). A negative
result obtained by subtracting D from B shall be taken as zero. The resulting figures shall be rounded to four decimal places. 

	

	

 
 
    7.
     If requested by the Agent, each Reference Bank shall, as soon as practicable after publication by the Financial Services Authority, supply to the Agent, the rate of charge payable by
that Reference Bank to the Financial Services Authority pursuant to the Fees Rules in respect of the relevant financial year of the Financial Services Authority (calculated for this purpose by that
Reference Bank as being the average of the Fee Tariffs applicable to that Reference Bank for that financial year) and expressed in pounds per £1,000,000 of the Tariff Base of that
Reference Bank. 

	

	

 
 
    8.
     Each Lender shall supply any information required by the Agent for the purpose of calculating its Additional Cost Rate. In particular, but without limitation, each Lender shall supply
the following information in writing on or prior to the date on which it becomes a Lender: 

	(a)
	its
jurisdiction of its Facility Office; and

	(b)
	any
other information that the Agent may reasonably require for such purpose. 

Each
Lender shall promptly notify the Agent in writing of any change to the information provided by it pursuant to this paragraph. 

	

	

 
 
    9.
     The percentages of each Lender for the purpose of A and C above and the rates of charge of each Reference Bank for the purpose of E above shall be determined by the Agent based upon the
information supplied to it pursuant to paragraphs 7 and 8 above and on the assumption that, unless a Lender notifies the Agent to the contrary, each Lender's obligations in relation to cash ratio
deposits and Special Deposits are the same as those of a typical bank from its jurisdiction of incorporation with a Facility Office in the same jurisdiction as its Facility Office. 

	

	

 
 
    10.
   The Agent shall have no liability to any person if such determination results in an Additional Cost Rate which over or under compensates any Lender and shall be entitled to assume that
the information provided by any Lender pursuant to paragraphs 3, 7 and 8 above is true and correct in all respects. 

	

	

 
 
    11.
   The Agent shall distribute the additional amounts received as a result of the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate for each Lender based on the
information provided by each Lender pursuant to paragraphs 3, 7 and 8 above. 

110

 
	

	

 
 
    12.
   Any determination by the Agent pursuant to this Schedule in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to a Lender shall, in the absence of
manifest error, be conclusive and binding on all Parties. 

	

	

 
 
    13.
   The Agent may from time to time, after consultation with the Parent and the Lenders, determine and notify to all Parties any amendments which are required to be made to this Schedule in
order to comply with any change in law, regulation or any requirements from time to time imposed by the Bank of England, the Financial Services Authority or the European Central Bank (or, in any case,
arty other authority which replaces all or any of its functions) and any such determination shall, in the absence of manifest error, be conclusive and binding on all Parties. 

111

  

 
 

SCHEDULE 6    
    
    FORM OF TRANSFER CERTIFICATE    
    

	

	

 
 
    To:
   [    •    ] as Agent 

	

	

 
 
    From:
 [The Existing Lender] (the "Existing Lender") and [The New Lender] (the "New Lender") 

Dated: 

Paradigm Geotechnology BV—$77,750,000 Facility Agreement

dated [    •    ] (the "Agreement")  

	

	

 
 
    1.
     We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this
Transfer Certificate. 

	

	

 
 
    2.
     We refer to Clause 26.5 (Procedure for transfer): 

	(a)
	The
Existing Lender and the New Lender agree to the Existing Lender transferring to the New Lender by novation all or part of the Existing Lender's Commitment, rights and obligations
referred to in the Schedule in accordance with Clause 26.5 (Procedure for transfer).

	(b)
	The
proposed Transfer Date is [    •    ].

	(c)
	The
Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause 33.2 (Addresses) are set out in the Schedule. 

	

	

 
 
    3.
     The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in paragraph (c) of Clause 26.4 (Limitation of responsibility of Existing
Lenders). 

	

	

 
 
    4.
     [The New Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either: 

	(i)
	a
company resident in the United Kingdom, or a partnership each member of which is a company resident in the United Kingdom, for United Kingdom tax purposes; or

	(ii)
	a
company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a branch or agency and interest payable in respect of an advance under a
Finance Document falls to be brought into account in computing the chargeable profits of that company for the purposes of section 11(2) of the Taxes Act.] 

	

	

 
 
    [4/5]
 The New Lender confirms to each of the Agent, the Lenders and the Dutch Borrowers that on the date hereof it is a PMP and that it is aware that it does not benefit from (creditor)
protection offered by the Dutch Banking Act when lending monies to persons or entities which are exempted from the prohibition of Article 6 or excepted from the prohibition of Article 82
in each case of the Dutch Banking Act and, in this regard, it is acknowledged that the Agent has made no enquiries with respect to the status of the New Lender as a PMP and shall have no obligation or
liability in respect thereof. 

	

	

 
 
    [5/6]
 The New Lender represents to each Dutch Borrower that, as at the date hereof and on each date on which a Loan is made available to a Dutch Borrower, to the extent that it participates
therein, it is a PMP and is aware that it does not benefit from (creditor) protection offered by the Dutch Banking Act when lending monies to persons or entities which are exempted from the
prohibition of Article 6 or excepted from the prohibition of Article 82 in each case of the Dutch Banking Act. 

112

 
	

	

 
 
    [6/7]
 This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer
Certificate. 

	

	

 
 
    [7/8]
 This Transfer Certificate is governed by English law. 

 
 

THE SCHEDULE    
    
    Commitment/rights and obligations to be transferred    
    

[insert relevant details] 

[Facility
Office address, fax number and attention details for notices and account

details for payments,] 

	[Existing Lender]	 	[New Lender]
	

By:	

 	
 	

By:	

 

This
Transfer Certificate is accepted by the Agent and the Transfer Date is confirmed as [    •    ]. 

[Agent]

By:

113

  

 
 

SCHEDULE 7    
    
    FORM OF COMPLIANCE CERTIFICATE    
    

	

	

 
 
    To:
   Bank of Scotland 

	

	

 
 
    From:
 [Parent] 

Dated: 

Dear
Sirs 

Paradigm Geotechnology BV—$77,750,000 Facility Agreement

dated [    •    ] (the "Agreement")  

	

	

 
 
    1.
     We refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different
meaning in this Compliance Certificate. 

	

	

 
 
    2.
     We confirm that [Insert details of covenants to be certified] 

	

	

 
 
    3.
     We confirm that no Default is continuing [save for the following:]. 

	Signed:	    
 Managing Director

of

[Parent]	 	    
 Managing Director

of

[Parent]
	

    	

 	
 	

 
	

[insert applicable certification language]
	

    	

 	
 	

 
	

    
 for and on behalf of

[name of auditors of the Parent]	
 	

 

114

  

 
 

SCHEDULE 8    
    
    EXISTING SECURITY    
    

	Name of Obligor
 
	 	Security
	 	Total Principal Amount

of Indebtedness Secured

	Paradigm Geophysical Ltd (Israel)	 	Charge over computer equipment in favour of Techlease Services Ltd	 	£220,000

115

  

 
 

SCHEDULE 9    
    
    LMA FORM OF CONFIDENTIALITY UNDERTAKING    
    

[Letterhead of Arranger]  

	

	

 
 
    To:
   [insert name of Potential Lender] 

	

	

 
 
    Re:
  The Facilit[y/ies] 

Borrower:

Amount:

Agent:

Dear
Sirs 

We
understand that you are considering participating in the Facilit[y/ies]. In consideration of us agreeing to make available to you certain information, by your signature of a
copy of this letter you agree as follows: 

 
 

1.     Confidentiality Undertaking         

You
undertake: 

	(a)
	to
keep the Confidential Information confidential and not to disclose it to anyone except as provided for by paragraph 2 below and to ensure that the Confidential Information
is protected with security measures and a degree of care that would apply to your own confidential information;

	(b)
	to
keep confidential and not disclose to anyone the fact that the Confidential Information has been made available or that discussions or negotiations are taking place or have taken
place between us in connection with the Facilit[y/ies];

	(c)
	to
use the Confidential Information only for the Permitted Purpose;

	(d)
	to
use all reasonable endeavours to ensure that any person to whom you pass any Confidential Information (unless disclosed under paragraph 2(b) below) acknowledges and complies
with the provisions of this letter as if that person were also a party to it; and

	(e)
	not
to make enquiries of any member of the Group or any of their officers, directors, employees or professional advisers relating directly or indirectly to the
Facilit[y/ies]. 

 
 

2.     Permitted Disclosure         

We
agree that you may disclose Confidential Information: 

	(a)
	to
members of the Participant Group and their officers, directors, employees and professional advisers to the extent necessary for the Permitted Purpose and to any auditors of members
of the Participant Group;

	(b)
	(i) where
requested or required by any court of competent jurisdiction or any competent judicial, governmental, supervisory or regulatory body, (ii) where required by
the rules of any stock exchange on which the shares or other securities of any member of the Participant Group are listed or (iii) where required by the laws or regulations of any country with
jurisdiction over the affairs of any member of the Participant Group; or

	(c)
	with
the prior written consent of us and the Borrower. 

116

 

 
 

3.     Notification of Required or Unauthorised Disclosure         

You
agree (to the extent permitted by law) to inform us of the full circumstances of any disclosure under paragraph 2(b) or upon becoming aware that Confidential Information has been disclosed
in breach of this letter. 

 
 

4.     Return of Copies         

If
we so request in writing, you shall return all Confidential Information supplied to you by us and destroy or permanently erase all copies of Confidential Information made by you and use all
reasonable endeavours to ensure that anyone to whom you have supplied any Confidential Information destroys or permanently erases such Confidential Information and any copies made by them, in each
case save to the extent that you or the recipients are required to retain any such Confidential Information by any applicable law, rule or regulation or by any competent judicial, governmental,
supervisory or regulatory body or in accordance with internal policy, or where the Confidential Information has been disclosed under paragraph 2(b) above. 

 
 

5.     Continuing Obligations         

The
obligations in this letter are continuing and, in particular, shall survive the termination of any discussions or negotiations between you and us. Notwithstanding the previous sentence, the
obligations in this letter shall cease (a) if you become a party to or otherwise acquire (by assignment or sub participation) an interest, direct or indirect in the Facility/ies] or
(b) twelve months after you have returned all Confidential Information supplied to you by us and destroyed or permanently erased all copies of Confidential Information made by you (other than
any such Confidential Information or copies which have been disclosed under paragraph 2 above (other than sub-paragraph 2(a)) or which, pursuant to paragraph 4 above,
are not required to be returned or destroyed). 

 
 

6.     No Representation; Consequences of Breach, etc         

You
acknowledge and agree that: 

	(a)
	neither
we nor any of our officers, employees or advisers (each a "Relevant Person") (i) make any representation or warranty, express or implied, as to, or assume arty
responsibility for, the accuracy, reliability or completeness of any of the Confidential Information or any other information supplied by us or any member of the Group or the assumptions on which it
is based or (B.) shall be under any obligation to update or correct any inaccuracy in the Confidential Information or any other information supplied by us or any member of the Group or be otherwise
liable to you or any other person in respect to the Confidential Information or any such information; and

	(b)
	we
or members of the Group may be irreparably harmed by the breach of the terms of this letter and damages may not be an adequate remedy; each Relevant Person or member of the Group
may be granted an injunction or specific performance for any threatened or actual breach of the provisions of this letter by you. 

 
 

7.     No Waiver; Amendments, etc         

This
letter sets out the full extent of your obligations of confidentiality owed to us in relation to the information the subject of this Letter. No failure or delay in exercising any right, power or
privilege under this letter will operate as a waiver thereof nor will any single or partial exercise of any right, power or privilege preclude any further exercise thereof or the exercise of any other 

117

 

right,
power or privileges under this letter. The terms of this letter and your obligations under this letter may only be amended or modified by written agreement between us. 

 
 

8.     Inside Information         

You
acknowledge that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation
relating to insider dealing and you undertake not to use any Confidential Information for any unlawful purpose. 

 
 

9.     Nature of Undertakings         

The
undertakings given by you under this letter are given to us and (without implying any fiduciary obligations on our part) are also given for the benefit of the Borrower and each other member of the
Group. 

 
 

10.   Third party rights         

	(a)
	Subject
to paragraph 6 and paragraph 9 the terms of this letter may be enforced and relied upon only by you and us and the operation of the Contracts (Rights of Third
Parties) Act 1999 is excluded.

	(b)
	Notwithstanding
any provisions of this letter, the parties to this letter do not require the consent of any Relevant Person or any member of the Group to rescind or vary this letter
at any time. 

 
 

11.   Governing Law and Jurisdiction         

This
letter (including the agreement constituted by your acknowledgement of its terms) shall be governed by and construed in accordance with the laws of England and the parties submit to the
non-exclusive jurisdiction of the English courts. 

 
 

12.   Definitions         

In
this letter (including the acknowledgement set out below): 

"Confidential Information" means any information relating to the Borrower, the Group, and the Facilit[y/ies] including, without
limitation, the information memorandum, provided to you by us or any of our affiliates or advisers, in whatever form, and includes information given orally and any document, electronic file or any
other way of representing or recording information which contains or is derived or copied from such information but excludes information that (a) is or becomes public knowledge other than as a
direct or indirect result of any breach of this letter or (b) is known by you before the date the information is disclosed to you by us or any of our affiliates or advisers or is lawfully
obtained by you after that date, other than from a source which is connected with the Group and which, in either case, as far as you are aware, has not been obtained in violation of, and is not
otherwise subject to, any obligation of confidentiality; 

"Group" means the Borrower and each of its holding companies and subsidiaries and each subsidiary of each of its holding companies (as each such term is
defined in the Companies Act 1985); 

"Participant Group" means you, each of your holding companies and subsidiaries and each subsidiary of each of your holding companies (as each such term
is defined in the Companies Act 1985); and 

"Permitted Purpose" means considering and evaluating whether to enter into the Facilit[y/ies]. 

118

 

Please
acknowledge your agreement to the above by signing and returning the enclosed copy. 

	Yours faithfully	 	 	 
	

    
	
 	

 	

 

For
and on behalf of 

[Arranger] 

	

	

 
 
    To:
   [Arranger] 

The
Parent and each other member of the Group 

We
acknowledge and agree to the above: 

For
and on behalf of

[Potential Lender] 

119

  

 
 

SCHEDULE 10    
    
    TIMETABLES    
    

 
  PART I—LOANS    
    

	 
	 	Loans in dollars
	 	Loans in euro
	 	Loans in other

currencies

	Approval as an Optional Currency if required (Clause 4.3 (Conditions relating to Optional Currencies))	 	N/A	 	N/A	 	11.00 a.m.

D-5
	

Agent notifies the Parent if a currency is approved as an Optional Currency in accordance with Clause 4.3 (Conditions relating to Optional Currencies)	
 	

N/A	
 	

N/A	
 	

3.00 p.m.

D-5
	

Delivery of a duly completed Utilisation Request (Clause 5.1 (Delivery of a Utilisation Request) or a Selection Notice (Clause 13.1 (Selection of Interest Periods))	
 	

11.00 a.m.

D-3 (or, in the case of the initial Utilisations, D)	
 	

11.00 a.m.

D-2	
 	

11.00 a.m.

D-2
	

Agent determines (in relation to a Utilisation) the Case Currency Amount of the Loan, if required under Clause 5.4 (Lenders' participation).	
 	

N/A	
 	

12.00 p.m.

D-2	
 	

1.00 p.m.

D-2
	

Agent notifies the Lenders of the Loan in accordance with Clause 5.4 (Lenders' participation)	
 	

1.00 p.m.

D-3 (or, in the case of the initial Utilisations, N/A)	
 	

1.00 p.m.

D-2	
 	

1.00 p.m.

D-2
	

Agent receives a notification from a Lender under Clause 9.2 (Unavailability of a currency)	
 	

N/A	
 	

9.30 a.m.

D	
 	

9.30 a.m.

D
	

Agent gives notice in accordance with Clause 9.2 (Unavailability of a currency)	
 	

N/A	
 	

11.00 a.m.

D	
 	

11.00 a.m.

D
	

LIBOR or EURIBOR is fixed	
 	

11.00 a.m.

D-2	
 	

11.00 a.m.

D-2	
 	

11.00 a.m.

D-2

Where
"D" represents the date of drawdown or (if applicable) the last date of an Interest Period for the relevant Loan, "-1", "-2" etc represents the number of Business Days
before that date and all times are UK times except in relation to EURIBOR in which case all times will be Brussels time. 

120

 
 
 

PART II—LETTERS OF CREDIT    
    

	Delivery of a duly completed Utilisation Request (Clause 6.3 (Delivery of a Utilisation Request for Letters of Credit))	 	10.00 a.m.

D-2 (or, in the case of the initial Utilisation, D)
	

Agent determines (in relation to a Utilisation) the Base Currency Amount of the Letter of Credit, if required under Clause 6.6 (Issue of Letters of Credit) Agent notifies the Issuing Bank and the Lenders of the Letter of Credit in accordance with 6.6
(Issue of Letters of Credit)	
 	

12.00 p.m.

D-2

 

1.00 p.m.

D-2
	

Delivery of a duly completed Renewal Request (Clause 6.7 (Renewal of a Letter of Credit))	
 	

10.00 p.m.

D-1

121

  

 
 

SCHEDULE 11    
    
    GROUP STRUCTURE CHART    
    

         

  

	

 	
 	

 
	*	 	Paradigm Geophysical B.V. owns 0.05% of the shares of Paradigm Geophysical Holdings Sarl
	**	 	Paradigm Geophysical (U.K.) Ltd. owns 5% of the shares of Paradigm Geophysical S.A. (Argentina)
	***	 	Paradigm Geophysical (U.K.) Ltd. owns 1% of the shares of PT Paradigm Geophysical (Indonesia)
	****	 	Paradigm Geotechnology B.V. owns 5% of the shares of Paradigm Geotechnology (Egypt)
	*****	 	Paradigm Geophysical B.V. owns 5% of the shares of Paradigm Geotechnology (Egypt)
	******	 	Paradigm Geotechnology B.V. owns 50.2% of the shares of Paradigm Geophysical Canada Ltd.
	*******	 	Jonathan Keller holds one share as nominee in Paradigm Geophysical B.V. representing 0.5%
	********	 	Jonathan Keller holds one quota as nominee in Paradigm Geophysical do Brasil Ltda. representing 0.1%

122

  

 
 

SCHEDULE 12    
    
    FORM OF ACCESSION LETTER    
    

	

	

 
 
    To:
   [                        ] as Agent 

	

	

 
 
    From:
 [Subsidiary] and [Parent] 

Dated:

Dear
Sirs 

Paradigm Geotechnology BV—$77,750,000 Facility Agreement

dated [            ] (the "Agreement")  

	

	

 
 
    1.
     We refer to the Agreement. This is an Accession Letter. Terms defined in the Agreement have the same meaning in this Accession Letter unless given a different meaning in this Accession
Letter. 

	

	

 
 
    2.
     [Subsidiary] agrees to become an Additional Borrower and to be bound by the terms of the Agreement as an Additional Borrower pursuant to Clause 27.2
(Additional Borrowers) of the Agreement. [Subsidiary] is a company duly incorporated under the laws of [name of relevant jurisdiction]. 

	

	

 
 
    3.
     [Subsidiary's] administrative details are as follows: 

Address:

Fax
No: 

Attention:

	

	

 
 
    4.
     This Accession Letter is governed by English law. 

	    	 	 	 	 
	

[Parent]	
 	

[Subsidiary]
	

    	

 	
 	

 	

 

123

  

 
 

SCHEDULE 13    
    
    FORM OF RESIGNATION LETTER    
    

	To:
	[                        ]
as Agent

	From:
	[resigning
Obligor] and [Parent] 

Dated:

Dear
Sirs 

Paradigm Technology BV—$77,750,000 Facility Agreement

dated [            ] (the "Agreement")  

	1.
	We
refer to the Agreement. This is a Resignation Letter. Terms defined in the Agreement have the same meaning in this Resignation Letter unless given a different meaning in this
Resignation.

	2.
	Pursuant
to Clause 27.3 (Resignation of a Borrower), we request that [resigning Obligor] be released from its obligations as a Borrower under Facility B
in terms of the Agreement.

	3.
	We
confirm that

	(a)
	no
Default is continuing or would result from the acceptance of this request; and

	(b)
	[resigning
Borrower]* is under no actual or contingent liability as a Borrower under the Finance Documents (without prejudice to its obligations as an Obligor
under the Finance Documents)

	4.
	This
Resignation Letters is governed by English law. 

	[Parent]	 	[Subsidiary]
	

By:	

 	
 	

By:	

 

	*
	Insert
any other conditions required by the Facility Agreement 

124

  

 
 

SCHEDULE 14    
    
    FORM OF LETTER OF CREDIT    
    

	

	

 
 
    To:
   [Beneficiary]

(the "Beneficiary") 

[Date]

 
 

Irrevocable Standby Letter of Credit no. [            ]    
    

At
the request of [                        ], [Issuing bank] (the "Issuing Bank")
issues this irrevocable standby
letter of credit ("Letter of Credit") in your favour on the following terms and conditions: 

 
 

1.     Definitions         

In
this Letter of Credit: 

"Business Day" means a day (other than a Saturday or a Sunday) on which banks are open for general business in [London]. 

"Demand" means a demand for a payment under this Letter of Credit in the form of the schedule to this Letter of Credit. 

"Expiry Date" means [                        ]. 

"Total L/C Amount" means [                        ]. 

 
 

2.     Issuing Bank's agreement         

	(a)
	The
Beneficiary may request a drawing or drawings under this Letter of Credit by giving to the Issuing Bank a duly completed Demand. A Demand must be received by the Issuing Bank by
[            ] p.m. ([London] time) on the Expiry Date.

	(b)
	Subject
to the terms of this Letter of Credit, the Issuing Bank unconditionally and irrevocably undertakes to the Beneficiary that, within [ten] Business Days
of receipt by it of a Demand, it must pay to the Beneficiary the amount demanded in that Demand.

	(c)
	The
Issuing Bank will not be obliged to make a payment under this Letter of Credit if as a result the aggregate of all payments made by it under this Letter of Credit would exceed the
Total L/C Amount. 

 
  3. 

	Expiry
	

	(a)
	The
Issuing Bank will be released from its obligations under this Letter of Credit on the date (if any) notified by the Beneficiary to the Issuing Bank as the date upon which the
obligations of the Issuing Bank under this Letter of Credit are released.

	(b)
	Unless
previously released under paragraph (a) above, on [            ] p.m. ([London] time) on the Expiry Date the
obligations of the Issuing Bank under this Letter of Credit will cease with no further liability on the part of the Issuing Bank except for any Demand validly presented under the Letter of Credit that
remains unpaid.

	(c)
	When
the Issuing Bank is no longer under any further obligations under this Letter of Credit, the Beneficiary must return the original of this Letter of Credit to the Issuing Bank. 

 
  4.     Payments         

All
payments under this Letter of Credit shall be made in [            ] and for value on the due date to the account of the Beneficiary specified in the Demand. 

125

 

 
 

5.     Delivery of Demand         

Each
Demand shall be in writing, and, unless otherwise stated, may be made by letter, fax or telex and must be received in legible form by the Issuing Bank at its address and by the particular
department or officer (if any) as follows: 

[                                         
                                          
   ]
 

 
 

6.     Assignment         

The
Beneficiary's rights under this Letter of Credit may not be assigned or transferred. 

 
 

7.     UCP         

Except
to the extent it is inconsistent with the express terms of this Letter of Credit, this Letter of Credit is subject to the Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500. 

 
 

8.     Governing Law         

This
Letter of Credit is governed by English law. 

 
 

9.     Jurisdiction         

The
courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Letter of Credit. 

Yours
faithfully, 

[Issuing
Bank] 

By:

126

  

 
 

SCHEDULE
  
  FORM OF DEMAND    
    

	

	

 
 
    To:
   [ISSUING BANK] 

[Date] 

Dear
Sirs 

Standby Letter of Credit no. [            ] issued in favour of [BENEFICIARY] (the "Letter of
Credit")

We
refer to the Letter of Credit. Terms defined in the Letter of Credit have the same meaning when used in this Demand. 

	

	

 
 
    1.
     We certify that the sum of [            ] is due [and has remained unpaid for at least [      ] Business
Days] [under [set out underlying contract or agreement]]. We therefore demand payment of the sum of
[            ]. 

	

	

 
 
    2.
     Payment should be made to the following account: 

Name:

Account
Number: 

Bank:

	

	

 
 
    3.
     The date of this Demand is not later than the Expiry Date. 

	Yours faithfully	 	 
	

    	
 	

 
	

(Authorised Signatory)	
 	

(Authorised Signatory)

For

[BENEFICIARY]

127

 
 
 

SIGNATORIES    
    

	THE PARENT
	

PARADIGM GEOTECHNOLOGY BV
	

Address for Notice:	

Chobham House

Christchurch Way

WOKING

Surrey GU21 1JP

United Kingdom
	

Fax:	

+44 1483 758182
	

Attention:	

Corporate VP Finance/General Counsel
	
THE ORIGINAL BORROWERS
	

PARADIGM GEOPHYSICAL LIMITED
	

Address for Notice:	

Chobham House

Christchurch Way

WOKING

Surrey GU21 1JP

United Kingdom
	

Fax:	

+44 1483 758182
	

Attention:	

Corporate VP Finance/General Counsel

128

 

	SIGNED by	/s/  DAVID FLETT      
	 	 

	

PARADIGM GEOPHYSICAL PTY LTD
	

Address for Notice:	

Chobham House

Christchurch Way

WOKING

Surrey GU21 1JP

United Kingdom
	

Fax:	

+44 1483 758182
	

Attention:	

Corporate VP Finance/General Counsel

	

SIGNED by	

/s/  NICOLAY BARANSKY      
	
 	

 

	

PARADIGM GEOPHYSICAL LLC
	

Address for Notice:	

Chobham House

Christchurch Way

WOKING

Surrey GU21 1JP

United Kingdom
	

Fax:	

+44 1483 758182
	

Attention:	

Corporate VP Finance/General Counsel

129

 

	SIGNED by	/s/  SHAI BUBER      
	 	 

	

PARADIGM GEOPHYSICAL (UK) LIMITED
	

Address for Notice:	

Chobham House

Christchurch Way

WOKING

Surrey GU21 1JP

United Kingdom
	

Fax:	

+44 1483 758182
	

Attention:	

Corporate VP Finance/General Counsel

	

SIGNED by	

/s/  SHAI BUBER      
	
 	

 

	

PARADIGM GEOPHYSICAL CORPORATION
	

Address for Notice:	

Chobham House

Christchurch Way

WOKING

Surrey GU21 1JP

United Kingdom
	

Fax:	

+44 1483 758182
	

Attention:	

Corporate VP Finance/General Counsel

130

 

	THE ARRANGER
	

THE GOVERNOR AND COMPANY

OF THE BANK OF SCOTLAND
	

Address for Notice:	

3/5 Albyn Place

Aberdeen

AB10 1PY
	

Fax:	

+44 1224 283230
	

Attention:	

Kevin Hammell
	
THE AGENT
	

THE GOVERNOR AND COMPANY

OF THE BANK OF SCOTLAND
	

Address for Notice:	

3/5 Albyn Place

Aberdeen

AB10 1PY
	

Fax:	

+44 1224 283230
	

Attention:	

Kevin Hammell

131

 

	THE ISSUING BANK
	

THE GOVERNOR AND COMPANY

OF THE BANK OF SCOTLAND
	

Address for Notice:	

3/5 Albyn Place

Aberdeen

AB10 1PY
	

Fax:	

+44 1224 283230
	

Attention:	

Kevin Hammell
	
THE SECURITY TRUSTEE
	

THE GOVERNOR AND COMPANY

OF THE BANK OF SCOTLAND
	

Address for Notice:	

3/5 Albyn Place

Aberdeen

AB10 1PY
	

Fax:	

+44 1224 283230
	

Attention:	

Kevin Hammell

132

 

	THE LENDER
	

THE GOVERNOR AND COMPANY

OF THE BANK OF SCOTLAND
	

Address for Notice:	

3/5 Albyn Place

Aberdeen

AB10 1PY
	

Fax:	

+44 1224 283230
	

Attention:	

Kevin Hammell

133

 
 
 

SIGNATORIES TO SECOND SUPPLEMENTAL FACILITY AGREEMENT    
    

	THE PARENT
	

    /s/ Shai Buber

	

By: Shai Buber

Title: Attorney in Fact

for and on behalf of
 PARADIGM GEOTECHNOLOGY BV
	

Address for Notice:	

Chobham House

Christchurch Way

WOKING

Surrey GU21 1JP

United Kingdom
	

Fax:	

+44 1483 758182
	

Attention:	

Corporate VP Finance/General Counsel
	
THE ORIGINAL BORROWERS
	

    /s/ Shai Buber

	

By: Shai Buber

Title: Attorney in Fact

for and on behalf of
 PARADIGM GEOPHYSICAL LIMITED
	

Address for Notice:	

Chobham House

Christchurch Way

WOKING

Surrey GU21 1JP

United Kingdom
	

Fax:	

+44 1483 758182
	

Attention:	

Corporate VP Finance/General Counsel

134

 

	    /s/ David Flett

	

By: David Flett

Title: Director

for and on behalf of
 PARADIGM GEOPHYSICAL PTY LTD
	

in the presence of:-
	

                             Witness
	

                             Full Name
	

                             Address
	

                             Occupation
	

Address for Notice:	

Chobham House

Christchurch Way

WOKING

Surrey GU21 1JP

United Kingdom
	

Fax:	

+44 1483 758182
	

Attention:	

Corporate VP Finance/General Counsel
	

    /s/ Nicolay Baransky

	

By: Nicolay Baransky

Title: Director

for and on behalf of
 PARADIGM GEOPHYSICAL LLC
	

Address for Notice:	

Chobham House

Christchurch Way

WOKING

Surrey GU21 1JP

United Kingdom
	

Fax:	

+44 1483 758182
	

Attention:	

Corporate VP Finance/General Counsel

135

 

	    /s/ Shai Buber

	

By: Shai Buber

Title: Attorney in Fact

for and on behalf of
 PARADIGM GEOPHYSICAL (UK) LIMITED
	

Address for Notice:	

Chobham House

Christchurch Way

WOKING

Surrey GU21 1JP

United Kingdom
	

Fax:	

+44 1483 758182
	

Attention:	

Corporate VP Finance/General Counsel
	

    /s/ Shai Buber

	

By: Shai Buber

Title: Attorney in Fact

for and on behalf of
 PARADIGM GEOPHYSICAL CORP.
	

Address for Notice:	

Chobham House

Christchurch Way

WOKING

Surrey GU21 1JP

United Kingdom
	

Fax:	

+44 1483 758182
	

Attention:	

Corporate VP Finance/General Counsel

136

 

	THE ARRANGER
	

/s/ Gregor Morton Stewart

	

By: Gregor Morton Stewart

Title: Associate Director of Corporate Banking

for and on behalf of
 THE GOVERNOR AND COMPANY

OF THE BANK OF SCOTLAND
	

Address for Notice:	

3-5 Albyn Place

Aberdeen AB10 1PY

United Kingdom
	

Fax:	

+44 1224 283230
	

Attention:	

Kevin Hammell
	
THE AGENT
	

/s/ Gregor Morton Stewart

	

By: Gregor Morton Stewart

Title: Associate Director of Corporate Banking

for and on behalf of
 THE GOVERNOR AND COMPANY

OF THE BANK OF SCOTLAND
	

Address for Notice:	

3-5 Albyn Place

Aberdeen AB10 1PY

United Kingdom
	

Fax:	

+44 1224 283230
	

Attention:	

Kevin Hammell

137

 

	THE ISSUING BANK
	

/s/ Gregor Morton Stewart

	

By: Gregor Morton Stewart

Title: Associate Director of Corporate Banking

for and on behalf of
 THE GOVERNOR AND COMPANY

OF THE BANK OF SCOTLAND
	

Address for Notice:	

3-5 Albyn Place

Aberdeen AB10 1PY

United Kingdom
	

Fax:	

+44 1224 283230
	

Attention:	

Kevin Hammell
	
THE SECURITY TRUSTEE
	

/s/ Gregor Morton Stewart

	

By: Gregor Morton Stewart

Title: Associate Director of Corporate Banking

for and on behalf of
 THE GOVERNOR AND COMPANY

OF THE BANK OF SCOTLAND
	

Address for Notice:	

3-5 Albyn Place

Aberdeen AB10 1PY

United Kingdom
	

Fax:	

+44 1224 283230
	

Attention:	

Kevin Hammell

138

 

	THE LENDER
	

/s/ Gregor Morton Stewart

	

By: Gregor Morton Stewart

Title: Associate Director of Corporate Banking

for and on behalf of
 THE GOVERNOR AND COMPANY

OF THE BANK OF SCOTLAND
	

Address for Notice:	

3-5 Albyn Place

Aberdeen AB10 1PY

United Kingdom
	

Fax:	

+44 1224 283230
	

Attention:	

Kevin Hammell

139

QuickLinks

SECOND SUPPLEMENTAL FACILITY AGREEMENT between PARADIGM GEOTECHNOLOGY BV and others as Borrowers and

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(A)

(B)

1. DEFINITIONS AND INTERPRETATION

1.1.

1.2.

1.3.

1.4.

2. CONDITIONS PRECEDENT AND SUBSEQUENT

2.1.

2.2.

2.3.

2.4.

3. ADMINISTRATION

3.1.

3.2.

4. AMENDMENTS TO THE FACILITY AGREEMENT

4.1.

4.2.

4.3.

5. REPRESENTATIONS AND WARRANTIES

5.1.

5.2.

6. FEES AND EXPENSES

6.1.

6.2.

7. PRESERVATION OF GUARANTEES AND SECURITY

8. WAIVER

9. GENERAL

9.1.

9.2.

10. COUNTERPARTS

11. NOTICES

12. GOVERNING LAW

SCHEDULE 1 THE COMPANIES

SCHEDULE 2 CONDITIONS PRECEDENT

1. General

2. Australia

3. Canada

4. France

5. Israel

6. Netherlands

7. USA

8. Cayman Islands

SCHEDULE 3 FORM OF AMENDED AND RESTATED FACILITY AGREEMENT

CONTENTS

(1)

(2)

(3)

(4)

(5)

(6)

(7)

SECTION 1 INTERPRETATION

1. DEFINITIONS AND INTERPRETATION

1.1. Definitions

1.2. Construction

1.3. Third party rights

SECTION 2 THE FACILITIES

2. THE FACILITIES

2.1. The Facilities

2.2. Finance Parties' rights and obligations

2.3. Ancillary Facilities

2.4. Amount of Facilities

3. PURPOSE

3.2. Monitoring

4. CONDITIONS OF UTILISATION

4.1. Initial conditions precedent

4.2. Further conditions precedent

4.3. Conditions relating to Optional Currencies

4.4. Maximum number of Utilisations

4.5. Limitations on Utilisation

SECTION 3 UTILISATION

5. UTILISATION—LOANS

5.1. Delivery of a Utilisation Request

5.2. Completion of a Utilisation Request

5.3. Currency and amount

5.4. Lenders' participation

6. UTILISATION—LETTERS OF CREDIT

6.1. General

6.2. Facility B

6.3. Delivery of a Utilisation Request for Letters of Credit

6.4. Completion of a Utilisation Request for Letters of Credit

6.5. Currency and amount

6.6. Issue of Letters of Credit

6.7. Renewal of a Letter of Credit

6.8. Revaluation of Letters of Credit

7. LETTERS OF CREDIT

7.1. Immediately payable

7.2. Assignments and transfers

7.3. Fee payable in respect of Letters of Credit

7.4. Claims under a Letter of Credit

7.5. Indemnities

7.6. Rights of contribution

7.7. Role of the Issuing Bank

8. ANCILLARY FACILITIES

8.2. Terms of Ancillary Facilities

8.3. Facility B Commitment

8.4. Refinancing of Ancillary Facility

8.5. Information

8.6. Affiliates of Lenders as Ancillary Lenders

9. OPTIONAL CURRENCIES

9.1. Selection of currency

9.2. Unavailability of a currency

9.3. Participation in a Loan

SECTION 4 REPAYMENT, PREPAYMENT AND CANCELLATION

Repayment

10. REPAYMENT

10.1. Repayment of Facility A Loan

10.2. Repayment of Facility B Loans

11. PREPAYMENT AND CANCELLATION

11.1. Illegality

11.2. Voluntary cancellation

11.3. Voluntary prepayment of Facility A Loan

11.4. Voluntary Prepayment of Facility B Loans

11.5. Sale, Listing or Change of Control

11.6. Asset Disposals

11.7. Insurance Claims

11.8. Cash Sweep

11.9. Financial Covenant Breach

11.10. Terms of Mandatory Prepayments

11.11. Right of repayment and cancellation in relation to a single Lender

11.12. Restrictions

SECTION 5 COSTS OF UTILISATION

12. INTEREST

12.1. Calculation of interest

12.2. Payment of interest

12.3. Default interest

12.4. Notification of rates of interest

13. INTEREST PERIODS

13.1. Selection of Interest Periods

13.2. Changes to Interest Periods

13.3. Non-Business Days

14. CHANGES TO THE CALCULATION OF INTEREST

14.1. Absence of quotations

14.2. Market disruption

14.3. Alternative basis of interest or funding

14.4. Break Costs

15. FEES

15.1. Commitment fee

15.2. Arrangement fee

15.3. Agency fee

15.4. Monitoring fee

SECTION 6 ADDITIONAL PAYMENT OBLIGATIONS

16. TAX GROSS UP AND INDEMNITIES

16.1. Definitions

16.2. Tax gross-up

16.3. Tax indemnity

16.4. Tax Credit

16.5. Stamp taxes

16.6. Value added tax

17. INCREASED COSTS

18. OTHER INDEMNITIES

18.2. Other indemnities

18.3. Indemnity to the Agent

19. MITIGATION BY THE LENDERS

19.1. Mitigation

19.2. Limitation of liability

20. COSTS AND EXPENSES

20.1. Transaction expenses

20.2. Amendment costs

20.3. Enforcement costs

SECTION 7 REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

21. REPRESENTATIONS

21.1. Status

21.2. Binding obligations

21.3. Non-conflict with other obligations

21.4. Power and authority

21.5. Validity and admissibility in evidence

21.6. Governing law and enforcement

21.7. Deduction of Tax

21.8. No filing or stamp taxes

21.9. No default

21.10. Original Financial Statements

21.11. Financial Statements

21.12. Transaction Information

21.13. Base Case Model

21.14. Other Information

21.15. Disclosure Deleted.

21.16. Pari passu ranking

21.17. No proceedings

21.18. Security Interests

21.19. Environment

21.20. Intellectual Property

21.21. Ownership of Assets

21.22. Financial Indebtedness

21.23. No Obligation to Create Security

21.24. Group Structure

21.25. Ownership of the Parent

21.26. Compliance with Dutch Banking Act

21.27. Office of Chief Scientist and Approved Enterprise Status from the Investment Centre

21.28. Repetition

22. INFORMATION UNDERTAKINGS

22.1. Financial statements

22.2. Operating Budget

22.3. Compliance Certificates

22.4. Requirements as to financial statements

22.5. Information: miscellaneous

22.6. Notification of default

23. FINANCIAL COVENANTS

23.1.

23.2.

23.3.

23.4.

24. GENERAL UNDERTAKINGS

24.1. Authorisations

24.2. Compliance with laws

24.3. Negative pledge

24.4. Disposals

24.5. Merger

24.6. Change of business

24.7. Compliance with Obligations

24.8. Insurance

24.9. Intellectual Property Rights

24.10. Access by Agent to Auditors

24.11. Tax

24.12. Bank Transactions and Cash Balances

24.13. Compliance with Environmental Law

24.14. Storage of Hazardous Substances

24.15. Pensions and Severance Pay

24.16. Dividends

24.17. Financial Indebtedness

24.18. Guarantees

24.19. Loans

24.20. Acquisitions

24.21. Joint Ventures

24.22. Capital Expenditure

24.23. Change in Accounts Date or Auditors

24.24. Change in Accounting Principles

24.25. Status of Parent

24.26. Issue of Shares

24.27. Purchase or Redemption of Shares

24.28. Amendment of Equity Documents

24.29. Payment of Subordinated Debt/Shareholder Fees/Investor Counter-Indemnity

24.30. Off Balance Sheet Finance

24.31. Hedging Transactions

24.32. Management Team

24.33. Israeli Office of Chief Scientist

24.34. Core Labs Receivable

24.35. Paradigm Geophysical Holdings SAS

24.36. US Obligors

25. EVENTS OF DEFAULT

25.1. Non-payment

25.2. Key covenants

25.3. Other obligations

25.4. Misrepresentation

25.5. Cross default

25.6. Insolvency

25.7. Insolvency proceedings

25.8. Creditors' process

25.9. Similar events elsewhere

25.10. Ownership of the Obligors

25.11. Unlawfulness

25.12. Repudiation

25.13. Ceasing to Carry on Business

25.14. Government Intervention

25.15. Qualified Audit Report

25.16. Litigation

25.17. Inter Creditor Deed

25.18. Amendment of Constitution of the Parent

25.19. Material Adverse Effect

25.20. Acceleration

SECTION 8 CHANGES TO PARTIES

26. CHANGES TO THE LENDERS

26.1. Assignments and transfers by the Lenders

26.2. Conditions of assignment or transfer

26.3. Assignment or transfer fee

26.4. Limitation of responsibility of Existing Lenders

26.5. Procedure for transfer

26.6. Disclosure of information

26.7. Assistance with Syndication

27. CHANGES TO THE OBLIGORS AND FURTHER SECURITY

27.1. Assignments and transfer by the Obligors

27.2. Additional Borrowers

27.3. Resignation of a Borrower

27.4. Repetition of Representations

27.5. Further Security

27.6. Release of Security

SECTION 9 THE FINANCE PARTIES

28.

28.1. Appointment of the Agent and the Security Trustee

28.2.

28.3. Role of the Arranger

28.4. Role of the Security Trustee

28.5. No fiduciary duties

28.6. Business with the Group

28.7. Rights and discretions of the Agent and the Security Trustee

28.8. Majority Lenders' instructions

28.9. Responsibility for documentation

28.10. Exclusion of liability

28.11. Lenders' Indemnity to the Agent

28.12. Resignation of the Agent

28.13. Confidentiality

28.14. Relationship with the Lenders

28.15. Credit appraisal by the Lenders

28.16. Reference Banks

28.17. Deduction from amounts payable by the Agent

28.18. PMP

29. CONDUCT OF BUSINESS BY THE FINANCE PARTIES

30. SHARING AMONG THE FINANCE PARTIES

30.1. Payments to Finance Parties

30.2.

30.3. Recovering Finance Party's rights

30.4. Reversal of redistribution

30.5. Exceptions

SECTION 10 ADMINISTRATION

31. PAYMENT MECHANICS

31.1. Payments to the Agent

31.2. Distributions by the Agent

31.3. Distributions to an Obligor

31.4. Clawback

31.5. Partial payments

31.6. No set-off by Obligors

31.7. Business Days

31.8. Currency of account

32. SET-OFF

33. NOTICES

33.1. Communications in writing

33.2. Addresses

33.3. Delivery

33.4. Notification of address and fax number

33.5. Electronic communication

33.6.

33.7. English language

34. CALCULATIONS AND CERTIFICATES

34.1. Accounts

34.2. Certificates and Determinations

34.3. Day count convention

35. PARTIAL INVALIDITY

36. REMEDIES AND WAIVERS

37. AMENDMENTS AND WAIVERS

37.1. Required consents

37.2. Exceptions

38. COUNTERPARTS

SECTION 11 GOVERNING LAW AND ENFORCEMENT

39. GOVERNING LAW

40. ENFORCEMENT

40.1. Jurisdiction of English courts

40.2. Service of Process

SCHEDULE 1 THE ORIGINAL PARTIES

Part I The Original Borrowers

Part II The Original Obligors

Part III The Original Lenders

SCHEDULE 2 CONDITIONS PRECEDENT

PART I

1. Original Obligors

2. Legal opinions

3. Other documents and evidence

4. Shares /Subordinated Notes

5. Acquisition

6. Security Documents

7. Refinancing Documents

8. Inter Creditor Deed

9. Due Diligence Reports

10. Business Plan.

11. Fees Letters

12. Interest Rate Hedging

13. Miscellaneous

Part II Conditions Precedent required to be delivered by an Additional Obligor

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

SCHEDULE 3 REQUESTS

Part IA Utilisation Request—Loan

From

To

1.

2.

3.

4.

5.

Part 1B Utilisation Request—Letters of Credit

From

To

1.

2.

3.

4.

5.

Part II Selection Notice

From

To

1.

2.

3.

4.

SCHEDULE 4 REPAYMENT SCHEDULE FACILITY A REPAYMENT SCHEDULE

SCHEDULE 5 MANDATORY COST FORMULAE

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

SCHEDULE 6 FORM OF TRANSFER CERTIFICATE

To

From

1.

2.

3.

4.

[4/5]

[5/6]

[6/7]

[7/8]

THE SCHEDULE Commitment/rights and obligations to be transferred

SCHEDULE 7 FORM OF COMPLIANCE CERTIFICATE

To

From

1.

2.

3.

SCHEDULE 8 EXISTING SECURITY

SCHEDULE 9 LMA FORM OF CONFIDENTIALITY UNDERTAKING

To

Re

1. Confidentiality Undertaking

2. Permitted Disclosure

3. Notification of Required or Unauthorised Disclosure

4. Return of Copies

5. Continuing Obligations

6. No Representation; Consequences of Breach, etc

7. No Waiver; Amendments, etc

8. Inside Information

9. Nature of Undertakings

10. Third party rights

11. Governing Law and Jurisdiction

12. Definitions

To

SCHEDULE 10 TIMETABLES

PART I—LOANS

PART II—LETTERS OF CREDIT

SCHEDULE 11 GROUP STRUCTURE CHART

SCHEDULE 12 FORM OF ACCESSION LETTER

To

From

1.

2.

3.

4.

SCHEDULE 13 FORM OF RESIGNATION LETTER

SCHEDULE 14 FORM OF LETTER OF CREDIT

To

Irrevocable Standby Letter of Credit no. [ ]

1. Definitions

2. Issuing Bank's agreement

3.

4. Payments

5. Delivery of Demand

6. Assignment

7. UCP

8. Governing Law

9. Jurisdiction

SCHEDULE FORM OF DEMAND

To

1.

2.

3.

SIGNATORIES

SIGNATORIES TO SECOND SUPPLEMENTAL FACILITY AGREEMENTQuickLinks
 -- Click here to rapidly navigate through this document

Exhibit 10.17  

REGULATIONS FOR SHARE OPTIONS

GRANTED ON                        2001 BY THE

BOARD OF DIRECTORS OF T-SURF SA1

 
 

1.     BENEFICIARIES         

        By
virtue of the legal requirements, only salaried employees and managers of T-SURF SA who are subject to the tax regime for employees and employees of subsidiaries in which
T-SURF SA holds over 10% of the stock can be beneficiaries of the options. Salaried employees and managers of the other companies in the group and managers of the subsidiaries in which
T-SURF SA holds over 10% of the stock are excluded from the scheme. 

        The
rights resulting from the granted options are not transferable until the options are exercised. However, if the options beneficiary dies during the options validity period, and
before they have been fully declared, his/her heirs may declare them within the time specified below. 

 
 

2.     TIMETABLE FOR THE EXERCISE OF OPTIONS AND LOSS OF RIGHTS TO EXERCISE OPTIONS         

        The
options can not be exercised until four (4) years after the date on which they were granted. 

        After
the end of the four (4) year lock-in period, the options may be exercised on one or more occasions, in the following manner: 

	(i)
	If
the options holder is employed by T-SURF SA at the expiry date of the said lock-in period, the options may be exercised within the twelve
(12) months following the end of the lock-in period, i.e. up to and including the fifth anniversary of the date on which the options were granted to the holder concerned, subject to
the following exceptions.

	(ii)
	If,
on the expiry of the above-mentioned lock-in period, the options holder is a salaried employee of a subsidiary of T-SURF in which
T-SURF holds over 10% of the stock, in accordance with the legal provisions, or the options holder has become a salaried employee of T-SURF SA, after having been at some time
from the option award date, an employee of a T-SURF subsidiary held at over 10% by T-SURF, as stated above, the options may be exercised during a period of
twenty-four (24) months from the lock-in period, i.e. up to and including the sixth anniversary of the date on which options were granted to the holder concerned,
subject to the following exceptions. 

	

	

 
 
    2.1
   The right to exercise options within the above-mentioned time limit will legally expire if the options beneficiary leaves T-SURF SA as a result of resignation, discharge for
gross or serious misconduct or dismissal for misconduct defined as gross or serious under labour law. 

	

	

 
 
    2.2
   In the event of retirement, discharge or dismissal not resulting from gross or serious misconduct, the beneficiary of the options will be entitled to a period of six (6) months
from notification of retirement, discharge or dismissal to exercise the options, although the overall time limit for exercise of the options may not be extended beyond the following dates: if the
employee is in the case described in 2 (i) above, not beyond 30 June 2006; if the employee is in the case described in 2 (ii) above, not beyond 30 June 2007. If the options
beneficiary fails to exercise his/her options within the said six (6) months deadline, the options will become void and the beneficiary will not be entitled to receive any indemnity. 

	1
	The
decision by the board of directors to grant options to employees of T-SURF must take place within thirty-eight (38) months of the authorisation
granted by the extraordinary general meeting of shareholders. 

 
	

	

 
 
    2.3
   In the event of the beneficiary's death, his/her heirs will be entitled to exercise the options within six (6) months of the beneficiary's death, although the overall time limit
for exercise of the options may not be extended beyond 30 June 2006 if the employee was in the case described in 2(i) above or 30 June 2007 for an employee in the case described
in 2 (ii) above. 

	

	

 
 
    2.4
   In the event of resignation, loss of the right to exercise the options will take effect from the date that the resignation is notified. 

	

	

 
 
    2.5
   In the event of discharge for gross or serious misconduct, or dismissal for misconduct defined as gross or serious under labour law, loss of the right to exercise the options will take
effect from the date of the dismissal decision or notice of discharge. 

	

	

 
 
    2.6
   In the hypothetical event of control (in the sense of clause II of article 233-3 of the French Commercial Code) of T-SURF SA being transferred, the
board of directors may, at that time, bring forward the options exercise date. In this case, and subject to such decision being taken by the board of directors of T-SURF SA, the board will
inform each options beneficiary that he/she has twenty (20) days to exercise his/her options if he/she so wishes. If the options beneficiary fails to exercise their options within the
prescribed twenty (20) days, the options will become void with no indemnity payable by T-SURF SA. 

	

	

 
 
    2.7
   In the hypothetical case of a merger between T-SURF SA and another company, the board of directors of T-SURF SA may, at that time, bring forward the options
exercise date. In this case, and subject to such decision being taken by the board of directors of T-SURF SA, the board will inform each options beneficiary of the proposed merger, sixty
(60) days before the extraordinary general meeting of shareholders which will be called to resolve on the merger and will give him/her twenty (20) days from notice of the proposed merger
to exercise all of his/her options if he/she so wishes. If the beneficiary fails to exercise his/her options within the prescribed twenty (20) day period the options which are not exercised
will become void with no indemnity payable by T-SURF SA. Failing notice from the beneficiaries, the options will be maintained and in the event of a takeover of T-SURF SA, will
be transferred to the absorbing company's shares.2 

 
 

3.     SUSPENSION OF THE RIGHT TO EXERCISE OPTIONS         

        The
board of directors may suspend the right to exercise the options if necessary. Such suspension will take place primarily whenever an operation on the share capital of
T-SURF SA requires exact and prior knowledge of the number of shares constituting the capital. 

        The
company will inform the options beneficiary at least eight (8) days in advance by indicating the date on which the options exercise will be suspended, and the date on which it
will resume. In any event, this period may not exceed three (3) months. 

        If
the end of the options exercise period occurs during the suspension period, the options exercise period will be extended by three (3) months.3 

	2
	Clauses
2.1 to 2.7 of these regulations are provided by way of example. In fact, the board of directors may need to subordinate the exercise of BSPCE warrants to specific
conditions to be complied with at the time of the exercise. It may therefore be necessary to provide for the loss of rights to exercise the options with immediate effect in the event of the
beneficiary losing his/her employee status for whatever reason. 
	3
	Paragraph 3
is also provided by way of example. 

2

 

 
 

4.     SETTING THE SHARE PURCHASE PRICE FOR EXERCISE OF THE OPTIONS         

        The
subscription price has been set at        Euros4. 

        The
price may not be modified during the lifetime of the options except for adjustments made under the conditions provided for by law as described below: 

        In
the event that the company proceeds to carry out one of the operations listed in article L 225-181 of the French Commercial Code, the subscription price for the
option shares which was fixed before such operation, would be adjusted. However, if such adjustment were to reduce the subscription price below the share's face value, the new subscription price would
be fixed at face value. 

        In
the cases described below, the adjustment will be made as follows: 

	1/
	In
the event of the issuance of cash shares, without renunciation by shareholders of their preferential subscription rights, the subscription price will be reduced by an amount equal
to the result calculated using the ratio between the value of the subscription right and the share value before detachment of this right.

	2/
	In
the event of the issuance of convertible or exchangeable bonds without renunciation by shareholders of their preferential subscription rights, the subscription price will be reduced
by an amount calculated using the same method as for the issuance of cash shares.

	3/
	In
the event of a capital increase by capitalisation of reserves, profits or issuance premiums and allocation of free shares, or likewise for splitting or consolidation of shares, the
subscription price will be adjusted using the result obtained from the ratio between the number of old shares and the number of shares existing after the operation.

	4/
	In
the event of distribution of reserves in cash (or as shares) the subscription price will be reduced by an amount equal to the result obtained from the ratio between the amount of
cash (or the value of shares distributed) and the value of the share before the distribution (article D.174-12, para. 1).

	5/
	In
the event of a capital reduction required because of losses, the subscription price will be adjusted by determining the price using the ratio between the number of old shares and
the number existing after the reduction (D.174-16, para. 1). 

        In
all the cases provided for above, the new number of option shares will be equal to the ratio between the amount of unexercised options and the new share subscription price. This
figure will be rounded up to the next unit. 

 
 

5.     EXERCISING OPTION RIGHTS         

        Options
may only be exercised in full. 

        An
option exercise declaration notice, which substitutes for a subscription form, should be sent to the company together with the payment, either in cash or as an offset to a due claim. 

        The
subscribed shares will be registered in a pure nominee account or in a nominee account administered by [bank/company] in the subscriber's name5. 

	4
	Cf.
New provisions of the NRE law: Article L. 225-177 of the French Commercial Code on the methods for fixing the exercise price with no possibility of
a discount. 
	5
	If
the company has its own securities accounting function, these are recorded in accounts known as "pure nominee accounts". 

3

 

 
 

6.     AVAILABILITY OF SHARES—OWNERSHIP OF SHARES         

        The
subscribed shares will be created with rights to receive dividends from the beginning of the financial year in which the option is exercised. They will receive entitlement in respect
of this financial year and subsequent years with the same face value and the same dividend as the dividend distributed to other shares with the same ownership rights. They will, consequently, be fully
integrated with the said shares after payment of the dividend relating to the previous financial year, or if none was distributed, after the holding of the annual meeting of shareholders which
approves the accounts for that year6. 

 
 

7.     MANDATORY TAX DECLARATIONS         

 a/ The company's obligations:  

	—
	In
respect of the year in which the option is exercised: 

The
company is obliged to provide the beneficiary with an individual statement, specifying the company name and the address of its main business office, as well as its registered office address (if
different), the dates of award and option exercise, the number of subscribed shares and their subscription unit price. This statement must be provided no later than 15 February of the following year.
Furthermore, the company will send a duplicate statement by the same deadline (by 15 February at the latest) to the tax authority office where the company's earnings declaration is filed. 

	—
	In
respect of the year in which shares are sold (or they convert to bearer shares), if such sale (or conversion) occurs before the end of the tax
lock-in period: 

The
company must send an individual statement at the latest by 15 February in the following year to both the beneficiary and the tax authority which covers the beneficiary's home address. The
statement must specify the date of the sale (or conversion to bearer shares) of the shares and the dates of award and exercise, the number of shares involved, the subscription price and their value at
option exercise date. 

In
the event of an exchange of shares with no cash adjustment of the company's shares against shares resulting from a public offering, merger, split, re-forming or consolidation of shares
effected in compliance with the regulations in force, the above-mentioned obligations for tax will be transferred to the company whose shares replace the shares under option and will from that point
forward relate to the new shares. 

 b/ Obligations of each beneficiary  

	—
	In
respect of the year in which the option is exercised: 

The
beneficiary must attach the individual statement received from the company to his/her tax declaration. 

	—
	In
respect of the year in which the shares are sold: 

	6
	The
statement of the shares created by the exercise of options must be made by the board of directors at its first meeting after the financial year end following the
exercise of options. The company's articles of association should have been modified to reflect the capital increase and the legal notices arising from the increase should also have been published. 

4

 

The
beneficiary is required to state on his/her income declaration for the sale year on the one hand the difference between the value of the shares at the option exercise date and the subscription
price7 and on the other hand the profit received at the sale date, equaling the difference between the sale price and the value of the shares at option exercise date, if the gain falls
within conditions for taxation. 

For
this purpose, the beneficiary must complete annex no. 2074 on his/her income tax declaration. 

0

0        0

        Failure
by either the company or the beneficiary to comply with the above-mentioned tax declaration obligations constitutes default under the fiscal regime on account of
article 163 bis-C of the French General Tax Code and leads to imposition of tax under common law terms of the benefit
obtained at the option exercise. Furthermore, the company is liable in respect of the obligations that it has not complied with for tax fines under articles 1725 and 1726 of the French
General Tax Code. 

THE BOARD OF DIRECTORS

	7
	The
profit will be taxable unless the holder expressly opts for taxation under the regime that applies to wages and salaries, currently at a fixed rate of 40%, provided
that the sale occurs after the expiry of the tax lock-in period. 

5

QuickLinks

1. BENEFICIARIES

2. TIMETABLE FOR THE EXERCISE OF OPTIONS AND LOSS OF RIGHTS TO EXERCISE OPTIONS

2.1

2.2

2.3

2.4

2.5

2.6

2.7

3. SUSPENSION OF THE RIGHT TO EXERCISE OPTIONS

4. SETTING THE SHARE PURCHASE PRICE FOR EXERCISE OF THE OPTIONS

5. EXERCISING OPTION RIGHTS

6. AVAILABILITY OF SHARES—OWNERSHIP OF SHARES

7. MANDATORY TAX DECLARATIONS

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00111-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00111-of-00352.parquet"}]]