Document:

Exhibit
10.3

 

CONSTRUCTION LOAN AGREEMENT

 

 

By and
Between

 

 

GLOBAL
GEOPHYSICAL SERVICES, INC., a Delaware corporation,

GGS INTERNATIONAL HOLDINGS, INC., a Texas corporation,

and

AUTOSEIS, INC., a Texas corporation

 

and

 

 

CITIBANK,
N.A.,

a
national banking association

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
  ARTICLE I

  	
  DEFINITION
  OF TERMS

  	
  1

  
	
  1.1

  	
  Definitions

  	
  1

  
	
  1.2

  	
  Additional Definitions

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  THE
  LOAN

  	
  6

  
	
  2.1

  	
  Agreement to Lend

  	
  6

  
	
  2.2

  	
  Advances

  	
  7

  
	
  2.3

  	
  Allocations

  	
  7

  
	
  2.4

  	
  Limitation on Advances

  	
  7

  
	
  2.5

  	
  Reallocations

  	
  7

  
	
  2.6

  	
  Contingency Allocations

  	
  7

  
	
  2.7

  	
  Regulatory Restrictions

  	
  7

  
	
  2.8

  	
  Withholding on Advances

  	
  8

  
	
  2.9

  	
  Loan Limitation

  	
  8

  
	
  2.10

  	
  Appraisal Right

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  ADVANCES

  	
  8

  
	
  3.1

  	
  Conditions to Initial Advance

  	
  8

  
	
  3.2

  	
  Conditions to Advances

  	
  11

  
	
  3.3

  	
  Conditions Precedent to Advances

  	
  12

  
	
  3.4

  	
  Advance Not A Waiver

  	
  13

  
	
  3.5

  	
  Borrower’s Deposit

  	
  13

  
	
  3.6

  	
  Advance Not An Approval

  	
  14

  
	
  3.7

  	
  Time and Place of Advances

  	
  14

  
	
  3.8

  	
  Retainage

  	
  14

  
	
  3.9

  	
  No Third Party Beneficiaries

  	
  15

  
	
  3.10

  	
  Extended Maturity Date Options

  	
  15

  
	
  3.11

  	
  Note Repayment

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  WARRANTIES
  AND REPRESENTATIONS

  	
  16

  
	
  4.1

  	
  Plans and Specifications

  	
  16

  
	
  4.2

  	
  Governmental Requirements

  	
  16

  
	
  4.3

  	
  Municipal Services

  	
  16

  
	
  4.4

  	
  Access

  	
  17

  
	
  4.5

  	
  Intentionally Blank

  	
  17

  
	
  4.6

  	
  Financial Statements

  	
  17

  
	
  4.7

  	
  Statements

  	
  17

  
	
  4.8

  	
  No Proceedings

  	
  17

  
	
  4.9

  	
  Disclaimer of Permanent Financing

  	
  17

  
	
  4.10

  	
  Solvency

  	
  17

  
	
  4.11

  	
  Business Loan

  	
  18

  
	
  4.12

  	
  Relationship

  	
  18

  
	
  4.13

  	
  Intentionally Blank

  	
  18

  
	
  4.14

  	
  Licenses; Permits

  	
  18

  
	
  4.15

  	
  No Assignment

  	
  18

  

 

i

 

	
   

  	
   

  	
  Page

  
	
  4.16

  	
  Compliance with Laws

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  COVENANTS
  OF BORROWER

  	
  18

  
	
  5.1

  	
  Completion

  	
  18

  
	
  5.2

  	
  No Changes

  	
  19

  
	
  5.3

  	
  Advances

  	
  19

  
	
  5.4

  	
  Lender’s Expenses

  	
  19

  
	
  5.5

  	
  Surveys

  	
  19

  
	
  5.6

  	
  Defects and Variances

  	
  20

  
	
  5.7

  	
  Estoppel Certificates

  	
  20

  
	
  5.8

  	
  Inspecting Person

  	
  20

  
	
  5.9

  	
  Brokers

  	
  20

  
	
  5.10

  	
  Personalty and Fixtures

  	
  20

  
	
  5.11

  	
  Compliance with Governmental Requirements

  	
  20

  
	
  5.12

  	
  Compliance with Restrictive Covenants

  	
  20

  
	
  5.13

  	
  Intentionally Omitted

  	
  21

  
	
  5.14

  	
  Affidavit of Completion

  	
  21

  
	
  5.15

  	
  Payment of Expenses

  	
  21

  
	
  5.16

  	
  Notices Received

  	
  21

  
	
  5.17

  	
  Advertising by Lender

  	
  21

  
	
  5.18

  	
  Leases

  	
  21

  
	
  5.19

  	
  Intentionally Blank

  	
  21

  
	
  5.20

  	
  Delivery of Contracts

  	
  21

  
	
  5.21

  	
  Financial Statements

  	
  22

  
	
  5.22

  	
  Reserve for Taxes and Insurance Premiums

  	
  22

  
	
  5.23

  	
  Equity Contribution

  	
  24

  
	
  5.24

  	
  Other Activities

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  ASSIGNMENTS

  	
  24

  
	
  6.1

  	
  Assignment of Construction Contract

  	
  24

  
	
  6.2

  	
  Assignment of Plans and Specifications

  	
  25

  
	
  6.3

  	
  Assignment of Design Services Contract

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  EVENTS
  OF DEFAULT

  	
  27

  
	
  7.1

  	
  Events of Default

  	
  27

  
	
  7.2

  	
  Remedies

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  LENDER’S
  DISCLAIMERS - BORROWER’S INDEMNITIES

  	
  30

  
	
  8.1

  	
  No Obligation by Lender to Construct

  	
  30

  
	
  8.2

  	
  No Obligation by Lender to Operate

  	
  30

  
	
  8.3

  	
  INDEMNITY BY BORROWER

  	
  30

  
	
  8.4

  	
  No Agency

  	
  31

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  MISCELLANEOUS

  	
  32

  
	
  9.1

  	
  Successors and Assigns

  	
  32

  
	
  9.2

  	
  Headings

  	
  32

  

 

ii

 

	
   

  	
   

  	
  Page

  
	
  9.3

  	
  Survival

  	
  32

  
	
  9.4

  	
  APPLICABLE LAW

  	
  32

  
	
  9.5

  	
  Notices

  	
  32

  
	
  9.6

  	
  Reliance by Lender

  	
  33

  
	
  9.7

  	
  Participations

  	
  33

  
	
  9.8

  	
  Interest Provisions

  	
  33

  
	
  9.9

  	
  Controlling Document

  	
  35

  
	
  9.10

  	
  Counterparts

  	
  35

  
	
  9.11

  	
  Waiver of Right to Trial by Jury

  	
  35

  
	
  9.12

  	
  WAIVER OF CONSUMER RIGHTS

  	
  35

  
	
  9.13

  	
  ENTIRE AGREEMENT

  	
  36

  

 

iii

 

CONSTRUCTION LOAN AGREEMENT

 

This CONSTRUCTION LOAN
AGREEMENT (“Agreement”) is executed effective as of the         
day of February, 2008, by and between GLOBAL GEOPHYSICAL SERVICES, INC., a
Texas corporation, d/b/a GGS Seismic, Inc. (“Global”), GGS
INTERNATIONAL HOLDINGS, INC., a Texas corporation and AUTOSEIS, INC., a Texas
corporation whose address is 3535 Briarpark Drive, Suite 200, Houston,
Texas, 77042, and CITIBANK, N.A., a national banking association (“Lender”),
whose address is 2000 West Sam Houston Parkway South, Suite 600,
Houston, Texas 77042.

 

ARTICLE I

 

DEFINITION OF TERMS

 

1.1                                 Definitions. 
As used in this Agreement, the following terms shall have the respective
meanings indicated below:

 

Advance:  A disbursement by Lender, whether by journal
entry or deposit to Borrower’s account, of any of the proceeds of the Loan, any
insurance proceeds or Borrower’s Deposit.

 

Affidavit of Commencement:  As defined in Section 5.13
hereof.

 

Affidavit of Completion:  As defined in Section 5.14
hereof.

 

Agreement:  This Construction Loan Agreement, as the same
may from time to time be amended or supplemented.

 

Allocations:  The line items set forth in the Budget for
which Advances of Loan proceeds will be made.

 

Borrower:  Shall mean, jointly and severally, Global,
GGS International Holdings, Inc., a Texas corporation and Autoseis, Inc.,
a Texas corporation and Borrower shall also mean any one of them.

 

Borrower’s Deposit:  Such cash amounts as Lender may deem
necessary for Borrower to deposit with it in accordance with the provisions of Section 3.5
of this Agreement.

 

Budget:  The initial budget which is set forth on Exhibit “B”
attached hereto and incorporated herein by reference, as the same may be
amended from time to time and approved by Lender.

 

Commencement Date:  The date set forth in the Schedule of
Definitions.

 

Completion:  When all of the following have been delivered
to the Lender:  (i) Certificate of
Occupancy (or its equivalent) from the appropriate Governmental Authority
having jurisdiction over the Mortgaged Property; (ii) Certificate of
Substantial Completion from the 

 

1

 

Design Professional
(verified by the Inspecting Person); and (iii) an Affidavit and Release of
Liens, in form and substance acceptable to Lender, from the Contractor and,
upon request of Lender, any other contractor or subcontractor who performed
Work.

 

Completion Date:  The date set forth in the Schedule of
Definitions.

 

Constituent Party:  Any signatory to this Agreement that signs on
Borrower’s behalf that is a corporation, general partnership, limited
partnership, joint venture, trust, or other type of business organization.

 

Construction Contract:  Collectively, all contracts and agreements
entered into between Global and Contractor pertaining to the development,
construction and completion of the Improvements.

 

Contractor:  The person or entity who is acceptable to
Lender and set forth in the Schedule of Definitions (if other than
Global), together with any other person or entity acceptable to Lender with
whom Global contracts for the development, construction and completion of the
Improvements or any portion thereof.

 

Debtor Relief Laws:  Title 11 of the United States Code, as
now or hereafter in effect, or any other applicable law, domestic or foreign,
as now or hereafter in effect, relating to bankruptcy, insolvency, liquidation,
receivership, reorganization, arrangement or composition, extension or
adjustment of debts, or similar laws affecting the rights of creditors.

 

Deed of Trust:  The Deed of Trust of even date herewith
pursuant to which Global mortgages the Mortgaged Property to secure the Loan,
as the same may be modified and amended from time to time as provided therein.

 

Design Professional:  Collectively, the architects, engineers,
other design professional consultants and planners, and firms set forth in the
Schedule of Definitions, with whom Global contracts for the providing of
planning, design, architectural, engineering or other similar design services
relating to the Improvements, if any.

 

Design Services Contract:  Collectively, all contracts and agreements
entered into between Global and each Design Professional pertaining to the
design, development and construction of the Improvements, if any.

 

Draw Request Form:  The form for submission by Borrower to Lender
as a condition precedent for an Advance, in the form of the Draw Request
attached to the Budget or such other form as may be approved by Lender.

 

Environmental Law:  Any federal, state, or local law, statute,
ordinance, or regulation pertaining to health, industrial hygiene, or the
environmental conditions on, under, or about the Mortgaged Property, including
without limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (as now or hereafter amended, “CERCLA”), 42 U.S.C.
§ 9601 et  seq., the Resource, Conservation and Recovery Act
(as now or hereafter amended, “RCRA”), 42 U.S.C. § 6901 et  seq.,
as amended by the Superfund Amendments and Reauthorization Act of 1986 (as now
or hereafter amended, “SARA”), Pub. L. 99-499 100 Stat. 

 

2

 

1613, the Toxic
Substances Control Act, 15 U.S.C. § 2601 et  seq., the
Emergency Planning and Community Right to Know Act of 1986, 42 U.S.C.
§ 1101 et  seq.; Clean Water Act (“CWA”), 33 U.S.C.
§ 1251 et  seq.; Clean Air Act (“CAA”), 42 U.S.C.
§ 7401 et  seq.; Federal Water Pollution Control Act (“FWPCA”),
33 U.S.C. § 1251 et  seq.; and any corresponding state laws
or ordinances including, but not limited to, the Texas Water Code (“TWC”)
§ 26.001 et  seq.; Texas Health & Safety Code (“THSC”)
§ 361.001 et  seq.; the Texas Solid Waste Disposal Act (“TSWDA”),
Tex. Rev. Civ. Stat. Ann. art. 4477-7; and
regulations, rules, guidelines, or standards promulgated pursuant to such laws,
as such statutes, regulations, rules, guidelines, and standards are amended
from time to time.

 

Equity:  Shall mean the “Borrower’s Cash Portion” as
described on the Budget.

 

Event of Default:  Any happening or occurrence described in Section 7.1
of this Agreement.

 

Extended Maturity Date:  The date in January, 2019 corresponding to
the date hereof.

 

Extended Maturity Date
Option:  The option to
extend the Maturity Date to the Extended Maturity Date as described in Section 3.10
hereof.

 

Financing Statement:  The financing statement or financing
statements (on Standard Form UCC-1 or otherwise) authorized to be
delivered by Global in connection with the Loan Documents.

 

Governmental Authority:  Any and all courts, boards, agencies,
commissions, offices, or authorities of any nature whatsoever for any
governmental unit (federal, state, county, district, municipal, city or
otherwise), whether now or hereafter in existence.

 

Governmental Requirements:  All statutes, laws, ordinances, rules,
regulations, orders, writs, injunctions or decrees of any Governmental
Authority applicable to Borrower or the Mortgaged Property.

 

Hazardous Substance:  Hazardous Substance is any substance,
product, waste, or other material which is or becomes listed, regulated, or
addressed as being a toxic, hazardous, polluting, or similarly harmful substance
under any Environmental Law, including without limitation:  (i) any substance included within the
definition of “hazardous waste” pursuant to Section 1004 of RCRA; (ii) any
substance included within the definition of “hazardous substance” pursuant to Section 101
of CERCLA; (iii) any substance included within (a) the definition of “regulated
substance” pursuant to Section 26.342(9) of TWC; or (b) the
definition of “hazardous substance” pursuant to Section 361.003(13) of
THSC; (iv) asbestos; (v) polychlorinated biphenyls; (vi) petroleum
products; (vii) underground storage tanks, whether empty, filled or
partially filled with any substance; (viii) any radioactive materials,
urea formaldehyde foam insulation or radon; (ix) any substance included
within the definition of “waste” pursuant to Section 30.003(b) of TWC
or “pollutant” pursuant to Section 26.001(13) of TWC; and (x) any
other chemical, material or substance, the exposure to which is prohibited,
limited or regulated by any Governmental Authority on the basis that such
chemical, material or substance is toxic, hazardous or harmful to human health
or the environment.  For the purposes of
this definition, Hazardous Substance(s) shall not include any substance of
a nature, quantity or 

 

3

 

concentration that does
not violate Environmental Laws and is customarily used, stored or disposed as
part of or incidental to the operation and maintenance of the applicable
portion of the Mortgaged Property and the construction of Improvements thereon
in the ordinary course of Borrower’s business currently conducted (or currently
contemplated to be conducted following completion of construction of
Improvements, if applicable) as to such portion of the Mortgaged Property
so long as (x) such use, storage or disposal complies fully with
applicable Environmental Laws and good and safe business practice, (y) any
disposal takes place in accordance with applicable Environmental Laws and, if
applicable, at disposal facilities and locations other than the Mortgaged
Property and which are fully permitted in accordance with Environmental Laws
and (z) such use, storage or disposal does not require Borrower, any agent
or employee of Borrower or any operator of the Mortgaged Property to have a
hazardous waste generator identification number or any other permit based
primarily on or related primarily to Hazardous Substance activity.

 

Improvements:  The improvements generally described in the
Schedule of Definitions to be constructed by Borrower upon the Land, all
as more particularly described in the Plans and Specifications.

 

Indebtedness:  As defined in the Deed of Trust.

 

Initial Advance:  The Advance to be made at the time Borrower
satisfies the conditions set forth in Sections 3.1 of this Agreement,
except as otherwise provided herein.

 

Inspecting Person:  A person designated by Lender from time to
time who may inspect the Improvements from time to time for the benefit of
Lender.

 

Land:  The real property or interest therein
described in Exhibit “A” attached hereto and incorporated herein by
this reference.

 

Leases:  Any and all leases, master leases, subleases,
licenses, concessions, or other agreements (written or oral, now or hereafter
in effect) which grant to third parties a possessory interest in and to, or the
right to use, all or any part of the Mortgaged Property, together with all
security and other deposits or payments made in connection therewith.

 

Loan:  The loan evidenced by the Note and governed
by this Agreement.

 

Loan Amount:  The amount set forth in the Schedule of
Definitions.

 

Loan Documents:  The Note, the Deed of Trust, this Agreement,
the Security Agreement, the Financing Statement, the Assignment of Leases and
Rents, the Guaranty, if any, and any and all other documents now or hereafter
executed by Global, Borrower, or any other person or party in connection with
the Loan, the indebtedness evidenced by the Note, or the covenants contained in
this Agreement.

 

Material Adverse Effect:  Any material and adverse effect on (i) the
business condition (financial or otherwise), operations, prospects, results of
operations, capitalization, liquidity or any properties of Borrower or Global,
taken as a whole, (ii) the value of the Mortgaged Property, (iii) the
ability of Borrower (or if Borrower is a partnership, joint venture, trust or
other type of 

 

4

 

business association, of
any of the parties comprising Borrower or of the ground lessor if the estate
held by Borrower in the Land is a leasehold estate) to pay and perform the
Indebtedness and the Obligations, respectively, or (iv) the validity,
enforceability or binding effect of any of the Loan Documents.

 

Maturity Date:  The date in January, 2009 corresponding to
the date hereof.

 

Maximum Lawful Rate:  As defined in Section 9.8 hereof.

 

Mortgaged Property:  Collectively, the Land, Improvements and all
other collateral covered by the Loan Documents.

 

Note:  The promissory note dated as of even date
herewith in the principal sum of the Loan Amount (together with all renewals
and extensions thereof) executed and delivered by Borrower payable to the
order of Lender, evidencing the Loan.

 

Obligations:  Any and all of the covenants, conditions,
warranties, representations, and other obligations (other than to repay the
Indebtedness) made or undertaken by Borrower, or any other person or party to
the Loan Documents to Lender, the trustee of the Deed of Trust, or others as
set forth in the Loan Documents, and in any deed, lease, sublease, or other
form of conveyance, or any other agreement pursuant to which Borrower is
granted a possessory interest in the Land.

 

Origination Fee:  The sum set forth in the Schedule of
Definitions to be paid by Borrower to Lender pursuant to the terms of this Agreement.

 

Plans and Specifications:  The plans and specifications for the
development and construction of the Mortgaged Property, prepared by Borrower or
the Design Professional and approved by Lender as required herein, by all
applicable Governmental Authorities, by any party to a purchase or construction
contract with a right of approval, all amendments and modifications thereof
approved in writing by the same, and all other design, engineering or
architectural work, test reports, surveys, shop drawings, and related items.

 

Regulatory Authority:  As defined in Section 2.10
hereof.

 

Schedule of
Definitions:  The
Schedule of Definitions attached hereto and incorporated herein by
reference for all purposes, containing the specific information or identity of
certain terms and definitions used herein.

 

Security Agreement:  The Security Agreement shall mean all
security agreements, whether contained in the Deed of Trust, a separate
security agreement or otherwise creating a security interest in all personal
property and fixtures of Global (including replacements, substitutions and
after-acquired property) now or hereafter located in or upon the Land or
Improvements, or used or intended to be used in the operation thereof, to
secure the Loan.

 

Soft Costs:
The costs incurred by Borrower for environmental reviews, appraisals, soil
analysis, architectural and engineering plans and drawings, legal and
professional services, testing services, financing costs, inspection fees,
plotting fees, printing fees, permit expenses, 

 

5

 

and other out-of-pocket
expenses incurred as a prerequisite to the commencement of construction on the
Mortgaged Property, together with an interest reserve to cover interest to
accrue on the Note.

 

Special Account:  An account established by Borrower with
Lender (in which Borrower shall at all times maintain a minimum balance of
$1,000.00) into which all Advances made directly to Borrower will be deposited.

 

Title Company:  The Title Company (and its issuing
agent, if applicable) issuing the Title Insurance, which shall be
acceptable to Lender in its sole and absolute discretion.

 

Title Insurance:  One or more title insurance commitments,
binders or policies, as Lender may require, issued by the Title Company, in the
maximum amount of the Loan insuring or committing to insure that the Deed of
Trust constitutes a valid lien covering the Land and Improvements subject only
to those exceptions which Lender may approve.

 

1.2                                 Additional Definitions. 
As used herein, the following terms shall have the following meanings:

 

(a)                                  “Hereof,” “hereby,” “hereto,” “hereunder,”
“herewith,” and similar terms mean of, by, to, under and with respect to, this
Agreement or to the other documents or matters being referenced.

 

(b)                                 “Heretofore” means before, “hereafter”
means after, and “herewith” means concurrently with, the date of this
Agreement.

 

(c)                                  All pronouns, whether in masculine,
feminine or neuter form, shall be deemed to refer to the object of such pronoun
whether same is masculine, feminine or neuter in gender, as the context may
suggest or require.

 

(d)                                 All terms used herein, whether or not
defined in Section 1.1 hereof, and whether used in singular or
plural form, shall be deemed to refer to the object of such term whether such
is singular or plural in nature, as the context may suggest or require.

 

ARTICLE II

 

THE LOAN

 

2.1                                 Agreement to Lend. 
Lender hereby agrees to lend up to but not in excess of the Loan Amount
to Borrower , and Borrower hereby agrees to borrow up to but not in excess of
such sum from Lender, all upon and subject to the terms and provisions of this
Agreement, such sum to be evidenced by the Note.  No principal amount repaid by Borrower may be
reborrowed by Borrower.  Borrower’s
liability for repayment of the interest on account of the Loan shall be limited
to and calculated with respect to Loan proceeds actually disbursed to Borrower
pursuant to the terms of this Agreement and the Note and only from the date or
dates of such disbursements.  After an Event
of Default, Lender may, in Lender’s discretion, disburse Loan proceeds by
journal entry to pay interest and financing costs and disburse Loan proceeds
directly 

 

6

 

to third parties to pay costs or expenses required to be paid by
Borrower pursuant to this Agreement. 
Loan proceeds disbursed by Lender by journal entry to pay interest or
financing costs, and Loan proceeds disbursed directly by Lender to pay costs or
expenses required to be paid by Borrower pursuant to this Agreement, shall
constitute Advances to Borrower.

 

2.2                                 Advances.  The purposes
for which Loan proceeds are allocated and the respective amounts of such
Allocations are set forth in the Budget. 
Notwithstanding anything herein to the contrary, Advances shall be made
on a monthly basis during the term of the Loan.

 

2.3                                 Allocations. 
The Advances shall be disbursed only for the purposes and in respect of
the Allocations set forth in the Budget. 
Lender shall not be obligated to make an Advance for an Allocation set
forth in the Budget to the extent that the amount of the Advance for such
Allocation would, when added to all prior Advances for such Allocation, exceed
the total of such Allocation as set forth in the Budget.

 

2.4                                 Limitation on Advances. 
To the extent that Loan proceeds disbursed by Lender pursuant to the
Allocations are insufficient to pay all costs required for the acquisition,
development, construction and completion of the Mortgaged Property after
contribution of the Borrower’s Equity as required pursuant to Section 5.26
hereof, Borrower shall pay such excess costs with funds derived from sources
other than the Loan.  Under no
circumstances shall Lender be required to disburse any proceeds of the Loan in
excess of the Loan Amount.

 

2.5                                 Reallocations. 
If expenses incurred to complete, or that will be incurred to complete,
a particular line item in the Budget are less than the amount allocated to such
item in the Budget (the “Savings”) and Borrower provides Lender with evidence
reasonably satisfactory to Lender of such Savings, Borrower may use any Savings
to cover any contingencies or cost overruns in any other particular line item
in the Budget without consent of Lender; provided, however, that no Savings
shall be reallocated from the interest reserve line item on the Budget or to
the developer’s fee or contractor’s fee line items in the Budget.

 

2.6                                 Contingency Allocations. 
Any amount allocated in the Budget for “contingencies” may be disbursed
upon the request of the Borrower on a percentage of completion basis without
the Lender’s consent.  Borrower has the
right to request the Lender to disburse amounts on an accelerated basis and the
Lender shall not unreasonably withhold its consent to such a request.

 

2.7                                 Regulatory Restrictions. 
Notwithstanding anything in this Agreement or the other Loan Documents
to the contrary, in no event shall Lender be required to disburse, nor shall
Borrower be entitled to demand that Lender disburse, all or any portion of the
Loan if the amount of the Loan would, in Lender’s reasonable discretion, cause
Lender to exceed the lending limit to a single borrower under any applicable
state or federal law, regulation or ruling. 
If Lender determines, in its reasonable discretion, at any time
(including after any portion or all of the Loan has been disbursed) that
the transaction evidenced by this Agreement and the other Loan Documents
violates such lending limit restriction, then Lender shall have the right to
immediately reduce the amount of credit available under the Note to an amount
that complies with the Lender’s understanding of what its loan limit is.

 

7

 

2.8           Withholding
on Advances.  Lender may withhold
from an Advance or, on account of subsequently discovered evidence, withhold
from a later Advance under this Agreement, or require Borrower to repay to
Lender the whole or any part of any earlier Advance, to such extent as may be
necessary to protect the Lender from loss on account of (i) defective work
as determined by the Inspecting Person not remedied or requirements of this
Agreement not performed after notice and opportunity to cure in the manner
specified in Section 7.1, (ii) liens filed or reasonable
evidence indicating probable filing of liens against the Mortgaged Property,
unless the same are bonded around in a manner satisfactory to the Lender, (iii) failure
of Borrower to make payments to subcontractors for material or labor, subject
to Borrower’s rights to contest the same in good faith, and, where Lender
requires, the establishment of cash reserves for such contested claim, or (iv) a
reasonable doubt that the construction can be completed for the balance of the
Loan Amount then undisbursed unless Borrower has satisfied the requirements of Section 2.4
herein.  When all such grounds are
removed, payment shall be made of any amount so withheld because of them.

 

2.9           Loan
Limitation.  Notwithstanding anything
in this Agreement to the contrary, the amount of the Loan with respect to the
Mortgaged Property shall not exceed the lesser of (i) $7,500,000.00, (ii) seventy-five
percent (75%) of the cost of the Improvements or (iii) seventy-five
percent (75%) of the fair market value thereof, as reflected in a MAI appraisal
acceptable to Lender.

 

2.10         Appraisal
Right.  In the event that any
appraisal is required or desired by Lender (no more than annually unless an
Event of Default exists), the Federal Deposit Insurance Corporation, the Office
of Comptroller of Currency or other governmental entity or quasi-governmental
entity which has the authority and power to regulate the business and other
activities of Lender (“Regulatory Authority”), Lender may (at Borrower’s
sole cost and expense) obtain an appraisal of the Mortgaged Property in
form, substance and by an appraising firm acceptable to Lender and, if
applicable, the Regulatory Authority requiring such appraisal.  All appraisals will be performed by state certified
appraisers estimating the market value as defined in the Uniform Standards of
Professional Appraisal Practice and will need all the requirements and
instructions found in the regulations at 12 C.F.R. Part 34.44.

 

ARTICLE III

 

ADVANCES

 

3.1           Conditions
to Initial Advance.  The obligation
of Lender to make the Initial Advance hereunder is subject to the prior or
simultaneous occurrence of each of the following conditions:

 

(a)           Lender
shall have received from Borrower all of the Loan Documents duly executed by
the appropriate party.

 

(b)           Lender
shall have received certified copies of resolutions of Borrower, if Borrower is
a corporation, or a certified copy of a consent of partners, if Borrower is a
partnership, authorizing execution, delivery and performance of all of the Loan

 

8

 

Documents and
authorizing the borrowing hereunder, along with such certificates of existence,
certificates of good standing and other certificates or documents as Lender may
reasonably require to evidence Borrower’s authority.

 

(c)           Lender
shall have received true copies of all organization documents of Borrower,
including all amendments or supplements thereto, if Borrower is a legal entity
other than a corporation, along with such certificates or other documents as
Lender may reasonably require to evidence Borrower’s authority.

 

(d)           Lender
shall have received evidence that the Mortgaged Property is not located within
any designated flood plain or special flood hazard area; or evidence that
Global has applied for and received flood insurance covering the Mortgaged
Property in the amount of the Loan or the maximum coverage available to Lender.

 

(e)           Lender
shall have received evidence that all permits required for the phase of construction
commenced or to be immediately commenced have been received.

 

(f)            Lender
shall have received a full-size, single sheet copy of all recorded subdivision
or plat maps of the Land approved (to the extent required by Governmental
Requirements) by all Governmental Authorities, if applicable, and legible
copies of all instruments representing exceptions to the state of title to the
Mortgaged Property.

 

(g)           Lender
shall have received proof of insurance upon and relating to the Mortgaged
Property with such insurers, in such amounts and covering such risks as shall
be satisfactory to Lender, from time to time, including but not limited
to:  (i) owner’s and contractors’
(if applicable) policies of commercial general public liability insurance
(including automobile coverage) with a minimum coverage of $2,000,000 per
occurrence and $5,000,000 in the aggregate for bodily injury or property damage
liability per occurrence; (ii) property insurance against all risks of
loss, including collapse, in an amount not less than the full replacement cost
of all Improvements, including the cost of debris removal, with annual agreed
amount endorsement and sufficient at all times to prevent Borrower from
becoming a coinsurer and prior to commencement of pouring a foundation for the
Improvements, a builder’s all-risk insurance policy form on a non-reporting
basis and including coverage for all materials and equipment, wherever located,
intended to be installed in or utilized in the construction of the
Improvements; (iii) if the Mortgaged Property is in a “Flood Hazard Area,”
a flood insurance policy, or binder therefor, in an amount equal to the
principal amount of the note or the maximum amount available under the Flood
Disaster Protection Act of 1973, and regulations issued pursuant thereto, as
amended from time to time, whichever is less, in form complying with the “insurance
purchase requirement” of that act; (iv) workmen’s compensation insurance
for Borrower and the Contractor performing any work on or with respect to the
Mortgaged Property; and (v) such other insurance, if any, as Lender may
reasonably require from time to time. 
Each insurance policy issued in connection herewith shall provide by way
of endorsements, riders or otherwise that (a) with respect to liability
insurance, it shall name Lender as an additional insured, with respect to the
other insurance, it shall be payable to Lender as the primary mortgagee or loss
payee and not as a coinsured, and with respect to all policies of insurance
carried by any lessee for the 

 

9

 

benefit of
Borrower, it shall be payable to Lender as Lender’s interest may appear; (b) the
coverage of Lender shall not be terminated, reduced, or affected in any manner
regardless of any breach or violation by Borrower of any warranties,
declarations, or conditions in such policy; (c) no such insurance policy
shall be canceled, not renewed, endorsed, altered, or reissued to effect a
change in coverage for any reason and to any extent whatsoever unless such
insurer shall have first given Lender thirty (30) days’ prior written notice
thereof; and (d) Lender may, but shall not be obligated to, make premium
payments to prevent any cancellation, endorsement, alteration, or reissuance,
and such payments shall be accepted by the insurer to prevent same.  Lender shall be furnished with a certificate
evidencing such insurance coincident with the execution of this Agreement and
certificate(s) evidencing each renewal policy not less than ten (10) days’
prior to the expiration of the initial, or each immediately preceding renewal
policy.  Upon request of Lender, Borrower
shall furnish to Lender a statement certified by Borrower or a duly authorized
officer of Borrower of the amounts of insurance maintained in compliance
herewith, of the risks covered by such insurance and of the insurance company
or companies which carry such insurance. 
Notwithstanding the foregoing coverage, builder’s all risk must be in
place no later than the date of the first foundation pour and must remain in
effect through the completion of all Improvements.

 

(h)           Lender
shall have received the Title Insurance, at the sole expense of Borrower.

 

(i)            Lender
shall have received from Borrower such other instruments, evidence and
certificates as Lender may reasonably require, including the items indicated
below:

 

(1)           Evidence
that all the streets furnishing access to the Mortgaged Property have been
dedicated to public use and installed and accepted by applicable Governmental
Authorities.

 

(2)           The Budget,
as may be amended as provided herein, from time to time.

 

(3)           Evidence
satisfactory to Lender showing the availability of all necessary utilities on
the Land or at the boundary lines of the Land, including sanitary and storm
sewer facilities, potable water, telephone, electricity, gas, and municipal
services.

 

(4)           Evidence
that the current and proposed use of the Land and Mortgaged Property and the
construction of the Improvements complies with all Governmental Requirements.

 

(5)           A cost
breakdown satisfactory to Lender showing the total costs, including, but not
limited to, such related nonconstruction items as interest during construction,
commitment, legal, design professional and real estate agents’ fees, plus the
amount of the Land cost and direct construction costs required to be paid 

 

10

 

to satisfactorily
complete the Mortgaged Property, free and clear of liens or claims for liens
for material supplied and for labor services performed.

 

(6)           A schedule
of construction progress with the anticipated commencement and completion dates
of each phase of construction and the anticipated date and amounts of each
Advance for the same.

 

(7)           Copies of
all subcontracts where the amount payable to the subcontractor is $100,000.00
or more and agreements pertaining to the development, construction and
completion of the Improvements or pertaining to materials to be used in
connection therewith, together with a schedule of anticipated dates and amounts
of each Advance for the same.

 

(8)           Evidence
that the construction of the Improvements comply or will comply, with all
applicable architectural barriers laws [including, without limitation, the
Americans with Disabilities Act of 1990, P.L. 101-336, and 23 Tex. Rev. Civ.
Stat. Ann., art. 9102, as amended], ordinances, rules and regulations,
or a plan of Borrower to achieve compliance therewith within the time
contemplated by said laws, ordinances, rules and regulations, or evidence
that such improvements are exempted from compliance with said laws, ordinances,
rules and regulations.

 

(9)           Such
other instruments, evidence or certificates as Lender may reasonably request,
including (without limitation) the additional items listed, if any, under “Additional
Items Required” in the Schedule of Definitions.

 

(j)            Lender
shall have received payment of the Origination Fee.

 

(k)           Lender is
satisfied that the lien in favor of Lender created pursuant to the Deed of
Trust and covering the Mortgaged Property and Improvements thereon constitutes
a first and sole lien in favor of Lender.

 

3.2           Conditions to
Advances.  The obligation of Lender
to make each Advance hereunder, shall be subject to the prior or simultaneous
occurrence or satisfaction of each of the following conditions:

 

(a)           The Loan
Documents shall be and remain outstanding and enforceable in accordance with
their terms, all as required hereunder.

 

(b)           Lender
shall have received a title report dated within two (2) days of the
requested Advance from the Title Company showing no state of facts (other
than the Permitted Exceptions) objectionable to Lender, including, but not
limited to, a showing that title to the Land is vested in Global and that no
claim for mechanics’ or materialmen’s liens has been filed against the
Mortgaged Property.

 

(c)           The
representations and warranties made by Borrower, as contained in this Agreement
and in all other Loan Documents shall be true and correct as of the date of 

 

11

 

each Advance; and
if requested by Lender, Borrower shall give to Lender a certificate to that
effect.

 

(d)           The
covenants made by Borrower to Lender, as contained in this Agreement and in all
other Loan Documents shall have been fully complied with, except to the extent
such compliance may be limited by the passage of time or the completion of
construction of the Improvements.

 

(e)           The
Improvements shall not have been materially injured, damaged or destroyed by
fire or other uninsured casualty, nor shall any part of the Mortgaged Property
be subject to condemnation proceedings or negotiations for sale in lieu
thereof.

 

(f)            Borrower
shall have complied with all requirements of the Inspecting Person and all
Governmental Authorities.

 

(g)           There
shall exist no formal claim or dispute between Contractor and any contractor,
subcontractor or materialmen as to monies owed in connection with any labor or
materials furnished in connection with the construction of the Improvements.

 

(h)           There
shall exist no default or breach by any obligated party (other than the Lender)
under the Loan Documents, provided however, to the extent that any grace or
cure period is applicable to such a default or breach, the Lender shall be
under no obligation to make an Advance unless and until said default or breach
is cured to the reasonable satisfaction of the Lender.

 

3.3           Conditions Precedent
to Advances.  After the Initial
Advance, no Advance of the proceeds of the Loan for any purpose shall occur
until Borrower has provided the Lender with the following:

 

(a)           Lender
shall have received (i) a fully executed counterpart of each Construction
Contract or copy thereof; and (ii) a report of any changes, replacements,
substitutions, additions or other modification in the list of contractors,
subcontractors and materialmen involved or expected to be involved in the
construction of the Improvements.

 

(b)           Lender
shall have received from Borrower a Draw Request for such Advance: (i) completed,
executed and certified to by Borrower, with the Inspecting Person’s approval
noted thereon, stating that said construction was performed in accordance with
the Plans and Specifications; (ii) with the statement from Borrower that,
in the opinion of Borrower, construction of the Improvements can be completed
on or before the Completion Date for an additional cost not in excess of the
amount then available under the Loan; (iii) setting forth the amount of
retainage as required by Section 3.8) for each category for which
retainage applies; and (iv) approved by the Inspecting Person.  To the extent approved by Lender, and
included in the Budget, such expenses may be paid from the proceeds of the
Loan.

 

(c)           Borrower
shall have furnished to Lender, from each contractor, subcontractor and
materialman, including Contractor, an invoice, lien waiver and such 

 

12

 

other instruments
and documents as Lender may from time to time specify, in form and content, and
containing such certifications, approvals and other data and information, as
Lender may require.  The invoice, lien
waiver and other documents shall cover and be based upon work actually
completed or materials actually furnished. 
The lien waiver of each contractor, subcontractor and materialman shall
be received by Lender not later than one month after the making of any Advance
for the benefit of such contractor, subcontractor or materialman which pays the
amount described in such lien waiver.

 

(d)           Borrower
shall have furnished to Lender such city inspection reports, if any, budget
variance reports for the operating budget and other matters, all in form and
substance acceptable to Lender, with respect to the construction of the
Improvements.

 

(e)           If
requested the opinion of the Inspection Person that all work typically done at
the stage of construction when the Advance is requested shall have been done,
and all materials, supplies, chattels and fixtures typically furnished or
installed at such stage of construction shall have been furnished or installed.

 

(f)            All
personal property not yet incorporated into the Improvements but which is to be
paid for out of such Advance, must then be located upon the Land, secured in a
method acceptable to Lender, and Lender shall have received evidence thereof.

 

(g)           Borrower
shall have recorded the executed Affidavit of Commencement as required under Section 5.13
of this Agreement.

 

(h)           Original
or a copy of each fully executed Design Services Contract.

 

(i)            A copy
of the Plans and Specifications.

 

(j)            Building
permit(s), grading permit(s) and all other permits required with respect
to the construction of the Improvements.

 

(k)           Lender
shall have received a completed Budget from Borrower in form and substance
acceptable to Lender, if different from the budget attached hereto as Exhibit “B”.

 

3.4           Advance
Not A Waiver.  No Advance of the
proceeds of the Loan shall constitute a waiver of any of the conditions of
Lender’s obligation to make further Advances, nor, in the event Borrower is
unable to satisfy any such condition, shall any such Advance have the effect of
precluding Lender from thereafter declaring such inability to be an Event of
Default.

 

3.5           Borrower’s
Deposit.  If at any time Lender shall
in its reasonable discretion deem that the undisbursed proceeds of the Loan
together with Borrower’s Equity contributions as required pursuant to Section 5.26
are insufficient to meet the costs of completing construction of the
Improvements, plus the costs of insurance, ad valorem taxes and other normal
costs of the Improvements, Lender may refuse to make any additional Advances to
Borrower hereunder until Borrower shall have deposited with Lender sufficient
additional funds (“Borrower’s Deposit”) or Borrower shall have received
additional equity to cover the deficiency which Lender reasonably deems to
exist.  Such Borrower’s Deposit will be
disbursed by Lender to Borrower pursuant to 

 

13

 

the terms and conditions hereof as if they constituted a portion of the
Loan being made hereunder.  Pursuant to
the provisions of this paragraph, Borrower agrees upon fifteen (15) days’
written demand by Lender to deposit with Lender such Borrower’s Deposit.  Lender shall pay interest on Borrower’s
Deposit.

 

3.6           Advance
Not An Approval.  The making of any
Advance or part thereof shall not be deemed an approval or acceptance by Lender
of the work theretofore done.  Lender
shall have no obligation to make any Advance or part thereof after the
happening of any Event of Default, but shall have the right and option so to do;
provided that if Lender elects to make any such Advance, no such Advance shall
be deemed to be either a waiver of the right to demand payment of the Loan, or
any part thereof, or an obligation to make any other Advance.

 

3.7           Time
and Place of Advances.  All Advances
are to be made at the office of Lender, or at such other place as Lender may
designate; and Lender shall require at least five (5) days’ prior notice
in writing before the making of any such Advance.  Except as set forth in this Agreement, all
Advances are to be made by direct deposit into the Special Account.  In the event Borrower shall part with or be
in any manner whatever deprived of Borrower’s interests in and to the Land,
Lender may, at Lender’s option but without any obligation to do so, continue to
make Advances under this Agreement, and subject to all its terms and
conditions, to such person or persons as may succeed to Borrower’s title and
interest and all sums so disbursed shall be deemed Advances under this
Agreement and secured by the Deed of Trust and all other liens or security
interests securing the Loan.

 

3.8           Retainage.  An amount equal to ten percent (10%) of the
cost of construction of the Improvements to be constructed by any Contractor
providing services having a contract price of $100,000.00 or more shall be retained
by Lender (except no holdback shall be required for those items specified in Schedule 3.8)
and shall be paid over by Lender to Borrower, provided that no lien claims are
then filed against the Mortgaged Property (unless bonded around in a manner
satisfactory to Lender), when all of the following have occurred to the
satisfaction of Lender:

 

(a)            Lender
has received a completion certificate prepared by the Inspecting Person and
executed by Borrower and the Design Professional stating that the Improvements
have been completed in accordance with the Plans and Specifications, together
with such other evidence that no mechanics or materialmen’s liens or other
encumbrances have been filed (unless bonded around in a manner satisfactory to
Lender) and remain in effect against the Mortgaged Property and that all
offsite utilities and streets serving the Improvements have been completed to
the satisfaction of Lender and any applicable Governmental Authority;

 

(b)           each
applicable Governmental Authority shall have duly inspected and approved the
Improvements and issued the appropriate permit, license or certificate to
evidence such approval;

 

(c)           thirty
(30) days shall have elapsed from the date of completion of the improvements
which are the subject of the contract for which the retainage is being
withheld, as specified in Texas Property Code §53.106;

 

14

 

(d)           receipt
by Lender of evidence satisfactory to Lender that payment in full has been made
for all obligations incurred in connection with the construction and completion
of all off-site utilities and improvements (if any) serving the
Improvements, if any, as required by Lender or any Governmental Authority; and

 

(e)           a final
lien waiver in a form acceptable to the Lender is exchanged for final payment.

 

3.9           No
Third Party Beneficiaries.  The
benefits of this Agreement shall not inure to any third party, nor shall this
Agreement be construed to make or render Lender liable to any materialmen,
subcontractors, contractors, laborers or others for goods and materials
supplied or work and labor furnished in connection with the construction of the
Improvements or for debts or claims accruing to any such persons or entities
against Borrower.  Lender shall not be
liable for the manner in which any Advances under this Agreement may be applied
by Borrower, Contractor and any of Borrower’s other contractors or
subcontractors.  Notwithstanding anything
contained in the Loan Documents, or any conduct or course of conduct by the
parties hereto, before or after signing the Loan Documents, this Agreement
shall not be construed as creating any rights, claims or causes of action
against Lender, or any of its officers, directors, agents or employees, in
favor of any contractor, subcontractor, supplier of labor or materials, or any
of their respective creditors, or any other person or entity other than
Borrower.  Without limiting the
generality of the foregoing, Advances made to any contractor, subcontractor or
supplier of labor or materials, pursuant to any requests for Advances, whether
or not such request is required to be approved by Borrower, shall not be deemed
a recognition by Lender of a third-party beneficiary status of any such person
or entity.

 

3.10         Extended
Maturity Date Options.  Notwithstanding anything to the contrary
contained herein or inferable from any provision of this Agreement, the Note
shall mature, and shall be immediately due and payable in full without the
necessity of any further action on the part of the Lender, on the Maturity
Date.  However, Borrower shall be
entitled to exercise the Extended Maturity Date Option, in which event the Note
shall mature on the Extended Maturity Date, and shall be immediately due and
payable in full without the necessity of any further action on the part of the
Lender, if, respectively, the following conditions are met:

 

(a)           The Loan
Documents shall be and remain outstanding and enforceable in accordance with
their terms, all as required hereunder, and no Event of Default has occurred or
is continuing (beyond any applicable grace or cure period) under this
Agreement, the Note, the Deed of Trust, or any other Loan Documents.

 

(b)           Lender
shall have received a title endorsement dated within thirty (30) days of
the Maturity Date from the Title Company showing no defects (other than
the Permitted Exceptions) and no claim for mechanics’ or materialmen’s liens
has been filed against the Mortgaged Property unless bonded around in a manner
satisfactory to Lender.

 

(c)           The
representations and warranties made by Borrower, as contained in this Agreement
and in all other Loan Documents shall be true and correct in all material 

 

15

 

respects as of the
date of the Extended Maturity Date; and if requested by Lender, Borrower shall
give to Lender a certificate to that effect.

 

(d)           The
covenants made by Borrower to Lender, as contained in this Agreement and in all
other Loan Documents shall have been fully complied with in all material
respects.

 

(e)           The Improvements
shall not have been materially injured, damaged or destroyed by fire or other
uninsured casualty, nor shall any part of the Mortgaged Property be subject to
condemnation proceedings or negotiations for sale in lieu thereof.

 

(f)            Borrower
provides the Lender with final certificates of occupancy by the appropriate
Governmental Authority for the applicable portions of the Improvements and an
as-built survey of the Mortgaged Property reflecting that no portions of the
Improvements encroach upon any easement, setback or building line or
restrictions or overlap the property lines of the Land.

 

(g)           Thirty
(30) days prior to the Maturity Date, Borrower shall have delivered to the
Lender a written request establishing its entitlement to exercise the Extended Maturity
Date Option.

 

3.11         Note
Repayment.  In the event that the
Extended Maturity Date Option is exercised, the principal and interest accruing
on the Note shall be repayable in the manner provided therein.

 

ARTICLE IV

 

WARRANTIES AND
REPRESENTATIONS

 

Borrower hereby unconditionally warrants and
represents to Lender, as of the date hereof and at all times during the term of
this Agreement, as follows:

 

4.1           Plans
and Specifications.  To best of
Borrower’s knowledge, the Plans and Specifications are satisfactory to
Borrower, are in compliance with all Governmental Requirements and, to the
extent required by Governmental Requirements or any effective restrictive
covenant, have been approved by each Governmental Authority and/or by the
beneficiaries of any such restrictive covenant affecting the Mortgaged
Property.

 

4.2           Governmental
Requirements.  To best of Borrower’s
knowledge, no material violation of any Governmental Requirements exists or
will exist with respect to the Mortgaged Property and Borrower is not, and will
not be, in default with respect to any Governmental Requirements.

 

4.3           Municipal
Services.  All utilities, services
and facilities necessary for the construction of the Improvements and the use
thereof for their intended purposes are or will be timely available, as to
utilities (including, without limitation, potable water, storm and sanitary
sewer, gas, electric and telephone utilities), in sufficient size and capacity
either within or at the 

 

16

 

boundaries of the Land for connection to the Improvements, and as to
other municipal services (including, without limitation, police and fire
protection, ambulance service, trash collection and cable television service),
same are or will be timely available for or at the Mortgaged Property.

 

4.4           Access.  All roads necessary for the full utilization
of the Improvements for their intended purposes have been completed and (i) have
been dedicated to the public use and accepted by the appropriate Governmental
Authority or (ii) are subject to private easements that are sufficient to
provide uninterrupted access.

 

4.5           Intentionally
Blank.

 

4.6           Financial
Statements.  Each financial statement
of Borrower delivered heretofore, concurrently herewith or hereafter to Lender
was and will be prepared in conformity with generally accepted accounting
principles, or other good accounting principles approved by Lender in writing,
applied on a basis consistent with that of previous statements and completely
and accurately disclose the financial condition of Borrower (including all
contingent liabilities) as of the date thereof and for the period covered
thereby, and there has been no material adverse change in Borrower’s financial
condition subsequent to the date of the most recent financial statement of
Borrower delivered to Lender.

 

4.7           Statements.  No certificate, statement, report or other
information delivered heretofore, concurrently herewith or hereafter by
Borrower to Lender in connection herewith, or in connection with any
transaction contemplated hereby, contains or will contain any untrue statement
of a material fact or fails to state any material fact necessary to keep the
statements contained therein from being misleading, and same were true,
complete and accurate as of the date hereof.

 

4.8           No
Proceedings.  There is no pending or
threatened litigation or proceeding affecting the Mortgaged Property or
Borrower not fully covered by insurance where the total potential liability may
exceed $250,000.00 in the aggregate.

 

4.9           Disclaimer
of Permanent Financing.  Borrower
acknowledges and agrees that Lender has not made any commitments, either
express or implied, to extend the term of the Loan (unless otherwise expressly
set forth herein) past its stated maturity date or to provide Borrower with any
permanent financing.

 

4.10         Solvency.  Borrower (i) is not insolvent, has not
been adjudicated insolvent or applied for the appointment of a trustee or
receiver of its business, estate or assets or any substantial part thereof, or any
of the Mortgaged Property, and (ii) has not commenced any liquidation,
reorganization, debt adjustment or other proceedings under any bankruptcy law
or other similar law for the relief of debtors. 
No such proceeding has been commenced against Borrower.  No receiver or similar officer has been
appointed for any of the Mortgaged Property or the estate of Borrower, and
Borrower has not made an assignment, statutory or otherwise, for the benefit of
creditors.  There has been no levy or
execution or any attachment or similar process against the interest of Borrower
in the Mortgaged Property.  Borrower has
not admitted in writing its inability to pay its debts as such debts
mature.  There are no outstanding liens,
suits, 

 

17

 

garnishments or court actions pending against Borrower which would
result in the liquidation, termination or dissolution of Borrower or would
render Borrower bankrupt.

 

4.11         Business
Loan.  The Loan is a business loan
transaction in the stated amount solely for the purpose of carrying on the
business of Borrower and none of the proceeds of the Loan will be used for the
personal, family or agricultural purposes of Borrower.

 

4.12         Relationship.  The relationship between Borrower and Lender
is solely that of borrower and lender, and Lender has no fiduciary or other
special relationship with Borrower, and no term or condition of any of the Loan
Documents shall be construed so as to deem the relationship between Borrower
and Lender to be other than that of borrower and lender.

 

4.13         Intentionally
Blank.

 

4.14         Licenses;
Permits.  All licenses, permits,
easements and rights-of-way required by all Governmental Authorities and from
private parties, if any, having jurisdiction over the Mortgaged Property for
the construction of the Improvements as contemplated by the Loan Documents have
been or will be timely obtained.

 

4.15         No
Assignment.  Borrower has made no
previous assignment of its interest in the Plans and Specifications, the Design
Services Contract and the Construction Contract.

 

4.16         Compliance
with Laws.  Upon completion of
construction of the Improvements in accordance with the Plans and
Specifications, the Improvements will substantially comply with all applicable
laws, rules, governmental regulations and restrictive covenants, including,
without limitation, zoning laws, building codes, handicap or disability
legislation, and all rules, regulations and orders relating thereto, and
environmental matters, and the use to which Borrower is using and intends to
use the Mortgaged Property complies with or will comply with such laws, rules and
governmental regulations.  Borrower has
obtained or applied for and received or will receive timely all approvals for
the construction of the Improvements and use of the Mortgaged Property
necessary to comply with such laws, rules and governmental requirements.

 

ARTICLE V

 

COVENANTS OF BORROWER

 

Borrower hereby
unconditionally covenants and agrees with Lender, until the Loan shall have
been paid in full, as follows:

 

5.1           Completion.  Borrower will cause the construction of the
Improvements to be prosecuted with diligence and continuity and will complete
the same in accordance with the Plans and Specifications on or before the
Completion Date, free and clear of liens or claims for liens for material
supplied and for labor services performed in connection with the construction
of the Improvements unless bonded around in a manner satisfactory to Lender.

 

18

 

5.2           No Changes.  Borrower will
not materially amend, alter or change (pursuant to change order, amendment or
otherwise) the Plans and Specifications unless the same shall have been
approved in advance in writing by Lender, by all applicable Governmental Authorities,
and by each surety under payment or performance bonds covering the Construction
Contract or any other contract for construction of all or a portion of the
Improvements.  Notwithstanding the
foregoing, Borrower shall be allowed to make changes in the Plans and
Specifications without obtaining Lender’s approval upon and subject to the
following conditions and requirements:

 

(i)            Any single change shall not increase the
cost of construction of the Improvements by more than $100,000.00.

 

(ii)           All changes, including the currently
requested change and all prior changes, shall not increase the cost of
construction of the Improvements, in the aggregate, by more than $250,000.00, unless a greater amount
is available as a result of savings under Section 2.5.

 

(iii)          Such change, by itself and when
considered with all prior changes, shall not, in Lender’s reasonable
discretion, cause or be likely to cause the Completion to occur after the
Completion Date.

 

(iv)          Any such change, or all changes in the
aggregate, shall not relate to any structural components of the Improvements
and shall not adversely affect, in Lender’s reasonable discretion, the
structural integrity, utility or appearance of the Improvements.

 

(v)           Borrower shall have deposited into
Borrower’s Deposit, sufficient funds to cover all costs associated with the
requested change and all increases in the cost of construction of the
Improvements anticipated by such changes, as determined by Lender in its
reasonable discretion, unless funds are available as a result of savings under Section 2.5.

 

5.3           Advances.  Borrower will
receive the Advances and will hold same as a trust fund for the purpose of
paying the cost of construction of the Improvements and related nonconstruction
costs related to the Mortgaged Property as provided for herein.  Borrower will apply the same promptly to the
payment of the costs and expenses for which each Advance is made and will not
use any part thereof for any other purpose.

 

5.4           Lender’s Expenses. 
Borrower will reimburse Lender for all reasonable out of pocket expenses
of Lender, including reasonable attorneys’ fees, reasonably and necessarily
incurred in connection with the preparation, execution, delivery,
administration and performance of the Loan Documents.

 

5.5           Surveys.  Borrower will
furnish Lender an as-built survey and, after any foundation has been poured of
the following buildings:  the office
building, the staff housing building and the repair shop, a foundation survey
of the foundation of such building, all at Borrower’s expense, and a survey
prepared by a registered engineer or surveyor acceptable to Lender, showing
that the locations of the Improvements, and certifying that same are entirely
within the property lines of the Land, do not encroach upon any easement, setback
or building line or restrictions, are placed in accordance with the Plans and
Specifications, all Governmental 

 

19

 

Requirements and all restrictive covenants affecting the Land and/or
Improvements, and showing no state of facts (other than the Permitted
Exceptions) objectionable to Lender. All surveys shall be in form and substance
and from a registered public surveyor acceptable to Lender.

 

5.6           Defects and Variances. 
Borrower will, upon demand of Lender and at Borrower’s sole expense,
correct any structural defect in the Improvements or any variance from the
Plans and Specifications not approved in writing by Lender, except as otherwise
provided in Section 5.2, other than minor variations that do not
adversely affect the structural integrity or appearance of the Improvements.

 

5.7           Estoppel Certificates. 
Borrower will deliver to Lender, promptly after request therefor,
estoppel certificates or written statements, duly acknowledged, stating the amount
that has then been advanced to Borrower under this Agreement, the amount due on
the Note, and whether any offsets or defenses exist against the Note or any of
the other Loan Documents.

 

5.8           Inspecting Person. 
Borrower will pay the reasonable fees and expenses of, and cooperate
with, the Inspecting Person and will cause the Design Professional, the
Contractor, each contractor and subcontractor and the employees of each of them
to cooperate with the Inspecting Person and, upon request, will furnish the Inspecting
Person whatever the Inspecting Person may reasonably consider necessary or
useful in connection with the performance of the Inspecting Person’s
duties.  Without limiting the generality
of the foregoing, Borrower shall furnish or cause to be furnished such items as
working details, Plans and Specifications and details thereof, samples of
materials, licenses, permits, certificates of public authorities, zoning
ordinances, building codes and copies of the contracts between such person and
Borrower (if applicable).  Borrower will
permit Lender, the Inspecting Person and their representative to enter the
Mortgaged Property for the purposes of inspecting same.  Borrower acknowledges that the duties of the
Inspecting Person run solely to Lender and that the Inspecting Person shall
have no obligations or responsibilities whatsoever to Borrower, Contractor, the
Design Professional, or to any of Borrower’s or Contractor’s agents, employees,
contractors or subcontractors.

 

5.9           Brokers.  The fees,
commissions and other compensation payable to all brokers, if any, involved in
this transaction shall be paid by Borrower at or prior to the disbursement of
the Initial Advance.  Borrower hereby
agrees to indemnify and hold harmless Lender from and against any loss, damage,
expense or claims of brokers arising by reason of the execution hereof or the
consummation of the transactions contemplated hereby, including but not limited
to, any transactions involving or relating to any leases with respect to the
Mortgaged Property.

 

5.10         Personalty and Fixtures. 
Borrower will deliver to Lender, on demand, any contracts, bills of
sale, statements, receipted vouchers or agreements under which Borrower claims
title to any materials, fixtures or articles incorporated in the Improvements
or subject to the lien of the Deed of Trust or to the security interest of the
Security Agreement.

 

5.11         Compliance with Governmental Requirements. 
Borrower will comply promptly with all Governmental Requirements.

 

5.12         Compliance with Restrictive Covenants. 
Borrower will comply with all restrictive covenants, if any, affecting
the Mortgaged Property.  Construction of
the 

 

20

 

Improvements will be performed in a good and workmanlike manner, within
the perimeter boundaries of the Land and within all applicable building and
setback lines in accordance with all Governmental Requirements and the Plans
and Specifications.  There are, and will
be, no structural defects in the Improvements.

 

5.13         Intentionally Omitted.

 

5.14         Affidavit of Completion. 
Borrower, within ten (10) days after construction of the
Improvements has been completed, shall file in the appropriate records in the
county in which the Land is situated an Affidavit of Completion (“Affidavit
of Completion”) in the form of Exhibit “C” attached hereto and
incorporated herein by this reference.

 

5.15         Payment of Expenses. 
Borrower shall pay or reimburse to Lender all costs and expenses
relating to the Mortgaged Property and for which an Advance is made, including
(without limitation), title insurance and examination charges, survey costs,
insurance premiums, filing and recording fees, and other expenses payable to
third parties incurred by Lender in connection with the consummation of the
transactions contemplated by this Agreement.

 

5.16         Notices Received. 
Borrower will promptly deliver to Lender a true and correct copy of all
notices received by Borrower from any person or entity with respect to
Borrower, the Mortgaged Property, or any or all of them, which would have a
Material Adverse Effect upon the Mortgaged Property.

 

5.17         Advertising by Lender. 
Subject to approval of applicable Governmental Authorities, Borrower
agrees that Lender may, at its sole cost, during the term of the Loan, erect
and thereafter maintain on the Mortgaged Property one or more advertising signs
furnished by Lender indicating that the financing for the Mortgaged Property
has been furnished by Lender.

 

5.18         Leases.  Borrower has
indicated it does not intend to lease any portion of the Mortgaged
Property.  Should Borrower elect to lease
any portion of the Mortgaged Property, Borrower will obtain the Lender’s prior
written approval of the terms and conditions of any lease or ground lease,
including the proposed tenant.  Borrower
will deliver to Lender executed counterparts of all leases and rental
agreements affecting the Mortgaged Property; and all said leases will contain a
written provision acceptable to Lender whereby all rights of the tenant in the
lease and the Mortgaged Property are subordinated to the liens and security
interests granted in the Loan Documents. 
Furthermore, if requested by Lender, Borrower shall cause to be executed
and delivered to Lender a Non-Disturbance, Attornment and Subordination
Agreement, in form and substance acceptable to Lender, relating to each such
lease and fully executed by Lender, Borrower and such lessee.

 

5.19         Intentionally Blank.

 

5.20         Delivery of Contracts. 
Borrower will deliver to Lender a copy of each Contract (as defined in
the Deed of Trust) promptly after the execution of same by all parties thereto.

 

21

 

5.21         Financial Statements.

 

(a)           Borrower shall maintain full
and accurate books of accounts and other records reflecting Borrower’s
financial conditions and transactions, and shall furnish, or cause to be
furnished, to Lender:  (i) beginning
December 31, 2007 within one hundred twenty (120) days after the end of
each fiscal year of Borrower, and beginning with the calendar quarter ending December 31,
2007, within forty five (45) days of the end of each calendar quarter,
financial statements (which shall mean and include a balance sheet, statement
of cash flow and income statement for Borrower\, such reports to be in such
form and in reasonable detail as Lender may request, setting forth the
financial condition (including all contingent liabilities), cash flow and the
income and expenses for Borrower for the immediately preceding fiscal year) of
Borrower, prepared in accordance with generally accepted accounting principles
consistently applied, and which fairly present the financial condition and
transactions of Borrower as of the date thereof or for the period covered
thereby and in the case of the annual financial statements audited by a
certified public accountant acceptable to the Lender and containing no
qualifications and accompanied by a compliance certificate prepared by the
chief financial officer of Borrower certifying that, as of the date thereof,
there does or does not (as the case may be) exist an event which constitutes,
or which upon due notice or lapse of time or both would constitute an Event of
Default or, if an Event of Default exists specifying the nature thereof, and in
the case of the quarterly financial statements also accompanied by a
certificate of the chief financial officer of Borrower certifying that, as of
the date thereof, there does or does not (as the case may be) exist an event
which constitutes, or which upon due notice or lapse of time or both would constitute
an Event of Default or, if an Event of Default exists specifying the nature
thereof; (ii) a tax return for each fiscal year of Borrower from and after
the date hereof, as soon as available, but in any event no later than
forty-five (45) days after same has been filed with the Internal Revenue
Service, but in no event later than ninety (90) days after the end of each
fiscal year (provided, however, if Borrower shall have duly filed for an
extension of the filing deadline for such tax return, and promptly furnished
evidence thereof to Lender, then such tax return shall be delivered to Lender
on or before two hundred fifty-five (255) days after the end of such
fiscal year); and (iii) immediate notice of any material adverse changes
in the financial condition or business prospects of Borrower.  The fiscal year of Borrower ends on December 31.

 

5.22         Reserve for Taxes and Insurance Premiums. 
Upon the occurrence of, and during the continuation of an Event of
Default, Borrower shall pay to Lender on the first day of each month a monthly
escrow for taxes and insurance in an amount determined by Lender, in its
reasonable discretion, as being necessary to pay taxes and insurance premiums
with respect to the Mortgaged Property which next become due.  Such annual amounts of taxes or insurance
premiums shall be fully escrowed at least one (1) month prior to the due
date thereof in an interest bearing and segregated account.  Any excess reserve shall, at the discretion
of Lender, be credited by Lender on subsequent reserve payments or subsequent
payments to be made on the Note by the maker thereof.  In the event there exists a deficiency in
such fund or reserve at any time when ad valorem taxes or insurance premiums
are due and payable, Lender may, but shall not be obligated to, advance the
amount of such deficiency on behalf of Borrower and such amounts so advanced
shall become a part of the Indebtedness, shall be immediately due and 

 

22

 

payable, and shall bear interest at the Default Rate (as defined in the
Note) from the date of such advance through and including the date of
repayment.  Transfer of legal title to
the Mortgaged Property pursuant to the Deed of Trust shall automatically
transfer to the holder of legal title to the Mortgaged Property the interest of
Borrower in all sums deposited with Lender under the provisions hereof or
otherwise.

 

(a)           During the continuation of an Event of
Default, the amount of the monthly tax escrow account payment shall be in the
amount as Lender shall from time to time reasonably determine based upon the
prior or current year’s ad valorem taxes for the Mortgaged Property.  The initial tax escrow payment shall be due
on the first day of the first calendar month after the date hereof, in the
amount of one-twelfth (1/12) of the ad valorem taxes assessed against the
Mortgaged Property for the current taxable year, if such taxes have been then
established, or otherwise based on the prior year’s taxes (with any adjustment
thereto as Lender may determine to be to appropriate), multiplied by a number
equal to twelve (12) less the number of whole months remaining until the
next calendar September 1st. 
Thereafter, the amount of the monthly ad valorem tax escrow payment
shall be one-twelfth (1/12th) of the ad valorem taxes estimated by Lender as
applicable for the then current tax year, as same may be adjusted by Lender
from time to time.  On or after October 1st
and on or before December 31st of each year, Borrower will deliver to
Lender a statement or statements showing the amount of such ad valorem taxes
required to be paid and the taxing authority to which same is payable.  Borrower will, at the same time, deposit with
Lender such additional amounts as will, when added to the amount of ad valorem
tax escrows previously deposited with Lender and then remaining available for
that purpose, be sufficient to pay such ad valorem tax obligations with respect
to the Mortgaged Property.  Upon delivery
by Borrower to Lender of such statements and such additional funds, if the same
is necessary, Lender shall apply such deposits in payment of such ad valorem
tax obligations.  Neither Lender nor
Borrower shall be required to pay or cause to be paid such ad valorem taxes
affecting the Mortgaged Property if the payment thereof is being contested by
Borrower in accordance with the applicable provisions of the Deed of Trust.

 

(b)           Upon the occurrence of an Event of
Default, on the first day of the first calendar month after the date thereof,
Borrower shall escrow with Lender an amount for insurance premiums equal to
one-twelfth (1/12) of the current annual cost of insurance premiums for
the insurance policies required pursuant to the Loan Documents, multiplied by a
number equal to twelve (12) less the number of whole months remaining
until thirty (30) days prior to the next annual payment date for such insurance
premiums.  Thereafter, the amount of the
monthly insurance premium escrow payment shall be one-twelfth (1/12) of
the current annual cost for insurance premiums on all insurance policies
required by the Loan Documents, as adjusted by Lender from time to time.  On or before one (1) month prior to the
due date for the next annual insurance premiums, Borrower shall deliver to
Lender the statement or invoice therefor, together with such additional funds
as will, when added to the amount of insurance premium previously escrowed with
Lender and then remaining available for such purpose, be sufficient to pay such
insurance premiums.  Upon delivery of
such statements and such additional funds, if the same is necessary, Lender
shall apply such deposits in payment of such insurance premiums.

 

23

 

5.23         Equity Contribution. 
As a condition precedent to Lender’s obligation to disburse each Advance
of proceeds of the Loan, Borrower shall at the same time advance from the
Equity its proportionate share of the draw request.

 

5.24         Other Activities. 
Borrower shall not now or at any time until the Indebtedness has been
fully repaid and the Obligations have been fully satisfied or discharged own,
acquire, construct or operate or contract to own, acquire, construct or operate
any other commercial real estate properties, without Lender’s prior written
approval, which such approval shall be in Lender’s sole and absolute
discretion.

 

ARTICLE VI

 

ASSIGNMENTS

 

6.1           Assignment of Construction Contract. 
As additional security for the payment of the Loan, Borrower hereby
collaterally transfers and collaterally assigns to Lender all of Borrower’s
rights and interest, but not its obligations, in, under and to each
Construction Contract upon the following terms and conditions:

 

(a)           Borrower represents and warrants that the
copy of each Construction Contract Borrower has furnished or will furnish to Lender
is or will be (as applicable) a true and complete copy thereof, including
all amendments thereto, if any, and that Borrower’s interest therein is not
subject to any claim, setoff or encumbrance.

 

(b)           Neither this collateral assignment nor
any action by Lender shall constitute an assumption by Lender of any
obligations under any Construction Contract, and Borrower shall continue to be
liable for all obligations of Borrower thereunder, Borrower hereby agreeing to
perform all of its obligations under each Construction Contract.  Borrower agrees to indemnify and hold Lender
harmless against and from any loss, cost, liability or expense (including but
not limited to attorneys’ fees) resulting from any failure of Borrower to so
perform.

 

(c)           Upon the occurrence of an Event of
Default, Lender shall have the right at any time (but shall have no obligation)
to take in its name or in the name of Borrower such action as Lender may at any
time determine to be necessary or advisable to cure any default under any Construction
Contract or to protect the rights of Borrower or Lender thereunder.  Lender shall incur no liability if any action
so taken by it or in its behalf shall prove to be inadequate or invalid, and
Borrower agrees to indemnify and hold Lender harmless against and from any
loss, cost, liability or expense (including but not limited to reasonable
attorneys’ fees) incurred in connection with any such action, except for the
willful misconduct of Lender or Lender’s agents or employees.

 

(d)           Upon Event of Default, Borrower hereby
irrevocably constitutes and appoints Lender as Borrower’s attorney-in-fact, in
Borrower’s or Lender’s name, to enforce all rights of Borrower under each
Construction Contract.  Such appointment
is coupled with an interest and is therefore irrevocable.

 

24

 

(e)           Prior to the occurrence of an Event of
Default, Borrower shall have the right to exercise its rights as owner under
each Construction Contract, provided that Borrower shall not cancel or amend
any Construction Contract or do or suffer to be done any act which would impair
the security constituted by this assignment without the prior written consent
of Lender, which consent shall not be unreasonably withheld, delayed or
conditioned.

 

(f)            This assignment shall inure to the
benefit of Lender and its successors and assigns, any purchaser upon
foreclosure of the Deed of Trust, any receiver in possession of the Mortgaged
Property and any corporation affiliated with Lender which assumes Lender’s
rights and obligations under this Agreement.

 

6.2           Assignment of Plans and Specifications. 
As additional security for the Loan, Borrower hereby collaterally
transfers and collaterally assigns to Lender all of Borrower’s right, title and
interest in and to the Plans and Specifications and hereby represents and
warrants to and agrees with Lender as follows:

 

(a)           Each schedule of the Plans and
Specifications delivered or to be delivered by Borrower to Lender is and shall
be a complete and accurate description of the Plans and Specifications.

 

(b)           The Plans and Specifications are and
shall be complete and adequate for the construction of the Improvements and
there have been no modifications thereof except as described in such
schedule.  Except as otherwise provided
in this Agreement, the Plans and Specifications shall not be modified without
the prior written consent of Lender, which consent shall not be unreasonably
withheld, delayed or conditioned.

 

(c)           Lender may use the Plans and
Specifications for any purpose relating to the Improvements, including but not
limited to inspections of construction and the completion of the Improvements.

 

(d)           Lender’s acceptance of this assignment
shall not constitute approval of the Plans and Specifications by Lender.  Lender has no liability or obligation in
connection with the Plans and Specifications and no responsibility for the
adequacy thereof or for the construction of the Improvements contemplated by
the Plans and Specifications.  Lender has
no duty to inspect the Improvements, and if Lender should inspect the
Improvements, Lender shall have no liability or obligation to Borrower or any
other party arising out of such inspection. 
No such inspection nor any failure by Lender to make objections after
any such inspection shall constitute a representation by Lender that the
Improvements are in accordance with the Plans and Specifications or any other
requirement or constitute a waiver of Lender’s right thereafter to insist that
the Improvements be constructed in accordance with the Plans and Specifications
or any other requirement.

 

(e)           This collateral assignment shall inure to
the benefit of Lender and its successors and assigns, any purchaser upon
foreclosure of the Deed of Trust, any receiver in possession of the Mortgaged
Property and any corporation affiliated with Lender which assumes Lender’s
rights and obligations under this Agreement.

 

25

 

6.3           Assignment of Design Services Contract. 
As additional security for the payment of the Loan, Borrower hereby
collaterally transfers and collaterally assigns to Lender as security in the
Indebtedness all of Borrower’s rights and interest, but not its obligations,
in, under and to each Design Services Contract upon the following terms and
conditions:

 

(a)           Borrower represents and warrants that the
copy of each Design Services Contract Borrower has furnished or will furnish to
Lender is or will be (as applicable) a true and complete copy thereof,
including all amendments thereto, if any, and that Borrower’s interest therein
is not subject to any claim, setoff or encumbrance.

 

(b)           Neither this assignment nor any action by
Lender shall constitute an assumption by Lender of any obligations under any
Design Services Contract, and Borrower shall continue to be liable for all
obligations of Borrower thereunder, Borrower hereby agreeing to perform all of
its obligations under each Design Services Contract.  Borrower agrees to indemnify and hold Lender
harmless against and from any loss, cost, liability or expense (including but
not limited to attorneys’ fees) resulting from any failure of Borrower to so
perform.

 

(c)           Upon the occurrence of an Event of
Default, Lender shall have the right at any time (but shall have no obligation)
to take in its name or in the name of Borrower such action as Lender may at any
time determine to be necessary or advisable to cure any default under any
Design Services Contract or to protect the rights of Borrower or Lender
thereunder.  Lender shall incur no
liability if any action so taken by it or in its behalf shall prove to be
inadequate or invalid, and Borrower agrees to indemnify and hold Lender
harmless against and from any loss, cost, liability or expense (including but
not limited to reasonable attorneys’ fees) incurred in connection with any such
action, except the willful misconduct of Lender or Lender’s agents or
employees.

 

(d)           Borrower hereby irrevocably constitutes
and appoints Lender as Borrower’s attorney-in-fact, in Borrower’s or Lender’s
name, to enforce all rights of Borrower under each Design Services
Contract.  Such appointment is coupled
with an interest and is therefore irrevocable.

 

(e)           Prior to the occurrence of an Event of
Default, Borrower shall have the right to exercise its rights as owner under
each Design Services Contract, provided that Borrower shall not cancel or amend
any Design Services Contract or do or suffer to be done any act which would
impair the security constituted by this assignment without the prior written
consent of Lender, which consent shall not be unreasonably withheld, delayed or
conditioned.

 

(f)            This collateral assignment shall inure to
the benefit of Lender and its successors and assigns, any purchaser upon
foreclosure of the Deed of Trust, any receiver in possession of the Mortgaged
Property and any corporation affiliated with Lender which assumes Lender’s
rights and obligations under this Agreement.

 

26

 

ARTICLE VII

 

EVENTS OF DEFAULT

 

7.1           Events of Default.  Each of the
following shall constitute an “Event of Default” hereunder:

 

(a)           Borrower shall fail, refuse, or neglect
to pay, in full, (i) any installment or portion of the Indebtedness within
two (2) days from the date the Lender gives Borrower notice of such non-payment,
or (ii) the Indebtedness at maturity, whether at the due date thereof
stipulated in the Loan Documents, upon acceleration or otherwise;

 

(b)           Borrower shall fail, refuse or neglect,
or cause others to fail, refuse, or neglect to comply with, perform and
discharge fully and timely any of the Obligations as and when called for, and
such failure, refusal, or neglect shall continue for thirty (30) days after
notice thereof is provided to Borrower;

 

(c)           Any representation, warranty, or
statement made by Borrower, or others in, under, or pursuant to the Loan
Documents or any affidavit or other instrument executed or delivered with
respect to the Loan Documents or the Indebtedness is determined by Lender to be
false or misleading in any material respect as of the date hereof or thereof or
shall become so at any time prior to the repayment in full of the Indebtedness
and Borrower or others fail and refuse to cause such representation, warranty
or statement to be made true within thirty (30) days of the date of notice
of such failure is provided to Borrower or other party, but if such
representation, warranty or statement cannot with reasonable diligence be made
true within such thirty (30) days, and Borrower or other party is
diligently attempting to cause such representation, warranty or other statement
to be made true, then within such additional time as may be necessary to cause
such statement to be made true, so long as diligence in pursuing such remedy is
followed but in no event beyond sixty (60) days of notice;

 

(d)           Borrower shall commit an event of
default, as defined therein, after notice and opportunity to cure under and
pursuant to any other mortgage or security agreement which covers or affects
any part of the Mortgaged Property;

 

(e)           Borrower (i) shall execute an
assignment for the benefit of creditors or an admission in writing by Borrower
of Borrower’s inability to pay, or Borrower’s failure to pay, debts generally
as the debts become due; or (ii) shall allow the levy against the
Mortgaged Property or any part thereof, of any execution, attachment,
sequestration or other writ which is not vacated within sixty days after the
levy; or (iii) shall allow the appointment of a receiver, trustee or
custodian of Borrower or of the Mortgaged Property or any part thereof, which
receiver, trustee or custodian is not discharged within sixty (60) days after
the appointment; or (iv) files as a debtor a petition, case, proceeding or
other action pursuant to, or voluntarily seeks the benefit or benefits of any
Debtor Relief Law (as defined in the Deed of Trust), or takes any action in
furtherance thereof; or (v) files either a petition, complaint, answer or
other instrument which seeks to effect a suspension of, or which has the effect
of suspending any of the rights or powers of 

 

27

 

Lender or the
trustee under the Deed of Trust granted in the Note, herein or in any Loan
Document; or (vi) allows the filing of a petition, case, proceeding or
other action against Borrower as a debtor under any Debtor Relief Law or seeks
appointment of a receiver, trustee, custodian or liquidator of Borrower or of
the Mortgaged Property, or any part thereof, or of any significant portion of
Borrower’s other property; and (a) Borrower admits, acquiesces in or fails
to contest diligently the material allegations thereof, or (b) the
petition, case, proceeding or other action results in the entry of an order for
relief or order granting the relief sought against Borrower, or (c) the
petition, case, proceeding or other action is not permanently dismissed or
discharged on or before the earlier of trial thereon or sixty (60) days next
following the date of filing;

 

(f)            Global or any Constituent Party (as
defined in the Deed of Trust) shall die, dissolve, terminate or liquidate, or
merge with or be consolidated into any other entity;

 

(g)           Global creates, places, or permits to be
created or placed, or through any act or failure to act, acquiesces in the
placing of, or allows to remain, any Subordinate Mortgage (as defined in the
Deed of Trust), regardless of whether such Subordinate Mortgage is expressly
subordinate to the liens or security interests of the Loan Documents, with
respect to the Mortgaged Property, other than the Permitted Exceptions (as defined
in the Deed of Trust);

 

(h)           Borrower makes a Disposition (as defined
in the Deed of Trust), without the prior written consent of Lender;

 

(i)            Any condemnation proceeding is instituted
or threatened which would, in Lender’s reasonable judgment, materially impair
the use and enjoyment of the Mortgaged Property for its intended purposes;

 

(j)            The Mortgaged Property is demolished,
destroyed, or substantially damaged so that, in Lender’s reasonable judgment,
it cannot be restored or rebuilt with available funds to the condition existing
immediately prior to such demolition, destruction, or damage within a
reasonable period of time;

 

(k)           Global abandons all or any portion of the
Mortgaged Property;

 

(l)            The occurrence of any event referred to
in Sections 7.1(e) and (f) hereof with respect to any
Constituent Party or other person or entity obligated in any manner to pay or
perform the Indebtedness or Obligations, respectively, or any part thereof (as
if such Constituent Party or other person or entity were “Borrower” in such
Sections);

 

(m)          An Event of Default as defined in any of
the Loan Documents occurs and continues beyond any applicable cure or grace
period;

 

(n)           The construction of the Improvements are,
at any time, (i) discontinued due to acts or matters within Borrower’s
control for a period of thirty (30) or more consecutive days, (ii) not
carried on with reasonable dispatch, or (iii) not completed by the
Completion Date;

 

28

 

(o)           Borrower
is unable to satisfy any condition of Borrower’s right to receive Advances
hereunder for a period in excess of thirty (30) days after Lender’s reasonable
refusal to make any further Advances, but if such obligation cannot with
reasonable diligence be cured within such thirty (30) days, and Borrower is
diligently attempting such cure, then within such additional time as may be
necessary to effect such cure so long as diligence in pursuing such cure is
followed;

 

(p)           Borrower
executes any conditional bill of sale, chattel mortgage or other security
instrument covering any materials, fixtures or articles intended to be
incorporated in the Improvements or the appurtenances thereto, or covering
articles of personal property placed in the Improvements, or files a financing
statement publishing notice of such security instrument, or if any of such
materials, fixtures or articles are not purchased in such a manner that the
ownership thereof vests unconditionally in Borrower, free from encumbrances, on
delivery at the Land, or if Borrower does not produce to Lender upon reasonable
demand the contracts, bills of sale, statements, receipted vouchers or
agreements, or any of them, under which Borrower claims title to such
materials, fixtures and articles; or

 

(q)           Any levy,
attachment or garnishment is issued, or if any lien for the performance of work
or the supply of materials is filed, against any part of the Mortgaged Property
and remains unsatisfied or unbonded following thirty (30) days after the date
Borrower is notified of filing thereof.

 

7.2           Remedies.  Lender shall have the right, upon the
happening and continuance of an Event of Default beyond any applicable notice
and cure period, in addition to any rights or remedies available to it under
all other Loan Documents, to enter into possession of the Mortgaged Property
and perform any and all work and labor necessary to complete the Improvements
in accordance with the Plans and Specifications.  All amounts so expended by Lender shall be
deemed to have been disbursed to Borrower as Loan proceeds and secured by the
Deed of Trust.  For this purpose,
Borrower hereby constitutes and appoints (which appointment is coupled with an
interest and is therefore irrevocable) Lender as Borrower’s true and
lawful attorney-in-fact, with full power of substitution to complete the
Improvements in the name of Borrower, and hereby empowers Lender, acting as
Borrower’s attorney-in-fact, as follows: 
to use any funds of Borrower, including any balance which may be held in
escrow, any Borrower’s Deposit and any funds which may remain unadvanced
hereunder, for the purpose of completing the Improvements in the manner called
for by the Plans and Specifications; to make such additions and changes and
corrections in the Plans and Specifications which shall be necessary to
complete the Improvements in the manner contemplated by the Plans and
Specifications; to continue all or any existing construction contracts or
subcontracts; to employ such contractors, subcontractors, agents, design professionals
and inspectors as shall be required for said purposes; to pay, settle or
compromise all existing bills and claims which are or may be liens against the
Mortgaged Property, or may be necessary for the completion of the work or the
clearing of title; to execute all the applications and certificates in the name
of Borrower which may be required by any construction contract; and to do any
and every act with respect to the construction of the Improvements which
Borrower could do in Borrower’s own behalf. 
Lender, acting as Borrower’s attorney-in-fact, shall also have power to
prosecute and defend all actions or proceedings in 

 

29

 

connection with the Mortgaged Property and to take such action and require
such performance as is deemed necessary.

 

ARTICLE VIII

 

LENDER’S DISCLAIMERS - BORROWER’S INDEMNITIES

 

8.1           No
Obligation by Lender to Construct. 
Lender has no liability or obligation whatsoever or howsoever in
connection with the Mortgaged Property or the development, construction or
completion thereof or work performed thereon, and has no obligation except to
disburse the Loan proceeds as herein agreed. 
Lender is not obligated to inspect the Improvements nor is Lender
liable, and under no circumstances whatsoever shall Lender be or become liable,
for the performance or default of any contractor or subcontractor, or for any
failure to construct, complete, protect or insure the Mortgaged Property, or
any part thereof, or for the payment of any cost or expense incurred in
connection therewith, or for the performance or nonperformance of any
obligation of Borrower to Lender nor to any other person, firm or entity
without limitation.  Nothing, including
without limitation any disbursement of Loan proceeds or Borrower’s Deposit nor
acceptance of any document or instrument, shall be construed as such a
representation or warranty, express or implied, on Lender’s part.

 

8.2           No
Obligation by Lender to Operate.  Any
term or condition of any of the Loan Documents to the contrary notwithstanding,
Lender shall not have, and by its execution and acceptance of this Agreement
hereby expressly disclaims, any obligation or responsibility for the
management, conduct or operation of the business and affairs of Borrower.  Any term or condition of the Loan Documents
which permits Lender to disburse funds, whether from the proceeds of the Loan,
Borrower’s Deposit or otherwise, or to take or refrain from taking any action
with respect to Borrower, the Mortgaged Property or any other collateral for
repayment of the Loan, shall be deemed to be solely to permit Lender to audit
and review the management, operation and conduct of the business and affairs of
Borrower and to maintain and preserve the security given by Borrower to Lender
for the Loan, and may not be relied upon by any other person.  Further, Lender shall not have, has not
assumed and by its execution and acceptance of this Agreement hereby expressly
disclaims any liability or responsibility for the payment or performance of any
indebtedness or obligation of Borrower and no term or condition of the Loan
Documents, shall be construed otherwise. 
Borrower hereby expressly acknowledges that no term or condition of the
Loan Documents shall be construed so as to deem the relationship between
Borrower and Lender to be other than that of borrower and lender, and Borrower
shall at all times represent that the relationship between Borrower and Lender
is solely that of borrower and lender.  Borrower
hereby indemnifies and agrees to hold Lender harmless from and against any
cost, expense or liability incurred or suffered by Lender as a result of any
assertion or claim of any obligation or responsibility of Lender for the
management, operation and conduct of the business and affairs of Borrower or as
a result of any assertion or claim of any liability or responsibility of Lender
for the payment or performance of any indebtedness or obligation of Borrower.

 

8.3           INDEMNITY BY BORROWER.  BORROWER HEREBY INDEMNIFIES
LENDER AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS, 

 

30

 

DIRECTORS, EMPLOYEES, AND AGENTS (THE “INDEMNIFIED
PARTIES”) FROM, AND HOLDS EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES,
LIABILITIES, CLAIMS, DAMAGES, COSTS, AND EXPENSES TO WHICH ANY OF THEM MAY BECOME
SUBJECT, INSOFAR AS SUCH LOSSES, LIABILITIES, CLAIMS, DAMAGES, COSTS, AND
EXPENSES ARISE FROM OR RELATE TO ANY OF THE LOAN DOCUMENTS OR ANY OF THE
TRANSACTIONS CONTEMPLATED THEREBY OR FROM ANY INVESTIGATION, LITIGATION, OR
OTHER PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY THREATENED INVESTIGATION,
LITIGATION, OR OTHER PROCEEDING RELATING TO ANY OF THE FOREGOING.  WITHOUT INTENDING TO LIMIT THE REMEDIES
AVAILABLE TO LENDER WITH RESPECT TO THE ENFORCEMENT OF ITS INDEMNIFICATION
RIGHTS AS STATED HEREIN OR AS STATED IN ANY LOAN DOCUMENT, IN THE EVENT ANY
CLAIM OR DEMAND IS MADE OR ANY OTHER FACT COMES TO THE ATTENTION OF LENDER IN
CONNECTION WITH, RELATING OR PERTAINING TO, OR ARISING OUT OF THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT, WHICH LENDER REASONABLY BELIEVES MIGHT INVOLVE OR LEAD TO
SOME LIABILITY OF LENDER, BORROWER SHALL, IMMEDIATELY UPON RECEIPT OF WRITTEN
NOTIFICATION OF ANY SUCH CLAIM OR DEMAND, ASSUME IN FULL THE PERSONAL
RESPONSIBILITY FOR AND THE DEFENSE OF ANY SUCH CLAIM OR DEMAND AND PAY IN
CONNECTION THEREWITH ANY LOSS, DAMAGE, DEFICIENCY, LIABILITY OR OBLIGATION,
INCLUDING, WITHOUT LIMITATION, LEGAL FEES AND COURT COSTS INCURRED IN
CONNECTION THEREWITH.  IN THE EVENT OF
COURT ACTION IN CONNECTION WITH ANY SUCH CLAIM OR DEMAND, BORROWER SHALL ASSUME
IN FULL THE RESPONSIBILITY FOR THE DEFENSE OF ANY SUCH ACTION AND SHALL
IMMEDIATELY SATISFY AND DISCHARGE ANY FINAL DECREE OR JUDGMENT RENDERED
THEREIN.  LENDER MAY, IN ITS REASONABLE
DISCRETION, MAKE ANY PAYMENTS SUSTAINED OR INCURRED BY REASON OF ANY OF THE
FOREGOING; AND BORROWER SHALL IMMEDIATELY REPAY TO LENDER, IN CASH AND NOT WITH
PROCEEDS OF THE LOAN, THE AMOUNT OF SUCH PAYMENT, WITH INTEREST THEREON AT THE
MAXIMUM RATE OF INTEREST PERMITTED BY APPLICABLE LAW FROM THE DATE OF SUCH
PAYMENT.  LENDER SHALL HAVE THE RIGHT TO
JOIN BORROWER AS A PARTY DEFENDANT IN ANY LEGAL ACTION BROUGHT AGAINST LENDER,
AND BORROWER HEREBY CONSENTS TO THE ENTRY OF AN ORDER MAKING BORROWER A PARTY
DEFENDANT TO ANY SUCH ACTION.

 

NOTWITHSTANDING THE FOREGOING, BORROWER SHALL HAVE
NO OBLIGATION TO REIMBURSE ANY MEMBER OF THE INDEMNIFIED PARTIES FOR DAMAGES,
INCLUDING ATTORNEYS’ FEES AND EXPENSES, IN ANY ACTION WHERE THERE IS A FINAL,
NON-APPEALABLE JUDGMENT IMPOSING UPON THE INDEMNIFIED PARTY LIABILITY FOR ACTS
OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

 

8.4           No
Agency.  Nothing herein shall be
construed as making or constituting Lender as the agent of Borrower in making
payments pursuant to any construction contracts or 

 

31

 

subcontracts entered into by Borrower for construction of the
Improvements or otherwise.  The purpose
of all requirements of Lender hereunder is solely to allow Lender to check and
require documentation (including, but not limited to, lien waivers) sufficient
to protect Lender and the Loan contemplated hereby.  Borrower shall have no right to rely on any
procedures required by Lender, Borrower whereby acknowledging that Borrower has
sole responsibility for constructing the Improvements and paying for work done
in accordance therewith and that Borrower has solely, on Borrower’s own behalf,
selected or approved each contractor, each subcontractor and each materialman,
Lender having no responsibility for any such persons or entities or for the
quality of their materials or workmanship.

 

ARTICLE IX

 

MISCELLANEOUS

 

9.1           Successors
and Assigns.  This Agreement shall be
binding upon, and shall inure to the benefit of, Borrower and Lender, and their
respective heirs, legal representatives, successors and assigns; provided,
however, that Borrower may not assign any rights or obligations under this
Agreement without the prior written consent of Lender.

 

9.2           Headings.  The Article, Section, and
Subsection entitlements hereof are inserted for convenience of reference
only and shall in no way alter, modify, define or be used in construing the
text of such Articles, Sections or Subsections.

 

9.3           Survival.  The provisions hereof shall survive the
execution of all instruments herein mentioned, shall continue in full force and
effect until the Loan has been paid in full and shall not be affected by any
investigation made by any party.

 

9.4           APPLICABLE
LAW.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND
THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.  COURTS WITHIN THE STATE OF TEXAS SHALL HAVE
JURISDICTION OVER ANY AND ALL DISPUTES BETWEEN BORROWER AND LENDER, WHETHER IN
LAW OR EQUITY, INCLUDING, BUT NOT LIMITED TO, ANY AND ALL DISPUTES ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT; AND VENUE IN ANY
SUCH DISPUTE WHETHER IN FEDERAL OR STATE COURT SHALL BE LAID IN HARRIS COUNTY,
TEXAS.

 

9.5           Notices.  All notices or other communications required
or permitted to be given pursuant to this Agreement shall be in writing and
shall be considered as properly given if (i) mailed by first class United
States mail, postage prepaid, registered or certified with return receipt
requested, (ii) by delivering same in person to the intended addressee, or
(iii) by delivery to an independent third party commercial delivery
service for same day or next day delivery and providing for evidence of receipt
at the office of the intended addressee. 
Notice so mailed shall be effective upon its deposit with the United
States Postal Service or any successor thereto; notice sent by such a
commercial delivery service shall be effective upon delivery to such commercial
delivery service; notice given by personal delivery shall be effective only if
and 

 

32

 

when received by the addressee; and notice given by other means shall
be effective only if and when received at the designated address of the
intended addressee.  For purposes of
notice, the addresses of the parties shall be as set forth on page 1 of
this Agreement; provided, however, that either party shall have the right to
change its address for notice hereunder to any other location within the
continental United States by the giving of thirty (30) days’ notice to the
other party in the manner set forth herein.

 

9.6           Reliance
by Lender.  Lender is relying and is
entitled to rely upon each and all of the provisions of this Agreement; and
accordingly, if any provision or provisions of this Agreement should be held to
be invalid or ineffective, then all other provisions hereof shall continue in
full force and effect notwithstanding.

 

9.7           Participations.  Lender shall have the right at any time and
from time to time to grant participations in the Loan and Loan Documents.  Each participant shall be entitled to receive
all information received by Lender regarding the creditworthiness of Borrower,
any of its principals and any guarantor (if any), including (without
limitation) information required to be disclosed to a participant pursuant to
Banking Circular 181 (Rev., August 2, 1984), issued by the Comptroller of
the Currency (whether the participant is subject to the circular or not).  Notwithstanding the above, Lender expressly
agrees not to grant participations to Southern National Bank in the Loan and
Loan Documents.

 

9.8           Interest
Provisions.

 

(a)           Savings
Clause.  It is expressly stipulated
and agreed to be the intent of Borrower and Lender at all times to comply
strictly with the applicable Texas law governing the maximum rate or amount of
interest payable on the Note or the Related Indebtedness (or applicable United
States federal law to the extent that it permits Lender to contract for,
charge, take, reserve or receive a greater amount of interest than under Texas
law).  If the applicable law is ever
judicially interpreted so as to render usurious any amount (i) contracted
for, charged, taken, reserved or received pursuant to the Note, any of the
other Loan Documents or any other communication or writing by or between
Borrower and Lender related to the transaction or transactions that are the
subject matter of the Loan Documents, (ii) contracted for, charged or
received by reason of Lender’s exercise of the option to accelerate the
maturity of the Note and/or the Related Indebtedness, or (iii) Borrower
will have paid or Lender will have received by reason of any voluntary
prepayment by Borrower of the Note and/or the Related Indebtedness, then it is
Borrower’s and Lender’s express intent that all amounts charged in excess of
the Maximum Lawful Rate shall be automatically cancelled, ab initio, and
all amounts in excess of the Maximum Lawful Rate theretofore collected by
Lender shall be credited on the principal balance of the Note and/or the
Related Indebtedness (or, if the Note and all Related Indebtedness have been or
would thereby be paid in full, refunded to Borrower), and the provisions of the
Note and the other Loan Documents immediately be deemed reformed and the
amounts thereafter collectible hereunder and thereunder reduced, without the
necessity of the execution of any new document, so as to comply with the
applicable law, but so as to permit the recovery of the fullest amount
otherwise called for hereunder and thereunder; provided, however, if the Note
has been paid in full before the end of the stated term of the Note, then
Borrower and Lender agree that Lender shall, 

 

33

 

with reasonable
promptness after Lender discovers or is advised by Borrower that interest was
received in an amount in excess of the Maximum Lawful Rate, either refund such
excess interest to Borrower and/or credit such excess interest against the Note
and/or any Related Indebtedness then owing by Borrower to Lender.  Borrower hereby agrees that as a condition
precedent to any claim seeking usury penalties against Lender, Borrower will
provide written notice to Lender, advising Lender in reasonable detail of the
nature and amount of the violation, and Lender shall have sixty (60) days after
receipt of such notice in which to correct such usury violation, if any, by
either refunding such excess interest to Borrower or crediting such excess
interest against the Note and/or the Related Indebtedness then owing by Borrower
to Lender.  All sums contracted for,
charged or received by Lender for the use, forbearance or detention of any debt
evidenced by the Note and/or the Related Indebtedness shall, to the extent
permitted by applicable law, be amortized or spread, using the actuarial
method, throughout the stated term of the Note and/or the Related Indebtedness
(including any and all renewal and extension periods) until payment in full so
that the rate or amount of interest on account of the Note and/or the Related Indebtedness
does not exceed the Maximum Lawful Rate from time to time in effect and
applicable to the Note and/or the Related Indebtedness for so long as debt is
outstanding.  In no event shall the
provisions of Chapter 346 of the Texas Finance Code (which regulates
certain revolving credit loan accounts and revolving triparty accounts) apply
to the Note and/or the Related Indebtedness. 
Notwithstanding anything to the contrary contained herein or in any of
the other Loan Documents, it is not the intention of Lender to accelerate the
maturity of any interest that has not accrued at the time of such acceleration
or to collect unearned interest at the time of such acceleration.

 

(b)           Definitions.  As used herein, the term “Maximum Lawful
Rate” shall mean the maximum lawful rate of interest which may be
contracted for, charged, taken, received or reserved by Lender in accordance
with the applicable laws of the State of Texas (or applicable United States
federal law to the extent that it permits Lender to contract for, charge, take,
receive or reserve a greater amount of interest than under Texas law), taking
into account all Charges (as herein defined) made in connection with the
transaction evidenced by the Note and the other Loan Documents.  As used herein, the term “Charges”
shall mean all fees, charges and/or any other things of value, if any,
contracted for, charged, received, taken or reserved by Lender in connection
with the transactions relating to the Note and the other Loan Documents, which
are treated as interest under applicable law. 
As used herein, the term “Related Indebtedness” shall mean any
and all debt paid or payable by Borrower to Lender pursuant to the Loan
Documents or any other communication or writing by or between Borrower and
Lender related to the transaction or transactions that are the subject matter
of the Loan Documents, except such debt which has been paid or is payable by
Borrower to Lender under the Note.

 

(c)           Ceiling
Election.  To the extent that Lender
is relying on Chapter 303 of the Texas Finance Code to determine the
Maximum Lawful Rate payable on the Note and/or the Related Indebtedness, Lender
will utilize the weekly ceiling from time to time in effect as provided in such
Chapter 303, as amended.  To the
extent United States federal law permits Lender to contract for, charge, take,
receive or reserve a greater amount of interest than under Texas law, Lender
will rely on United States federal law 

 

34

 

instead of such
Chapter 303 for the purpose of determining the Maximum Lawful Rate.  Additionally, to the extent permitted by
applicable law now or hereafter in effect, Lender may, at its option and from
time to time, utilize any other method of establishing the Maximum Lawful Rate
under such Chapter 303 or under other applicable law by giving notice, if
required, to Borrower as provided by applicable law now or hereafter in effect.

 

9.9           Controlling
Document.  In the event of a conflict
between the terms and conditions of this Agreement and the terms and conditions
of any other Loan Document, the terms and conditions of this Agreement shall
control.

 

9.10         Counterparts.  To facilitate execution, this instrument may
be executed in as many counterparts as may be convenient or required.  It shall not be necessary that the signature
of, or on behalf of, each party, or that the signature of all persons required
to bind any party, appear on each counterpart. 
All counterparts shall collectively constitute a single instrument.  It shall not be necessary in making proof of
this instrument to produce or account for more than a single counterpart
containing the respective signatures of, or on behalf of, each of the parties
hereto.  Any signature page to any
counterpart may be detached from such counterpart without impairing the legal
effect of the signatures thereon and thereafter attached to another counterpart
identical thereto except having attached to it additional signature pages.

 

9.11         Waiver
of Right to Trial by Jury.  BORROWER
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, SUIT, PROCEEDING, OR COUNTERCLAIM THAT RELATES TO OR ARISES OUT OF ANY
OF THE LOAN DOCUMENTS OR THE ACTS OR FAILURE TO ACT OF OR BY LENDER IN THE
ENFORCEMENT OF ANY OF THE TERMS OR PROVISIONS OF THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS.

 

9.12         WAIVER OF CONSUMER RIGHTS.  BORROWER HEREBY WAIVES BORROWER’S
RIGHTS UNDER THE PROVISIONS OF CHAPTER 17, SUBCHAPTER E, SECTION 17.41
THROUGH 17.63 INCLUSIVE OF THE TEXAS BUSINESS AND COMMERCE CODE, GENERALLY
KNOWN AS THE “DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT,” A LAW THAT
GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS. 
AFTER CONSULTATION WITH AN ATTORNEY OF BORROWER’S OWN SELECTION,
BORROWER VOLUNTARILY CONSENTS TO THIS WAIVER. 
IT IS THE INTENT OF LENDER AND BORROWER THAT THE RIGHTS AND REMEDIES
WITH RESPECT TO THIS TRANSACTION SHALL BE GOVERNED BY LEGAL PRINCIPLES OTHER
THAN THE TEXAS DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT.  THE WAIVER SET FORTH HEREIN SHALL EXPRESSLY
SURVIVE THE TERMINATION OF THE REFERENCED TRANSACTION.  BORROWER REPRESENTS AND WARRANTS TO LENDER
THAT BORROWER (I) IS A BUSINESS CONSUMER, (II) HAS KNOWLEDGE AND
EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS THAT ENABLE BORROWER TO EVALUATE
THE MERITS AND RISKS OF THE SUBJECT TRANSACTION, (III) IS NOT IN A
SIGNIFICANTLY DISPARATE BARGAINING POSITION WITH RESPECT TO THE SUBJECT
TRANSACTION, AND (IV) HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL
(WHO WAS NOT, DIRECTLY OR INDIRECTLY, IDENTIFIED, 

 

35

 

SUGGESTED OR SELECTED BY LENDER OR LENDER’S
AGENTS) IN CONNECTION WITH THE REFERENCED TRANSACTION.

 

9.13         ENTIRE
AGREEMENT.  THIS LOAN AGREEMENT
AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. 
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.  THIS INSTRUMENT MAY BE AMENDED ONLY BY
AN INSTRUMENT IN WRITING EXECUTED BY THE PARTIES HERETO.

 

[Signature Page Follows]

 

36

 

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.

 

	
   

  	
   

  	
  LENDER:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CITIBANK, N.A.,

  	
   

  
	
   

  	
   

  	
  a national banking association

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Joey Powell

  	
   

  
	
   

  	
   

  	
  Relationship Manager

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  NOTICE OF INDEMNIFICATION: 

  	
   

  	
  GLOBAL: 

  	
    

  
	
   

  	
   

  	
   

  	
   

  
	
  GLOBAL HEREBY ACKNOWLEDGES AND AGREES THAT THIS
  AGREEMENT CONTAINS CERTAIN INDEMNIFICATION PROVISIONS PURSUANT TO SECTION 8.3
  HEREOF.

  	
   

  	
   

  GLOBAL GEOPHYSICAL SERVICES, INC.,
  a 

  Delaware corporation, d/b/a GGS Seismic, Inc.

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Craig Lindberg

  
	
   

  	
   

  	
  Senior Vice President, CFO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BORROWER:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GLOBAL GEOPHYSICAL SERVICES, INC.,
  a 

  Delaware corporation, d/b/a GGS Seismic, Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Craig Lindberg

  	
   

  
	
   

  	
   

  	
  Senior Vice President, CFO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GGS INTERNATIONAL HOLDINGS,
  INC., a 

  Texas corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Craig Lindberg 

  	
   

  
	
   

  	
   

  	
  Senior Vice President, CFO

  
					

 

 

	
   

  	
   

  	
  AUTOSEIS, INC., 

  a Texas corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Craig Lindberg

  	
   

  
	
   

  	
   

  	
  Senior Vice President, CFO

  	
   

  
					

 

List of
Attachments:

 

Schedule of
Definitions

Exhibit “A” - Land Description

Exhibit “B” - Budget

Exhibit “C” - Affidavit of Completion

Schedule 3.8
– Exception from retainage

Annex I – Interest
Rate Options

 

 

SCHEDULE OF DEFINITIONS

 

	
  I.

  	
   

  	
  Definitions:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Commencement Date:

  	
   

  	
  Work commenced prior to the date hereof.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Origination Fee:

  	
   

  	
  $18,750.00

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Completion Date:

  	
   

  	
  The date which is twelve (12) months after the effective
  date of this Agreement. Subject to strikes, lockouts, labor troubles, failure
  of power, riots, insurrection, war, shortages of labor, materials or
  equipment, inclement weather, delays in obtaining insurance or condemnation
  proceeds, acts of God or other reasons of like nature beyond Borrower’s
  control.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Improvements:

  	
   

  	
  Construction of a
  Global’s company headquarters in Fort Bend County, Texas.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Loan Amount:

  	
   

  	
  $7,500,000.00

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Contractor:

  	
   

  	
  The Borrower has provided the Lender the names of
  each of the contractors who are providing the services on the attached list
  where services provided are for $100,000.00 or more.

  

 

 

	
  Slabs & Panels &
  Paving

  	
  $1.529 million

  	
   

  
	
  Stabilized, Site Work, &
  Yard

  	
  $275k

  	
   

  
	
  Structural Steel Fab

  	
  $700k

  	
  a material vendor –not
  going to do any 10% retainage-30 to 40 days terms

  
	
  LBM Steel Fab &
  Roof B & C

  	
  $298k

  	
  “same”

  
	
  New Concept
  Construction

  	
  $75k

  	
   

  
	
  Spiral Stairs

  	
  $100k+

  	
   

  
	
  Erector

  	
  $232k

  	
   

  
	
  Roofing

  	
  $210k

  	
   

  
	
  Other Roofing

  	
  $70k

  	
   

  
	
  Electrical

  	
  $1.150 million

  	
   

  
	
  Plumb

  	
  $225k

  	
   

  
	
  HVAC

  	
  $500k

  	
   

  
	
  Libert HVAC in Computer
  room

  	
  $200k

  	
   

  
	
  Generator

  	
  $225k

  	
   

  
	
  Interior Build out
  (studs, SR, etc.)

  	
  1.200 million

  	
   

  
	
  Brick Work

  	
  $90k

  	
   

  
	
  Glass and doors

  	
  $245k

  	
   

  
	
  Elevators

  	
  $80k

  	
   

  
	
  Sprinklers

  	
  $150k

  	
   

  
	
  Cabling

  	
  $85k

  	
   

  
	
  Carport

  	
  $100k +

  	
   

  

 

 

EXHIBIT “A”

 

Land Description

 

All of
GLOBAL GEOPHYSICAL INDUSTRIAL PARK, a subdivision of 17.5284 acre, as set forth
on map or plat thereof recorded under Slide No. 20060274 of the Plat
Records of Fort Bend County, Texas.

 

1

 

EXHIBIT “B”

 

Budget

 

GGS
BUILDING COSTS

BUDGET

 

	
  LEFT HAND TURN
  LANE

  	
  300 LF

  	
  Infrastructure

  	
   

  	
   

  	
  45,000

  	
   

  
	
  GENERAL EXPENSES NOT
  UNDER SUBCONTRACTORS

  	
  see below

  	
   

  	
  275,034

  	
   

  
	
  Infrastructure-WCID
  Tap costs to bore under Gessner Meters

  	
   

  	
   

  	
  100,000

  	
   

  
	
  GENERAL CONDITIONS-SEE
  BREAKDOWN

  	
  see below

  	
   

  	
  514,845

  	
   

  
	
  Geo Grid for
  Yard

  	
  LABOR

  	
  in Site bid

  	
   

  	
   

  	
  0

  	
   

  
	
  Geo Grid for
  Yard

  	
  24 rolls @ 756
  roll

  	
  M&f&T

  	
   

  	
   

  	
  19,500

  	
   

  
	
  SITE         11
  ACRES R & F GRADING, C & F, CRUSHED ROCK

  	
   

  	
   

  	
   

  	
   

  
	
  UTILITIES       STORM,
  WATER, FIRE, SANITARY, OUTFALL

  	
   

  	
   

  	
  681,022

  	
   

  
	
  UTILITIES-CEMENT/DIRT
  FILL COMPACTION FOR ELECTRICAL

  	
   

  	
   

  	
   

  	
   

  
	
  INSTALL ALL CONDUIT
  SITE LIGHTING, DATA, FEEDS

  	
  est

  	
   

  	
   

  	
  140,000

  	
   

  
	
  SITE-REMOVAL OF
  ELECTRICAL SPOILS

  	
  est

  	
   

  	
   

  	
  11,000

  	
   

  
	
  SITE-REMOVAL OF UTILITY
  SPOILS

  	
   

  	
  sub-bid

  	
   

  	
   

  	
  0

  	
   

  
	
  SITE-REMOVAL OF
  CONCRETE SPOILS

  	
  est

  	
  1323 CY

  	
   

  	
   

  	
  9,000

  	
   

  
	
  CONCRETE AND TILT WALLS

  	
  W/2ND FLOOR

  	
   

  	
   

  	
   

  	
   

  
	
  CONCRETE MEZZANINE OVER
  OFFICES

  	
   

  	
   

  	
   

  	
   

  
	
  CONCRETE ROADS,
  PARKING, PADS

  	
   LS

  	
   

  	
  1,330,000

  	
   

  
	
  STEEL  FABRICATION

  	
  M,T,F

  	
   D

  	
   

  	
  35,000

  	
   

  
	
  STEEL  FABRICATION

  	
  M,T,F

  	
   A & E

  	
   

  	
  564,000

  	
   

  
	
  METAL BUILDING
  FABRICATION

  	
  M,T,F

  	
   B & C

  	
   

  	
  220,000

  	
   

  
	
  STEEL METAL BUILDING
  ERECTION AROUND TILT WALLS

  	
   B & C

  	
   

  	
  55,000

  	
   

  
	
  STEEL SPIRAL
  STAIRCASE

  	
  W/PLEXIGLASS

  	
  M &
  F& T

  	
   

  	
   

  	
  62,000

  	
   

  
	
  STEEL SPIRAL STAIRCASE

  	
  est. erection

  	
   

  	
   

  	
  4,000

  	
   

  
	
  STEEL & PANEL
  ERECTION

  	
  STEEL FOR
  A,E,D-PANEL-ALL

  	
   

  	
   

  	
  220,000

  	
   

  
	
  MASONRY STUCCO AT A,
  SIGN, TRIM CAPS

  	
  M&L

  	
   A

  	
   

  	
  18,000

  	
   

  
	
  MASONRY

  	
  CMU

  	
  M&L&T

  	
   A

  	
   

  	
  17,000

  	
   

  
	
  MASONRY

  	
  DUMPSTERS, WALLS, SIGN,
  ALL CMU

  	
   all

  	
   

  	
  60,000

  	
   

  
	
  WATERPROOFING PANELS,
  PARKING LOT, DAMP PROOFING

  	
   

  	
   

  	
  27,000

  	
   

  
	
  BUILT-UP ROOF &
  GUTTERS, FLASHING

  	
  M,L,T

  	
   A

  	
   

  	
  185,000

  	
   

  
	
  BUILT-UP ROOF &
  GUTTERS, FLASHING

  	
  M,L,T

  	
   E

  	
   

  	
  35,000

  	
   

  
	
  BUILT-UP ROOF &
  GUTTERS, FLASHING

  	
  M,L,T

  	
   D

  	
   

  	
  20,250

  	
   

  
	
  METAL ROOF

  	
  STANDING SEAM

  	
  M,L,T

  	
   B,C

  	
   

  	
  153,000

  	
   

  
	
  METAL ROOF

  	
  AWNINGS

  	
  26 units

  	
  M,L,T

  	
   A,B,E

  	
   

  	
  82,000

  	
   

  
	
  METAL ROOF

  	
  CANOPY ENTRY

  	
  w/framing

  	
   A 

  	
   

  	
  7,900

  	
   

  
	
  METAL ROOF

  	
  ROOF OVER HVAC/AIR
  COMPRESSOR

  	
   B 

  	
   

  	
  8,000

  	
   

  
	
  CARPORT FOOTINGS

  	
  16

  	
  CANOPY FOOTINGS

  	
  6

  	
   A 

  	
   

  	
  3,500

  	
   

  
	
  CARPORT
  ROOFING/STANDING SEAM

  	
  M&T&L

  	
   

  	
   

  	
  46,000

  	
   

  
	
  CARPORT

  	
  FRAMING

  	
  M&T&L

  	
   

  	
   

  	
  28,000

  	
   

  
	
  CARPORT STEEL COLUMNS &
  TUBING & FRAMING

  	
  ONLY 2

  	
   

  	
   

  	
  16,000

  	
   

  
	
  CARPORT W/ CMU AND
  LIMESTONE

  	
  ROUNDED SCREEN

  	
   

  	
   

  	
  2,000

  	
   

  
	
  CARPORT FOOTINGS

  	
  16

  	
  CANOPY FOOTINGS

  	
  6

  	
   A 

  	
   

  	
  3,500

  	
   

  
	
  CARPORT
  ROOFING/STANDING SEAM

  	
  M&T&L

  	
   

  	
   

  	
  46,000

  	
   

  
	
  CARPORT

  	
  FRAMING

  	
  M&T&L

  	
   

  	
   

  	
  28,000

  	
   

  
															

 

1

 

	
  CARPORT STEEL COLUMNS &
  TUBING & FRAMING 

  	
  ONLY 2

  	
   

  	
   

  	
  16,000

  	
   

  
	
  CARPORT W/ CMU AND
  LIMESTONE

  	
  ROUNDED SCREEN

  	
   

  	
   

  	
  2,000

  	
   

  
	
  EXTERIOR WALL FRAMING
  FOR CANOPY COLUMNS

  	
   A

  	
   

  	
  1,000

  	
   

  
	
  EXTERIOR WALL FRAMING &
  DENS GLASS

  	
   A

  	
   

  	
  8,300

  	
   

  
	
  LINER PANEL SHOP WALLS

  	
  200 LF

  	
  10’ HIGH

  	
  M&L&T

  	
   B

  	
   

  	
  7,400

  	
   

  
	
  INTERIOR-STUDS, SR, TF,
  PAINT, INSUL, CAB, CEILING, DOORS

  	
   

  	
   

  	
   

  	
   

  
	
  INCLUDES GRAN/SSC TOPS,
  PLAM IN WORK AREAS

  	
   A

  	
   

  	
  597,000

  	
   

  
	
  INTERIOR-STUDS, SR, TF,
  PAINT, INSUL, CAB, CEILING, DOORS

  	
   

  	
   

  	
   

  	
   

  
	
  INCLUDE  LAMINATES CAB SURFACES AND TOPS

  	
   E

  	
   

  	
  175,000

  	
   

  
	
  UPGRADE TO SOLID
  SURFACE TOPS

  	
  355 SF

  	
   E

  	
   

  	
  19,000

  	
   

  
	
  INTERIOR-STUDS, SR, TF,
  PAINT, INSUL, CAB, CEILING, DOORS

  	
   B

  	
   

  	
  16,000

  	
   

  
	
  ADD FOR ACCENT COLORS
  IN EXEC. OFFICES

  	
   

  	
   

  	
  4,000

  	
   

  
	
  PLUMBING

  	
  AND FIXTURES

  	
  M&L&T

  	
   

  	
   

  	
  210,000

  	
   

  
	
  ELECTRICAL

  	
  M&T&L

  	
   

  	
   

  	
  500,000

  	
   

  
	
  ELECTRICAL FIXTURE
  ALLOWANCE

  	
  incls. Site poles, etc.

  	
   

  	
   

  	
  150,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HVAC

  	
   

  	
   

  	
  455,000

  	
   

  
	
  AER0-K FIRE
  SUPPRESSION-SERVER ROOM

  	
   

  	
   

  	
  15,000

  	
   

  
	
  SPRINKLER SYSTEMS

  	
  1.75 SF +

  	
   A & E

  	
   

  	
  125,000

  	
   

  
	
  FIRE STOPPING 

  	
  AND CAULK ALL STUD BASE
  PLATES

  	
   A,B,E,C,D

  	
   

  	
  10,000

  	
   

  
	
  FIRE PROOFING

  	
  STEEL WITH MONOKOTE

  	
   

  	
   

  	
  0

  	
   

  
	
  FIRE LINE LOOPING

  	
   

  	
   

  	
  0

  	
   

  
	
  DOCK BAY DOORS

  	
  10-16X16,3-14X14,1-10X10

  	
  M,L,T

  	
   A & 
  B

  	
   

  	
  72,000

  	
   

  
	
  DOCK LEVELER-RITE HITE

  	
  M,L,T

  	
   A

  	
   

  	
  5,800

  	
   

  
	
  WHS GUARD RAILING
  SYS  117 LF

  	
  M,L,T

  	
   A

  	
   

  	
  8,500

  	
   

  
	
  COLUMN GUARDS, 

  	
  7

  	
  295 EA

  	
  M,L,T

  	
   A

  	
   

  	
  2,065

  	
   

  
	
  BIG  FAN INSTALLED

  	
  M,L,T

  	
   A

  	
   

  	
  7,300

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CABLING  IT INFRASTRUCTURE   fiber optic connect

  	
  M & T& L

  	
   

  	
   

  	
  90,000

  	
   

  
	
  WASH BAY

  	
  Equip.

  	
   

  	
   

  	
  33,000

  	
   

  
	
  ACCENT WALL VERTICAL
  TILE

  	
  LABOR

  	
  25 LF

  	
   

  	
   

  	
  850

  	
   

  
	
  ACCENT WALL VERTICAL
  TILE

  	
  M&T

  	
  5.99 SF

  	
   

  	
   

  	
  1,600

  	
   

  
	
  CARPET  45,000SF 
  add 20% extra future  1.07 SF + M&F&T

  	
   

  	
   

  	
  53,500

  	
   

  
	
  CARPET LABOR

  	
  38,000 SF

  	
  .55 SF

  	
   

  	
   

  	
  20,900

  	
   

  
	
  VINYL

  	
  .63 SF +

  	
  M&F&T

  	
   10,000 SF

  	
   

  	
  6,900

  	
   

  
	
  VINYL

  	
  LABOR  1.00 SF est

  	
  M&T&L

  	
   

  	
   

  	
  10,000

  	
   

  
	
  LOBBY FLOOR TILE

  	
  11.88 SF +

  	
  M&F&T

  	
   2440 
  SF

  	
   

  	
  32,000

  	
   

  
	
  BATH/LOCKERS/HOTEL TILE
  FLOOR

  	
  1.43 SF

  	
  M,T,F,T

  	
   3000 SF

  	
   

  	
  4,660

  	
   

  
	
  SHOWER TILE &
  WALL TILE    2.00 SF +  

  	
  M&F&T

  	
  3,900

  	
   

  	
  8,600

  	
   

  
	
  MISCEL. TILE
  MATERIALS        TRIM, BASE, MORTAR,
  SAND

  	
   

  	
   

  	
  2,500

  	
   

  
	
  TILE LABOR

  	
   ALL

  	
   

  	
  30,000

  	
   

  
	
  TILE AT VESTIBULE

  	
  M&T

  	
   

  	
   

  	
  1,400

  	
   

  
	
  SECURITY &
  FIRE ALARMS       CCTV

  	
  CARD READERS

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ALLOWANCE

  	
   

  	
   

  	
  75,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CONVAULT TANK
  INSTALLATION

  	
   

  	
   

  	
  20,000

  	
   

  
	
  CRANE

  	
  10 TON

  	
  40 ft span  x  100  M&L&T

  	
   

  	
   

  	
  58,000

  	
   

  
	
  ELEVATOR

  	
  2

  	
  M&L&T

  	
   A & E

  	
   

  	
  80,000

  	
   

  
	
  EXTERIOR KITCHEN
  CAB & COUNTERTOPS

  	
  ALLOW

  	
   

  	
   

  	
  20,000

  	
   

  
	
  EXT. COV. ARBOR
  W/METAL ROOF

  	
  ALLOW

  	
  M&T&L

  	
   

  	
   

  	
  60,000

  	
   

  
	
  WROUGHT IRON
  FENCE TO LOT LINE

  	
  AT PATIO

  	
   

  	
   

  	
  7,000

  	
   

  
																			

 

2

 

	
  LAB, ENGINE
  REPAIR RM SHELVES & CAB

  	
   

  	
   

  	
  2000

  	
   

  
	
  LOBBY GLASS
  ENTRY          DOORS, WINDOWS

  	
  M&L&T

  	
   

  	
   

  	
  215,000

  	
   

  
	
  ADA DRINKING
  FOUNTAINS

  	
  2

  	
  M&L&T

  	
   

  	
   

  	
  750

  	
   

  
	
  WROUGHT IRON
  FENCING

  	
  AT HOTEL

  	
  M&L&T

  	
   

  	
   

  	
  35,000

  	
   

  
	
  PERIMETER
  FENCING

  	
  plus 3 auto car &
  man gates

  	
   

  	
   

  	
   

  	
  85,000

  	
   

  
	
  HANDICAP
  PAINTING & SIGNS    8 EA    210 EA       M&L&T

  	
   

  	
   

  	
  1,900

  	
   

  
	
  STAIN &
  SEAL CONCRETE    23,600 SF    .50 SF          M&L&T

  	
   A&B&D

  	
   

  	
  11,750

  	
   

  
	
  EXTERIOR
  PAINT-TILT, STEEL, STUCCO, DOORS

  	
  M&L&T

  	
   ALL

  	
   

  	
  60,000

  	
   

  
	
  PARKING LANE
  PAINTING

  	
  6500     .18
  LF

  	
  M&L&T

  	
   

  	
   

  	
  1,300

  	
   

  
	
  FIRE LANE
  PAINTING & STENCILING    125 @
  8.ea

  	
  M&L&T

  	
   

  	
   

  	
  1,200

  	
   

  
	
  WASH BAY
  PLUMBING   

  	
  DRAINS-PATIO

  	
  NIB

  	
   

  	
   

  	
  2,000

  	
   

  
	
  MONUMENT SIGN

  	
  ALLOWANCE

  	
   

  	
   

  	
  15,000

  	
   

  
	
  LANDSCAPING

  	
  ALLOWANCE

  	
   

  	
   

  	
  80,000

  	
   

  
	
  IRRIGATION

  	
  ALLOWANCE

  	
   

  	
   

  	
  25,000

  	
   

  
	
  WALLPAPER

  	
  ALLOWANCE

  	
   

  	
   

  	
  3,500

  	
   

  
	
  SHOWER DOORS

  	
  ALLOWANCE

  	
   

  	
   

  	
  1,300

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BUILDERS
  RISK 

  	
   

  	
   

  	
  32000

  	
   

  
	
  WORKERS COMP-INS

  	
   

  	
   

  	
   

  	
   

  
	
  GENERAL
  LIABILITY INS

  	
   

  	
   

  	
  60,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Sub Total

  	
   

  	
   

  	
  8,631,026

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Add .05%  FOR 
  INFLATION, CHANGES, UNKNOWNS

  	
   

  	
   

  	
   

  	
   

  
	
  MISSING ITEMS,
  PROBLEMS ENCOUNTERED - CONTINGENCIES

  	
  0.05

  	
   

  	
  431,551

  	
   

  
	
   

  	
  TOTAL

  	
   

  	
   

  	
  $

  	
  9,062,577

  	
   

  
	
   

  	
  Loan Amount

  	
   

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
   

  	
  Borrower’s Cash
  Portion

  	
   

  	
  $

  	
  1,562,577

  	
   

  
										

 

Lender may withhold from an Advance or, on account of
subsequently discovered evidence, withhold from a later Advance under this
Agreement or require Borrower to repay to Lender the whole or any part of any
earlier Advance to such extent as may be necessary to protect Lender from loss
on account of (a) defective work not remedied or requirements of this
Agreement not performed, (b) liens filed or reasonable evidence indicating
probable filing of liens, (c) failure of Borrower to make payments to
subcontractors for material or labor, or (d) a reasonable doubt that the
construction can be completed for the balance of the Loan Amount then
undisbursed.  When all such grounds are
removed, payment shall be made of any amount so withheld because of them.

 

3

 

EXHIBIT “C”

 

Affidavit of Completion

 

BEFORE ME, the undersigned authority, on this day
personally appeared                              
(“Affiant”), as                          
of GLOBAL GEOPHYSICAL SERVICES, INC., a Texas corporation (“Owner”), known to
me to be the person whose name is subscribed below, and who, being by me first
duly sworn, did his oath state as follows:

 

1.             Owner.  The name and
address of Owner are:

 

GLOBAL GEOPHYSICAL SERVICES, INC.

3535 Briarpark Drive, Suite 200

Houston, Texas 77042

 

2.             Contractor.  The name and
address of the original contractor (“Contractor”) are:

 

 

 

 

 

3.             Improvements.  The
improvements (“Improvements”), which are being, or will be, constructed
on the Land are generally described as follows: 
consisting of an office building of approximately                         
sq. ft. to be located on the property (“Land”) described in Schedule “A”
attached hereto.

 

4.             Real Property.  Owner is the
owner of the real property (“Real Property”) situated in Harris County,
Texas, on which the Improvements were constructed and are located, which Real
Property is more particularly described as follows:

 

See Schedule “A”
attached hereto and incorporated herein by reference for all purposes.

 

5.             Completion.  The
Improvements under the Contract between Owner and Contractor have been completed
within the meaning of Texas  Property  Code §53.106(e), and
the date of such completion was                              ,
200     (“Date of Completion”).

 

6.             Affiant.  The Affiant
is an authorized representative of Owner and has been duly authorized to execute
this Affidavit of Completion and cause it to be recorded with the County Clerk
of the county in which the Real Property is situated.

 

NOTICE:  A CLAIMANT MAY NOT
HAVE A LIEN ON RETAINED FUNDS UNLESS THE CLAIMANT FILES THE AFFIDAVIT CLAIMING
A LIEN NOT LATER THAN THE 30TH DAY AFTER THE DATE OF COMPLETION.

 

1

 

DATED as of the           
day of                            ,
20      .

 

	
   

  	
   

  	
  AFFIANT:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Print Name:

  	
   

  	
  ,

  
	
   

  	
   

  	
  who is an authorized representative of Owner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

SUBSCRIBED
AND SWORN BEFORE ME, on this the           
day of                    ,
20     .

 

 

	
  [SEAL]

  	
   

  	
   

  
	
   

  	
   

  	
  Notary Public, State of Texas

  
	
  My Commission Expires:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Printed or Typed Name of Notary

  

 

2

 

SCHEDULE 3.8

 

Exceptions to
Retainage

 

Structural Steel
Fabricator

 

Approximate amount
of contract $700,000.00

 

LBM Steel
Fabrication and Roof

 

Approximate amount
of contract $298,000.00

 

 

ANNEX I

 

Interest Rate Provisions

 

1.             Definitions.

 

(a)           Unless
otherwise defined in this Agreement, all capitalized terms used herein shall
have the meanings given such terms in this Agreement.

 

(b)           The
following terms are additionally defined for purposes of this Agreement and, as
with all other provisions herein, shall be deemed to be incorporated into the
Rate Option Note (as that term is defined herein) for all purposes.  This Annex I shall control in the event
any of the following terms are otherwise defined in the Agreement.

 

“Applicable CMT (Treasury)
Rate” shall mean the 10-year U.S. Treasury Note held to a constant
maturity date as quoted in the Money Rate Section of The Wall
Street Journal thirty (30) days prior to the Maturity Date plus TWO
PERCENT (2%).

 

“Applicable Prime Rate”
shall mean the Prime Rate minus FIFTY HUNDREDTHS PERCENT (0.5%).

 

“Prime Rate”
shall mean the prime rate from time to time announced by the Lender, as it
changes from time to time.  The prime
rate of the Lender is an index only and is not necessarily the lowest rate
charged by the Lender to its customers.

 

“Rate Option Note”
shall mean the $7,500,000.00 Note described in the Agreement.

 

2.             Interest
Rate Prior to Event of Default. 
Notwithstanding anything in the Loan Agreement or the Rate Option Note
to the contrary, prior to the occurrence of an Event of Default, the
outstanding principal balance of the Rate Option Note shall bear interest at
the Applicable Prime Rate prior to the Maturity Date and, so long as the
Extended Rate Option is available and exercised, after the Maturity Date at the
Applicable CMT (Treasury) Rate.

 

3.             Regulatory
Changes.  Borrower agrees to
reimburse the Lender upon demand for any costs, taxes or other charges
applicable to the Lender by reason of any regulatory change occurring after the
date of this Agreement with respect to loans bearing interest at a LIBOR
Rate.  This reimbursement obligation is
in addition to any other reimbursement obligations of Borrower under this
Agreement or the Rate Option Note.

 

1Exhibit 10.10

 

Executed Version

 

 

 

FIRST LIEN
CREDIT AGREEMENT

 

dated as of

 

January 16,
2008,

 

among

 

GLOBAL
GEOPHYSICAL SERVICES, INC.,

 

THE LENDERS
PARTY HERETO

 

and

 

CREDIT SUISSE,

as
Administrative Agent and Collateral Agent

 

 

CREDIT SUISSE
SECURITIES (USA) LLC

and

JEFFERIES
FINANCE LLC,

as Joint
Bookrunners and Co-Lead Arrangers

 

WHITNEY
NATIONAL BANK,

as Syndication
Agent

 

and

 

ALLIED IRISH
BANKS PLC,

as
Documentation Agent

 

 

 

 

TABLE OF CONTENTS

 

	
   

  	
  PAGE

  
	
  ARTICLE 1

  	
   

  
	
  DEFINITIONS

  	
   

  
	
   

  	
   

  
	
  Section 1.01. Defined Terms

  	
  1

  
	
  Section 1.02. Terms Generally

  	
  25

  
	
  Section 1.03. Pro Forma Calculations

  	
  26

  
	
  Section 1.04. Classification of
  Loans and Borrowings

  	
  26

  
	
  Section 1.05. Senior Debt

  	
  27

  
	
   

  	
   

  
	
  ARTICLE 2

  	
   

  
	
  THE CREDITS

  	
   

  
	
   

  	
   

  
	
  Section 2.01. Commitments

  	
  27

  
	
  Section 2.02. Loans

  	
  27

  
	
  Section 2.03. Borrowing Procedure

  	
  29

  
	
  Section 2.04. Evidence of Debt;
  Repayment of Loans

  	
  30

  
	
  Section 2.05. Fees

  	
  31

  
	
  Section 2.06. Interest on Loans

  	
  32

  
	
  Section 2.07. Default Interest

  	
  32

  
	
  Section 2.08. Alternate Rate of
  Interest

  	
  32

  
	
  Section 2.09. Termination and
  Reduction of Commitments

  	
  33

  
	
  Section 2.10. Conversion and
  Continuation of Borrowings

  	
  34

  
	
  Section 2.11. Repayment of Term
  Borrowings

  	
  35

  
	
  Section 2.12. Optional Prepayment

  	
  36

  
	
  Section 2.13. Mandatory Prepayments

  	
  36

  
	
  Section 2.14. Reserve Requirements;
  Change in Circumstances

  	
  40

  
	
  Section 2.15. Change in Legality

  	
  41

  
	
  Section 2.16. Indemnity

  	
  42

  
	
  Section 2.17. Pro Rata Treatment

  	
  42

  
	
  Section 2.18. Sharing of Setoffs

  	
  43

  
	
  Section 2.19. Payments

  	
  43

  
	
  Section 2.20. Taxes

  	
  44

  
	
  Section 2.21. Assignment of Commitments
  Under Certain Circumstances; Duty to Mitigate

  	
  45

  
	
  Section 2.22. Swingline Loans

  	
  47

  
	
  Section 2.23. Letters of Credit

  	
  48

  
	
   

  	
   

  

 

i

 

	
  ARTICLE 3

  	
   

  
	
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  
	
  Section 3.01. Organization; Power;
  Qualification

  	
  53

  
	
  Section 3.02. Ownership

  	
  54

  
	
  Section 3.03. Authorization of Agreement, Loan Documents and
  Borrowing

  	
  54

  
	
  Section 3.04. Compliance of
  Agreement, Loan Documents and Borrowing With Laws, Etc

  	
  54

  
	
  Section 3.05. Compliance with Law;
  Governmental Approvals

  	
  55

  
	
  Section 3.06. Tax Returns and
  Payments

  	
  55

  
	
  Section 3.07. Intellectual Property
  Matters

  	
  55

  
	
  Section 3.08. Environmental Matters

  	
  56

  
	
  Section 3.09. ERISA

  	
  57

  
	
  Section 3.10. Use of Proceeds; Margin
  Stock.

  	
  58

  
	
  Section 3.11. Government Regulation

  	
  58

  
	
  Section 3.12. Material Contracts

  	
  58

  
	
  Section 3.13. Employee Relations

  	
  59

  
	
  Section 3.14. Burdensome Provisions

  	
  59

  
	
  Section 3.15. Financial Statements

  	
  59

  
	
  Section 3.16. No Material Adverse
  Change

  	
  60

  
	
  Section 3.17. Solvency

  	
  60

  
	
  Section 3.18. Titles to Properties

  	
  60

  
	
  Section 3.19. Liens

  	
  60

  
	
  Section 3.20. Debt and Guaranty
  Obligations

  	
  60

  
	
  Section 3.21. Litigation

  	
  60

  
	
  Section 3.22. Absence of Defaults

  	
  61

  
	
  Section 3.23. Senior Debt Status

  	
  61

  
	
  Section 3.24. Accuracy and
  Completeness of Information

  	
  61

  
	
  Section 3.25. Sanctioned Persons

  	
  61

  
	
  Section 3.26. Insurance

  	
  62

  
	
  Section 3.27. Security Documents

  	
  62

  
	
   

  	
   

  
	
  ARTICLE 4

  	
   

  
	
  CONDITIONS OF LENDING

  	
   

  
	
   

  	
   

  
	
  Section 4.01. All Credit Events

  	
  63

  
	
  Section 4.02. First Credit Event

  	
  64

  
	
   

  	
   

  
	
  ARTICLE 5

  	
   

  
	
  AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
   

  
	
  Section 5.01. Financial Statements,
  Reports, Etc

  	
  67

  
	
  Section 5.02. Notice of Litigation
  and Other Matters

  	
  69

  
	
  Section 5.03. Accuracy of
  Information

  	
  71

  
	
  Section 5.04. Preservation of
  Corporate Existence and Related Matters

  	
  71

  
	
  Section 5.05. Maintenance of
  Property

  	
  71

  
	
  Section 5.06. Insurance

  	
  72

  

 

ii

 

	
  Section 5.07. Accounting Methods and
  Financial Records

  	
  72

  
	
  Section 5.08. Payment and
  Performance of Obligations

  	
  72

  
	
  Section 5.09. Compliance with Laws
  and Approvals

  	
  73

  
	
  Section 5.10. Environmental Laws

  	
  73

  
	
  Section 5.11. ERISA

  	
  74

  
	
  Section 5.12. Compliance with
  Agreements

  	
  74

  
	
  Section 5.13. Visits and Inspections

  	
  74

  
	
  Section 5.14. Additional
  Subsidiaries; Collateral

  	
  75

  
	
  Section 5.15. Interest Rate
  Contracts

  	
  77

  
	
  Section 5.16. Use of Proceeds

  	
  77

  
	
  Section 5.17. Further Assurances

  	
  77

  
	
  Section 5.18. Ratings

  	
  77

  
	
  Section 5.19. Information Regarding
  Collateral

  	
  77

  
	
   

  	
   

  
	
  ARTICLE 6

  	
   

  
	
  NEGATIVE COVENANTS

  	
   

  
	
   

  	
   

  
	
  Section 6.01. Limitations on Debt

  	
  78

  
	
  Section 6.02. Limitations on Liens

  	
  80

  
	
  Section 6.03. Limitations on Loans,
  Advances, Investments and Acquisitions

  	
  82

  
	
  Section 6.04. Limitations on Mergers
  and Liquidation

  	
  85

  
	
  Section 6.05. Limitations on Sale of
  Assets

  	
  85

  
	
  Section 6.06. Limitations on
  Dividends and Distributions

  	
  86

  
	
  Section 6.07. Limitations on
  Exchange and Issuance of Capital Stock

  	
  88

  
	
  Section 6.08. Transactions with
  Affiliates

  	
  88

  
	
  Section 6.09. Certain Accounting
  Changes; Organizational Documents

  	
  89

  
	
  Section 6.10. Amendments; Payments
  and Prepayments of Certain Debt

  	
  89

  
	
  Section 6.11. Restrictive Agreements

  	
  90

  
	
  Section 6.12. Nature of Business

  	
  91

  
	
  Section 6.13. Capital Expenditures

  	
  91

  
	
  Section 6.14. Sale and Lease-Back
  Transactions

  	
  91

  
	
  Section 6.15. Assets of Non-Loan
  Parties

  	
  91

  
	
  Section 6.16. Total Leverage Ratio

  	
  92

  
	
  Section 6.17. Interest Coverage
  Ratio

  	
  92

  
	
   

  	
   

  
	
  ARTICLE 7

  	
   

  
	
  EVENTS OF DEFAULT

  	
   

  
	
   

  	
   

  
	
  Section 7.01. Events of Default

  	
  92

  
	
  Section 7.02. Borrower’s Right to
  Cure

  	
  95

  

 

iii

 

	
  ARTICLE 8

  	
   

  
	
  THE ADMINISTRATIVE AGENT AND THE COLLATERAL
  AGENT

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ARTICLE 9

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  Section 9.01. Notices

  	
  99

  
	
  Section 9.02. Survival of Agreement

  	
  100

  
	
  Section 9.03. Binding Effect

  	
  100

  
	
  Section 9.04. Successors and Assigns

  	
  100

  
	
  Section 9.05. Expenses; Indemnity

  	
  105

  
	
  Section 9.06. Right of Setoff

  	
  108

  
	
  Section 9.07. Applicable Law

  	
  108

  
	
  Section 9.08. Waivers; Amendment

  	
  108

  
	
  Section 9.09. Interest Rate
  Limitation

  	
  110

  
	
  Section 9.10. Entire Agreement

  	
  110

  
	
  Section 9.11. WAIVER OF JURY TRIAL

  	
  110

  
	
  Section 9.12. Severability

  	
  111

  
	
  Section 9.13. Counterparts

  	
  111

  
	
  Section 9.14. Headings

  	
  111

  
	
  Section 9.15. Jurisdiction; Consent
  to Service of Process

  	
  111

  
	
  Section 9.16. Confidentiality

  	
  112

  
	
  Section 9.17. USA PATRIOT ACT Notice

  	
  112

  

 

	
  SCHEDULES

  
	
   

  
	
   

  
	
  Schedule
  1.01(a)

  	
  -

  	
  Existing Letters of Credit

  
	
  Schedule
  1.01(b)

  	
  -

  	
  Mortgaged Property

  
	
  Schedule
  2.01

  	
  -

  	
  Lenders and Commitments

  
	
  Schedule
  3.01

  	
  -

  	
  Organization; Power; Qualification

  
	
  Schedule
  3.02

  	
  -

  	
  Ownership

  
	
  Schedule
  3.09

  	
  -

  	
  ERISA

  
	
  Schedule
  3.12

  	
  -

  	
  Breaches and Defaults under Material Contracts

  
	
  Schedule
  3.13

  	
  -

  	
  Labor Union

  
	
  Schedule  3.18

  	
  -

  	
  Real Property

  
	
  Schedule
  3.20

  	
  -

  	
  Debt and Guaranty Obligations

  
	
  Schedule
  3.21

  	
  -

  	
  Litigation

  
	
  Schedule
  3.26

  	
  -

  	
  Insurance

  
	
  Schedule
  3.27(a)

  	
  -

  	
  UCC Filing Offices

  
	
  Schedule
  3.27(c)

  	
  -

  	
  Mortgage Filing Offices

  
	
  Schedule
  3.27(d)

  	
  -

  	
  Vessel Mortgage Filing Offices

  
	
  Schedule
  6.02

  	
  -

  	
  Existing Liens

  

 

iv

 

	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  -

  	
  Form of Administrative Questionnaire

  
	
  Exhibit B

  	
  -

  	
  Form of Assignment and Acceptance

  
	
  Exhibit C

  	
  -

  	
  Form of Borrowing Request

  
	
  Exhibit D-1

  	
  -

  	
  Form of Collateral Agreement

  
	
  Exhibit D-2

  	
  -

  	
  Form of Guaranty Agreement

  
	
  Exhibit E

  	
  -

  	
  Form of Officer’s Compliance Certificate

  
	
  Exhibit F

  	
  -

  	
  Form of Opinion of Haynes and Boone, LLP

  
	
  Exhibit G

  	
  -

  	
  Form of Intercreditor Agreement

  
	
  Exhibit H

  	
  -

  	
  Form of Vessel Mortgage

  

 

v

 

FIRST LIEN CREDIT AGREEMENT dated as of January 16, 2008 among
GLOBAL GEOPHYSICAL SERVICES, INC., a Delaware corporation (the “Borrower”), the Lenders (as defined in Article 1), and
CREDIT SUISSE, as administrative agent (in such capacity, the “Administrative Agent”) and as collateral agent (in such
capacity, the “Collateral Agent”) for the
Lenders.

 

The Borrower has requested the Lenders to extend credit in the form of (a) Term
Loans (such term and each other capitalized term used but not defined in this
introductory statement having the meaning given it in Article 1) on the
Closing Date, in an aggregate principal amount of $120,000,000, and (b) Revolving
Loans at any time after the Closing Date and from time to time prior to the
Revolving Credit Maturity Date, in an aggregate principal amount at any time
outstanding not in excess of $30,000,000. 
The Borrower has requested the Swingline Lender to extend credit, at any
time after the Closing Date and from time to time prior to the Revolving Credit
Maturity Date, in the form of Swingline Loans, in an aggregate principal amount
at any time outstanding not in excess of $5,000,000.  The Borrower has requested the Issuing Bank
to issue Letters of Credit, in an aggregate face amount at any time outstanding
not in excess of $30,000,000, to support payment and performance obligations
incurred in the ordinary course of business by the Borrower and its
Subsidiaries.  The proceeds of the Term
Loans are to be used solely (v) to repay all amounts outstanding or due
under, and terminate, the Existing Credit Agreements, (w) to fund Capital
Expenditures expected to be incurred by the GGS Companies, (x) to pay
related fees and expenses, (y) to fund repurchases of shares of the
Borrower’s Class A Common Stock and Class B Common Stock to the
extent permitted under Section 6.06(e) and (z) for other general
corporate purposes.  The proceeds of the
Revolving Loans and the Swingline Loans are to be used solely for working
capital and other general corporate purposes of the Borrower and its
Subsidiaries.

 

The Lenders are willing to extend such credit to the Borrower, and the
Issuing Bank is willing to issue Letters of Credit for the account of the
Borrower, in each case on the terms and subject to the conditions set forth
herein.   Accordingly, the parties hereto
agree as follows:

 

ARTICLE 1

DEFINITIONS

 

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

 

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

 

 

“Adjusted LIBO Rate”
shall mean, with respect to any Eurodollar Borrowing for any Interest Period,
an interest rate per annum equal to the product of (a) the LIBO Rate in
effect for such Interest Period and (b) Statutory Reserves.

 

“Administrative Agent Fees”
shall have the meaning assigned to such term in Section 2.05(b).

 

“Administrative
Questionnaire” shall mean an Administrative Questionnaire in the
form of Exhibit A, or such other form as may be supplied from time to time
by the Administrative Agent.

 

“Affiliate” shall mean, with respect to
any Person, any other Person which directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such first Person or any of its Subsidiaries.  
The term “control” shall mean (a) the power to vote 10% or more of
the securities or other equity interests of a Person having ordinary voting
power, or (b) the possession, directly or indirectly, of any other power
to direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or otherwise.

 

“Aggregate Revolving Credit Exposure”
shall mean the aggregate amount of the Lenders’ Revolving Credit Exposures.

 

“Alternate Base Rate” shall mean, for
any day, a rate per annum equal to the greater of (a) the Prime Rate in
effect on such day and (b) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%.   If the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance with the
terms of the definition thereof, the Alternate Base Rate shall be determined
without regard to clause (b) of the preceding sentence until the
circumstances giving rise to such inability no longer exist.   Any change in the Alternate Base Rate due to
a change in the Prime Rate or the Federal Funds Effective Rate shall be effective
on the effective date of such change in the Prime Rate or the Federal Funds
Effective Rate, as the case may be.

 

“Applicable Law” shall mean all
applicable provisions of constitutions, laws, statutes, ordinances, rules,
treaties, regulations, permits, licenses, approvals, interpretations and orders
of courts or Governmental Authorities and all orders and decrees of all courts
and arbitrators.

 

“Applicable Percentage” shall mean, for
any day (a) with respect to any Eurodollar Term Loan, 4.75% per annum, (b) with
respect to any ABR Term Loan, 3.75% per annum and (c) with respect to any
Eurodollar Revolving Loan or ABR Revolving Loan, the applicable percentage set
forth below under the caption “Eurodollar
Spread—Revolving Loans” or “ABR Spread—Revolving

 

2

 

Loans”,
as the case may be, based upon the Total Leverage Ratio as of the relevant date
of determination:

 

	
  Total Leverage Ratio

  	
   

  	
  Eurodollar

  Spread –

  Revolving Loans

  	
   

  	
  ABR Spread -

  Revolving

  Loans

  	
   

  
	
  Category 1
  

  Equal to or greater than 2.00 to 1.00

  	
   

  	
  4.75

  	
  %

  	
  3.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category 2
  

  Equal to or greater than 1.75 to 1.00, but less than 2.00 to 1.00

  	
   

  	
  4.25

  	
  %

  	
  3.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category 3
  

  Equal to or greater than 1.50 to 1.00, but less than 1.75 to 1.00

  	
   

  	
  4.00

  	
  %

  	
  3.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category 4
  

  Equal to or greater than 1.25 to 1.00, but less than 1.50 to 1.00

  	
   

  	
  3.75

  	
  %

  	
  2.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category 5
  

  Less than 1.25 to 1.00

  	
   

  	
  3.50

  	
  %

  	
  2.50

  	
  %

  

 

Each change in the Applicable
Percentage resulting from a change in the Total Leverage Ratio shall be
effective with respect to all Loans and Letters of Credit outstanding on and
after the date of delivery to the Administrative Agent of the financial
statements and certificates required by Section 5.01(a) or 5.01(b) and
Section 5.01(d), respectively, indicating such change until the date
immediately preceding the next date of delivery of such financial statements
and certificates indicating another such change.   Notwithstanding the foregoing, until the
Borrower shall have delivered the financial statements and certificates
required by Section 5.01(a) and Section 5.01(d), respectively,
for the period ended March 31, 2008, the Total Leverage Ratio shall be
deemed to be in Category 1 for purposes of determining the Applicable
Percentage.  In addition, (a) at any
time during which the Borrower has failed to deliver the financial statements
and certificates required by Section 5.01(a) or 5.01(b) and Section 5.01(d),
respectively, or (b) at any time after the occurrence and during the
continuance of an Event of Default, the Total Leverage Ratio shall be deemed to
be in Category 1 for purposes of determining the Applicable Percentage.   In the event that any financial statement or
Compliance Certificate delivered pursuant to Section 5.01(a), 5.01(b) or
5.01(d) is inaccurate (regardless of whether this Agreement or the
Commitments are in effect when such inaccuracy is discovered), and such
inaccuracy, if corrected, would have led to the application of a higher
Applicable Percentage for any period (an “Applicable Period”)
than the Applicable Percentage applied for such Applicable Period, then (i) the
Borrower shall immediately deliver to the Administrative Agent a corrected
financial statement and a corrected Compliance Certificate for such Applicable
Period, (ii) the Applicable Percentage shall be determined based on the
corrected Compliance Certificate for such Applicable

 

3

 

Period, and (iii) the
Borrower shall immediately pay to the Administrative Agent the accrued
additional interest owing as a result of such increased Applicable Percentage
for such Applicable Period, which payment shall be promptly applied by the
Administrative Agent in accordance with Section 2.19.  The provisions of the immediately preceding
sentence shall not limit the rights of the Administrative Agent or the Lenders
with respect to Section 2.07 and Article 7 hereof.

 

“Applicable Period” shall have the
meaning assigned to such term in the definition of “Applicable Percentage”.

 

“Approved Fund” shall mean any Person
(other than a natural Person), including any special purpose entity, that is
(or will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business; provided, that such Person must be
administered or managed by (a) a Lender, (b) an Affiliate of a Lender
or (c) an entity or an Affiliate of an entity that administers or manages
a Lender.

 

“Arrangers” shall mean Credit Suisse
Securities (USA) LLC and Jefferies Finance LLC, in their capacities as co-lead
arrangers and joint bookrunners of the Loans hereunder.

 

 “Assignment
and Acceptance” shall mean an assignment and acceptance entered into
by a Lender and an assignee, and accepted by the Administrative Agent, in the
form of Exhibit B or such other form as shall be approved by the
Administrative Agent.

 

“Available Amount” shall mean, at any
time of determination, the cumulative amount of Excess Cash Flow for each
fiscal year commencing on or after January 1, 2008, and ending prior to
the time of determination that (a) was not or is not required to be
applied to prepay the Loans and/or cash collateralize Letters of Credit and/or
prepay loans under the Second Lien Credit Agreement as described in Section 2.13(f) and
(b) has not been utilized on or prior to the time of determination
pursuant to Section 6.03(c), Section 6.03(i), Section 6.05(h) or
Section 6.06(g).

 

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

 

“Borrower” shall mean Global Geophysical
Services, Inc., a Delaware corporation.

 

“Borrower Materials” shall have the
meaning assigned to such term in Section 5.02.

 

4

 

“Borrowing” shall mean (a) Loans of
the same Class and Type made, converted or continued on the same date and,
in the case of Eurodollar Loans, as to which a single Interest Period is in
effect, or (b) a Swingline Loan.

 

“Borrowing Request” shall mean a request
by the Borrower in accordance with the terms of Section 2.03 and
substantially in the form of Exhibit C, or such other form as shall be
approved by the Administrative Agent.

 

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

 

“Capital Expenditures” shall mean, for
any period, (a) the additions to property, plant and equipment and other
capital expenditures of the Borrower and its consolidated Subsidiaries that are
(or should be) set forth in a consolidated statement of cash flows of the
Borrower for such period prepared in accordance with GAAP and (b) obligations
in respect of Capital Leases incurred by the Borrower and its consolidated
Subsidiaries during such period; provided that
Capital Expenditures for any period shall not include (i) the purchase of any capital asset made within 365 days (or within an additional six
months if a binding agreement to reinvest is entered into with an entity that
is not an Affiliate within such 365-day period) of the sale of any asset to the
extent such purchase is effected with the proceeds of such sale made pursuant
to and in accordance with Section 2.13(d), (ii) the purchase of any
capital asset made within 365 days (or within an additional six months if a
binding agreement to reinvest is entered into with an entity that is not an
Affiliate within such 365-day period) of
the receipt of insurance or condemnation proceeds to the extent such purchase
is effected with such insurance or condemnation proceeds pursuant to and in
accordance with Section 2.13(e), (iii) any capital asset
acquired during such period as part of a Permitted Acquisition and (iv) any
capital asset purchased or acquired for consideration consisting of any
combination of (x) Equity Interests of the Borrower or (y) the then
Equity Proceeds Available Amount.

 

“Capital Lease” shall mean any lease of
any property by any Person as lessee, that should, in accordance with GAAP, be
classified and accounted for as a capital lease on a balance sheet of such
Person.  The amount of the obligations of
any Person under any Capital Lease shall be the capitalized amount thereof
determined in accordance with GAAP.

 

“Cash Equivalents” shall have the
meaning assigned to such term in Section 6.03(b).

 

A “Change in Control” shall be deemed
to have occurred if (a) any “person” or “group” (within the meaning of Rule 13d
5 of the Securities Exchange Act of 1934 as in effect on the date hereof),
other than any of the

 

5

 

Borrower’s shareholders of
record on the Closing Date (i) shall own, directly or indirectly,
beneficially or of record, shares representing more than 30% of the aggregate
ordinary voting power represented by the issued and outstanding capital stock
of the Borrower and the percentage of the aggregate ordinary voting power
acquired by such person or group exceeds the percentage of such voting power
owned by the Kelso Investors and their Affiliates (other than any portfolio
company) or (ii) shall have obtained the power (whether or not exercised)
to elect a majority of the members of the board of directors (or similar
governing body) of the Borrower, (b) a majority of the seats (other than
vacant seats) on the board of directors of the Borrower shall at any time be
occupied by persons who were neither (i) members of the board of directors
of the Borrower on the Closing Date, (ii) nominated by the board of
directors of the Borrower nor (iii) appointed by directors so nominated,
or (c) any change in control (or similar event, however denominated) with
respect to the Borrower or any Subsidiary shall occur under and as defined in
any indenture or agreement governing Subordinated Debt to which the Borrower or
any Subsidiary is a party.

 

“Change in Law”
shall mean (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or the
Issuing Bank (or, for purposes of Section 2.14, by any lending office of
such Lender or by such Lender’s or Issuing Bank’s holding company, if any) with
any request, guideline or directive (whether or not having the force of law) of
any Governmental Authority made or issued after the date of this Agreement.

 

“Class”, when
used in reference to any Loan or Borrowing, refers to whether such Loan, or the
Loans comprising such Borrowing, are Revolving Loans, Term Loans or Swingline
Loans and, when used in reference to any Commitment, refers to whether such
Commitment is a Revolving Credit Commitment, Term Loan Commitment or Swingline
Commitment.

 

“Closing Date”
shall mean the date of the first Credit Event.

 

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

 

“Collateral”
shall mean all the “Collateral” as
defined in any Security Document and shall also include the Mortgaged
Properties.

 

“Collateral Agreement”
shall mean the First Lien Collateral Agreement, substantially in the form of Exhibit D-1
hereto, among the Borrower, the Subsidiary Guarantors and the Collateral Agent
for the ratable benefit of the Secured Parties.

 

6

 

“Commitment”
shall mean, with respect to any Lender, such Lender’s Revolving Credit
Commitment, Term Loan Commitment and Swingline Commitment.

 

“Commitment Fee”
shall have the meaning assigned to such term in Section 2.05(a).

 

“Confidential Information
Memorandum” shall mean the Confidential Information Memorandum of
the Borrower dated December 2007.

 

“Credit Event”
shall have the meaning assigned to such term in Section 4.01.

 

“Credit Facilities”
shall mean the revolving credit, swingline, letter of credit and term loan
facilities provided for by this Agreement.

 

“Debt” of any
Person shall mean at any date and without duplication, the sum of the
following: (a) all liabilities, obligations and indebtedness for borrowed
money and all obligations evidenced by bonds, debentures, notes or other similar
instruments of such Person, (b) all obligations to pay the deferred
purchase price of property or services of such Person, excluding trade payables
arising in the ordinary course of business, and all obligations of such Person
under conditional sale or other title retention agreements relating to property
or assets purchased by such Person, (c) all obligations of such Person as
lessee under Capital Leases, (d) all Debt of any other Person secured by
(or for which the holder of such Debt has an existing right, contingent or
otherwise, to be secured by) a Lien on any asset of such Person, whether or not
the obligations secured thereby have been assumed; provided
that, if not assumed, the amount of Debt related thereto shall be limited to
the lesser of the amount of such obligations and the fair market value of such
assets securing such obligations, (e) all obligations, contingent or
otherwise, of such Person relative to the face amount of letters of credit,
whether or not drawn, including any reimbursement obligation in respect of any
Letter of Credit, and banker’s acceptances issued for the account of such
Person, (f) all net payment obligations incurred by such Person pursuant
to Financial Hedging Agreements and (g) all Guaranty Obligations of such
Person of any such obligation of the type described in clauses (a) – (f) hereof
of any other Person.  The Debt of any
Person shall include the Debt of any partnership in which such Person is a
general partner.

 

“Default” shall
mean any event or condition which upon notice, lapse of time or both would
constitute an Event of Default.

 

“Defaulting Lender”
shall mean any Revolving Credit Lender that has (a) defaulted in its
obligation to make a Revolving Loan or to fund its participation in a Letter of
Credit or Swingline Loan required to be made or funded by it hereunder, (b) notified
the Administrative Agent or a Loan Party in writing that it

 

7

 

does not intend to satisfy any
such obligation or (c) become insolvent or the assets or management of
which has been taken over by any Governmental Authority.

 

“dollars” or “$” shall mean lawful money of the United States of America.

 

“Domestic Subsidiaries”
shall mean all Subsidiaries incorporated or organized under the laws of the
United States of America, any State thereof or the District of Columbia.

 

“EBITDA” shall
mean, for any period, the sum of the following determined on a consolidated
basis, without duplication, for the GGS Companies:  (a) Net Income for such period plus (b) the
sum of the following, without duplication, to the extent deducted in
determining such Net Income: (i) income, property, foreign and franchise
taxes, (ii) Interest Expense, (iii) all amounts attributable to
amortization, depreciation and impairment of goodwill or other intangible
assets, (iv) extraordinary losses, other than any non-cash losses that
constitute an accrual of or reserve for future cash payments or amortization of
a prepaid cash item that was paid in a prior period, (v) unusual, non-recurring
or other non-cash charges, other than any non-cash charges that constitute an
accrual of or reserve for future cash payments or amortization of a prepaid
cash item that was paid in a prior period, (vi) unusual or non-recurring
cash charges in an aggregate amount not to exceed 5% of the amount of EBITDA
for such period prior to the adjustment provided for in this clause (provided that any such adjustment shall not be available
more than twice during the term of this Agreement), (vii) any fees, costs and
expenses related to the Transactions or any Permitted Acquisitions, (viii) any
fees, costs, expenses or other charges incurred in connection with any issuance
of Debt or Equity Interests by any GGS Company, and (ix) payments made
pursuant to earn-out provisions of acquisition agreements entered into in
connection with Permitted Acquisitions less (c) to the extent included in
determining such Net Income, interest income and any extraordinary, unusual or
non-recurring gains or other non-cash gains.

 

“Employee Benefit Plan”
shall mean any employee benefit plan within the meaning of Section 3(3) of
ERISA which (a) is maintained for employees of the Borrower or any ERISA
Affiliate or (b) has at any time within the preceding six years been
maintained for the employees of the Borrower or any current or former ERISA
Affiliate.

 

 “Environmental Claims” shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigations (other than internal
reports prepared by any Person in the ordinary course of business and not in
response to any third party action or request of any kind) or proceedings
relating in any way to any actual or alleged violation of or liability under
any Environmental Law or relating to any permit issued, or any approval given,
under any such Environmental Law, including any and all claims by Governmental
Authorities

 

8

 

for enforcement, cleanup,
removal, response, remedial or other actions or damages, contribution,
indemnification cost recovery, compensation or injunctive relief resulting from
Hazardous Materials or arising from alleged injury or threat of injury to human
health or the environment.

 

“Environmental Laws”
shall mean any and all federal, foreign, state, provincial and local laws,
statutes, ordinances, rules, regulations, permits, licenses, approvals,
interpretations and orders of courts or Governmental Authorities, relating to
the protection of human health or the environment, including requirements
pertaining to the manufacture, processing, distribution, use, treatment,
storage, disposal, transportation, handling, reporting, licensing, permitting,
investigation or remediation of Hazardous Materials.

 

“Equity Interests”
shall mean shares of capital stock, partnership interests, membership interests
in a limited liability company, beneficial interests in a trust or other equity
interests in any person, and any option, warrant or other right entitling the
holder thereof to purchase or otherwise acquire any such equity interest.

 

“Equity Proceeds
Available Amount” shall mean, at any
time of determination, the cumulative amount of Net Cash Proceeds of any
offering or sale of Equity Interests by the Borrower (other than to any GGS
Company) after the Closing Date and on or prior to the time of determination
that (a) was not or is not required to be applied to prepay the Loans
and/or cash collateralize Letters of Credit and/or prepay loans under the Second
Lien Credit Agreement as described in Section 2.13(c) and (b) has
not been utilized on or prior to the time of determination pursuant to clause
(iv)(y) of the proviso to the definition of “Capital Expenditures”, Section 6.03(c),
Section 6.03(i), Section 6.05(h), Section 6.06(h) or Section 6.15
or as a Specified Equity Contribution pursuant to Section 7.02 or as a “Specified
Equity Contribution” pursuant to Section 7.02 of the Second Lien Credit
Agreement.

 

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

 

“ERISA Affiliate”
shall mean any Person who together with the Borrower is treated as a single
employer within the meaning of Section 414(b), (c), (m) or (o) of
the Code or Section 4001(b) of ERISA.

 

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

 

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

 

9

 

“Excess Cash Flow”
shall mean, for any period of determination, the sum of the following
determined on a consolidated basis, without duplication, for the GGS Companies:
(a) EBITDA for such period, adjusted to exclude any gains or losses
attributable to any events as a result of which a prepayment of the Loans
and/or cash collateralization of the Letters of Credit and/or prepayment of
loans under the Second Lien Credit Agreement is required pursuant to Section 2.13(d) or
Section 2.13(e), minus (b) income, property, foreign and franchise
taxes payable in cash for such period, minus (c) Interest Expense (paid in
cash) during such period, minus (d) permanent repayments of Debt permitted
hereunder (other than mandatory prepayments of Loans and loans under the Second
Lien Credit Agreement under Section 2.13) made in cash by the GGS
Companies during such period, but only to the extent that the Debt so prepaid
by its terms cannot be reborrowed or redrawn and such prepayments do not occur
in connection with a refinancing of all or any portion of such Debt, minus (e) Capital
Expenditures made in cash in accordance with Section 6.13 during such
period, except to the extent financed with the proceeds of Debt (including, for
the avoidance of doubt, Debt previously or contemporaneously incurred under the
Loan Documents or the Second Lien Loan Documents) or equity issuances or other
proceeds that would not be included in EBITDA, minus (f) cash investments
in Permitted Acquisitions during such period, except to the extent financed
with the proceeds of Debt (including, for the avoidance of doubt, Debt
previously or contemporaneously incurred under the Loan Documents or the Second
Lien Loan Documents), equity issuances, casualty proceeds, condemnation
proceeds or other proceeds that would not be included in EBITDA, minus (g) cash
payments made during such period pursuant to earn-out provisions of acquisition
agreements entered into in connection with Permitted Acquisitions, minus (h) any
extraordinary, non-recurring or unusual charges, losses or expenses to the
extent paid in cash and added to Net Income in determining EBITDA for such period,
plus or minus (as applicable) (i) net changes in working capital during
such period (other than cash and Cash Equivalents), minus (j) any fees,
costs and expenses related to the Transactions and incurred during such period
and minus (k) any fees, costs, expenses or other cash charges incurred
during such period in connection with any issuance of Debt or Equity Interests
by any GGS Company.

 

“Excluded Taxes”
shall mean, with respect to the Administrative Agent, any Lender, the Issuing
Bank or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) income or franchise taxes
imposed on (or measured by) its net income by the United States of America, or
by the jurisdiction under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which
its applicable lending office is located, (b) any branch profits taxes
imposed by the United States of America or any similar tax imposed by any other
jurisdiction described in clause (a) above and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Borrower
under Section 2.21(a)), any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement (or

 

10

 

designates a new lending
office) or is attributable to such Foreign Lender’s failure to comply with Section 2.20(e),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new lending office (or assignment),
to receive additional amounts from the Borrower with respect to such
withholding tax pursuant to Section 2.20(a).

 

“Existing Credit Agreements”
shall mean, collectively, (i) the First Lien Credit Agreement dated as of February 7,
2007 among the Borrower, the lenders party thereto, and Credit Suisse, as
administrative agent and collateral agent, together with all collateral and
guarantee documents executed in connection therewith and (ii) the Second
Lien Credit Agreement dated as of February 7, 2007 among the Borrower, the
lenders party thereto, and Credit Suisse, as administrative agent and
collateral agent, together with all collateral and guarantee documents executed
in connection therewith, in each case as in effect immediately prior to the
Closing Date.

 

“Existing Letter of Credit”
shall mean each Letter of Credit previously issued for the account of the
Borrower that (a) is outstanding on the Closing Date and (b) is
listed on Schedule 1.01(a).

 

“FDIC” shall
mean the Federal Deposit Insurance Corporation, or any successor thereto.

 

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

 

“Fee Letter”
shall mean the Fee Letter dated December 3, 2007, among the Borrower, the
Arrangers and the Administrative Agent.

 

“Fees” shall
mean the fees payable hereunder, under any other Loan Document or under the Fee
Letter, including, without limitation, the Commitment Fees, the Administrative
Agent Fees, the L/C Participation Fees and the Issuing Bank Fees.

 

“Financial Covenants”
shall mean the covenants set forth in Sections 6.16 and 6.17.

 

“Financial Hedging
Agreement” shall mean any agreement with respect to any Interest
Rate Contract or Foreign Exchange Agreement, all as amended, restated,
supplemented or otherwise modified from time to time.

 

11

 

“Financial Hedging
Obligation” shall have the meaning assigned thereto in the
definition of “Obligations”.

 

“Financial Officer”
of any person shall mean the chief financial officer, principal accounting
officer, treasurer or controller of such person.

 

“Foreign Exchange Agreement”
shall mean any agreement with respect to any forward foreign exchange
agreement, currency swap agreement, cross-currency rate swap agreement,
currency option agreement or other agreement or arrangement designed to alter
the risks of any Person arising from fluctuations in currency values, all as
amended, restated, supplemented or otherwise modified from time to time.

 

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

 

“Foreign Subsidiary”
shall mean any Subsidiary that is not a Domestic Subsidiary.

 

“GAAP” shall
mean United States generally accepted accounting principles applied on a
consistent basis.

 

“GGS Companies”  shall mean the Borrower and the Subsidiaries.

 

“Governmental Approvals”
shall mean all authorizations, consents, approvals, licenses and exemptions of,
registrations and filings with, and reports to, all Governmental Authorities.

 

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

 

“Granting Lender”
shall have the meaning assigned to such term in Section 9.04(i).

 

“Guaranty Agreement”
shall mean the First Lien Guaranty Agreement, substantially in the form of Exhibit D-2
hereto, executed by the Subsidiary Guarantors in favor of the Administrative
Agent for the ratable benefit of itself and the other Secured Parties.

 

“Guaranty Obligation”
shall mean, with respect to any Person, without duplication, any obligation,
contingent or otherwise, of any such Person pursuant to which such Person has
directly or indirectly guaranteed any Debt or other obligation of any other
Person and, without limiting the generality of the

 

12

 

foregoing, any obligation,
direct or indirect, contingent or otherwise, of any such Person (a) to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Debt or other obligation (whether arising by virtue of partnership
arrangements, by agreement to keep well, to purchase assets, goods, securities
or services, to take-or-pay, or to maintain financial statement condition or
otherwise) or (b) entered into for the purpose of assuring in any other
manner the obligee of such Debt or other obligation of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in part); provided, that the term Guaranty Obligation shall not
include endorsements for collection or deposit in the ordinary course of
business.

 

“Hazardous Materials”
shall mean any substances or materials (a) which are or become defined as
hazardous wastes, hazardous substances, pollutants, contaminants, chemical
substances or mixtures or toxic substances under any Environmental Law, (b) which
are toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise harmful to human health or the environment
and are or become regulated by any Governmental Authority, (c) the
presence of which require investigation or remediation under any Environmental
Law or common law, (d) the discharge or emission or release of which
requires a permit or license under any Environmental Law or other Governmental
Approval, (e) which are deemed to constitute a nuisance or a trespass
which pose a health or safety hazard to Persons or neighboring properties, (f) which
consist of underground or aboveground storage tanks, whether empty, filled or
partially filled with any substance, or (g) which contain, without
limitation, asbestos, polychlorinated biphenyls, urea formaldehyde foam
insulation, petroleum hydrocarbons, petroleum derived substances or waste,
crude oil, nuclear fuel, natural gas or synthetic gas.

 

“Inactive Subsidiary” shall mean any
Subsidiary that (a) has assets with a book value not in excess of $100,000
and (b) does not have any Debt outstanding.

 

“Indemnified Taxes”
shall mean Taxes other than Excluded Taxes.

 

“Intercreditor Agreement”
shall mean the Intercreditor Agreement, substantially in the form of Exhibit G,
among the GGS Companies from time to time party thereto, the First Lien
Administrative Agent (as defined therein) and the Second Lien Administrative
Agent (as defined therein).

 

“Interest Coverage Ratio”
shall mean the ratio of (i) EBITDA for the period of four consecutive
fiscal quarters ending on or immediately prior to any date of determination to (ii) Interest
Expense paid in cash for the period of four consecutive fiscal quarters ending
on or immediately prior to such date of determination.

 

“Interest Expense”
shall mean, with respect to the GGS Companies for any period, the gross
interest expense paid or payable (including interest expense attributable to
Capital Leases and all net payment obligations pursuant to

 

13

 

Financial Hedging Agreements
and excluding the effect of any changes in fair value with respect to any
Financial Hedging Agreements) of the GGS Companies, all determined for such
period on a consolidated basis, without duplication.

 

“Interest Payment Date”
shall mean (a) with respect to any ABR Loan (including any Swingline
Loan), the last Business Day of each March, June, September and December and
(b) with respect to any Eurodollar Loan, the last day of the Interest
Period applicable to the Borrowing of which such Loan is a part and, in the
case of a Eurodollar Borrowing with an Interest Period of more than three
months’ duration, each day that would have been an Interest Payment Date had
successive Interest Periods of three months’ duration been applicable to such
Borrowing.

 

“Interest Period”
shall mean, with respect to any Eurodollar Borrowing, the period commencing on
the date of such Borrowing and ending on the numerically corresponding day (or,
if there is no numerically corresponding day, on the last day) in the calendar
month that is 1, 2, 3 or 6 months thereafter (or 9 or twelve months thereafter
if, at the time of such Borrowing, all Lenders participating therein agree to
make an interest period of such duration available), as the Borrower may elect;
provided, however,
that if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless
such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business
Day.   Interest shall accrue from and
including the first day of an Interest Period to but excluding the last day of
such Interest Period.  For purposes
hereof, the date of a Borrowing initially shall be the date on which such
Borrowing is made and thereafter shall be the effective date of the most recent
conversion or continuation of such Borrowing.

 

“Interest Rate Contract”
shall mean any interest rate swap agreement, interest rate cap agreement,
interest rate floor agreement, interest rate collar agreement, interest rate
option, forward rate agreement, any agreement or arrangement designed to alter
the risks of any Person arising from fluctuations in interest rates, or any
other agreement regarding the hedging of interest rate risk exposure executed
in connection with hedging the interest rate exposure of any Person and any
confirming letter executed pursuant to such agreement, all as amended,
restated, supplemented or otherwise modified from time to time.

 

“Issuing Bank”
shall mean, as the context may require, (a) Credit Suisse, acting through
any of its Affiliates or branches, in its capacity as the issuer of Letters of
Credit hereunder, (b) with respect to each Existing Letter of Credit, the
Lender that issued such Existing Letter of Credit, and (c) any other
Lender that may become an Issuing Bank pursuant to Section 2.23(i) or
Section 2.23(k), with respect to Letters of Credit issued by such
Lender.  The Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by
Affiliates or branches of the Issuing Bank, in which case the term “Issuing
Bank” shall include

 

14

 

any such Affiliate or branch
with respect to Letters of Credit issued by such Affiliate or branch.

 

“Issuing Bank Fees”
shall have the meaning assigned to such term in Section 2.05(c).

 

“Kelso Agreement”
shall mean that certain letter agreement between the Borrower and Kelso &
Company, L.P.  dated as of December 1,
2006, as in effect on the Closing Date.

 

“Kelso Investors”
shall mean Kelso Investment Associates VII, L.P.  and KEP VI, LLC.

 

“L/C Commitment”
shall mean the commitment of the Issuing Bank to issue Letters of Credit
pursuant to Section 2.23.

 

“L/C Disbursement”
shall mean a payment or disbursement made by the Issuing Bank pursuant to a
Letter of Credit.

 

“L/C Exposure”
shall mean at any time the sum of (a) the aggregate undrawn amount of all
outstanding Letters of Credit at such time and (b) the aggregate amount of
all L/C Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time.   The L/C Exposure
of any Revolving Credit Lender at any time shall equal its Pro Rata Percentage
of the aggregate L/C Exposure at such time.

 

“L/C Participation Fee”
shall have the meaning assigned to such term in Section 2.05(c).

 

“Lenders” shall
mean (a) the persons listed on Schedule 2.01 or in the Register on the
date hereof (other than any such person that has ceased to be a party hereto
pursuant to an Assignment and Acceptance) and (b) any person that has
become a party hereto pursuant to an Assignment and Acceptance.  Unless the context clearly indicates
otherwise, the term “Lenders” shall
include the Swingline Lender.

 

“Letter of Credit”
shall mean any letter of credit issued pursuant to Section 2.23 and any
Existing Letter of Credit.

 

“LIBO Rate”
shall mean, with respect to any Eurodollar Borrowing for any Interest Period,
the rate per annum determined by the Administrative Agent at approximately
11:00 a.m.  (London time) on the
date that is two Business Days prior to the commencement of such Interest
Period by reference to the British Bankers’ Association Interest Settlement
Rates for deposits in dollars (as set forth by the Bloomberg Information
Service or any successor thereto or any other service selected by the
Administrative Agent that has been nominated by the British Bankers’
Association as an authorized information vendor for the purpose

 

15

 

of displaying such rates) for a
period equal to such Interest Period; provided that,
to the extent that an interest rate is not ascertainable pursuant to the foregoing
provisions of this definition, the “LIBO Rate” shall be the interest rate per
annum determined by the Administrative Agent to be the average of the rates per
annum at which deposits in dollars are offered for such relevant Interest
Period to major banks in the London interbank market in London, England by the
Administrative Agent at approximately 11:00 a.m.  (London time) on the date that is two
Business Days prior to the beginning of such Interest Period.

 

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

 

“Loan Documents”
shall mean this Agreement, the Letters of Credit, the Security Documents and
the promissory notes, if any, executed and delivered pursuant to Section 2.04(e).

 

“Loan Parties”
shall mean the Borrower and the Subsidiary Guarantors.

 

“Loans” shall
mean the Revolving Loans, the Term Loans and the Swingline Loans.

 

“Material Adverse Effect”
shall mean (a) a materially adverse effect on the properties, business,
operations, operating results or condition (financial or otherwise) of the GGS
Companies, taken as a whole, (b) a material impairment of the ability of
either (x) the Borrower or (y) the Loan Parties, taken as a whole, to
perform any of its or their obligations under any Loan Document to which it or
they are or will be a party or (c) a material impairment of the rights and
remedies of or benefits available to the Lenders under the Loan Documents.

 

“Material Contract”
shall mean (a) any contract or other agreement, written or oral, of any
GGS Company involving monetary liability of or to any such Person in an amount
in excess of $2,500,000 per annum, or (b) any other contract or agreement,
written or oral, of any GGS Company the failure to comply with which could
reasonably be expected to have a Material Adverse Effect.

 

“Moody’s” shall
mean Moody’s Investors Service, Inc., or any successor thereto.

 

“Mortgaged Properties”
shall mean, initially, the owned real properties and leasehold and subleasehold
interests of the Loan Parties specified on Schedule 1.01(b) and shall
include each other parcel of real property and

 

16

 

improvements thereto with
respect to which a Mortgage is granted pursuant to Section 5.14 or Section 5.17.

 

“Mortgage Requirement”
shall have the meaning assigned to such term in Section 5.14(d).

 

“Mortgages”
shall mean the mortgages, deeds of trust, leasehold mortgages, assignments of
leases and rents, modifications and other security documents delivered pursuant
to Section 5.14 or Section 5.17, each in form and substance
reasonably acceptable to the Administrative Agent.

 

“Multiemployer Plan”
shall mean a “multiemployer plan” as defined in Section 4001(a)(3) of
ERISA to which the Borrower or any ERISA Affiliate is making, or is accruing an
obligation to make, or has accrued an obligation to make contributions within
the preceding six years.

 

“Net Cash Proceeds”
shall mean, as applicable, (a) with respect to any sale or other
disposition of assets, the gross cash proceeds received (including cash
proceeds subsequently received (as and when received) in respect of noncash
consideration initially received) by any GGS Company from such sale or other
disposition less the sum of (i) all income taxes and other taxes assessed
by a Governmental Authority as a result of such sale or other disposition and
any other reasonable fees, costs and expenses incurred in connection therewith
(including reasonable legal fees) and (ii) the principal amount of,
premium, if any, and interest on any Debt secured by a Lien on the asset (or a
portion thereof) sold or disposed, which Debt is required to be repaid in
connection with such sale or other disposition, (b) with respect to any
offering of any Equity Interest or issuance of Debt, the gross cash proceeds
received by any GGS Company therefrom less all legal and other customary
underwriting and other fees, costs and expenses incurred in connection
therewith and (c) with respect to any payment under an insurance policy or
in connection with a condemnation proceeding, the amount of cash proceeds
received by any GGS Company from an insurance company or Governmental
Authority, as applicable, net of all reasonable costs and expenses of
collection (including reasonable legal fees).

 

“Net Income”
shall mean, for any period of determination, the net income (or loss) of the
GGS Companies for such period, determined on a consolidated basis; provided that there shall be excluded from Net Income (a) the
net income (or loss) of any Person in which any GGS Company has a joint
interest with a third party (other than any director or other person holding
qualifying shares in accordance with applicable law), except to the extent such
net income is actually paid to the Borrower or any wholly owned GGS Company by
dividend or other distribution during such period, (b) the net income (or
loss) of any Person accrued prior to the date it becomes a Subsidiary or is
merged into or consolidated with any GGS Company or that Person’s assets are
acquired by any GGS Company except to the extent included pursuant to the
foregoing clause (a) and (c) the income of any Subsidiary to the
extent that the declaration or payment of 

 

17

 

dividends or similar
distributions by the Subsidiary of that income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, statute, rule or governmental regulation applicable to such
Subsidiary; and provided further that there shall
be excluded from Net Income any item of income or expense relating to change in
fair value of any Financial Hedging Agreement.

 

“Obligations”
shall mean, in each case, whether now in existence or hereafter arising: (a) the
principal of and premium, if any, and interest on (including interest accruing
after the filing of any bankruptcy or similar petition (or that would accrue
but for the operation of applicable bankruptcy or insolvency laws), regardless
of whether allowed or allowable in such proceeding) the Loans, (b) each
payment required to be made by the Borrower under this Agreement in respect of
any Letter of Credit, when and as due, including payments in respect of
reimbursement of disbursements, interest thereon (including interest accruing
after the filing of any bankruptcy or similar petition (or that would accrue
but for the operation of applicable bankruptcy or insolvency laws), regardless of
whether allowed or allowable in such proceeding) and obligations to provide
cash collateral, (c) all existing or future payment and other obligations
owing by the Borrower under any Financial Hedging Agreement (which such
Financial Hedging Agreement is permitted hereunder) with any Person that is an
Arranger or a Lender or an Affiliate of an Arranger or a Lender as of the date
hereof (but only in respect of any Financial Hedging Agreement outstanding as
of the date hereof) or at the time such Financial Hedging Agreement is executed
(all such obligations with respect to any such Financial Hedging Agreement, “Financial Hedging Obligations”) and (d) all other fees
and commissions (including reasonable attorneys’ fees), charges, indebtedness,
loans, liabilities, indemnities, financial accommodations, obligations,
covenants and duties owing by any GGS Company to the Lenders or the
Administrative Agent or the Collateral Agent (including any obligations
accruing after the filing of any bankruptcy or similar petition (or that would
accrue but for the operation of applicable bankruptcy or insolvency laws),
regardless of whether allowed or allowable in such proceeding), in each case
under or in respect of this Agreement, any promissory notes executed and
delivered pursuant to Section 2.04(e), any Letter of Credit or any of the
other Loan Documents of every kind, nature and description, direct or indirect,
absolute or contingent, due or to become due, liquidated or unliquidated, and
whether or not evidenced by any note.

 

“OFAC” shall
have the meaning assigned to such term in Section 3.25.

 

“Officer’s Compliance
Certificate” shall have the meaning assigned to such term in Section 5.01(d).

 

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

 

18

 

“Owned Real Property”
shall mean the real property owned by the Borrower and located at 13927 S.  Gessner, Missouri City, Texas, and intended
for use as the corporate headquarters of the Borrower.

 

“PBGC” shall
mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA.

 

“Pension Plan”
shall mean any Employee Benefit Plan, other than a Multiemployer Plan, which is
subject to the provisions of Title IV of ERISA or Section 412 of the Code
and which (a) is maintained for the employees of the Borrower or any ERISA
Affiliates or (b) has at any time within the preceding six years been
maintained for the employees of the Borrower or any of its current or former
ERISA Affiliates.

 

“Perfection Certificate”
shall mean the Perfection Certificate substantially in the form of Exhibit A
to the Collateral Agreement.

 

“Permitted Acquisition”
shall have the meaning assigned to such term in Section 6.03(c).

 

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

 

“Platform” shall
have the meaning assigned to such term in Section 5.02.

 

“Pledged Debt”
shall mean any debt instrument constituting Collateral under any of the
Security Documents.

 

“Pledged Equity”
shall mean any certificated equity security constituting Collateral under any
of the Security Documents.

 

“Prime Rate”
shall mean the rate of interest per annum determined from time to time by
Credit Suisse as its prime rate in effect at its principal office in New York
City and notified to the Borrower.

 

“Pro Rata Percentage”
of any Revolving Credit Lender at any time shall mean the percentage of the
Total Revolving Credit Commitment represented by such Lender’s Revolving Credit
Commitment.  In the event the Revolving
Credit Commitments shall have expired or been terminated, the Pro Rata
Percentages shall be determined on the basis of the Revolving Credit
Commitments most recently in effect, giving effect to any subsequent
assignments.

 

“Public Lender”
shall have the meaning assigned to such term in Section 5.02.

 

“Register” shall
have the meaning assigned to such term in Section 9.04(d).

 

19

 

“Regulation T”
shall mean Regulation T of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.

 

“Regulation U”
shall mean Regulation U of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.

 

“Regulation X”
shall mean Regulation X of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.

 

“Related Fund”
shall mean, with respect to any Lender that is a fund or commingled investment
vehicle that invests in bank loans, any other fund that invests in bank loans
and is managed or advised by the same investment advisor as such Lender or by
an Affiliate of such investment advisor.

 

 “Related Parties” shall mean, with respect to any specified
person, such person’s Affiliates and the respective directors, trustees,
officers, employees, agents, advisors and members of such person and such
person’s Affiliates.

 

“Repayment Date”
shall mean the last Business Day of each March, June, September and December and
the Term Loan Maturity Date.

 

“Required Lenders”
shall mean, at any time, Lenders having Loans (excluding Swingline Loans), L/C
Exposure, Swingline Exposure and unused Revolving Credit Commitments and Term
Loan Commitments representing more than 50% of the sum of all Loans outstanding
(excluding Swingline Loans), L/C Exposure, Swingline Exposure and unused
Revolving Credit Commitments and Term Loan Commitments at such time; provided that the Revolving Loans, L/C Exposure, Swingline
Exposure and unused Revolving Credit Commitments of any Defaulting Lender shall
be disregarded in the determination of the Required Lenders at any time.

 

“Responsible Officer”
of any person shall mean any executive officer or Financial Officer of such
person and any other officer or similar official thereof responsible for the
administration of the obligations of such person in respect of this Agreement.

 

“Revolving Credit Borrowing”
shall mean a Borrowing comprised of Revolving Loans.

 

“Revolving Credit
Commitment” shall mean, with respect to each Lender, the commitment
of such Lender to make Revolving Loans hereunder (and to acquire participations
in Swingline Loans and Letters of Credit as provided for herein) as set forth
on Schedule 2.01, or in the Assignment and Acceptance pursuant to which such
Lender assumed its Revolving Credit Commitment, as applicable, as the same may
be (a) reduced from time to time pursuant to Section 2.09 and (b) reduced
or increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04.

 

20

 

“Revolving Credit Exposure”
shall mean, with respect to any Lender at any time, the aggregate principal
amount at such time of all outstanding Revolving Loans of such Lender, plus the aggregate amount at such time of such Lender’s L/C
Exposure, plus the aggregate amount at such time of such Lender’s Swingline
Exposure.

 

“Revolving Credit Lender”
shall mean a Lender with a Revolving Credit Commitment or an outstanding
Revolving Loan.

 

“Revolving Credit Maturity
Date” shall mean the sixth anniversary of the Closing Date or, if
such date is not a Business Day, the immediately preceding Business Day.

 

“Revolving Loans”
shall mean the revolving loans made by the Lenders to the Borrower pursuant to Section 2.01(b).

 

“Second Lien Credit
Agreement” shall mean the Second Lien Credit Agreement dated as of
even date herewith, among the Borrower, the lenders from time to time party
thereto and Credit Suisse, as administrative agent and collateral agent, as
amended, restated, supplemented or otherwise modified from time to time in
accordance with the provisions hereof and of the Intercreditor Agreement.

 

“Second Lien Credit
Facility” shall mean the term loan facility provided for by the
Second Lien Credit Agreement.

 

“Second Lien Loan Documents”
shall mean the “Loan Documents” as defined in the Second Lien Credit Agreement.

 

“Second Priority Liens”
shall have the meaning assigned to such term in the Intercreditor Agreement.

 

“Secured Parties”
shall mean (a) the Lenders, (b) the Administrative Agent and the
Collateral Agent, (c) any Issuing Bank, (d) each counterparty to any
Financial Hedging Agreement with a GGS Company that either (i) is in
effect on the Closing Date if such counterparty is an Arranger or a Lender or
an Affiliate of an Arranger or a Lender as of the Closing Date or (ii) is
entered into after the Closing Date if such counterparty is an Arranger or a
Lender or an Affiliate of an Arranger or a Lender at the time such Financial
Hedging Agreement is entered into, (e) the beneficiaries of each
indemnification obligation undertaken by any GGS Company under any Loan
Document and (f) the successors and assigns of each of the foregoing.

 

“Security Documents”
shall mean the Guaranty Agreement, the Collateral Agreement, the Intercreditor
Agreement, the Mortgages, the Vessel Mortgages and each other agreement or
writing pursuant to which any GGS Company purports to pledge or grant a
security interest in any property or assets securing the Obligations or any
such Person purports to guaranty the payment 

 

21

 

and/or performance of the
Obligations (including pursuant to Section 5.14 or Section 5.17).

 

“Series A Preferred
Stock” shall mean the Series “A” Convertible Preferred Stock of
the Borrower, the terms and conditions of which are set forth in the Second
Amended and Restated Certificate of Designation dated December 1, 2006.

 

“Solvent” shall
mean, as to any Person on a particular date, that any such Person (a) has
capital sufficient to carry on its business and transactions and all business
and transactions in which it is about to engage and is able to pay its debts as
they mature, (b) owns property having a value, both at fair valuation and
at present fair saleable value, greater than the amount required to pay its
probable liabilities (including contingencies), and (c) does not believe
that it will incur debts or liabilities beyond its ability to pay such debts or
liabilities as they mature.

 

“SPC” shall have
the meaning assigned to such term in Section 9.04(i).

 

“S&P” shall
mean Standard & Poor’s Ratings Service, or any successor thereto.

 

“Specified Equity
Contribution” shall have the meaning assigned to such term in Section 7.02.

 

“Sponsor” shall
mean Kelso & Company, L.P., a Delaware limited partnership.

 

“Statutory Reserves”
shall mean a fraction (expressed as a decimal), the numerator of which is the
number one and the denominator of which is the number one minus the aggregate
of the maximum reserve percentages (including any marginal, special, emergency
or supplemental reserves) expressed as a decimal established by the Board and
any other banking authority, domestic or foreign, to which the Administrative
Agent or any Lender (including any branch, Affiliate or other fronting office
making or holding a Loan) is subject for Eurocurrency Liabilities (as defined
in Regulation D of the Board).  
Eurodollar Loans shall be deemed to constitute Eurocurrency Liabilities
as defined in Regulation D of the Board) and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D.  Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.

 

“Subordinated Debt”
shall mean the collective reference to any Debt of the Loan Parties that
satisfies the conditions in the proviso to Section 6.01(l).

 

“subsidiary”
shall mean, with respect to any person (herein referred to as the “parent”), any corporation, partnership, limited liability
company, association 

 

22

 

or other business entity (a) of
which securities or other ownership interests representing more than 50% of the
equity or more than 50% of the ordinary voting power or more than 50% of the
general partnership interests are, at the time any determination is being made,
owned, controlled or held, or (b) that is, at the time any determination
is made, otherwise controlled, by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent.

 

“Subsidiary”
shall mean any subsidiary of the Borrower.

 

“Subsidiary Guarantor”
shall mean each Subsidiary that is or becomes a party to the Guaranty
Agreement.

 

“Swingline Commitment”
shall mean the commitment of the Swingline Lender to make loans pursuant to Section 2.22,
as the same may be reduced from time to time pursuant to Section 2.09.

 

“Swingline Exposure”
shall mean at any time the aggregate principal amount at such time of all
outstanding Swingline Loans.  The
Swingline Exposure of any Revolving Credit Lender at any time shall equal its
Pro Rata Percentage of the aggregate Swingline Exposure at such time.

 

“Swingline Lender”
shall mean Credit Suisse, acting through any of its Affiliates or branches, in
its capacity as lender of Swingline Loans hereunder.

 

“Swingline Loan”
shall mean any loan made by the Swingline Lender pursuant to Section 2.22.

 

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

 

“Term Borrowing”
shall mean a Borrowing comprised of Term Loans.

 

“Term Lender”
shall mean a Lender with a Term Loan Commitment or an outstanding Term Loan.

 

“Term Loan Commitment”
shall mean (i) in the case of a Lender that is a Lender on the date
hereof, the amount of such Lender’s “Term Loan Commitment” as set forth in the
Register on the date hereof and (ii) in the case of a Lender that becomes
a Lender after the date hereof, the amount specified as such Lender’s “Term
Loan Commitment” in the Assignment and Acceptance pursuant to which such Lender
assumed its Term Loan Commitment, as the same may be (a) reduced from time
to time pursuant to Section 2.09 and (b) reduced or increased from
time to time pursuant to assignments by or to such Lender pursuant to Section 9.04.

 

23

 

“Term Loan Maturity Date”
shall mean the seventh anniversary of the Closing Date or, if such date is not
a Business Day, the immediately preceding Business Day.

 

“Term Loans”
shall mean the term loans made by the Lenders to the Borrower pursuant to Section 2.01(a).

 

“Termination Event”
shall mean except for any such event or condition that could not reasonably be
expected to have a Material Adverse Effect: (a) a “Reportable Event”
described in Section 4043 of ERISA for which the notice requirement has
not been waived by the PBGC, or (b) the withdrawal of the Borrower or any
ERISA Affiliate from a Pension Plan during a plan year in which it was a “substantial
employer” as defined in Section 4001(a)(2) of ERISA, or (c) the
termination of a Pension Plan, the filing of a notice of intent to terminate a
Pension Plan or the treatment of a Pension Plan amendment as a termination,
under Section 4041 of ERISA, if the plan assets are not sufficient to pay
all plan liabilities, or (d) the institution of proceedings to terminate,
or the appointment of a trustee with respect to, any Pension Plan by the PBGC,
or (e) any other event or condition which would constitute grounds under Section 4042(a) of
ERISA for the termination of, or the appointment of a trustee to administer,
any Pension Plan, or (f) the imposition of a Lien pursuant to Section 412
of the Code or Section 302 of ERISA, or (g) the partial or complete
withdrawal of the Borrower of any ERISA Affiliate from a Multiemployer Plan if
withdrawal liability is asserted by such plan, or (h) any event or
condition which results in the reorganization or insolvency of a Multiemployer
Plan under Sections 4241 or 4245 of ERISA, or (i) any event or condition
which results in the termination of a Multiemployer Plan under Section 4041A
of ERISA or the institution by PBGC of proceedings to terminate a Multiemployer
Plan under Section 4042 of ERISA.

 

“Total Debt”
shall mean, at any time, the total Debt of the Borrower and the Subsidiaries at
such time (excluding Debt of the type described in clause (e) of the
definition of such term in respect of any letter of credit, except to the
extent of any unreimbursed drawings thereunder, and Debt of the type described
in clause (f) of the definition of such term).

 

“Total Leverage Ratio”
shall mean, on any date, the ratio of (a) Total Debt on such date to (b) EBITDA
for the period of four consecutive fiscal quarters most recently ended on or
prior to such date.  In any period of
four consecutive fiscal quarters in which a Permitted Acquisition occurs, the
Total Leverage Ratio shall be determined on a pro forma basis in accordance
with Section 1.03.

 

“Total Revolving Credit
Commitment” shall mean, at any time, the aggregate amount of the
Revolving Credit Commitments, as in effect at such time.  The initial Total Revolving Credit Commitment
is $30,000,000.

 

24

 

“Transactions”
shall mean, collectively, (a) the execution, delivery and performance by
the Loan Parties of the Loan Documents to which they are a party and the making
of the Borrowings hereunder, (b) the execution, delivery and performance
by the Loan Parties of the Second Lien Loan Documents to which they are a party
and the making of borrowings thereunder, (c) the repayment of all amounts
due or outstanding under or in respect of, and the termination of, the Existing
Credit Agreements and (d) the payment of related fees and expenses.

 

“Type”, when
used in respect of any Loan or Borrowing, shall refer to the Rate by reference
to which interest on such Loan or on the Loans comprising such Borrowing is
determined.  For purposes hereof, the
term “Rate” shall mean the Adjusted LIBO Rate
and the Alternate Base Rate.

 

“USA PATRIOT Act”
shall mean The Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of
Pub.  L. 
No.  107-56 (signed into law October 26, 2001)).

 

“Vessel Mortgages”
shall mean the preferred fleet mortgages, ship mortgages and other security
documents delivered pursuant to Section 5.14 or Section 5.17, each
substantially in the form of Exhibit H.

 

“Weinman Acquisition”
shall mean the acquisition of all or substantially all of the assets of Weinman
GeoScience, Inc. by the Borrower and/or a Subsidiary Guarantor in
accordance in all material respects with the terms and provisions set forth in
that certain letter agreement dated December 6, 2007 by and among the
Borrower, Weinman GeoScience, Inc., Barry Weinman and Jane Weinman; provided, however, that
any Debt incurred by the Borrower and/or any Subsidiary (other than Debt
permitted under Section 6.01(o)) must be Subordinated Debt permitted under
Section 6.01(s); provided, further, that there is no amendment to such letter
agreement that is adverse to the Lenders without the written consent of the
Administrative Agent.

 

“wholly owned Subsidiary”
of any person shall mean a subsidiary of such person of which securities
(except for directors’ qualifying shares) or other ownership interests
representing 100% of the Equity Interests are, at the time any determination is
being made, owned, controlled or held by such person or one or more wholly
owned Subsidiaries of such person or by such person and one or more wholly
owned Subsidiaries of such person.

 

Section 1.02.   Terms Generally.   The definitions in Section 1.01
shall apply equally to both the singular and plural forms of the terms
defined.  Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms.  The words “include”, “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation”.  The word “will” shall be
construed to have the same meaning and effect as the word “shall”; and the
words “asset” and “property” shall be construed as having 

 

25

 

the same meaning and effect and
to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.  All references herein to Articles, Sections,
Exhibits and Schedules shall be deemed references to Articles and Sections of,
and Exhibits and Schedules to, this Agreement unless the context shall
otherwise require.  Except as otherwise
expressly provided herein, (a) any reference in this Agreement to any Loan
Document shall mean such document as amended, restated, supplemented or
otherwise modified from time to time and (b) all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time; provided, however,
that if the Borrower notifies the Administrative Agent that the Borrower wishes
to amend any covenant in Article 6 or any related definition to eliminate
the effect of any change in GAAP occurring after the date of this Agreement on
the operation of such covenant (or if the Administrative Agent notifies the
Borrower that the Required Lenders wish to amend Article 6 or any related
definition for such purpose), then the Borrower’s compliance with such covenant
shall be determined on the basis of GAAP in effect immediately before the
relevant change in GAAP became effective, until either such notice is withdrawn
or such covenant is amended in a manner satisfactory to the Borrower and the
Required Lenders.

 

Section 1.03.   Pro Forma Calculations.   With respect to any period of
four consecutive fiscal quarters during which any Permitted Acquisition occurs
(and for purposes of determining whether an acquisition is a Permitted
Acquisition under Section 6.03(c) or would result in a Default or an
Event of Default), the Total Leverage Ratio shall be calculated with respect to
such period on a pro forma basis after giving effect to such Permitted
Acquisition (including, without duplication, (a) all pro forma adjustments
permitted or required by Article 11 of Regulation S-X under the Securities
Act of 1933, as amended, and (b) pro forma adjustments for cost savings
(net of continuing associated expenses) to the extent such cost savings are
factually supportable, are expected to have a continuing impact and have been
realized or are reasonably expected to be realized within 12 months following
such Permitted Acquisition; provided that
all such adjustments shall be set forth in a reasonably detailed certificate of
a Financial Officer of the Borrower), using, for purposes of making such
calculations, the historical financial statements of the Borrower and the
Subsidiaries which shall be reformulated as if such Permitted Acquisition, and
any other Permitted Acquisitions that have been consummated during the period,
had been consummated on the first day of such period.

 

Section 1.04.   Classification of Loans and
Borrowings.   For purposes of
this Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving Loan”)
or by Type (e.g., a “Eurocurrency
Loan”) or by Class and Type (e.g.,
a “Eurocurrency Revolving Loan”).  Borrowings also may be classified and
referred to by Class (e.g., a “Revolving Credit Borrowing”) or by Type (e.g., a “Eurocurrency Borrowing”)
or by Class and Type (e.g., a “Eurocurrency Revolving Credit Borrowing”).

 

26

 

Section 1.05.   Senior Debt.   The Loans and other Obligations
under the Loan Documents are hereby designated as “Senior Debt”
and “Designated Senior Debt” under all
instruments and documents, now or in the future, relating to the Subordinated
Debt.

 

ARTICLE 2

THE CREDITS

 

Section 2.01.   Commitments.   Subject to the terms and
conditions and relying upon the representations and warranties herein set forth,
each Lender agrees, severally and not jointly, (a) to make a Term Loan to
the Borrower on the Closing Date in a principal amount not to exceed its Term
Loan Commitment; provided that the amount payable
by such Lender to the Borrower pursuant to such Term Loan will equal 99% of the
aggregate principal amount of such Term Loan, and (b) to make Revolving
Loans to the Borrower, at any time and from time to time after the date hereof,
and until the earlier of the Revolving Credit Maturity Date and the termination
of the Revolving Credit Commitment of such Lender in accordance with the terms
hereof, in an aggregate principal amount at any time outstanding that will not
result in such Lender’s Revolving Credit Exposure exceeding such Lender’s
Revolving Credit Commitment.  Within the
limits set forth in clause (b) of the preceding sentence and subject to
the terms, conditions and limitations set forth herein, the Borrower may
borrow, pay or prepay and reborrow Revolving Loans.  Amounts paid or prepaid in respect of Term
Loans may not be reborrowed.

 

Section 2.02.   Loans.   (a)   Each Loan
(other than Swingline Loans as to which this clause (a) shall not apply)
shall be made as part of a Borrowing consisting of Loans made by the Lenders
ratably in accordance with their applicable Commitments; provided,
however, that the failure of any Lender
to make any Loan shall not in itself relieve any other Lender of its obligation
to lend hereunder (it being understood, however, that no Lender shall be
responsible for the failure of any other Lender to make any Loan required to be
made by such other Lender).  Except for
Loans deemed made pursuant to Section 2.02(f), the Loans comprising any
Borrowing shall be in an aggregate principal amount that is (i) an
integral multiple of $250,000 and not less than $1,000,000 or (ii) equal
to the remaining available balance of the applicable Commitments.

 

(b)        Subject to Sections 2.02(f), 2.08 and
2.15, each Borrowing shall be comprised entirely of ABR Loans or Eurodollar
Loans as the Borrower may request pursuant to Section 2.03.  Each Lender may at its option make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided that
any exercise of such option shall not affect the obligation of the Borrower to
repay such Loan in accordance with the terms of this Agreement.  Borrowings of more than one Type may be
outstanding at the same time; provided, however, that the Borrower shall not be entitled to

 

27

 

request any Borrowing that,
if made, would result in more than eight Eurodollar Borrowings outstanding
hereunder at any time.  For purposes of
the foregoing, Borrowings having different Interest Periods, regardless of
whether they commence on the same date, shall be considered separate
Borrowings.

 

(c)        Except with respect to Loans made pursuant to Section 2.02(f),
each Lender shall make each Loan to be made by it hereunder on the proposed
date thereof by wire transfer of immediately available funds to such account in
New York City as the Administrative Agent may designate not later than 1:00 p.m.,
New York City time, and the Administrative Agent shall promptly credit the
amounts so received to an account designated by the Borrower in the applicable
Borrowing Request or, if a Borrowing shall not occur on such date because any
condition precedent herein specified shall not have been met, return the
amounts so received to the respective Lenders.

 

(d)           Unless the Administrative Agent shall
have received notice from a Lender prior to the date of any Borrowing that such
Lender will not make available to the Administrative Agent such Lender’s
portion of such Borrowing, the Administrative Agent may assume that such Lender
has made such portion available to the Administrative Agent on the date of such
Borrowing in accordance with paragraph (c) above and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount.  If the
Administrative Agent shall have so made funds available then, to the extent
that such Lender shall not have made such portion available to the
Administrative Agent, such Lender and the Borrower severally agree to repay to
the Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the Borrower to but excluding the date such amount is repaid to the
Administrative Agent at (i) in the case of the Borrower, a rate per annum
equal to the interest rate applicable at the time to the Loans comprising such
Borrowing and (ii) in the case of such Lender, a rate determined by the
Administrative Agent to represent its cost of overnight or short term funds
(which determination shall be conclusive absent manifest error).  If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount shall constitute
such Lender’s Loan as part of such Borrowing for purposes of this Agreement.

 

(e)        Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request any Revolving Credit Borrowing if the
Interest Period requested with respect thereto would end after the Revolving
Credit Maturity Date.

 

(f)         If the Issuing Bank shall not have received from the Borrower
the payment required to be made by Section 2.23(e) within the time specified in
such Section, the Issuing Bank will promptly notify the Administrative Agent of
the L/C Disbursement and the Administrative Agent will promptly notify each
Revolving Credit Lender of such L/C Disbursement and its Pro Rata Percentage 

 

28

 

thereof.  Each Revolving Credit Lender shall pay by
wire transfer of immediately available funds to the Administrative Agent not
later than 2:00 p.m., New York City time, on such date (or, if such
Revolving Credit Lender shall have received such notice later than 12:00
(noon), New York City time, on any day, not later than 10:00 a.m., New
York City time, on the immediately following Business Day), an amount equal to
such Lender’s Pro Rata Percentage of such L/C Disbursement (it being understood
that (i) if the conditions precedent to borrowing set forth in Sections
4.01(b) and 4.01(c) have been satisfied, such amount shall be deemed
to constitute an ABR Revolving Loan of such Lender and, to the extent of such
payment, the obligations of the Borrower in respect of such L/C Disbursement
shall be discharged and replaced with the resulting ABR Revolving Credit
Borrowing, and (ii) if such conditions precedent to borrowing have not
been satisfied, then any such amount paid by any Revolving Credit Lender shall
not constitute a Loan and shall not relieve the Borrower from its obligation to
reimburse such L/C Disbursement), and the Administrative Agent will promptly
pay to the Issuing Bank amounts so received by it from the Revolving Credit
Lenders.  The Administrative Agent will
promptly pay to the Issuing Bank any amounts received by it from the Borrower
pursuant to Section 2.23(e) prior to the time that any Revolving
Credit Lender makes any payment pursuant to this paragraph (f); any such
amounts received by the Administrative Agent thereafter will be promptly
remitted by the Administrative Agent to the Revolving Credit Lenders that shall
have made such payments and to the Issuing Bank, as their interests may
appear.  If any Revolving Credit Lender
shall not have made its Pro Rata Percentage of such L/C Disbursement available
to the Administrative Agent as provided above, such Lender and the Borrower
severally agree to pay interest on such amount, for each day from and including
the date such amount is required to be paid in accordance with this paragraph
to but excluding the date such amount is paid, to the Administrative Agent for
the account of the Issuing Bank at (i) in the case of the Borrower, a rate
per annum equal to the interest rate applicable to Revolving Loans pursuant to Section 2.06(a),
and (ii) in the case of such Lender, for the first such day, the Federal
Funds Effective Rate, and for each day thereafter, the Alternate Base Rate.

 

Section 2.03.   Borrowing Procedure.   In order to request a Borrowing (other than a
Swingline Loan or a deemed Borrowing pursuant to Section 2.02(f), as to
which this Section 2.03 shall not apply), the Borrower shall notify the
Administrative Agent of such request by telephone (a) in the case of a
Eurodollar Borrowing, not later than 12:00 noon, New York City time, three
Business Days before a proposed Borrowing, and (b) in the case of an ABR
Borrowing, not later than 12:00 noon, New York City time, one Business Day
before a proposed Borrowing.  Each such
telephonic Borrowing Request shall be irrevocable, and shall be confirmed
promptly by hand delivery or fax to the Administrative Agent of a written
Borrowing Request and shall specify the following information: (i) whether
the Borrowing then being requested is to be a Term Borrowing or a Revolving
Credit Borrowing, and whether such Borrowing is to be a Eurodollar Borrowing or
an ABR Borrowing (provided that, until the
Administrative Agent 

 

29

 

shall have notified the Borrower that the
primary syndication of the Commitments has been completed (which notice shall
be given as promptly as practicable and, in any event, within 14 Business Days
after the Closing Date), the Borrower shall not be permitted to request a
Eurodollar Borrowing with an Interest Period in excess of one month); (ii) the
date of such Borrowing (which shall be a Business Day); (iii) the number and
location of the account to which funds are to be disbursed; (iv) the
amount of such Borrowing; and (v) if such Borrowing is to be a Eurodollar
Borrowing, the Interest Period with respect thereto; provided,
however, that, notwithstanding any
contrary specification in any Borrowing Request, each requested Borrowing shall
comply with the requirements set forth in Section 2.02.  If no election as to the Type of Borrowing is
specified in any such notice, then the requested Borrowing shall be an ABR
Borrowing.  If no Interest Period with
respect to any Eurodollar Borrowing is specified in any such notice, then the
Borrower shall be deemed to have selected an Interest Period of one month’s
duration.  The Administrative Agent shall
promptly advise the applicable Lenders of any notice given pursuant to this Section 2.03
(and the contents thereof), and of each Lender’s portion of the requested
Borrowing.

 

Section 2.04.   Evidence of Debt; Repayment
of Loans.  (a) The
Borrower hereby unconditionally promises to pay to the Administrative Agent for
the account of each Lender (i) the principal amount of each Term Loan of
such Lender as provided in Section 2.11 and (ii) the then unpaid
principal amount of each Revolving Loan of such Lender on the Revolving Credit
Maturity Date.  The Borrower hereby
promises to pay to the Swingline Lender the then unpaid principal amount of
each Swingline Loan on the Revolving Credit Maturity Date.

 

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

 

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

 

(d)        The entries made in the accounts maintained pursuant to
paragraphs (b) and (c) above shall be prima facie
evidence of the existence and amounts of the obligations therein recorded; provided, however, that
the failure of any Lender or the Administrative Agent to maintain such accounts
or any error therein shall not in any manner affect the obligations of the
Borrower to repay the Loans in accordance with their terms.

 

30

 

(e)        Any Lender may request that Loans made by it hereunder be
evidenced by a promissory note.  In such
event, the Borrower shall execute and deliver to such Lender a promissory note
payable to such Lender and its registered assigns and in a form and substance
reasonably acceptable to the Administrative Agent and the Borrower.  Notwithstanding any other provision of this
Agreement, in the event any Lender shall request and receive such a promissory
note, the interests represented by such note shall at all times (including after
any assignment of all or part of such interests pursuant to Section 9.04)
be represented by one or more promissory notes payable to the payee named
therein or its registered assigns.

 

Section 2.05.   Fees.   (a)  The Borrower agrees to pay to each
Lender, through the Administrative Agent, on the last Business Day of March,
June, September and December in each year and on each date on which
any Commitment of such Lender shall expire or be terminated as provided herein,
a commitment fee (a “Commitment Fee”)
equal to 0.50% per annum on the daily unused amount of the Revolving Credit
Commitment of such Lender during the preceding quarter (or other period
commencing with the date hereof or ending with the Revolving Credit Maturity
Date or the date on which the Commitments of such Lender shall expire or be
terminated).  All Commitment Fees shall
be computed on the basis of the actual number of days elapsed in a year of 360
days.  For purposes of calculating
Commitment Fees only, no portion of the Revolving Credit Commitments shall be
deemed utilized as a result of outstanding Swingline Loans.

 

(b)        The Borrower agrees to pay to the Administrative Agent, for
its own account, the administrative fees set forth in the Fee Letter at the
times and in the amounts specified therein (the “Administrative
Agent Fees”).

 

(c)        The Borrower agrees to pay (i) to each Revolving Credit
Lender, through the Administrative Agent, on the last Business Day of March,
June, September and December of each year and on the date on which
the Revolving Credit Commitment of such Lender shall be terminated as provided
herein, a fee (an “L/C Participation Fee”)
calculated on such Lender’s Pro Rata Percentage of the daily aggregate L/C
Exposure (excluding the portion thereof attributable to unreimbursed L/C
Disbursements) during the preceding quarter (or shorter period commencing with
the date hereof or ending with the Revolving Credit Maturity Date or the date
on which all Letters of Credit have been canceled or have expired and the
Revolving Credit Commitments of all Lenders shall have been terminated) at a
rate per annum equal to the Applicable Percentage from time to time used to
determine the interest rate on Revolving Credit Borrowings comprised of
Eurodollar Loans pursuant to Section 2.06, and (ii) on the last
Business Day of each March, June, September and December, to the Issuing
Bank with respect to each Letter of Credit a fronting fee (which shall accrue
at the rate of 0.125% per annum or at another rate agreed by the Borrower and
the Issuing Bank) and the standard issuance and drawing fees specified from
time to time by the Issuing Bank (the “Issuing Bank Fees”).  All L/C Participation Fees and 

 

31

 

Issuing Bank Fees shall be
computed on the basis of the actual number of days elapsed in a year of 360
days.

 

(d)        All Fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, if and as
appropriate, among the Lenders, except that the Issuing Bank Fees shall be paid
directly to the Issuing Bank.  Once paid,
none of the Fees shall be refundable under any circumstances.

 

Section 2.06.   Interest on Loans.   (a)  Subject to the provisions of Section 2.07,
the Loans comprising each ABR Borrowing, including each Swingline Loan, shall
bear interest (computed on the basis of the actual number of days elapsed over
a year of 365 or 366 days, as the case may be, when the Alternate Base Rate is
determined by reference to the Prime Rate and over a year of 360 days at all
other times and calculated from and including the date of such Borrowing to but
excluding the date of repayment thereof) at a rate per annum equal to the
Alternate Base Rate plus the Applicable Percentage in effect from time to time.

 

(b)        Subject to the provisions of Section 2.07, the Loans
comprising each Eurodollar Borrowing shall bear interest (computed on the basis
of the actual number of days elapsed over a year of 360 days) at a rate per
annum equal to the Adjusted LIBO Rate for the Interest Period in effect for
such Borrowing plus the Applicable Percentage in effect from time to time.

 

(c)        Interest on each Loan shall be payable on the Interest
Payment Dates applicable to such Loan except as otherwise provided in this
Agreement.  The applicable Alternate Base
Rate or Adjusted LIBO Rate for each Interest Period or day within an Interest
Period, as the case may be, shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.

 

Section 2.07.   Default Interest.   Upon the occurrence and during the continuance
of any Event of Default arising under Sections 7.01(a), 7.01(b), 7.01(i) or
7.01(j) or, at the election of the Required Lenders, upon the occurrence
and continuance of any other Event of Default, to the extent permitted by law,
all amounts outstanding under this Agreement and the other Loan Documents shall
bear interest (after as well as before judgment), payable on demand, (a) in
the case of principal, at the rate otherwise applicable to such Loan pursuant
to Section 2.06 plus 2.00% per annum and (b) in all other cases, at a
rate per annum (computed on the basis of the actual number of days elapsed over
a year of 365 or 366 days, as the case may be, when determined by reference to
the Prime Rate and over a year of 360 days at all other times) equal to the
rate that would be applicable to an ABR Revolving Loan plus 2.00% per annum.

 

Section 2.08.   Alternate Rate of
Interest.   In the event, and
on each occasion, that on the day two Business Days prior to the commencement
of any Interest Period for a Eurodollar Borrowing the Administrative Agent
shall have 

 

32

 

determined that dollar deposits in the
principal amounts of the Loans comprising such Borrowing are not generally
available in the London interbank market, or that the rates at which such
dollar deposits are being offered will not adequately and fairly reflect the
cost to any Lender of making or maintaining its Eurodollar Loan during such
Interest Period, or that reasonable means do not exist for ascertaining the
Adjusted LIBO Rate, the Administrative Agent shall, as soon as practicable
thereafter, give written or fax notice of such determination to the Borrower
and the Lenders.  In the event of any
such determination, until the Administrative Agent shall have advised the
Borrower and the Lenders that the circumstances giving rise to such notice no
longer exist, any request by the Borrower for a Eurodollar Borrowing pursuant
to Section 2.03 or 2.10 shall be deemed to be a request for an ABR
Borrowing.  Each determination by the
Administrative Agent under this Section 2.08 shall be conclusive absent
manifest error.

 

Section 2.09.   Termination and Reduction of
Commitments.   (a) The Term Loan Commitments shall
automatically terminate upon the making of the Term Loans on the Closing
Date.  The Revolving Credit Commitments
and the Swingline Commitment shall automatically terminate on the Revolving
Credit Maturity Date.  The L/C Commitment
shall automatically terminate on the earlier to occur of (i) the
termination of the Revolving Credit Commitments and (ii) the date 30 days
prior to the Revolving Credit Maturity Date. 
Notwithstanding the foregoing, all the Commitments shall automatically
terminate at 5:00 p.m., New York City time, on January 31, 2008 if
the initial Credit Event shall not have occurred by such time.

 

(b)        Upon at least three Business Days’ prior irrevocable written
or fax notice to the Administrative Agent, the Borrower may at any time in
whole permanently terminate, or from time to time in part permanently reduce,
the Term Loan Commitments, the Revolving Credit Commitments or the Swingline
Commitment; provided, however,
that (i) each partial reduction of the Term Loan Commitments or the
Revolving Credit Commitments shall be in an integral multiple of $250,000 and
in a minimum amount of $1,000,000, (ii) each partial reduction of the
Swingline Commitment shall be in an integral multiple of $250,000 and in a
minimum amount of $500,000 and (iii) the Total Revolving Credit Commitment
shall not be reduced to an amount that is less than the Aggregate Revolving
Credit Exposure at the time.

 

(c)        Each reduction in the Term Loan Commitments or the Revolving
Credit Commitments hereunder shall be made ratably among the Lenders in accordance
with their respective applicable Commitments. 
The Borrower shall pay to the Administrative Agent for the account of
the applicable Lenders, on the date of each termination or reduction, the
Commitment Fees on the amount of the Commitments so terminated or reduced
accrued to but excluding the date of such termination or reduction.

 

33

 

Section 2.10.   Conversion and Continuation
of Borrowings.   The Borrower shall have the right at any time
upon prior irrevocable notice to the Administrative Agent (a) not later
than 12:00 noon, New York City time, one Business Day prior to conversion, to
convert any Eurodollar Borrowing into an ABR Borrowing, (b) not later than
12:00 noon, New York City time, three Business Days prior to conversion or
continuation, to convert any ABR Borrowing into a Eurodollar Borrowing or to
continue any Eurodollar Borrowing as a Eurodollar Borrowing for an additional
Interest Period, and (c) not later than 12:00 noon, New York City time,
three Business Days prior to conversion, to convert the Interest Period with
respect to any Eurodollar Borrowing to another permissible Interest Period,
subject in each case to the following:

 

(i)            until
the Administrative Agent shall have notified the Borrower that the primary
syndication of the Commitments has been completed (which notice shall be given
as promptly as practicable and, in any event, within 14 Business Days after the
Closing Date), no ABR Borrowing may be converted into a Eurodollar Borrowing
with an Interest Period in excess of one month;

 

(ii)           each
conversion or continuation shall be made pro rata among the Lenders in
accordance with the respective principal amounts of the Loans comprising the
converted or continued Borrowing;

 

(iii)          if
less than all the outstanding principal amount of any Borrowing shall be
converted or continued, then each resulting Borrowing shall satisfy the
limitations specified in Sections 2.02(a) and 2.02(b) regarding the
principal amount and maximum number of Borrowings of the relevant Type;

 

(iv)          each
conversion shall be effected by each Lender and the Administrative Agent by
recording for the account of such Lender the new Loan of such Lender resulting
from such conversion and reducing the Loan (or portion thereof) of such Lender
being converted by an equivalent principal amount; accrued interest on any
Eurodollar Loan (or portion thereof) being converted shall be paid by the
Borrower at the time of conversion;

 

(v)           if
any Eurodollar Borrowing is converted at a time other than the end of the
Interest Period applicable thereto, the Borrower shall pay, upon demand, any
amounts due to the Lenders pursuant to Section 2.16;

 

(vi)          any
portion of a Borrowing maturing or required to be repaid in less than one month
may not be converted into or continued as a Eurodollar Borrowing;

 

34

 

(vii)         any
portion of a Eurodollar Borrowing that cannot be converted into or continued as
a Eurodollar Borrowing by reason of the immediately preceding clause shall be
automatically converted at the end of the Interest Period in effect for such
Borrowing into an ABR Borrowing;

 

(viii)        no
Interest Period may be selected for any Eurodollar Term Borrowing that would
end later than a Repayment Date occurring on or after the first day of such
Interest Period if, after giving effect to such selection, the aggregate
outstanding amount of (A) the Eurodollar Term Borrowings with Interest
Periods ending on or prior to such Repayment Date and (B) the ABR Term
Borrowings  would not be at least equal
to the principal amount of Term Borrowings to be paid on such Repayment Date;
and

 

(ix)           upon
the occurrence and during the continuance of any Event of Default arising under
Sections 7.01(a), 7.01(b), 7.01(i) or 7.01(j), or upon notice to the
Borrower from the Administrative Agent given at the request of the Required
Lenders upon the occurrence and during the continuance of any other Event of
Default, no outstanding Loan may be converted into, or continued as, a Eurodollar
Loan.

 

Each notice pursuant to this Section 2.10 shall
be irrevocable and shall refer to this Agreement and specify (i) the
identity and amount of the Borrowing that the Borrower requests be converted or
continued, (ii) whether such Borrowing is to be converted to or continued
as a Eurodollar Borrowing or an ABR Borrowing, (iii) if such notice
requests a conversion, the date of such conversion (which shall be a Business
Day) and (iv) if such Borrowing is to be converted to or continued as a
Eurodollar Borrowing, the Interest Period with respect thereto.  If no Interest Period is specified in any
such notice with respect to any conversion to or continuation as a Eurodollar
Borrowing, the Borrower shall be deemed to have selected an Interest Period of
one month’s duration.  The Administrative
Agent shall advise the Lenders of any notice given pursuant to this Section 2.10
and of each Lender’s portion of any converted or continued Borrowing.  If the Borrower shall not have given notice
in accordance with this Section 2.10 to continue any Borrowing into a
subsequent Interest Period (and shall not otherwise have given notice in
accordance with this Section 2.10 to convert such Borrowing), such
Borrowing shall, at the end of the Interest Period applicable thereto (unless
repaid pursuant to the terms hereof), automatically be continued into an ABR
Borrowing.

 

Section 2.11.   Repayment of Term
Borrowings.   (a) The Borrower shall pay to the
Administrative Agent, for the account of the Lenders, on each Repayment Date
prior to the Term Loan Maturity Date, a principal amount of the Term Loans (as
adjusted from time to time pursuant to Sections 2.12 and 2.13(h)), equal to
0.25% of the aggregate principal amount of Term Loans made on the 

 

35

 

Closing Date, together in each case with
accrued and unpaid interest on the principal amount to be paid to but excluding
the date of such payment.

 

(b)        To the extent not previously paid, all Term Loans shall be
due and payable on the Term Loan Maturity Date, together with accrued and
unpaid interest on the principal amount to be paid to but excluding the date of
payment.

 

(c)        All repayments pursuant to this Section 2.11 shall be
subject to Section 2.16, but shall otherwise be without premium or
penalty.

 

Section 2.12.   Optional Prepayment.   (a)  The Borrower shall have the right at
any time and from time to time to prepay any Borrowing, in whole or in part,
upon at least three Business Days’ prior written or fax notice (or telephone
notice promptly confirmed by written or fax notice) in the case of Eurodollar
Loans, or written or fax notice (or telephone notice promptly confirmed by
written or fax notice) at least one Business Day prior to the date of
prepayment in the case of ABR Loans, to the Administrative Agent before 12:00
noon, New York City time; provided, however, that each partial prepayment shall be in an amount
that is an integral multiple of $250,000 and not less than $1,000,000.

 

(b)        Optional prepayments of Term Loans shall be applied, first,
pro rata against the four next scheduled installments of principal due in
respect of the Term Loans under Section 2.11 until such installments have
been repaid in full and, second, pro rata against the remaining scheduled
installments of principal due in respect of the Term Loans under Section 2.11.

 

(c)        Each notice of prepayment shall specify the prepayment date,
the principal amount of each Borrowing (or portion thereof) to be prepaid and
the Class of Loans to be repaid, shall be irrevocable and shall commit the
Borrower to prepay such Borrowing by the amount stated therein on the date
stated therein; provided that any
such notice may state that it is conditioned on the effectiveness of other
credit facilities, in which case such notice may be revoked by the Borrower (by
notice to the Administrative Agent on or before the specified effective date)
if such condition is not satisfied.  All
prepayments under this Section 2.12 shall be subject to Section 2.16
but otherwise without premium or penalty. 
All prepayments under this Section 2.12 (other than prepayments of
ABR Revolving Loans that are not made in connection with the termination or
permanent reduction of the Revolving Credit Commitments) shall be accompanied
by accrued and unpaid interest on the principal amount to be prepaid to but
excluding the date of payment.

 

Section 2.13.   Mandatory Prepayments.   (a) In the event of any
termination of all the Revolving Credit Commitments, the Borrower shall, on the
date of such termination, repay or prepay all its outstanding Revolving Credit
Borrowings and all outstanding Swingline Loans and replace or cause to be
canceled (or make other arrangements satisfactory to the Administrative Agent
and the Issuing Bank with respect to) all outstanding Letters of Credit.  If, after 

 

36

 

giving effect to any partial reduction of the
Revolving Credit Commitments or at any other time, the Aggregate Revolving
Credit Exposure would exceed the Total Revolving Credit Commitment, then the
Borrower shall, on the date of such reduction or at such other time, repay or
prepay Revolving Credit Borrowings or Swingline Loans (or a combination
thereof) and, after the Revolving Credit Borrowings and Swingline Loans shall
have been repaid or prepaid in full, replace or cause to be canceled (or make
other arrangements satisfactory to the Administrative Agent and the Issuing
Bank with respect to) Letters of Credit in an amount sufficient to eliminate
such excess.

 

(b)        The Borrower shall make mandatory principal prepayments of
the Loans and/or cash collateralize Letters of Credit and/or prepay loans under
the Second Lien Credit Agreement in the manner set forth in Section 2.13(h) below
in amounts equal to 100% of the aggregate Net Cash Proceeds from any incurrence
of Debt by any GGS Company (except Debt permitted pursuant to Section 6.01).  Such prepayment and/or cash collateralization
shall be made within seven Business Days after the date of receipt of Net Cash
Proceeds of any such transaction.

 

(c)        The Borrower shall make mandatory principal prepayments of
the Loans and/or cash collateralize Letters of Credit and/or prepay loans under
the Second Lien Credit Agreement in the manner set forth in Section 2.13(h) below
in amounts equal to 50% of the aggregate Net Cash Proceeds from any offering or
sale of Equity Interests by any GGS Company, excluding (i) Net Cash
Proceeds from the issuance of any Equity Interests of the Borrower (A) to
any Kelso Investor or any other of the Borrower’s shareholders of record on the
Closing Date, (B) to management of any GGS Company pursuant to incentive
compensation plans in the ordinary course of business or (C) pursuant to a
underwritten registered initial public offering of the voting Equity Interests
of the Borrower which does not result in a Change in Control and which results
in gross proceeds to the Borrower of at least $75,000,000 and (ii) Net
Cash Proceeds from the issuance of any Equity Interests to any GGS
Company.  Such prepayment and/or cash
collateralization shall be made within seven Business Days after the date of
receipt of Net Cash Proceeds of any such transaction.

 

(d)        No later than 365 days (or an additional six months if a
binding agreement to reinvest is entered into with an entity that is not an
Affiliate within such 365-day period) following the receipt by any GGS Company
thereof, the Borrower shall make mandatory principal prepayments of the Loans
and/or cash collateralize Letters of Credit and/or prepay loans under the Second
Lien Credit Agreement in the manner set forth in Section 2.13(h) below
in amounts equal to 100% of the aggregate Net Cash Proceeds from the sale or
other disposition or series of related sales or other dispositions of assets by
such GGS Company (other than sales or transfers permitted pursuant to Section 6.05(a) through
6.05(e) or Section 6.05(h)); provided that
such prepayment and/or cash collateralization shall not be required to the
extent that such Net Cash Proceeds are reinvested in Permitted Acquisitions or
assets used or useful in the business of the Borrower or 

 

37

 

its Subsidiaries or any
business related thereto that is otherwise permitted under Section 6.12
(such assets the “Eligible Assets”)
within the applicable period set forth above. 
Notwithstanding any of the foregoing to the contrary, upon and during
the continuance of an Event of Default and upon notice from the Administrative
Agent, all such Net Cash Proceeds received by the GGS Companies (including all
such Net Cash Proceeds received prior to the occurrence of such Event of
Default and not subject to a binding agreement to reinvest) shall be applied to
make prepayments of the Loans and/or cash collateralize Letters of Credit
and/or prepay loans under the Second Lien Credit Agreement, such prepayments
and/or cash collateralization to be made within seven Business Days after the
applicable GGS Company’s receipt of such Net Cash Proceeds or notice from the
Administrative Agent, as applicable.

 

(e)        No later than 365 days (or an additional six months if a
binding agreement to reinvest is entered into with an entity that is not an
Affiliate within such 365-day period) following the date of receipt by any GGS
Company of any Net Cash Proceeds under any insurance policies (maintained
pursuant to Section 5.06 or otherwise) or from any condemnation proceeding
(the “Insurance and Condemnation Proceeds”)
which have not been applied as of such date to the cost of repairing, restoring
or replacing the applicable assets of such GGS Company or in Eligible Assets or
such repairs, restoration or replacement of such applicable assets, the
Borrower shall make mandatory principal prepayments of the Loans and/or cash
collateralize Letters of Credit and/or prepay loans under the Second Lien
Credit Agreement in the manner set forth in Section 2.13(h) below in
amounts equal to 100% of the aggregate amount of such Insurance and
Condemnation Proceeds received by such GGS Company which have not been so
applied.  Notwithstanding any of the
foregoing to the contrary, upon and during the continuance of an Event of
Default and upon notice from the Administrative Agent, all Insurance and
Condemnation Proceeds received by any GGS Company (including all such Insurance
and Condemnation Proceeds received prior to the occurrence of such Event of
Default and not subject to a binding agreement to reinvest) shall be applied to
make prepayments of the Loans and/or cash collateralize Letters of Credit
and/or prepay loans under the Second Lien Credit Agreement, such prepayments
and/or cash collateralization to be made within seven Business Days after such
GGS Company’s receipt of such Insurance and Condemnation Proceeds or notice
from the Administrative Agent, as applicable.

 

(f)         No later than 90 days after the end of any fiscal year,
beginning the fiscal year ending December 31, 2008, the Borrower shall
make a mandatory principal repayment of the Loans and/or cash collateralize
Letters of Credit and/or prepay loans under the Second Lien Credit Agreement in
the manner set forth in Section 2.13(h) below in an amount equal to
75% of Excess Cash Flow, if any, for such fiscal year; provided
that, commencing with the fiscal year ending December 31, 2009, such
percentage shall be reduced to 50% if the Total Leverage Ratio at the end of
such fiscal year is less than 1.25 to 1.0.

 

38

 

(g)        The Borrower shall deliver to the
Administrative Agent, at the time of each prepayment required under this
Section, (i) a certificate signed by a Financial Officer of the Borrower
setting forth in reasonable detail the calculation of the amount of such
prepayment and specifying the prepayment date and (ii) at least five
Business Days prior written notice of such prepayment.  All prepayments of Borrowings under this Section shall
be subject to Section 2.16, but shall otherwise be without premium or penalty,
and shall be accompanied by accrued and unpaid interest on the principal amount
to be prepaid to but excluding the date of payment.

 

(h)        Mandatory prepayments and/or cash
collateralization under paragraphs (b) though (f) of this Section shall
be applied:

 

(i)            first, pro rata
against the four next scheduled installments of principal due in respect of the
Term Loans under Section 2.11 until such installments have been repaid in
full and, then, pro rata against the remaining
scheduled installments of principal due in respect of the Term Loans under Section 2.11,
subject to the proviso to this paragraph below;

 

(ii)           second, if no
Term Loans are outstanding, to prepay ratably outstanding Revolving Loans to
the full extent thereof;

 

(iii)          third, if no
Term Loans or Revolving Loans are outstanding, to cash collateralize any
outstanding Letters of Credit (up to an aggregate amount equal to the aggregate
undrawn face amount of all such Letters of Credit);

 

(iv)          fourth, to
prepay outstanding loans under the Second Lien Credit Agreement (and the
corresponding accrued and unpaid interest and fees on the principal amount of
such loans so prepaid) if and to the extent required thereby; and

 

(v)           fifth, any
remaining amounts may be retained by the Borrower;

 

provided that, notwithstanding anything herein to the contrary, any Term
Lender may elect, by notice to the Administrative Agent by facsimile within two
Business Days of receiving notification from the Administrative Agent of any
prepayment of its Term Loans, to decline (in whole but not in part) such
prepayment pursuant to paragraphs (b) through (f) of this Section, in
which case the aggregate amount of the prepayment that would have been applied
to prepay the Term Loans of such declining Term Lender shall be applied as set
forth in clauses (iv) and (v) above. 
Mandatory prepayments in respect of the Term Loans shall be applied on a
pro rata basis to the then outstanding Term Loans being prepaid irrespective of
whether such outstanding Term Loans are ABR Loans or Eurodollar Loans; provided that if no Lenders exercise the right to waive a
given mandatory prepayment of the Term Loans pursuant to this Section 2.13(h),
then, 

 

39

 

with respect to such mandatory
prepayment, the amount of such mandatory prepayment shall be applied first to
Term Loans that are ABR Loans to the full extent thereof before application to
Term Loans that are Eurodollar Loans in a manner that minimizes the amount of
any payments required to be made by the Borrower pursuant to Section 2.16.

 

Section 2.14.   Reserve Requirements; Change
in Circumstances.   (a) Notwithstanding
any other provision of this Agreement, if any Change in Law shall impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of or credit extended by
any Lender or the Issuing Bank (except any such reserve requirement which is
reflected in the Adjusted LIBO Rate) or shall impose on such Lender or the Issuing
Bank or the London interbank market any other condition affecting this
Agreement or Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein, and the result of any of the foregoing shall be to
increase the cost to such Lender or the Issuing Bank of making or maintaining
any Eurodollar Loan or increase the cost to any Lender of issuing or
maintaining any Letter of Credit or purchasing or maintaining a participation
therein or to reduce the amount of any sum received or receivable by such
Lender or the Issuing Bank hereunder (whether of principal, interest or
otherwise) by an amount deemed by such Lender or the Issuing Bank to be
material, then the Borrower will pay to such Lender or the Issuing Bank, as the
case may be, upon demand such additional amount or amounts as will compensate
such Lender or the Issuing Bank, as the case may be, for such additional costs
incurred or reduction suffered.

 

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

 

(c)        A certificate of a Lender or the Issuing
Bank setting forth the amount or amounts necessary to compensate such Lender or
the Issuing Bank or its holding company, as applicable, as specified in
paragraph (a) or (b) above shall be delivered to the Borrower and
shall be conclusive absent manifest error. 
The 

 

40

 

Borrower shall
pay such Lender or the Issuing Bank the amount shown as due on any such
certificate delivered by it within 10 days after its receipt of the same.

 

(d)        Failure or delay on the part of any
Lender or the Issuing Bank to demand compensation for any increased costs or
reduction in amounts received or receivable or reduction in return on capital
shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to
demand such compensation; provided that
the Borrower shall not be under any obligation to compensate any Lender or the
Issuing Bank under paragraph (a) or (b) above with respect to
increased costs or reductions with respect to any period prior to the date that
is 120 days prior to such request if such Lender or the Issuing Bank knew or
could reasonably have been expected to know of the circumstances giving rise to
such increased costs or reductions and of the fact that such circumstances
would result in a claim for increased compensation by reason of such increased
costs or reductions; provided  further that the foregoing limitation shall not apply to any
increased costs or reductions arising out of the retroactive application of any
Change in Law within such 120-day period. 
The protection of this Section shall be available to each Lender
and the Issuing Bank regardless of any possible contention of the invalidity or
inapplicability of the Change in Law that shall have occurred or been imposed.

 

Section 2.15.   Change in Legality.   (a) Notwithstanding any
other provision of this Agreement, if any Change in Law shall make it unlawful
for any Lender to make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then,
by written notice to the Borrower and to the Administrative Agent:

 

(i)            such Lender may declare that Eurodollar Loans will not
thereafter (for the duration of such unlawfulness) be made by such Lender
hereunder (or be continued for additional Interest Periods) and ABR Loans will
not thereafter (for such duration) be converted into Eurodollar Loans,
whereupon any request for a Eurodollar Borrowing (or to convert an ABR
Borrowing to a Eurodollar Borrowing or to continue a Eurodollar Borrowing for
an additional Interest Period) shall, as to such Lender only, be deemed a
request for an ABR Loan (or a request to continue an ABR Loan as such for an
additional Interest Period or to convert a Eurodollar Loan into an ABR Loan, as
the case may be), unless such declaration shall be subsequently withdrawn; and

 

(ii)           such Lender may require that all outstanding Eurodollar
Loans made by it be converted to ABR Loans, in which event all such Eurodollar
Loans shall be automatically converted to ABR Loans as of the effective date of
such notice as provided in paragraph (b) below.

 

In the event any Lender shall
exercise its rights under (i) or (ii) above, all payments and
prepayments of principal that would otherwise have been applied to repay the
Eurodollar Loans that would have been made by such Lender or the 

 

41

 

converted Eurodollar Loans of
such Lender shall instead be applied to repay the ABR Loans made by such Lender
in lieu of, or resulting from the conversion of, such Eurodollar Loans.

 

(b)        For purposes of this Section 2.15,
a notice to the Borrower by any Lender shall be effective as to each Eurodollar
Loan made by such Lender, if lawful, on the last day of the Interest Period
then applicable to such Eurodollar Loan; in all other cases such notice shall
be effective on the date of receipt by the Borrower.

 

Section 2.16.   Indemnity.   The
Borrower shall indemnify each Lender against any loss or expense that such
Lender may sustain or incur as a consequence of (a) any event, other than
a default by such Lender in the performance of its obligations hereunder, which
results in (i) such Lender receiving or being deemed to receive any amount
on account of the principal of any Eurodollar Loan prior to the end of the
Interest Period in effect therefor, (ii) the conversion of any Eurodollar
Loan to an ABR Loan, or the conversion of the Interest Period with respect to
any Eurodollar Loan, in each case other than on the last day of the Interest
Period in effect therefor, or (iii) any Eurodollar Loan to be made by such
Lender (including any Eurodollar Loan to be made pursuant to a conversion or
continuation under Section 2.10) not being made after notice of such Loan
shall have been given by the Borrower hereunder (any of the events referred to
in this clause (a) being called a “Breakage Event”)
or (b) any default in the making of any payment or prepayment required to
be made hereunder.  In the case of any
Breakage Event, such loss shall include an amount equal to the excess, as
reasonably determined by such Lender, of (i) its cost of obtaining funds
for the Eurodollar Loan that is the subject of such Breakage Event for the
period from the date of such Breakage Event to the last day of the Interest
Period in effect (or that would have been in effect) for such Loan over (ii) the
amount of interest likely to be realized by such Lender in redeploying the
funds released or not utilized by reason of such Breakage Event for such
period.  A certificate of any Lender
setting forth any amount or amounts which such Lender is entitled to receive
pursuant to this Section 2.16 shall be delivered to the Borrower and shall
be conclusive absent manifest error.

 

Section 2.17.   Pro Rata Treatment.   Except as provided below in this Section 2.17
with respect to Swingline Loans and as required under Section 2.15 (and
other than with respect to any prepayment rejected by any Term Lender in
accordance with Section 2.13(h)), each Borrowing, each payment or
prepayment of principal of any Borrowing, each payment of interest on the
Loans, each payment of the Commitment Fees, each reduction of the Term Loan
Commitments or the Revolving Credit Commitments and each conversion of any
Borrowing to or continuation of any Borrowing as a Borrowing of any Type shall
be allocated pro rata among the Lenders in accordance with their respective
applicable Commitments (or, if such Commitments shall have expired or been
terminated, in accordance with the respective principal amounts of their
outstanding Loans).  For purposes of
determining the available Revolving Credit 

 

42

 

Commitments of the Lenders at
any time, each outstanding Swingline Loan shall be deemed to have utilized the
Revolving Credit Commitments of the Lenders (including those Lenders which
shall not have made Swingline Loans) pro rata in accordance with such
respective Revolving Credit Commitments. 
Each Lender agrees that in computing such Lender’s portion of any
Borrowing to be made hereunder, the Administrative Agent may, in its
discretion, round each Lender’s percentage of such Borrowing to the next higher
or lower whole dollar amount.

 

Section 2.18.   Sharing of Setoffs.   Each Lender agrees that if it
shall, through the exercise of a right of banker’s lien, setoff or counterclaim
against the Borrower or any other Loan Party, or pursuant to a secured claim
under Section 506 of Title 11 of the United States Code or other security
or interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, obtain payment (voluntary or involuntary) in
respect of any Loan or Loans or L/C Disbursement as a result of which the
unpaid principal portion of its Loans and participations in L/C Disbursements
shall be proportionately less than the unpaid principal portion of the Loans and
participations in L/C Disbursements of any other Lender, it shall be deemed
simultaneously to have purchased from such other Lender at face value, and
shall promptly pay to such other Lender the purchase price for, a participation
in the Loans and L/C Exposure of such other Lender, so that the aggregate
unpaid principal amount of the Loans and L/C Exposure and participations in
Loans and L/C Exposure held by each Lender shall be in the same proportion to
the aggregate unpaid principal amount of all Loans and L/C Exposure then
outstanding as the principal amount of its Loans and L/C Exposure prior to such
exercise of banker’s lien, setoff or counterclaim or other event was to the
principal amount of all Loans and L/C Exposure outstanding prior to such exercise
of banker’s lien, setoff or counterclaim or other event; provided,
however, that if any such purchase or
purchases or adjustments shall be made pursuant to this Section 2.18 and
the payment giving rise thereto shall thereafter be recovered, such purchase or
purchases or adjustments shall be rescinded to the extent of such recovery and
the purchase price or prices or adjustment restored without interest.  The Borrower expressly consents to the
foregoing arrangements and agrees that any Lender holding a participation in a
Loan or L/C Disbursement deemed to have been so purchased may exercise any and
all rights of banker’s lien, setoff or counterclaim with respect to any and all
moneys owing by the Borrower to such Lender by reason thereof as fully as if such
Lender had made a Loan directly to the Borrower in the amount of such
participation.

 

Section 2.19.   Payments.   (a) The Borrower shall make
each payment (including principal of or interest on any Borrowing or any L/C
Disbursement or any Fees or other amounts) hereunder and under any other Loan
Document not later than 12:00 (noon), New York City time, on the date when due
in immediately available dollars, without setoff, defense or counterclaim.  Each such payment (other than (i) Issuing
Bank Fees, which shall be paid directly to the 

 

43

 

Issuing Bank, and (ii) principal
of and interest on Swingline Loans, which shall be paid directly to the
Swingline Lender except as otherwise provided in Section 2.22(e)) shall be
made to the Administrative Agent at its offices at One Madison Avenue, New
York, NY 10010 or such other office as may be designated by the Administrative
Agent from time to time.  The
Administrative Agent shall promptly distribute to each Lender any payments
received by the Administrative Agent on behalf of such Lender.

 

(b)        Except as otherwise expressly provided
herein, whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
interest or Fees, if applicable.

 

(c)        Unless the Administrative Agent shall
have received notice from the Borrower prior to the date on which any payment
is due to the Administrative Agent for the account of the Lenders or the
Issuing Bank hereunder that the Borrower will not make such payment, the
Administrative Agent may assume that the Borrower has made such payment on such
date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders or the Issuing Bank, as the case may be, the amount
due.  In such event, if the Borrower does
not in fact make such payment, then each of the Lenders or the Issuing Bank, as
the case may be, severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Lender, and to pay
interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Administrative
Agent, at a rate determined by the Administrative Agent to represent its cost
of overnight or short-term funds (which determination shall be conclusive
absent manifest error).

 

Section 2.20.   Taxes.   (a) Any and all payments by
or on account of any obligation of the Borrower or any other Loan Party
hereunder or under any other Loan Document shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided that, if the Borrower or any other Loan Party shall
be required to deduct any Indemnified Taxes or Other Taxes from such payments,
then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section) the Administrative Agent, Lender or Issuing
Bank (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower or such Loan
Party shall make such deductions and (iii) the Borrower or such Loan Party
shall pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.

 

(b)        In addition, the Borrower shall pay any
Other Taxes to the relevant Governmental Authority in accordance with
applicable law.

 

44

 

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

 

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

 

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

 

Section 2.21.   Assignment of Commitments
Under Certain Circumstances; Duty to Mitigate.  
(a) In the event (i) any Lender or the Issuing Bank
delivers a certificate requesting compensation pursuant to Section 2.14, (ii) any
Lender or the Issuing Bank delivers a notice described in Section 2.15, (iii) the
Borrower is required to pay any additional amount to any Lender or the Issuing
Bank or any Governmental Authority on account of any Lender or the Issuing Bank
pursuant to Section 2.20 or (iv) any Lender refuses to consent to any
amendment, waiver or other modification of any Loan Document requested by the
Borrower that requires the consent of a greater percentage of the Lenders than
the Required Lenders and such amendment, waiver or other modification is
consented to by the Required Lenders, the Borrower may, at its sole expense and
effort (including with respect to the processing and recordation fee referred
to in Section 9.04(b)), upon notice to such Lender or the Issuing Bank, as
the case may be, and the Administrative Agent, require such Lender or the
Issuing Bank to transfer and assign, without recourse (in accordance with and
subject to the restrictions contained in Section 9.04), all of its
interests, rights and obligations under this 

 

45

 

Agreement (or, in the case of
clause (iv) above, all of its interests, rights and obligation with
respect to the Class of Loans or Commitments that is the subject of the
related consent, amendment, waiver or other modification) to an assignee that
shall assume such assigned obligations and, with respect to clause (iv) above,
shall consent to such requested amendment, waiver or other modification of any
Loan Documents (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (x) such
assignment shall not conflict with any law, rule or regulation or order of
any court or other Governmental Authority having jurisdiction, (y) the
Borrower shall have received the prior written consent of the Administrative
Agent (and, if a Revolving Credit Commitment is being assigned, of the Issuing
Bank and the Swingline Lender), which consents shall not unreasonably be
withheld or delayed and (z) the Borrower or such assignee shall have paid
to the affected Lender or the Issuing Bank in immediately available funds an
amount equal to the sum of the principal of and interest accrued to the date of
such payment on the outstanding Loans or L/C Disbursements of such Lender or
the Issuing Bank, respectively, plus all Fees and other amounts accrued for the
account of such Lender or the Issuing Bank hereunder with respect thereto
(including any amounts under Sections 2.14 and 2.16); provided
further that, if prior to any such transfer and assignment the
circumstances or event that resulted in such Lender’s or the Issuing Bank’s
claim for compensation under Section 2.14, notice under Section 2.15
or the amounts paid pursuant to Section 2.20, as the case may be, cease to
cause such Lender or the Issuing Bank to suffer increased costs or reductions
in amounts received or receivable or reduction in return on capital, or cease
to have the consequences specified in Section 2.15, or cease to result in
amounts being payable under Section 2.20, as the case may be (including as
a result of any action taken by such Lender or the Issuing Bank pursuant to
paragraph (b) below), or if such Lender or the Issuing Bank shall waive
its right to claim further compensation under Section 2.14 in respect of
such circumstances or event or shall withdraw its notice under Section 2.15
or shall waive its right to further payments under Section 2.20 in respect
of such circumstances or event or shall consent to the proposed amendment,
waiver, consent or other modification, as the case may be, then such Lender or
the Issuing Bank shall not thereafter be required to make any such transfer and
assignment hereunder.  Each Lender hereby
grants to the Administrative Agent an irrevocable power of attorney (which
power is coupled with an interest) to execute and deliver, on behalf of such
Lender as assignor, any Assignment and Acceptance necessary to effectuate any
assignment of such Lender’s interests hereunder in the circumstances
contemplated by this Section 2.21(a).

 

(b)        If (i) any Lender or the Issuing
Bank shall request compensation under Section 2.14, (ii) any Lender
or the Issuing Bank delivers a notice described in Section 2.15 or (iii) the
Borrower is required to pay any additional amount to any Lender or the Issuing
Bank or any Governmental Authority on account of any Lender or the Issuing
Bank, pursuant to Section 2.20, then such Lender or the Issuing Bank shall
use reasonable efforts (which shall not require such Lender or the Issuing Bank
to incur an unreimbursed loss or unreimbursed cost or expense 

 

46

 

or otherwise
take any action inconsistent with its internal policies or legal or regulatory
restrictions or suffer any disadvantage or burden deemed by it to be
significant) (x) to file any certificate or document reasonably requested
in writing by the Borrower or (y) to assign its rights and delegate and
transfer its obligations hereunder to another of its offices, branches or
affiliates, if such filing or assignment would reduce its claims for
compensation under Section 2.14 or enable it to withdraw its notice
pursuant to Section 2.15 or would reduce amounts payable pursuant to Section 2.20,
as the case may be, in the future.  The
Borrower hereby agrees to pay all reasonable costs and expenses incurred by any
Lender or the Issuing Bank in connection with any such filing or assignment,
delegation and transfer.

 

Section 2.22.   Swingline Loans.   (a) Swingline
Commitment.  Subject to the
terms and conditions and relying upon the representations and warranties herein
set forth, the Swingline Lender agrees to make loans to the Borrower at any
time and from time to time after the Closing Date and until the earlier of the
Revolving Credit Maturity Date and the termination of the Revolving Credit
Commitments, in an aggregate principal amount at any time outstanding that will
not result in (i) the aggregate principal amount of all Swingline Loans
exceeding $5,000,000 in the aggregate or (ii) the Aggregate Revolving
Credit Exposure, after giving effect to any Swingline Loan, exceeding the Total
Revolving Credit Commitment.  Each
Swingline Loan shall be in a principal amount that is an integral multiple of
$250,000 and not less than $500,000.  The
Swingline Commitment may be terminated or reduced from time to time as provided
herein.  Within the foregoing limits, the
Borrower may borrow, pay or prepay and reborrow Swingline Loans hereunder,
subject to the terms, conditions and limitations set forth herein.

 

(b)        Swingline Loans.  The Borrower shall notify the Administrative
Agent by fax, or by telephone (promptly confirmed by fax), not later than 12:00
noon New York City time, on the day of a proposed Swingline Loan.  Such notice shall be delivered on a Business
Day, shall be irrevocable and shall refer to this Agreement and shall specify
the requested date (which shall be a Business Day) and amount of such Swingline
Loan and the wire transfer instructions for the account of the Borrower to
which the proceeds of the Swingline Loan should be disbursed.  The Swingline Lender shall make each Swingline
Loan by wire transfer to the account specified in such request.

 

(c)        Prepayment.  The Borrower shall have the right at any time
and from time to time to prepay any Swingline Loan, in whole or in part, upon
giving written or fax notice (or telephone notice promptly confirmed by
written, or fax notice) to the Swingline Lender before 12:00 (noon), New York
City time, on the date of prepayment at the Swingline Lender’s address for
notices specified in Section 9.01.

 

47

 

(d)        Interest.  Each Swingline Loan shall be an ABR Loan and,
subject to the provisions of Section 2.07, shall bear interest as provided
in Section 2.06(a).

 

(e)        Participations.  The Swingline Lender may by written notice
given to the Administrative Agent not later than 1:00 p.m., New York City
time, on any Business Day require the Revolving Credit Lenders to acquire
participations on such Business Day in all or a portion of the Swingline Loans
outstanding.  Such notice shall specify
the aggregate amount of Swingline Loans in which Revolving Credit Lenders will
participate.  The Administrative Agent
will, promptly upon receipt of such notice, give notice to each Revolving
Credit Lender, specifying in such notice such Lender’s Pro Rata Percentage of
such Swingline Loan or Loans.  In
furtherance of the foregoing, each Revolving Credit Lender hereby absolutely
and unconditionally agrees, upon receipt of notice as provided above, to pay to
the Administrative Agent, for the account of the Swingline Lender, such
Revolving Credit Lender’s Pro Rata Percentage of such Swingline Loan or
Loans.  Each Revolving Credit Lender
acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or an Event of Default, and that each such payment
shall be made without any offset, abatement, withholding or reduction whatsoever.  Each Revolving Credit Lender shall comply
with its obligation under this paragraph by wire transfer of immediately
available funds, in the same manner as provided in Section 2.02(c) with
respect to Loans made by such Lender (and Section 2.02(c) shall apply,
mutatis mutandis, to the payment
obligations of the Lenders) and the Administrative Agent shall promptly pay to
the Swingline Lender the amounts so received by it from the Lenders.  The Administrative Agent shall notify the
Borrower of any participations in any Swingline Loan acquired pursuant to this
paragraph and thereafter payments in respect of such Swingline Loan shall be
made to the Administrative Agent and not to the Swingline Lender.  Any amounts received by the Swingline Lender
from the Borrower (or other person on behalf of the Borrower) in respect of a
Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale
of participations therein shall be promptly remitted to the Administrative
Agent; any such amounts received by the Administrative Agent shall be promptly
remitted by the Administrative Agent to the Lenders that shall have made their
payments pursuant to this paragraph and to the Swingline Lender, as their
interests may appear.  The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrower (or other person liable for obligations of the Borrower) of any
default in the payment thereof.

 

Section 2.23.   Letters of Credit.   (a) General.  The Borrower may request the issuance of a
Letter of Credit for its own account or for the account of any of its wholly
owned Subsidiaries (in which case the Borrower and such wholly owned Subsidiary
shall be co-applicants with respect to such Letter of Credit), in a form
reasonably acceptable to the Administrative Agent and the Issuing Bank, 

 

48

 

at any time and from time to
time until the 30th day preceding the Revolving Credit Maturity Date
while the L/C Commitment remains in effect. 
This Section shall not be construed to impose an obligation upon
the Issuing Bank to issue any Letter of Credit that is inconsistent with the
terms and conditions of this Agreement.

 

(b)        Notice of Issuance,
Amendment, Renewal, Extension; Certain Conditions.  In order to request the issuance of a Letter
of Credit (or to amend, renew or extend an existing Letter of Credit), the
Borrower shall hand deliver or fax to the Issuing Bank and the Administrative
Agent (reasonably in advance of the requested date of issuance, amendment,
renewal or extension) a notice requesting the issuance of a Letter of Credit,
or identifying the Letter of Credit to be amended, renewed or extended, the
date of issuance, amendment, renewal or extension, the date on which such
Letter of Credit is to expire (which shall comply with paragraph (c) below),
the amount of such Letter of Credit, the name and address of the beneficiary
thereof and such other information as shall be necessary to prepare such Letter
of Credit.  A Letter of Credit shall be
issued, amended, renewed or extended only if, and upon issuance, amendment,
renewal or extension of each Letter of Credit the Borrower shall be deemed to
represent and warrant that, after giving effect to such issuance, amendment,
renewal or extension (i) the L/C Exposure shall not exceed $30,000,000 and
(ii) the Aggregate Revolving Credit Exposure shall not exceed the Total
Revolving Credit Commitment.

 

(c)        Expiration Date.  Each Letter of Credit shall expire at the
close of business on the earlier of the date one year after the date of the
issuance of such Letter of Credit and the date that is five Business Days prior
to the Revolving Credit Maturity Date, unless such Letter of Credit expires by
its terms on an earlier date; provided, however, that a Letter of Credit may, upon the request of
the Borrower, include a provision whereby such Letter of Credit shall be
renewed automatically for additional consecutive periods of 12 months or less
(but not beyond the date that is five Business Days prior to the Revolving
Credit Maturity Date) unless the Issuing Bank notifies the beneficiary thereof
at least 30 days (or such longer period as may be specified in such Letter of
Credit) prior to the then-applicable expiration date that such Letter of Credit
will not be renewed.

 

(d)        Participations.  By the issuance of a Letter of Credit and
without any further action on the part of the Issuing Bank or the Lenders, the
Issuing Bank hereby grants to each Revolving Credit Lender, and each such
Lender hereby acquires from the Issuing Bank, a participation in such Letter of
Credit equal to such Lender’s Pro Rata Percentage of the aggregate amount
available to be drawn under such Letter of Credit, effective upon the issuance
of such Letter of Credit (or, in the case of the Existing Letters of Credit,
effective upon the Closing Date).  In
consideration and in furtherance of the foregoing, each Revolving Credit Lender
hereby absolutely and unconditionally agrees to pay to the Administrative
Agent, for the account of the Issuing Bank, such Lender’s Pro Rata Percentage
of each L/C Disbursement made by the Issuing Bank and not reimbursed by the

 

49

 

Borrower (or, if applicable,
another party pursuant to its obligations under any other Loan Document)
forthwith on the date due as provided in Section 2.02(f).  Each Revolving Credit Lender acknowledges and
agrees that its obligation to acquire participations pursuant to this paragraph
in respect of Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including the occurrence and
continuance of a Default or an Event of Default, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever.

 

(e)        Reimbursement.  If the Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, the Borrower shall pay to the
Administrative Agent an amount equal to such L/C Disbursement not later than
two hours after the Borrower shall have received notice from the Issuing Bank
that payment of such draft will be made, or, if the Borrower shall have
received such notice later than 10:00 a.m., New York City time, on any
Business Day, not later than 10:00 a.m., New York City time, on the
immediately following Business Day.

 

(f)         Obligations Absolute.  The Borrower’s obligations to reimburse L/C
Disbursements as provided in paragraph (e) above shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the terms
of this Agreement, under any and all circumstances whatsoever, and irrespective
of:

 

(i)            any
lack of validity or enforceability of any Letter of Credit or any Loan Document,
or any term or provision therein;

 

(ii)           any
amendment or waiver of or any consent to departure from all or any of the
provisions of any Letter of Credit or any Loan Document;

 

(iii)          the
existence of any claim, setoff, defense or other right that the Borrower, any
other party guaranteeing, or otherwise obligated with, the Borrower, any
Subsidiary or other Affiliate thereof or any other person may at any time have
against the beneficiary under any Letter of Credit, the Issuing Bank, the
Administrative Agent or any Lender or any other person, whether in connection
with this Agreement, any other Loan Document or any other related or unrelated
agreement or transaction;

 

(iv)          any
draft or other document presented under a Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;

 

(v)           payment
by the Issuing Bank under a Letter of Credit against presentation of a draft or
other document that does not comply with the terms of such Letter of Credit;
and

 

50

 

(vi)          any
other act or omission to act or delay of any kind of the Issuing Bank, the
Lenders, the Administrative Agent or any other person or any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of
the Borrower’s obligations hereunder.

 

Without limiting the generality of the foregoing, it
is expressly understood and agreed that the absolute and unconditional
obligation of the Borrower hereunder to reimburse L/C Disbursements will not be
excused by the gross negligence or willful misconduct of the Issuing Bank.  However, the foregoing shall not be construed
to excuse the Issuing Bank from liability to the Borrower to the extent of any
direct damages (as opposed to consequential damages, claims in respect of which
are hereby waived by the Borrower to the extent permitted by applicable law)
suffered by the Borrower that are caused by the Issuing Bank’s gross negligence
or willful misconduct in determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof.  It is further understood and agreed that the
Issuing Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary and, in making any payment under any Letter of
Credit (i) the Issuing Bank’s exclusive reliance on the documents
presented to it under such Letter of Credit as to any and all matters set forth
therein, including reliance on the amount of any draft presented under such
Letter of Credit, whether or not the amount due to the beneficiary thereunder
equals the amount of such draft and whether or not any document presented
pursuant to such Letter of Credit proves to be insufficient in any respect, if
such document on its face appears to be in order, and whether or not any other
statement or any other document presented pursuant to such Letter of Credit
proves to be forged or invalid or any statement therein proves to be inaccurate
or untrue in any respect whatsoever and (ii) any noncompliance in any
immaterial respect of the documents presented under such Letter of Credit with
the terms thereof shall, in each case, be deemed not to constitute gross
negligence or willful misconduct of the Issuing Bank.

 

(g)        Disbursement Procedures.  The Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit.  The
Issuing Bank shall as promptly as possible give telephonic notification,
confirmed by fax, to the Administrative Agent and the Borrower of such demand
for payment and whether the Issuing Bank has made or will make an L/C
Disbursement thereunder; provided that
any failure to give or delay in giving such notice shall not relieve the
Borrower of its obligation to reimburse the Issuing Bank and the Revolving
Credit Lenders with respect to any such L/C Disbursement.

 

(h)        Interim Interest.  If the Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, then, unless the Borrower shall
reimburse such L/C Disbursement in full on such date, the unpaid amount thereof

 

51

 

shall bear interest for the
account of the Issuing Bank, for each day from and including the date of such
L/C Disbursement, to but excluding the earlier of the date of payment by the
Borrower or the date on which interest shall commence to accrue thereon as
provided in Section 2.02(f), at the rate per annum that would apply to
such amount if such amount were an ABR Revolving Loan.

 

(i)         Resignation or Removal of
the Issuing Bank.  The Issuing
Bank may resign at any time by giving 30 days’ prior written notice to the
Administrative Agent, the Lenders and the Borrower, and may be removed at any
time by the Borrower by notice to the Issuing Bank, the Administrative Agent
and the Lenders.  Upon the acceptance of
any appointment as the Issuing Bank hereunder by a Lender that shall agree to
serve as successor Issuing Bank, such successor shall succeed to and become
vested with all the interests, rights and obligations of the retiring Issuing
Bank.  At the time such removal or
resignation shall become effective, the Borrower shall pay all accrued and
unpaid fees pursuant to Section 2.05(c)(ii).  The acceptance of any appointment as the
Issuing Bank hereunder by a successor Lender shall be evidenced by an agreement
entered into by such successor, in a form satisfactory to the Borrower and the
Administrative Agent, and, from and after the effective date of such agreement,
(i) such successor Lender shall have all the rights and obligations of the
previous Issuing Bank under this Agreement and the other Loan Documents and (ii) references
herein and in the other Loan Documents to the term “Issuing Bank” shall be
deemed to refer to such successor or to any previous Issuing Bank, or to such
successor and all previous Issuing Banks, as the context shall require.  After the resignation or removal of the
Issuing Bank hereunder, the retiring Issuing Bank shall remain a party hereto
and shall continue to have all the rights and obligations of an Issuing Bank
under this Agreement and the other Loan Documents with respect to Letters of
Credit issued by it prior to such resignation or removal, but shall not be
required to issue additional Letters of Credit.

 

(j)         Cash Collateralization.  If any Event of Default shall occur and be
continuing, the Borrower shall, on the Business Day it receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Credit Lenders holding participations in
outstanding Letters of Credit representing greater than 50% of the aggregate
undrawn amount of all outstanding Letters of Credit) thereof and of the amount
to be deposited, deposit in an account with the Collateral Agent, for the
benefit of the Revolving Credit Lenders, an amount in cash equal to 105% of the
L/C Exposure as of such date; provided that
the obligation to deposit such cash will become effective immediately, and such
deposit will become immediately due and payable, without demand or notice of
any kind, upon the occurrence of an Event of Default described in Sections 7.01(i) or
7.01(j).  Such deposit shall be held by
the Collateral Agent as collateral for the payment and performance of the
Obligations.  The Collateral Agent shall
have exclusive dominion and control, including the exclusive right of
withdrawal, over such account.  Other
than any interest earned on the investment of such deposits in Cash
Equivalents, which 

 

52

 

investments shall be made at
the option and sole discretion of the Collateral Agent, such deposits shall not
bear interest.  Interest or profits, if
any, on such investments shall accumulate in such account.  Moneys in such account shall (i) automatically
be applied by the Administrative Agent to reimburse the Issuing Bank for L/C
Disbursements for which it has not been reimbursed, (ii) be held for the
satisfaction of the reimbursement obligations of the Borrower for the L/C
Exposure at such time and (iii) if the maturity of the Loans has been
accelerated (but subject to the consent of Revolving Credit Lenders holding
participations in outstanding Letters of Credit representing greater than 50%
of the aggregate undrawn amount of all outstanding Letters of Credit), be applied
to satisfy the Obligations.  If the
Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent not
applied as aforesaid) shall be returned to the Borrower within three Business
Days after all Events of Default have been cured or waived.

 

(k)        Additional Issuing Banks.  The Borrower may, at any time and from time
to time with the consent of the Administrative Agent (which consent shall not
be unreasonably withheld or delayed) and such Lender, designate one or more
additional Lenders to act as an issuing bank under the terms of this Agreement,
subject to such Lender agreeing to provide the Administrative Agent with
reports reasonably satisfactory to the Administrative Agent with respect to
issuances, amendments, extensions and terminations of Letters of Credit by such
Lender.  Any Lender designated as an
issuing bank pursuant to this paragraph (k) shall be deemed to be an
“Issuing Bank” (in addition to being a Lender) in respect of Letters of Credit
issued or to be issued by such Lender, and, with respect to such Letters of
Credit, such term shall thereafter apply to the other Issuing Bank and such
Lender.

 

ARTICLE 3

REPRESENTATIONS AND
WARRANTIES

 

The Borrower represents and warrants to the
Administrative Agent, the Collateral Agent, the Issuing Bank and each of the
Lenders that:

 

Section 3.01.   Organization; Power;
Qualification.   Each GGS
Company is duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or formation, has the power and
authority to own its properties and to carry on its business as now being and
hereafter proposed to be conducted and is duly qualified and authorized to do
business in, and is in good standing in, each jurisdiction in which the
character of its properties or the nature of its business requires such
qualification and authorization except where the failure to be so qualified
could not reasonably be expected to have a Material Adverse Effect.  The jurisdictions in which each GGS Company
is organized and qualified to do business as of the Closing Date are described
on Schedule 3.01.

 

53

 

Section 3.02.   Ownership.   Each Subsidiary of the Borrower
as of the Closing Date is listed on Schedule 3.02.  As of the Closing Date, the capitalization of
each GGS Company consists of the number of shares or other ownership interests,
authorized, issued and outstanding, of such classes and series, with or without
par value, described on Schedule 3.02. 
All such outstanding shares or other ownership interests have been duly
authorized and validly issued and are fully paid and nonassessable, with no
personal liability attaching to the ownership thereof, and not subject to any
preemptive or similar rights.  The
equityholders of the GGS Companies and the number of shares owned by each as of
the Closing Date are described on Schedule 3.02.  As of the Closing Date, there are no
outstanding stock purchase warrants, subscriptions, options, securities,
instruments or other rights of any type or nature whatsoever, which are
convertible into, exchangeable for or otherwise provide for or permit the
issuance of capital stock of the GGS Companies, except as described on Schedule
3.02.

 

Section 3.03.   Authorization of Agreement,
Loan Documents and Borrowing.  Each
GGS Company has the right, power and authority and has taken all necessary
corporate and other action to authorize the execution, delivery and performance
of this Agreement and each of the other Loan Documents and each other agreement
or instrument contemplated thereby to which it is a party in accordance with
their respective terms and, in the case of the Borrower, to borrow hereunder.  This Agreement and each of the other Loan
Documents and each other agreement or instrument contemplated thereby have been
duly executed and delivered by the duly authorized officers of the respective
GGS Company party thereto, and each such document constitutes the legal, valid
and binding obligation of each GGS Company party thereto, enforceable in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar state or federal
debtor relief laws from time to time in effect which affect the enforcement of
creditors’ rights in general and the availability of equitable remedies.

 

Section 3.04.   Compliance of Agreement, Loan
Documents and Borrowing With Laws, Etc.. 
The execution, delivery and performance by each GGS Company
of the Loan Documents to which each such Person is a party, in accordance with
their respective terms, the extensions of credit hereunder and the other
transactions (including the other Transactions) contemplated hereby do not and
will not, by the passage of time, the giving of notice or otherwise, (i) require
any Governmental Approval (except for  (x) the
filing of Uniform Commercial Code financing statements and filings with the
United States Patent and Trademark Office and the United States Copyright
Office, (y) recordation of the Mortgages and the Vessel Mortgages and (z) such
as have been made or obtained and are in full force and effect) or violate any
Applicable Law relating to the GGS Companies, (ii) conflict with, result
in a breach of or constitute a default under, or give rise to any right to
accelerate or to require the prepayment, repurchase or redemption of any
obligations under, the articles of incorporation, bylaws or other
organizational documents of any GGS Company or any indenture or Material 

 

54

 

Contract to which such Person is a party or
by which any of its properties may be bound or any Governmental Approval
relating to such Person, (iii) result in or require the creation or imposition
of any Lien upon or with respect to any property now owned or hereafter
acquired by such Person other than Liens arising under the Loan Documents and
the Second Priority Liens or (iv) require any consent or authorization of,
filing with, or other act in respect of, an arbitrator or Governmental
Authority (other than as set forth in clause (i)) and no consent of any other
Person is required in connection with the execution, delivery, performance,
validity or enforceability of this Agreement or any other Loan Document except
where failure to obtain any such consents could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

Section 3.05.   Compliance with Law;
Governmental Approvals.  Each
GGS Company (i) has all Governmental Approvals required by any Applicable
Law for it to conduct its business, each of which is in full force and effect,
is final and not subject to review on appeal and is not the subject of any
pending or, to the best of its knowledge, threatened attack by direct or
collateral proceeding, (ii) is in compliance in all material respects with
each Governmental Approval applicable to it and in compliance in all material
respects with all other Applicable Laws relating to it or any of its respective
properties and (iii) has timely filed all material reports, documents and
other materials required to be filed by it under all Applicable Laws with any
Governmental Authority and has retained all material records and documents
required to be retained by it under Applicable Law.

 

Section 3.06.   Tax Returns and
Payments.  Each GGS Company
has duly filed or caused to be filed all federal, material state, local and
other tax returns required by Applicable Law to be filed, and has paid, or made
adequate provision for the payment of, all federal, state, local and other
taxes, assessments and governmental charges or levies upon it and its property,
income, profits and assets which are due and payable.  Such returns accurately reflect in all
material respects all liability for taxes of the GGS Companies for the periods
covered thereby.  There is no ongoing
audit or examination or, to the knowledge of any GGS Company, other
investigation by any Governmental Authority of the tax liability of any GGS
Company.  No Governmental Authority has
asserted any Lien or other claim against any GGS Company with respect to unpaid
taxes, other than any Lien or claim that has been discharged or resolved or is
being contested in compliance with Section 5.08.  The charges, accruals and reserves on the
books of each GGS Company in respect of federal, state, local and other taxes
for all fiscal years and portions thereof since the organization of such GGS
Company are, in the judgment, of such GGS Company adequate, and no GGS Company
anticipates any material additional taxes or assessments for any of such years.

 

Section 3.07.   Intellectual Property
Matters.   Each GGS Company
owns or possesses rights to use all franchises, licenses, copyrights, copyright
applications, patents, patent rights or licenses, patent applications,
trademarks, trademark rights, service mark, service mark rights, trade names,
trade name 

 

55

 

rights, copyrights and rights with respect to
the foregoing which are required to conduct its business.  No event has occurred which permits, or after
notice or lapse of time or both would permit, the revocation or termination of
any such rights, and, to each GGS Companies’ knowledge, no GGS Company is
liable to any Person for infringement under Applicable Law with respect to any
such rights as a result of its business operations except where such
liabilities, in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.

 

Section 3.08.   Environmental Matters.   Except for any such matters that,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect,

 

(a)        The properties owned, leased or operated by the GGS Companies
do not contain, and to their knowledge have not previously contained, any
Hazardous Materials in amounts or concentrations which (A) constitute or
constituted a violation of applicable Environmental Laws or (B) could give
rise to liability under applicable Environmental Laws;

 

(b)        Each GGS Company and such properties and all operations
conducted in connection therewith are in compliance, and have been in
compliance, with all applicable Environmental Laws, there is no contamination
at, under or about such properties or such operations which could interfere
with the continued operation of such properties or impair the fair saleable
value thereof and no GGS Company has become subject to any liability under any
Environmental Law;

 

(c)        No GGS Company has received any notice of violation, alleged
violation, non-compliance, liability or potential liability regarding
environmental matters, Hazardous Materials, or compliance with Environmental
Laws, nor does any GGS Company have knowledge or reason to believe that any
such notice will be received or is being threatened;

 

(d)        Hazardous Materials have not been transported or disposed of
to or from the properties owned, leased or operated by any GGS Company in
violation of, or in a manner or to a location which could give rise to
liability under, Environmental Laws, nor have any Hazardous Materials been
generated, treated, stored or disposed of at, on or under any of such
properties in violation of, or in a manner that could give rise to liability
under, any applicable Environmental Laws;

 

(e)        No judicial proceedings or governmental or administrative
action is pending, or, to the knowledge of any GGS Company, threatened, under
any Environmental Law to which any GGS Company is or will be named as a
potentially responsible party with respect to such properties or operations
conducted in connection therewith, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
with respect to any GGS Company or such properties or such operations; and

 

56

 

(f)         There has been no release, or to the best of each GGS
Company’s knowledge, threat of release, of Hazardous Materials at or from
properties owned, leased or operated by any GGS Company, now or in the past, in
violation of or in amounts or in a manner that could give rise to liability
under Environmental Laws.

 

Section 3.09.   ERISA.

 

(a)        As of the Closing Date, no GGS Company or ERISA Affiliate
maintains or contributes to, or has any obligation under, any Employee Benefit
Plans other than those identified on Schedule 3.09;

 

(b)        Each GGS Company and each ERISA Affiliate is in material
compliance with all applicable provisions of ERISA and the regulations and published
interpretations thereunder with respect to all Employee Benefit Plans except
for any required amendments for which the remedial amendment period as defined
in Section 401(b) of the Code has not yet expired and except where a
failure to so comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. 
Each Employee Benefit Plan that is intended to be qualified under Section 401(a) of
the Code has been determined by the Internal Revenue Service to be so qualified,
and each trust related to such plan has been determined to be exempt under Section 501(a) of
the Code except for such plans that have not yet received determination letters
but for which the remedial amendment period for submitting a determination
letter has not yet expired.  No liability
has been incurred by any GGS Company or ERISA Affiliate which remains
unsatisfied for any taxes or penalties with respect to any Employee Benefit
Plan or any Multiemployer Plan except for liabilities that, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect;

 

(c)        As of the Closing Date, no Pension Plan has been terminated,
nor has any accumulated funding deficiency (as defined in Section 412 of
the Code) been incurred (without regard to any waiver granted under Section 412
of the Code), nor has any funding waiver from the Internal Revenue Service been
received or requested with respect to any Pension Plan, nor has any GGS Company
or any ERISA Affiliate failed to make any contributions or to pay any amounts
due and owing as required by Section 412 of the Code, Section 302 of
ERISA or the terms of any Pension Plan prior to the due dates of such
contributions under Section 412 of the Code or Section 302 of ERISA,
nor has there been any event requiring any disclosure under Section 4041(c)(3)(C) or
4063(a) of ERISA with respect to any Pension Plan;

 

(d)        Except where the failure, individually or in the aggregate,
of any of the following representations to be correct could not reasonably be
expected to have a Material Adverse Effect, no GGS Company or ERISA Affiliate
has:  (A) engaged in a nonexempt
prohibited transaction described in Section 406 of the ERISA or Section 4975
of the Code, (B) incurred any liability to the PBGC which 

 

57

 

remains outstanding other
than the payment of premiums and there are no premium payments which are due
and unpaid, (C) failed to make a required contribution or payment to a
Multiemployer Plan, or (D) failed to make a required installment or other
required payment under Section 412 of the Code;

 

(e)        No Termination Event has occurred or is reasonably expected
to occur; and

 

(f)         Except where the failure, individually or in the aggregate,
of any of the following representations to be correct could not reasonably be
expected to have a Material Adverse Effect, no proceeding, claim (other than a
benefits claim in the ordinary course of business), lawsuit and/or
investigation is existing or, to the best knowledge of each GGS Company after
due inquiry, threatened concerning or involving any (A) employee welfare
benefit plan (as defined in Section 3(1) of ERISA) currently
maintained or contributed to by any GGS Company or any ERISA Affiliate, (B) Pension
Plan or (C) Multiemployer Plan.

 

Section 3.10.   Use of Proceeds; Margin
Stock.

 

(a)        The Borrower will use the proceeds of the Loans and will
request the issuance of Letters of Credit only for the purposes specified in
the introductory statement to this Agreement.

 

(b)        No GGS Company is engaged principally or as one of its
primary activities in the business of extending credit for the purpose of
“purchasing” or “carrying” any “margin stock” (as each such term is defined or
used, directly or indirectly, in Regulation U). 
No part of the proceeds of any of the Loans or Letters of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for purchasing or carrying margin stock or for any purpose which
violates, or which would be inconsistent with, the provisions of Regulation T,
U or X.

 

Section 3.11.   Government Regulation.   No GGS Company is an “investment
company” or a company “controlled” by an “investment company” (as each such
term is defined or used in the Investment Company Act of 1940, as amended) and
no GGS Company is, or after giving effect to any extension of credit hereunder
will be, subject to regulation under the Interstate Commerce Act, each as
amended, or any other Applicable Law which limits its ability to incur debt or
consummate the transactions contemplated hereby.

 

Section 3.12.   Material Contracts.   Other than as set forth in Schedule 3.12, each
Material Contract of the GGS Companies is, and after giving effect to the
consummation of the transactions contemplated by the Loan Documents will be, in
full force and effect in accordance with the terms thereof.  No GGS Company (nor, to the knowledge of any
GGS Company, any other party thereto) is in breach of or in default under any
Material Contract in any material respect.

 

58

 

Section 3.13.   Employee Relations.  As of the Closing Date, no GGS
Company is party to any collective bargaining agreement nor has any labor union
been recognized as the representative of its employees except as set forth on
Schedule 3.13.  Except for any such
matters which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect (i) no GGS Company knows of any
pending, threatened or contemplated strikes, work stoppage or other
collective labor disputes involving its employees or those of its Subsidiaries,
(ii) the hours worked by and payments made to employees of the GGS
Companies have not been in violation of the Fair Labor Standards Act or any
other applicable Federal, state, local or foreign law dealing with such
matters, (iii) all payments due from any GGS Company, or for which any
claim may be made against any GGS Company, on account of wages and employee
health and welfare insurance and other benefits, have been paid or accrued as a
liability on the books of such GGS Company and (iv) the consummation of
the transactions contemplated hereby will not give rise to any right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which any GGS Company is bound.

 

Section 3.14.   Burdensome Provisions.   No GGS Company is a party to any
indenture, agreement, lease or other instrument, or subject to any corporate or
similar restriction, Governmental Approval or Applicable Law which is so
unusual or burdensome as in the foreseeable future could be reasonably expected
to have a Material Adverse Effect.  The
GGS Companies do not presently anticipate that future expenditures needed to
meet the provisions of any statutes, orders, rules or regulations of a
Governmental Authority will be so burdensome as to have a Material Adverse
Effect.  No Subsidiary is party to any
agreement or instrument or otherwise subject to any restriction or encumbrance
that restricts or limits its ability to make dividend payments or other
distributions in respect of its Equity Interests to the Borrower or any
Subsidiary or to transfer any of its assets or properties to the Borrower or
any other Subsidiary in each case other than existing under or by reason of the
Loan Documents or as otherwise permitted under Section 6.11.

 

Section 3.15.   Financial Statements.   The Borrower has heretofore
furnished to the Lenders its consolidated balance sheets and related statements
of income, stockholder’s equity and cash flows (i) as of and for the
fiscal years ended December 31, 2004, 2005 and 2006, audited by and
accompanied by the opinion of UHY, LLP, independent public accountants, and (ii) as
of and for the fiscal quarters and the portion of the fiscal year ended March 31,
2007, June 30, 2007 and September 30, 2007, in each case certified by
its chief financial officer.  Such
financial statements present fairly the financial condition and results of
operations and cash flows of the Borrower and its consolidated Subsidiaries as
of such dates and for such periods.  Such
balance sheets and the notes thereto disclose all material liabilities, direct
or contingent, of the Borrower and its consolidated Subsidiaries as of the
dates thereof.  Such financial statements
were prepared in accordance with GAAP applied on a consistent basis, subject,
in the 

 

59

 

case of unaudited financial statements, to
year-end audit adjustments and the absence of footnotes.

 

Section 3.16.   No Material Adverse
Change.  Since December 31,
2006, there has been no material adverse change in the properties, business,
operations, operating results or condition (financial or otherwise) of the GGS
Companies (taken as a whole) and no event has occurred or condition arisen
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

 

Section 3.17.   Solvency.  Immediately after the consummation
of the Transactions to occur on the Closing Date and immediately following the
making of each Loan and after giving effect to the application of the proceeds
of each Loan, each GGS Company is Solvent.

 

Section 3.18.   Titles to Properties.  Schedule  3.18
sets forth each parcel of real property owned or leased by the GGS Companies
and each GGS Company has such title to the real property owned or leased by it
as is reasonably necessary to the conduct of its business and valid and legal
title to all of its personal property and assets, except those which have been
disposed of by the GGS Companies subsequent to such date which dispositions
have been in the ordinary course of business or as otherwise expressly
permitted hereunder.

 

Section 3.19.   Liens.  None of the properties and assets
of any GGS Company is subject to any Lien, except Liens permitted pursuant to Section 6.02.  No GGS Company has signed any financing
statement or any security agreement authorizing any secured party thereunder to
file any financing statement, except to perfect those Liens permitted by Section 6.02
hereof.

 

Section 3.20.   Debt and Guaranty
Obligations.  Schedule 3.20 is
a complete and correct listing of all Debt and Guaranty Obligations of the GGS
Companies as of the Closing Date (other than under the Loan Documents and Debt
owed to another GGS Company).  The GGS
Companies have performed and are in compliance in all material respects with
all of the terms of such Debt and Guaranty Obligations and all instruments and
agreements relating thereto, and no default or event of default, or event or
condition which with notice or lapse of time or both would constitute such a
default or event of default, on the part of any GGS Company exists with respect
to any such Debt or Guaranty Obligation.

 

Section 3.21.   Litigation.  Except for matters existing on the
Closing Date and set forth on Schedule 3.21, there are no actions, suits,
proceedings or investigations pending nor, to the knowledge of any GGS Company,
threatened against or in any other way relating adversely to or affecting any
GGS Company or any of their respective properties in any court or before any
arbitrator of any kind or before or by any Governmental Authority (i) that
involve any Loan Document or the Transactions or (ii) that could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.  Since the Closing

 

60

 

Date, there
has been no change in the status of the matters disclosed on Schedule 3.21
that, individually or in the aggregate, has resulted in, or materially
increased the likelihood of, a Material Adverse Effect.

 

Section 3.22.   Absence of Defaults.  No event has occurred or is
continuing which constitutes a Default or an Event of Default.  No event has occurred or is continuing which
constitutes, or which with the passage of time or giving of notice or both
would constitute, a default or event of default by any GGS Company under any
Material Contract or judgment, decree or order to which any GGS Company is a
party or by which any GGS Company or any of its properties may be bound or
which would require any GGS Company to make any payment thereunder prior to the
scheduled maturity date therefor, in each case where any such event could,
individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect.

 

Section 3.23.   Senior Debt Status.  The Obligations of each GGS
Company under this Agreement and each of the other Loan Documents rank senior
in priority of payment to all Subordinated Debt and constitute “Senior
Indebtedness” and, together with the obligations under the Second Lien Credit
Agreement, sole “Designated Senior Debt” under all instruments and documents,
now or in the future, governing all Subordinated Debt of such GGS Company.

 

Section 3.24.   Accuracy and Completeness of
Information.  The Confidential
Information Memorandum and all other written information, reports, financial
statements, exhibits, schedules and other papers and data produced by or on
behalf of the GGS Companies (other than financial projections, which shall be
subject to the standard set forth in Section 5.01(c)) and furnished to the
Lenders were, at the time the same were so furnished, complete and correct in
all material respects.  No document
furnished or written statement made (as such documents and statements may be
corrected or supplemented, to the extent necessary, prior to each date the
representations contained in this Article 3 are made or deemed made) to
the Administrative Agent or the Lenders by the GGS Companies in connection with
the negotiation, preparation, execution or performance of this Agreement or any
of the Loan Documents contains or will contain any untrue statement of a fact
material to the creditworthiness of the GGS Companies, taken as a whole, or
omits or will omit to state a material fact necessary in order to make the
statements contained therein not misleading.

 

Section 3.25.   Sanctioned Persons.  None of the GGS Companies nor, to
the knowledge of the Borrower, any director, officer, agent, employee or
Affiliate of any GGS Company is currently subject to any sanctions administered
by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and no GGS Company will directly or indirectly use
the proceeds of the Loans or the Letters of Credit or otherwise make available
such proceeds to any person, for the purpose of financing the activities of any
person currently subject to any U.S. 
sanctions administered by OFAC.

 

61

 

Section 3.26.   Insurance.  Schedule 3.26 sets forth a true,
complete and correct description of all insurance maintained by the GGS Companies
as of the Closing Date.  As of such date,
such insurance is in full force and effect and all premiums due and payable
thereon have been paid.  The GGS
Companies have insurance in such amounts and covering such risks and
liabilities as are in accordance with customary industry practice.

 

Section 3.27.   Security Documents.  (a) The Collateral Agreement,
upon execution and delivery thereof by the parties thereto, will create in
favor of the Collateral Agent, for the ratable benefit of the Secured Parties,
a legal, valid and enforceable security interest in the Collateral (as defined
in the Collateral Agreement) and the proceeds thereof and (i) when the
Pledged Debt and Pledged Equity are delivered to the Collateral Agent, the Lien
created under the Collateral Agreement shall constitute a fully perfected first
priority Lien on, and security interest in, all right, title and interest of
the Loan Parties in such Collateral, in each case prior and superior in right
to any other person, and (ii) when financing statements in appropriate
form are filed in the offices specified on Schedule 3.27(a), the Lien created
under the Collateral Agreement will constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in such
Collateral (other than Intellectual Property, as defined in the Collateral
Agreement), in each case prior and superior in right to any other person, other
than with respect to Liens expressly permitted by Section 6.02.

 

(b)        Upon the recordation of the Collateral
Agreement (or a short-form security agreement in form and substance reasonably
satisfactory to the Borrower and the Collateral Agent) with the United States
Patent and Trademark Office and the United States Copyright Office, together
with the financing statements in appropriate form filed in the offices
specified on Schedule 3.27(a), the Lien created under the Collateral Agreement
shall constitute a fully perfected Lien on, and security interest in, all
right, title and interest of the Loan Parties in the Intellectual Property (as
defined in the Collateral Agreement) in which a security interest may be
perfected by filing in the United States and its territories and possessions,
in each case prior and superior in right to any other person (it being
understood that subsequent recordings in the United States Patent and Trademark
Office and the United States Copyright Office may be necessary to perfect a
Lien on registered trademarks and patents, trademark and patent applications
and registered copyrights acquired by the Loan Parties after the date hereof),
except as otherwise permitted under Section 6.02.

 

(c)        The Mortgages are effective to create in
favor of the Collateral Agent, for the ratable benefit of the Secured Parties,
a legal, valid and enforceable Lien on all of the Loan Parties’ right, title
and interest in and to the Mortgaged Property thereunder and the proceeds
thereof, and when the Mortgages are filed in the offices specified on Schedule
3.27(c), the Mortgages shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such
Mortgaged Property and the proceeds thereof, in each case prior

 

62

 

and superior
in right to any other person, other than with respect to the rights of persons
pursuant to Liens expressly permitted by Section 6.02.

 

(d)        The Vessel Mortgages are effective to
create in favor of the Collateral Agent, for the ratable benefit of the Secured
Parties, a legal, valid and enforceable Lien on all of the Loan Parties’ right,
title and interest in and to the marine vessel thereunder and the proceeds
thereof, and when the Vessel Mortgages are filed in the offices specified on
Schedule 3.27(d), the Vessel Mortgages shall constitute a fully perfected Lien
on, and security interest in, all right, title and interest of the Loan Parties
in such marine vessel and the proceeds thereof, in each case prior and superior
in right to any other person, other than with respect to the rights of persons
pursuant to Liens expressly permitted by Section 6.02.

 

ARTICLE 4

CONDITIONS OF LENDING

 

The obligations of the Lenders to make Loans
and of the Issuing Bank to issue Letters of Credit hereunder are subject to the
satisfaction of the following conditions:

 

Section 4.01.   All Credit Events.  On the date of each Borrowing
(other than a conversion or a continuation of a Borrowing), including each
Borrowing of a Swingline Loan and on the date of each issuance, amendment,
extension or renewal of a Letter of Credit (each such event being called a “Credit Event”):

 

(a)        The Administrative Agent shall have
received a notice of such Borrowing as required by Section 2.03 (or such
notice shall have been deemed given in accordance with Section 2.02) or,
in the case of the issuance, amendment, extension or renewal of a Letter of
Credit, the Issuing Bank and the Administrative Agent shall have received a
notice requesting the issuance, amendment, extension or renewal of such Letter
of Credit as required by Section 2.23(b) or, in the case of the
Borrowing of a Swingline Loan, the Swingline Lender and the Administrative
Agent shall have received a notice requesting such Swingline Loan as required
by Section 2.22(b).

 

(b)        The representations and warranties set
forth in Article 3 and in each other Loan Document shall be true and
correct on and as of the date of such Credit Event with the same effect as
though made on and as of such date, except to the extent such representations
and warranties expressly relate to an earlier date.

 

(c)        At the time of and immediately after
such Credit Event, no Default or Event of Default shall have occurred and be
continuing.

 

63

 

Each Credit Event shall be deemed to
constitute a representation and warranty by the Borrower on the date of such
Credit Event as to the matters specified in paragraphs (b) and (c) of
this Section 4.01.

 

Section 4.02.   First Credit Event.  On the Closing Date:

 

(a)        The Administrative Agent shall have received,
on behalf of itself, the Lenders and the Issuing Bank, a favorable written
opinion of Haynes and Boone, LLP, counsel for the Borrower, substantially to
the effect set forth in Exhibit F, (A) dated the Closing Date, (B) addressed
to the Issuing Bank, the Administrative Agent and the Lenders, and (C) covering
such other matters relating to the Loan Documents and the Transactions as the
Administrative Agent shall reasonably request, and the Borrower hereby requests
such counsel to deliver such opinion.

 

(b)        All legal matters incident to this
Agreement, the Borrowings and extensions of credit hereunder and the other Loan
Documents shall be satisfactory to the Lenders, to the Issuing Bank and to the
Administrative Agent.

 

(c)        The Administrative Agent shall have
received (i) a copy of the certificate or articles of incorporation (or
equivalent organizational document), including all amendments thereto, of each
Loan Party, certified as of a recent date by the Secretary of State of the
state of its organization, and a certificate as to the good standing of each
Loan Party as of a recent date, from such Secretary of State; (ii) a
certificate of the Secretary or Assistant Secretary of each Loan Party dated
the Closing Date and certifying (A) that attached thereto is a true and
complete copy of the by-laws (or equivalent organizational document) of such
Loan Party as in effect on the Closing Date and at all times since a date prior
to the date of the resolutions described in clause (B) below, (B) that
attached thereto is a true and complete copy of resolutions duly adopted by the
Board of Directors (or equivalent body) of such Loan Party authorizing the
execution, delivery and performance of the Loan Documents to which such person
is a party and, in the case of the Borrower, the borrowings hereunder, and that
such resolutions have not been modified, rescinded or amended and are in full
force and effect, (C) that the certificate or articles of incorporation
(or equivalent organizational document) of such Loan Party have not been
amended since the date of the last amendment thereto shown on the certificate
of good standing furnished pursuant to clause (i) above, and (D) as
to the incumbency and specimen signature of each officer executing any Loan
Document or any other document delivered in connection herewith on behalf of
such Loan Party; (iii) a certificate of another officer as to the
incumbency and specimen signature of the Secretary or Assistant Secretary
executing the certificate pursuant to clause (ii) above; and (iv) such
other documents as the Lenders, the Issuing Bank or the Administrative Agent
may reasonably request.

 

(d)        The Administrative Agent shall have
received a certificate, dated the Closing Date and signed by a Financial
Officer of the Borrower, confirming 

 

64

 

compliance
with the conditions precedent set forth in paragraphs (b) and (c) of Section 4.01.

 

(e)        The Administrative Agent shall have
received all Fees and other amounts due and payable on or prior to the Closing
Date, including, to the extent invoiced, reimbursement or payment of all out of
pocket expenses required to be reimbursed or paid by the Borrower hereunder or
under any other Loan Document.

 

(f)         The Intercreditor Agreement shall have
been duly executed by each party thereto and shall be in full force and effect
on the Closing Date.  The other Security
Documents shall have been duly executed by each Loan Party that is to be a
party thereto and shall be in full force and effect on the Closing Date.  The Collateral Agent on behalf of the Secured
Parties shall have a security interest in the Collateral of the type and
priority described in each Security Document.

 

(g)        (i) The Collateral Agent shall have
received a Perfection Certificate with respect to the Loan Parties dated the
Closing Date and duly executed by a Responsible Officer of the Borrower, and
shall have received the results of a search of the Uniform Commercial Code
filings (or equivalent filings) made with respect to the Loan Parties in the
states (or other jurisdictions) of formation of such persons as indicated on
such Perfection Certificate, and such other jurisdictions as may be reasonably
specified by the Collateral Agent, together with copies of the financing
statements (or similar documents) disclosed by such search, and accompanied by
evidence satisfactory to the Collateral Agent that the Liens indicated in any
such financing statement (or similar document) would be permitted under Section 6.02
or have been or will be contemporaneously released or terminated.  (ii) Except as otherwise consented to by
the Collateral Agent, all outstanding Equity Interests in any GGS Company owned
directly by or on behalf of any Loan Party shall have been pledged pursuant to
the Collateral Agreement (except that the Loan Parties shall not be required to
pledge more than 66% of the outstanding voting Equity Interests in any Foreign
Subsidiary) and the Collateral Agent shall have received all certificates or
other instruments representing such Equity Interests, together with stock
powers or other instruments of transfer with respect thereto endorsed in
blank.  (iii) All documents and
instruments, including Uniform Commercial Code financing statements, required
by law or reasonably requested by the Collateral Agent to be filed, registered
or recorded to create the Liens intended to be created by the Security
Documents and perfect or record such Liens to the extent, and with the
priority, required by the Security Documents, shall have been filed, registered
or recorded or delivered to the Administrative Agent for filing, registration
or recording.

 

(h)        The Administrative Agent shall have
received a copy of, or a certificate as to coverage under, and an insurance
broker’s letter with respect to, the insurance policies required by Section 5.06
and the applicable provisions of the Security Documents, each of which shall be
endorsed or otherwise amended to include a customary lender’s loss payable
endorsement and to name the

 

65

 

Collateral
Agent as additional insured, in form and substance satisfactory to the
Administrative Agent.  The Administrative
Agent shall have received evidence, in form and substance satisfactory to the
Administrative Agent, of the effectiveness of the Borrower’s existing key man
insurance policies.

 

(i)         The Borrower shall have received gross
cash proceeds of not less than $50,000,000 from borrowings under the Second
Lien Credit Agreement (not taking into account any original issue discount).  The terms and conditions of the Second Lien
Credit Agreement and the provisions of the Second Lien Loan Documents shall be
satisfactory to the Administrative Agent. 
The Administrative Agent shall have received copies of the Second Lien
Loan Documents, certified by a Financial Officer as being complete and correct.

 

(j)         All principal, premium, if any,
interest, fees and other amounts due or outstanding under the Existing Credit
Agreements shall have been paid in full, the commitments thereunder terminated
and all guarantees and security in support thereof discharged and released, and
the Administrative Agent shall have received reasonably satisfactory evidence
thereof.  Immediately after giving effect
to the Transactions and the other transactions contemplated hereby, the
Borrower and the Subsidiaries shall have outstanding no Debt or preferred stock
other than (i) Debt outstanding under this Agreement, (ii) Debt
outstanding under the Second Lien Credit Facility, (iii) the Series A
Preferred Stock and (iv) Debt set forth on Schedule 3.20.

 

(k)        The Lenders shall have received the
financial statements and opinion referred to in Section 3.15.

 

(l)         The Credit Facilities shall have
received a debt rating from Moody’s and from S&P and the Borrower shall
have received a public corporate family rating from Moody’s and a public
corporate credit rating from S&P.

 

(m)       The Administrative Agent shall have
received evidence in form and substance satisfactory to it that the Total
Leverage Ratio on the Closing Date, after giving pro forma effect to the
Transactions, does not exceed 3.99 to 1.00.

 

(n)        The Administrative Agent shall have
received a certificate from the chief financial officer of the Borrower
certifying that the Borrower and its Subsidiaries, on a consolidated basis
after giving effect to the Transactions to occur on the Closing Date, are
Solvent.

 

(o)        All requisite Governmental Authorities
and third parties shall have approved or consented to the Transactions and the
other transactions contemplated hereby to the extent required, all applicable
appeal periods shall have expired and there shall not be any litigation,
governmental, administrative or judicial action, actual or threatened in
writing, that would reasonably be expected to restrain, prevent or impose burdensome
conditions on the Transactions or the other transactions contemplated hereby.

 

66

 

(p)        The Administrative Agent shall have
received evidence that, as of the Closing Date, the procedures with respect to
cash management required by the Security Documents have been established and
are currently being maintained by each Loan Party, together with account
control agreements duly executed by each such Loan Party and the other parties
thereto in connection therewith.

 

(q)        No later than the fifth Business Day
prior to the Closing Date, the Lenders shall have received, to the extent
requested, all documentation and other information required by regulatory
authorities under applicable “know your customer” and anti-money laundering rules and
regulations, including the USA PATRIOT Act.

 

ARTICLE 5

AFFIRMATIVE COVENANTS

 

The Borrower covenants and agrees with each
Lender that so long as this Agreement shall remain in effect and until the
Commitments have been terminated and the principal of and interest on each
Loan, all Fees and all other expenses or amounts payable under any Loan
Document shall have been paid in full and all Letters of Credit have been
canceled or have expired and all amounts drawn thereunder have been reimbursed
in full, unless the Required Lenders shall otherwise consent in writing, the
Borrower will, and will cause each of its Subsidiaries to:

 

Section 5.01.   Financial Statements,
Reports, Etc.  In the case of
the Borrower, furnish to the Administrative Agent, which shall furnish to each
Lender:

 

(a)        As soon as practicable and in any event
within 45 days after the end of each fiscal quarter of each fiscal year except
for the fourth fiscal quarter in each fiscal year, an unaudited
consolidated  balance sheet of the GGS
Companies as of the close of such fiscal quarter and unaudited consolidated
statements of income and cash flows for the fiscal quarter then ended and that
portion of the fiscal year then ended, including the notes thereto, all in reasonable
detail setting forth in comparative form the corresponding figures as of the
end of and for the corresponding period in the preceding fiscal year, and
prepared by the GGS Companies in accordance with GAAP and, if applicable,
containing disclosure of the effect on the financial position or results of
operations of any change in the application of accounting principles and
practices during the period, and certified by the chief financial officer of
the Borrower as presenting fairly in all material respects the financial
condition of the GGS Companies on a consolidated basis as of their respective
dates and the results of operations of the GGS Companies for the respective
periods then ended, subject to normal year end adjustments.

 

(b)        As soon as practicable and in any event
within 90 days (or, in the case of the fiscal year ended December 31,
2007, 120 days) after the end of each

 

67

 

fiscal year
commencing with the fiscal year ended December 31, 2007, a consolidated
balance sheet of the GGS Companies as of the close of such fiscal year and
consolidated statements of income, retained earnings and cash flows for the
fiscal year then ended, including the notes thereto, all in reasonable detail
setting forth in comparative form the corresponding figures as of the end of
and for the preceding fiscal year and audited by UHY, LLP or another
independent certified public accounting firm acceptable to the Administrative
Agent in accordance with GAAP and, if applicable, containing disclosure of the
effect on the financial position or results of operations of any change in the
application of accounting principles and practices during the year, and
accompanied by a report thereon by such certified public accountants (which
report shall be without a “going concern” or like qualification or exception
and shall not be qualified with respect to scope limitations imposed by any GGS
Company or with respect to accounting principles followed by any GGS Company
not in accordance with GAAP) to the effect that such financial statements
fairly present in all material respects the financial conditions and results of
operations of the GGS Companies on a consolidated basis in accordance with GAAP
consistently applied.

 

(c)        As soon as practicable and in any event
prior to the beginning of each fiscal year (commencing with fiscal year 2008),
a business plan of the GGS Companies for the ensuing four fiscal quarters, such
plan to include, on a quarterly basis, the following:  a quarterly operating and capital budget,
operating assumptions, a projected income statement, statement of cash flows
and balance sheet and a report containing management’s discussion and analysis
of such projections, accompanied by a certificate from the chief financial officer
of the Borrower to the effect that, to the best of such officer’s knowledge,
such projections are good faith and reasonable estimates (utilizing reasonable
assumptions in light of current conditions and current facts) of the financial
condition and operations of the GGS Companies for such four quarter period.

 

(d)        At each time financial statements are
delivered pursuant to Sections 5.01(a) or 5.01(b) and at such other
times as the Administrative Agent shall reasonably request, a certificate of
the chief financial officer or the treasurer of the Borrower in the form of Exhibit E
attached hereto (an “Officer’s Compliance
Certificate”), including the portion, if any, of the Available
Amount or the Equity Proceeds Available Amount expended during the period
covered by such financial statements and the purpose for which such portion was
expended and the then remaining unutilized portion of the Available Amount and
the Equity Proceeds Available Amount.

 

(e)        At each time financial statements are
delivered pursuant to Sections 5.01(a) or 5.01(b), (i) a report
showing the projected usage of any and all seismic crews owned or operated by
the GGS Companies for the ensuing three calendar months and (ii) backlog
reports and a summary of the location of each seismic crew and the status of
each ongoing project for such crews.

 

68

 

(f)         At each time financial statements are
delivered pursuant to Section 5.01(b), a certificate of the independent
public accountants certifying such financial statements and stating that in
connection with their audit, nothing came to their attention that caused them
to believe that any GGS Company failed to comply with the Financial Covenants
insofar as they relate to financial and accounting matters or, if such is not
the case, specifying such non-compliance and its nature and period of
existence.

 

(g)        Promptly upon receipt thereof, copies of
all reports, if any, submitted to any GGS Company or its Board of Directors (or
equivalent body) or any shareholder thereof by its independent public
accountants in connection with their auditing function, including any
management report and any management responses thereto.

 

(h)        Promptly after the same become publicly
available, copies of all periodic and other reports, proxy statements and other
materials filed by any GGS Company with the Securities and Exchange Commission,
or any Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed to its
shareholders, as the case may be.

 

(i)         Such other information regarding the
operations, business affairs and financial condition of the GGS Companies, or
compliance with the terms of the Loan Documents, as the Administrative Agent or
any Lender may reasonably request, including all documentation and other
information that such Lender reasonably requests in order to comply with its
ongoing obligations under applicable “know your customer” and anti-money
laundering rules and regulations, including the USA PATRIOT Act.

 

Section 5.02.   Notice of Litigation and
Other Matters.  Furnish to the
Administrative Agent, the Issuing Bank and each Lender prompt (but in no event
later than 10 days after any executive officer of any GGS Company obtains
knowledge thereof) written notice of the following:

 

(a)        the commencement of, or notice of
intention of any person to commence, any proceedings and investigations by or
before any Governmental Authority and all actions and proceedings in any court
or before any arbitrator against or involving any GGS Company or any of their
respective properties, assets or businesses which if adversely determined could
reasonably be expected to have a Material Adverse Effect;

 

(b)        any notice of any violation received by
any GGS Company from any Governmental Authority including any notice of
violation of Environmental Laws which in any such case could reasonably be
expected to have a Material Adverse Effect;

 

69

 

(c)        any labor controversy that has resulted
in, or threatens to result in, a strike or other work action against any GGS
Company which in any such case could reasonably be expected to have a Material
Adverse Effect;

 

(d)        any attachment, judgment, lien, levy or
order exceeding $1,000,000 that may be assessed against any GGS Company and
which is not adequately covered by insurance;

 

(e)        (i) any Default or Event of Default
or (ii) any event which constitutes or which with the passage of time or
giving of notice or both would constitute a default or event of default under
any Material Contract to which any GGS Company is a party or by which any GGS
Company or any of their respective properties may be bound and which such event
could reasonably be expected to have a Material Adverse Effect, in each case
specifying the nature and extent thereof and the corrective action (if any)
taken or proposed to be taken with respect thereto;

 

(f)         with respect to any of the following
matters which, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect, (i) any unfavorable determination
letter from the Internal Revenue Service regarding the qualification of an
Employee Benefit Plan under Section 401(a) of the Code (along with a
copy thereof), (ii) all notices received by any GGS Company or ERISA
Affiliate of the PBGC’s intent to terminate any Pension Plan or to have a
trustee appointed to administer any Pension Plan, (iii) all notices
received by any GGS Company or any ERISA Affiliate from a Multiemployer Plan
sponsor concerning the imposition or amount of withdrawal liability pursuant to
Section 4202 of ERISA and (iv) any GGS Company obtaining knowledge or
reason to know that any GGS Company or ERISA Affiliate has filed or intends to
file a notice of intent to terminate any Pension Plan under a distress
termination within the meaning of Section 4041(c) of ERISA;

 

(g)        any other development that has resulted
in, or could reasonably be expected to result in, a Material Adverse Effect;
and

 

(h)        any change in the Borrower’s public
corporate credit rating by S&P, in the Borrower’s public corporate family
rating by Moody’s or in the ratings of the Credit Facilities by S&P or
Moody’s, or any notice from either such agency indicating its intent to effect
such a change or to place the Borrower or the Credit Facilities on a “CreditWatch”
or “WatchList” or any similar list, in each case with negative implications, or
its cessation of, or its intent to cease, rating the Borrower or the Credit
Facilities.

 

The Borrower hereby acknowledges that (a) the
Administrative Agent and/or an Arranger will make available to the Lenders
materials and/or information provided by or on behalf of the Borrower hereunder
(collectively, “Borrower Materials”) by posting
the Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and (b) certain of the Lenders

 

70

 

may be “public-side”
Lenders (i.e., Lenders that do not wish to
receive material non-public information with respect to the Borrower or its
securities) (each, a “Public Lender”).  The Borrower hereby agrees that at any time
that the Borrower is the issuer of any outstanding debt or equity securities
that are registered or issued pursuant to a private offering or is actively
contemplating issuing any such securities it will use commercially reasonable
efforts to identify that portion of the Borrower Materials that may be
distributed to the Public Lenders and that (w) all such Borrower Materials
shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall
mean that the word “PUBLIC” shall appear prominently on the first page thereof;
(x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed
to have authorized the Administrative Agent, the Arrangers and the Lenders to
treat such Borrower Materials as not containing any material non-public
information (although it may be sensitive and proprietary) with respect to the
Borrower or its securities for purposes of United States Federal and state
securities laws; (y) all Borrower Materials marked “PUBLIC” are permitted
to be made available through a portion of the Platform designated “Public
Investor”; and (z) the Administrative Agent and the Arrangers shall be
entitled to treat any Borrower Materials that are not marked “PUBLIC” as being
suitable only for posting on a portion of the Platform not designated “Public
Investor.”

 

Section 5.03.   Accuracy of Information.  All written information, reports,
statements and other papers and data furnished by or on behalf of the GGS
Companies to the Administrative Agent or any Lender whether pursuant to this Article 5
or any other provision of this Agreement, or any of the Security Documents,
shall, at the time the same is so furnished, comply with the representations
and warranties set forth in Section 3.24.

 

Section 5.04.   Preservation of Corporate
Existence and Related Matters.  Except
as permitted by Section 6.04, preserve and maintain its separate corporate
existence and all rights, franchises, licenses and privileges reasonably
necessary to the conduct of its business, and qualify and remain qualified as a
foreign corporation and authorized to do business in each jurisdiction in which
the failures to so qualify, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.

 

Section 5.05.   Maintenance of Property.  In addition to the requirements of
any of the Security Documents, protect and preserve all material properties
useful in and material to its business, including copyrights, patents, trade
names, service marks and trademarks; maintain in good working order and
condition all material buildings, equipment and other tangible real and
personal property; and from time to time make or cause to be made all renewals,
replacements and additions to such property necessary for the conduct of its
business, so that the business carried on in connection therewith may be
conducted in a commercially reasonable manner consistent with past practice.

 

71

 

Section 5.06.  
Insurance.  (a) Keep
its insurable properties adequately insured at all times by financially sound
and reputable insurers; maintain such other insurance, to such extent and
against such risks, including fire and other risks insured against by extended
coverage, as is customary with companies in the same or similar businesses
operating in the same or similar locations, including public liability
insurance against claims for personal injury or death or property damage
occurring upon, in, about or in connection with the use of any properties
owned, occupied or controlled by it; and maintain such other insurance as may
be required by Applicable Law.

 

(b)        Cause all such policies covering any
Collateral to be endorsed or otherwise amended to include a customary lender’s
loss payable endorsement, in form and substance satisfactory to the
Administrative Agent and the Collateral Agent, which endorsement shall provide
that, from and after the Closing Date, if the insurance carrier shall have
received written notice from the Administrative Agent or the Collateral Agent
of the occurrence of an Event of Default, the insurance carrier shall pay all
proceeds otherwise payable to the Borrower or the Loan Parties under such
policies directly to the Collateral Agent; cause all such policies to provide
that neither the Borrower, the Administrative Agent, the Collateral Agent nor
any other party shall be a coinsurer thereunder and to contain a “Replacement Cost Endorsement”, without any
deduction for depreciation, and such other provisions as the Administrative
Agent or the Collateral Agent may reasonably require from time to time to
protect their interests; promptly upon written request, deliver original or
certified copies of all such policies to the Collateral Agent; cause each such
policy to provide that it shall not be canceled, modified or not renewed
(i) by reason of nonpayment of premium upon not less than 10 days’ prior
written notice thereof by the insurer to the Administrative Agent and the
Collateral Agent (giving the Administrative Agent and the Collateral Agent the
right to cure defaults in the payment of premiums) or (ii) for any other
reason upon not less than 30 days’ prior written notice thereof by the insurer
to the Administrative Agent and the Collateral Agent; deliver to the
Administrative Agent and the Collateral Agent, prior to the cancellation,
modification or nonrenewal of any such policy of insurance, a copy of a renewal
or replacement policy (or other evidence of renewal of a policy previously
delivered to the Administrative Agent and the Collateral Agent) together with
evidence satisfactory to the Administrative Agent and the Collateral Agent of
payment of any premium due therefor.

 

Section 5.07.   Accounting
Methods and Financial Records.  Maintain
a system of accounting, and keep such books, records and accounts (which shall
be true and complete in all material respects) as may be required or as may be
necessary to permit the preparation of financial statements in accordance with
GAAP and in compliance in all material respects with the regulations of any
Governmental Authority having jurisdiction over it or any of its properties.

 

Section 5.08.   Payment and
Performance of Obligations.  Pay
and perform all Obligations under this Agreement and the other Loan Documents,
and

 

72

 

pay or perform promptly when
due (a) all taxes, assessments and other governmental charges that may be
levied or assessed upon it or any of its property, (b) all lawful claims
for labor, materials and supplies or otherwise that, if unpaid, might give rise
to a Lien upon such properties or any part thereof and (c) all other
indebtedness, obligations and liabilities in accordance with customary trade
practices; provided, that such
GGS Company may contest any item described in clauses (a), (b) or
(c) of this Section in good faith by appropriate proceedings so long
as adequate reserves are maintained with respect thereto in accordance with
GAAP and such contest operates to suspend collection of the contested item and,
in the case of a Mortgaged Property, there is no imminent risk of forfeiture of
such property.

 

Section 5.09.   Compliance
with Laws and Approvals.  Observe
and remain in compliance in all material respects with all Applicable Laws and
maintain in full force and effect all material Governmental Approvals, in each
case applicable to the conduct of its business.

 

Section 5.10.  
Environmental Laws.  (a) In
addition to and without limiting the generality of Section 5.09,
(i) except where the failure to so comply could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect, comply
with, and use commercially reasonable efforts consistent with customary
industry practices to ensure such compliance by all tenants and subtenants
with, all applicable Environmental Laws and obtain and comply with and
maintain, and use commercially reasonable efforts consistent with customary
industry practices to ensure that all tenants and subtenants, if any, obtain
and comply with and maintain, any and all licenses, approvals, notifications,
registrations or permits required by applicable Environmental Laws,
(ii) conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws, and promptly comply with all lawful orders and directives
of any Governmental Authority regarding Environmental Laws and
(iii) defend, indemnify and hold harmless the Administrative Agent, the Collateral
Agent and the Lenders, and their respective parents, Subsidiaries, Affiliates,
employees, agents, officers and directors, from and against any claims,
demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or otherwise,
arising out of, or in any way relating to the presence of Hazardous Materials,
or the violation of, noncompliance with or liability under any Environmental
Laws applicable to the operations of such GGS Company, or any orders,
requirements or demands of Governmental Authorities related thereto, including
reasonable attorney’s and consultant’s fees, investigation and laboratory fees,
response costs, court costs and litigation expenses, except to the extent that
any of the foregoing directly result from the gross negligence or willful
misconduct of the party seeking indemnification therefor, as determined by a
court of competent jurisdiction by final nonappealable judgment.

 

73

 

(b)        If a Default caused by reason of a
breach of Section 3.08 or Section 5.10(a) shall have occurred
and be continuing for more than 20 days without any GGS Company commencing
activities reasonably likely to cure such Default, at the written request of
the Required Lenders through the Administrative Agent, provide to the Lenders
within 45 days after such request, at the expense of the Loan Parties, an
environmental site assessment report regarding the matters which are the
subject of such Default prepared by an environmental consulting firm reasonably
acceptable to the Administrative Agent and indicating the presence or absence
of Hazardous Materials and the estimated cost of any compliance or remedial
action in connection with such Default.

 

Section 5.11.   ERISA.  In addition to and without
limiting the generality of Section 5.09, (a) except where the failure
to so comply could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, (i) comply with all material
applicable provisions of ERISA and the regulations and published
interpretations thereunder with respect to all Employee Benefit Plans,
(ii) not take any action or fail to take action the result of which could
be a liability to the PBGC or to a Multiemployer Plan, (iii) not
participate in any prohibited transaction that could result in any civil
penalty under ERISA or tax under the Code and (iv) operate each Employee
Benefit Plan in such a manner that will not incur any tax liability under Section 4980B
of the Code or any liability to any qualified beneficiary as defined in
Section 4980B of the Code and (b) furnish to the Administrative Agent
upon the Administrative Agent’s request such additional information about any
Employee Benefit Plan as may be reasonably requested by the Administrative
Agent.

 

Section 5.12.   Compliance
with Agreements.   Comply in
all respects with each term, condition and provision of all leases, agreements
and other instruments entered into in the conduct of its business including any
Material Contract, except (it being agreed that this exception shall not apply
to any Loan Document) where the failures to so comply could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect; provided, that such GGS Company may
contest any such lease, agreement or other instrument (except any Loan
Document) in good faith through appropriate proceedings so long as adequate
reserves are maintained in accordance with GAAP.

 

Section 5.13.   Visits and
Inspections.  Permit
representatives of the Administrative Agent or any Lender, from time to time
(and, if no Default or Event of Default has occurred and is continuing, upon
reasonable notice and during normal business hours), to visit and inspect its
properties; inspect, audit and make extracts from its books, records and files,
including management letters prepared by independent accountants; and discuss
with its principal officers, and its independent accountants, its business,
assets, liabilities, financial condition, results of operations and business
prospects; provided that, unless
an Event of Default has occurred and is continuing, the Lenders, as a whole,
shall be entitled to make only one visit for any such purpose in any fiscal
year.  The Borrower shall be responsible
for all reasonable costs incurred by the Administrative Agent

 

74

 

(including any consultant or
advisor engaged by the Administrative Agent) pursuant to this Section.

 

Section 5.14.   Additional
Subsidiaries; Collateral.  (a) Promptly,
but no later than 30 days (or such longer period as the Administrative Agent
may agree in its sole discretion), after any Domestic Subsidiary of any GGS
Company is formed or acquired (including as a result of any Permitted
Acquisition) (each such new Subsidiary, an “Additional
Subsidiary”), cause to be executed and delivered to the
Administrative Agent (A) a duly executed joinder agreement in form and
substance reasonably satisfactory to the Administrative Agent joining such
Additional Subsidiary to the Guaranty Agreement, the Collateral Agreement and
any other applicable Security Documents, (B) unless already pledged
pursuant thereto, a duly executed joinder agreement in form and substance
satisfactory to the Administrative Agent to the Collateral Agreement executed
by each Loan Party owning any Equity Interests in such Additional Subsidiary
pursuant to which such Equity Interests shall have been pledged in favor of the
Collateral Agent, (C) updated Schedules 3.01 and 3.02 reflecting the
creation or acquisition of such Additional Subsidiary and such other updated
schedules to any Loan Document as may be reasonably requested by the
Administrative Agent, (D) original stock or other certificates and stock
or other transfer powers evidencing the ownership interests of the Borrower or
applicable Subsidiary, as applicable, in such Additional Subsidiary and
(E) any other documents and certificates as may be reasonably requested by
the Administrative Agent or the Required Lenders (through the Administrative
Agent).

 

(b)        Promptly, but no later than 45 days (or
such longer period as the Administrative Agent may agree in its sole
discretion), after any acquisition of or involving material real property
(including material leasehold interests), in each case as determined by the
Administrative Agent in its reasonable discretion, cause to be executed and
delivered to the Administrative Agent (i) Mortgages (unless otherwise
agreed by the Administrative Agent) and (ii) an updated Schedule 3.18
together with title insurance policies, evidence of property insurance, copies
of title exceptions, flood surveys, property surveys, environmental assessments
and any other documentation reasonably requested by the Administrative Agent,
all in form and content reasonably acceptable to the Administrative Agent.

 

(c)        Promptly, but no later than 45 days (or
such longer period as the Administrative Agent may agree in its sole
discretion), after any acquisition of or involving any marine vessel, cause to
be executed and delivered to the Administrative Agent (i) a Vessel
Mortgage with respect thereto and (ii) an updated Schedule
3.27(d) together with evidence of insurance covering such vessel and any
other documentation reasonably requested by the Administrative Agent, all in
form and content reasonably acceptable to the Administrative Agent.

 

(d)        As promptly as practicable after the
Closing Date (but in any event by no later than the date that is three months
(or such later date as the Administrative Agent may agree in its sole
discretion) after the Closing Date)

 

75

 

cause to be executed and
delivered to the Administrative Agent a Mortgage with respect to the Owned Real
Property together with title insurance policies, evidence of property
insurance, copies of title exceptions, flood surveys, property surveys,
environmental assessments and any other documentation reasonably requested by
the Administrative Agent, all in form and content reasonably acceptable to the
Administrative Agent (the “Mortgage
Requirement”); provided, however,
that nothing contained in this Section 5.14(d) shall be construed to
limit or restrict the Borrower from granting Liens on the Owned Real Property
pursuant to Section 6.02(o) and in such event the Mortgage
Requirement shall no longer be in effect and any Liens existing in favor of the
Secured Parties with respect to such Owned Real Property shall be released and
of no further force and effect, and each Secured Party hereby authorizes and
directs the Administrative Agent and the Collateral Agent to execute and
deliver such releases, financing statements and other documents and agreements
requested by Borrower in order to effectuate the release of such Liens; provided further, however that upon the
release of any Liens granted pursuant to Section 6.02(o), the Borrower
shall promptly comply with the Mortgage Requirement.

 

(e)        If the aggregate book value of the
assets of Foreign Subsidiaries organized under the laws of any single
jurisdiction (a country being deemed to be a single jurisdiction) shall at any
time exceed $10,000,000 and such condition shall exist for three consecutive
Business Days, within 30 days (or such longer period as the Administrative
Agent may agree in its sole discretion), (i) cause all outstanding Equity
Interests in such Foreign Subsidiaries owned directly by or on behalf of any
Loan Party to be pledged in favor of the Collateral Agent pursuant to a pledge
agreement in form and content reasonably acceptable to the Administrative Agent
(except that the Loan Parties shall not be required to pledge more than 66% of
the outstanding voting Equity Interests in such Foreign Subsidiary) and shall
take such steps as are required or are reasonably advisable under the laws of
such jurisdiction to perfect such pledge (including, if required or reasonably
advisable under such laws, entering into a pledge agreement governed by the
laws of such jurisdiction) and (ii) cause to be executed and delivered to
the Administrative Agent original stock or other certificates and stock or
other transfer powers evidencing the ownership interests of the Loan Parties in
such Foreign Subsidiaries so pledged, and any other documents and certificates
as may be reasonably requested by the Administrative Agent or the Required
Lenders (through the Administrative Agent); provided
that the Administrative Agent may, in its sole discretion, exempt the Borrower
from entering into or perfecting such pledge if the Administrative Agent
determines that the cost of entering into or perfecting such pledge is
excessive in relation to the benefit afforded thereby.

 

(f)         Within the time periods specified
therein (unless extended by the Administrative Agent in its sole discretion),
the Borrower shall take the actions set forth in the letter agreement of even
date herewith by and among the Borrower and the Administrative Agent (the “Post-Closing Letter”).

 

76

 

(g)        In connection with any of the foregoing,
deliver or cause to be delivered to the Administrative Agent any legal opinions
and other documents as the Administrative Agent may reasonably request relating
to the existence of the relevant GGS Company, the corporate or other authority
for and the validity of the relevant Security Documents and the creation and
perfection of the Lien purportedly created thereby and any other matters
relevant thereto, all in form and substance reasonably acceptable to the
Administrative Agent.

 

Section 5.15.   Interest
Rate Contracts.  On or before
the date that is 30 days after the Closing Date, the Borrower shall establish
and thereafter maintain Interest Rate Contracts with respect to interest rate
exposure under this Agreement and the Second Lien Credit Agreement with an
aggregate notional principal amount thereunder equal to at least 50% of the
aggregate outstanding Term Loans under the Credit Facility and loans made under
the Second Lien Credit Facility on the Closing Date, with tenors not less than
two years from the Closing Date and otherwise in form and substance reasonably
satisfactory to the Administrative Agent.

 

Section 5.16.   Use of
Proceeds.  Use the proceeds of
the Loans and request the issuance of Letters of Credit only for the purposes
specified in the introductory statement to this Agreement.

 

Section 5.17.   Further
Assurances.  Execute any and
all further documents, financing statements, agreements and instruments, and
take all further action (including filing Uniform Commercial Code and other
financing statements, mortgages and deeds of trust) that may be required under
Applicable Law, or that the Required Lenders, the Administrative Agent or the
Collateral Agent may reasonably request, in order to effectuate the
transactions contemplated by the Loan Documents and in order to grant,
preserve, protect and perfect the validity and first priority of the security
interests created or intended to be created by the Security Documents.

 

Section 5.18.  
Ratings.  Use
commercially reasonable efforts to cause the Credit Facilities to be
continuously rated by S&P and Moody’s and to maintain a public corporate
credit rating from S&P and a public corporate family rating from Moody’s,
in each case in respect of the Borrower.

 

Section 5.19.   Information
Regarding Collateral.  (a) Furnish
to the Administrative Agent at least 30 days’ prior written notice of any
change (i) in any Loan Party’s corporate name, (ii) in the
jurisdiction of organization or formation of any Loan Party, (iii) in any
Loan Party’s identity or corporate structure or (iv) in any Loan Party’s
Federal Taxpayer Identification Number. 
The Borrower also agrees promptly to notify the Administrative Agent if
any material portion of the Collateral is damaged or destroyed.

 

(b)        In the case of the Borrower, each year, at
the time of delivery of the annual financial statements with respect to the
preceding fiscal year pursuant to

 

77

 

Section 5.01(b),
deliver to the Administrative Agent a certificate of a Financial Officer setting
forth the information required pursuant to Section 2 of the Perfection
Certificate or confirming that there has been no change in such information
since the date of the Perfection Certificate delivered on the Closing Date or
the date of the most recent certificate delivered pursuant to this
Section 5.19.

 

ARTICLE 6

NEGATIVE COVENANTS

 

The Borrower covenants and
agrees with each Lender that, so long as this Agreement shall remain in effect
and until the Commitments have been terminated and the principal of and
interest on each Loan, all Fees and all other expenses or amounts payable under
any Loan Document have been paid in full and all Letters of Credit have been
cancelled or have expired and all amounts drawn thereunder have been reimbursed
in full, unless the Required Lenders shall otherwise consent in writing,
neither the Borrower will, nor will it cause or permit any of its Subsidiaries
to:

 

Section 6.01.   Limitations
on Debt.  Create, incur,
assume or suffer to exist any Debt except:

 

(a)        the Obligations (excluding Financial
Hedging Obligations permitted pursuant to Section 6.01(b)); provided that the aggregate face amount of
Letters of Credit issued under this Agreement and letters of credit issued
under Section 6.01(n) shall not exceed $30,000,000 at any time
outstanding;

 

(b)        Debt incurred by the Borrower in
connection with a Financial Hedging Agreement (i) that is entered into in
the ordinary course of business for purposes of mitigating risks associated
with its business and that is not speculative in nature or (ii) required
pursuant to Section 5.15;

 

(c)        Debt of the Borrower and its
Subsidiaries existing on the Closing Date and set forth on Schedule 3.20 and
not otherwise permitted under this Section, and any extensions, renewals or
replacements of such Debt to the extent the principal amount of such Debt is
not increased, neither the final maturity nor the weighted average life to
maturity of such Debt is decreased, such Debt, if subordinated to the
Obligations, remains so subordinated on terms no less favorable to the Lenders,
and the original obligors in respect of such Debt remain the only obligors
thereon;

 

(d)        Debt of the Borrower under the Second
Lien Credit Agreement in an aggregate principal amount at any time outstanding
not to exceed $50,000,000;

 

78

 

(e)        Debt of the Loan Parties incurred in
connection with Capital Leases; provided
that the aggregate principal amount of Debt outstanding under Sections
6.01(e) and (f) shall not exceed $25,000,000 at any time outstanding;

 

(f)         purchase money Debt of the Loan
Parties; provided that the
aggregate principal amount of Debt outstanding under Sections 6.01(e) and
(f) shall not exceed $25,000,000 at any time outstanding;

 

(g)        Debt incurred by the Loan Parties to
finance the acquisition, development and construction of improvements on the
Owned Real Property in an aggregate principal amount not to exceed $7,500,000
at any time outstanding;

 

(h)        other unsecured Debt of the Loan Parties
in an aggregate principal amount not to exceed $25,000,000 at any time
outstanding;

 

(i)         Guaranty Obligations in favor of the
Administrative Agent for the benefit of the Administrative Agent and the other
Secured Parties;

 

(j)         Guaranty Obligations of any Loan Party
with respect to Debt permitted pursuant to subsections (a) through
(g) of this Section;

 

(k)        Debt in an aggregate principal amount
not to exceed $2,500,000 at any time outstanding consisting of promissory notes
issued by the Loan Parties to current or former officers, directors and
employees or their spouses or estates of such Loan Parties to purchase or
redeem capital stock or options of the Borrower; provided that any such promissory note is subordinated to
the Obligations under this Agreement on terms and conditions reasonably
acceptable to the Administrative Agent;

 

(l)         Subordinated Debt of the Loan Parties
(including Debt issued to a seller in connection with a Permitted Acquisition);
provided that (i) such
Subordinated Debt is expressly subordinated to the Obligations on terms
reasonably acceptable to the Administrative Agent, (ii) such Subordinated
Debt does not mature, and is not subject to repurchase, repayment, redemption,
sinking fund obligation or amortization, in each case, prior to the date that
is six months after the Term Loan Maturity Date, (iii) such Subordinated
Debt is not secured by any assets of the GGS Companies, (iv) such
Subordinated Debt contains no financial maintenance covenants and otherwise
contains covenants and events of default and are benefited by guarantees, if
any, which are no less favorable to the Loan Parties than the covenants and
events of default and guarantees contained in this Agreement and the other
applicable Loan Documents, (v) such Subordinated Debt is not exchangeable
or convertible into any other Debt of the GGS Companies or any preferred stock
or other Equity Interests (other than common equity of the Borrower) that is
not otherwise permitted under the terms of this Agreement, (vi) the
aggregate principal amount of such Subordinated Debt does not exceed
$25,000,000 at any one time outstanding and (vii) no Default or Event

 

79

 

of Default shall have
occurred and be continuing at the time of incurrence thereof or would result
therefrom;

 

(m)       intercompany loans among the Borrower and
the Subsidiaries to the extent permitted by Section 6.03(a);

 

(n)        Debt of the Loan Parties in respect of
letters of credit in an aggregate face amount not to exceed $30,000,000 at any
time outstanding supporting payment obligations incurred in the ordinary course
of business of the GGS Companies; provided
that the aggregate face amount of Letters of Credit issued under this Agreement
and letters of credit issued under this Section 6.01(n) shall not
exceed $30,000,000 at any time outstanding;

 

(o)        Debt not yet due that arises pursuant to
customary provisions in acquisition agreements relating to indemnification,
“earn-out” payments, payments under non-competition agreements, purchase price
adjustments or similar adjustments in connection with Permitted Acquisitions or
dispositions of assets permitted hereunder;

 

(p)        Debt of the Loan Parties arising under
insurance premium financing arrangements entered into in the ordinary course of
business in an aggregate principal amount not to exceed $5,000,000 at any time
outstanding;

 

(q)        obligations in respect of performance,
stay, customs, appeal and surety bonds and performance and completion
guarantees or obligations in respect of letters of credit related thereto, in
each case in the ordinary course of business and consistent with past practice;

 

(r)         Debt in respect of netting services,
overdraft protections and similar arrangements, in each case in connection with
cash management and deposit accounts; and

 

(s)        Subordinated Debt of the Loan Parties
incurred in connection with the Weinman Acquisition; provided that the maturity date of such Subordinated Debt
incurred pursuant to this Section 6.01(s) may be prior to the
maturity date of the Obligations.

 

Section 6.02.   Limitations
on Liens.  Create, incur,
assume or suffer to exist any Lien on or with respect to any of its assets or
properties (including any Equity Interests), real or personal, whether now
owned or hereafter acquired or on any income or revenues or rights in respect
thereof, except:

 

(a)        Liens for taxes, assessments and other
governmental charges or levies (excluding any Lien imposed pursuant to any of
the provisions of ERISA or Environmental Laws) not yet due or as to which the
period of grace (not to exceed 30 days), if any, related thereto has not
expired or which are being contested in compliance with Section 5.08;

 

80

 

(b)        the claims of materialmen, mechanics,
carriers, warehousemen, processors or landlords for labor, materials, supplies
or rentals incurred in the ordinary course of business, (i) which are not
overdue for a period of more than 30 days or (ii) which are being
contested in compliance with Section 5.08;

 

(c)        Liens consisting of deposits or pledges
made in the ordinary course of business in connection with, or to secure
payment of, obligations under workers’ compensation, unemployment insurance or
similar legislation;

 

(d)        (i) deposits to secure the
performance of bids, trade contracts, governmental contracts and leases (in
each case, other than Debt for borrowed money or Capital Leases), statutory
obligations, surety, stay, customs and appeal bonds, performance bonds,
performance and completion guarantees and other obligations of a like nature
(including those to secure health, safety and environmental obligations)
incurred in the ordinary course of business and consistent with past practice
and (ii) obligations in respect of letters of credit or bank guarantees
that have been posted by the Borrower or any of its Subsidiaries to support the
payment of items set forth in preceding clause (i) of this subsection;

 

(e)        Liens constituting encumbrances in the
nature of zoning restrictions, easements, rights of way, encroachments and
other minor irregularities of title, and rights or restrictions of record on
the use of real property, which in the aggregate are not substantial in amount
and which do not, in any case, detract from the value of such property or
impair the use thereof in the ordinary conduct of business;

 

(f)         Liens of the Collateral Agent for the
benefit of the Collateral Agent and the other Secured Parties under the Loan
Documents;

 

(g)        subject to the terms of the
Intercreditor Agreement, the Second Priority Liens on the Collateral;

 

(h)        Liens on the assets of the Borrower or
its Subsidiaries not otherwise permitted by this Section and in existence
on the Closing Date and described on Schedule 6.02; provided that such Liens shall secure only those obligations
which they secure on the Closing Date;

 

(i)         Liens on the assets of the Loan Parties
securing Debt permitted under Sections 6.01(e) and 6.01(f); provided that (i) such Liens shall be
created substantially simultaneously with the acquisition or lease of the
related asset, (ii) such Liens do not at any time encumber any property
other than the property financed by such Debt, (iii) the amount of Debt
secured thereby is not increased and (iv) the principal amount of Debt
secured by any such Lien shall at no time exceed 100% of the original purchase
price or lease payment amount of such property at the time it was acquired;

 

81

 

(j)         Liens on cash deposits by Loan Parties
in an aggregate amount not exceeding $30,000,000 at any time securing Debt
permitted by Section 6.01(n);

 

(k)        Liens on amounts held in escrow accounts
pursuant to the terms of acquisition agreements in connection with Permitted
Acquisitions;

 

(l)         purported Liens evidenced by the filing
of precautionary UCC financing statements relating solely to operating leases
of personal property entered into in the ordinary course of business;

 

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

 

(n)        judgment Liens not otherwise
constituting or arising out of an Event of Default pursuant to
Section 7.01(m);

 

(o)        Liens on the Owned Real Property and any
improvements constructed thereon securing Debt incurred pursuant to
Section 6.01(g);

 

(p)        Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods in the ordinary course of business;
and

 

(q)        Liens not otherwise permitted hereunder
on assets of the Loan Parties securing Debt or other obligations which do not
exceed $5,000,000 in the aggregate at any time outstanding.

 

Section 6.03.   Limitations
on Loans, Advances, Investments and Acquisitions.  Purchase, own, invest in or
otherwise acquire, directly or indirectly, any Equity Interest (including the
creation or capitalization of any Subsidiary), evidence of Debt or other
obligation or security, substantially all or a portion of the business or
assets of any other Person or any other investment or interest whatsoever in
any other Person, or make or permit to exist, directly or indirectly, any
loans, advances or extensions of credit to, or any investment in cash or by
delivery of property in, any Person except:

 

(a)        loans, advances or investments
(i) existing on the date hereof by the Borrower in or to any Subsidiary or
by any Subsidiary in or to the Borrower or any other Subsidiary and
(ii) made after the date hereof by the Borrower in or to any Subsidiary or
by any Subsidiary in or to the Borrower or any other Subsidiary; provided that the aggregate outstanding
amount of such loans, advances and investments made by Loan Parties in or to
Subsidiaries that are not Loan Parties (determined without regard to any
write-downs or write-offs of such investments, loans and advances) shall not
exceed $25,000,000 at any time outstanding;

 

82

 

(b)        investments in (i) marketable
direct obligations issued or unconditionally guaranteed by the United States of
America (or any agency thereof to the extent such obligations are backed by the
full faith and credit of the United States of America) maturing within 365 days
from the date of acquisition thereof, (ii) commercial paper maturing no
more than 120 days from the date of creation thereof and currently having the
highest rating obtainable from either S&P or Moody’s, (iii) certificates
of deposit maturing no more than 365 days from the date of creation thereof
issued by commercial banks incorporated under the laws of the United States of
America, each having combined capital, surplus and undivided profits of not
less than $500,000,000 and having a rating of “A” or better by a nationally
recognized rating agency; (iv) shares of any money market mutual fund that
(a) has substantially all of its assets invested continuously in the types
of investments referred to in clauses (i), (ii), (iii) and (vi), (b) has
net assets of not less than $500,000,000, and (c) has the highest rating
obtainable from either S&P or Moody’s; (v) fully collateralized repurchase agreements with a term of not
more than 30 days for underlying securities of the type described in clauses
(i) and (ii) above entered into with any bank meeting the
qualifications specified in clause (iii) above or securities dealers of
recognized national standing; or (vi) time deposits maturing no
more than 90 days from the date of creation thereof with commercial banks or
savings banks or savings and loan associations each having membership either in
the FDIC or the deposits of which are insured by the FDIC and in amounts not
exceeding the maximum amounts of insurance thereunder (such investments described
in items (i) through (vi) above, “Cash
Equivalents”);

 

(c)        the Borrower or any Subsidiary may
acquire all or substantially all the assets of a Person or line of business of
such Person, or not less than 100% of the Equity Interests (other than
directors’ qualifying shares) of a Person (referred to herein as the “Acquired Entity”) if each such acquisition
meets all of the following requirements (such acquisitions being “Permitted Acquisitions”):

 

(i)        the Acquired Entity
shall be primarily in substantially similar or related lines of business as the
Borrower and its Subsidiaries;

 

(ii)       the Administrative
Agent shall have received evidence of approval of the acquisition by the
acquiree’s board of directors or equivalent governing body;

 

(iii)      a description of the
acquisition in form and substance satisfactory to the Administrative Agent
shall have been delivered to the Administrative Agent not less than 15 days
prior to the consummation of the acquisition (it being agreed that the
description of the Weinman Acquisition contained in the letter agreement
referred to in the definition thereof shall be deemed satisfactory to the
Administrative Agent so long as the Borrower delivers definitive documentation
for such acquisition to the Administrative Agent prior to the date hereof and
such documentation is substantially consistent with such description);

 

83

 

(iv)     the Borrower or any
Subsidiary (or if any Loan Party is a party thereto, such Loan Party) shall be
the surviving Person and no Change in Control shall have been effected thereby;

 

(v)      prior to consummation of
the acquisition, the Borrower or applicable Subsidiary shall have delivered
written evidence demonstrating to the satisfaction of the Administrative Agent
that (A) the Borrower will be in compliance with the Financial Covenants
after giving pro forma effect to the acquisition and any Debt incurred in
connection therewith (and to any other acquisitions consummated and Debt
incurred in connection therewith during the applicable calculation period) and (B) no
Default or Event of Default shall have occurred and be continuing both before
and after giving effect to the acquisition;

 

(vi)     the Borrower or
applicable Subsidiary shall comply with the provisions of Section 5.14
within the time required by such Section; and

 

(vii)    the total cash
consideration (after deducting cash and Cash Equivalents on the balance sheet
of the Person being acquired or included in the assets being acquired to the
extent such cash and Cash Equivalents are readily available to repay the
Obligations) for all such Permitted Acquisitions shall not exceed $25,000,000
plus the then Available Amount plus the then Equity Proceeds Available Amount
in any 12 month period (provided
that the cash consideration paid in respect of the Weinman Acquisition shall
not reduce the amount available for other Permitted Acquisitions pursuant to
this clause (vii));

 

(d)        Financial Hedging Agreements permitted
pursuant to Section 6.01(b);

 

(e)        purchases of assets in the ordinary
course of business;

 

(f)         loans by any GGS Company to officers,
directors and employees of the GGS Companies to facilitate their purchase of
ownership interests or options in the Borrower in an aggregate amount not to
exceed $500,000 at any time (determined without regard to any write-downs or
write-offs);

 

(g)        transactions permitted under Section 6.05(c);

 

(h)        loans and advances to employees for
reasonable travel and business expenses in the ordinary course of business in
an aggregate amount not in excess of $500,000 outstanding at any time
(determined without regard to any write-downs or write-offs); and

 

(i)         other additional loans and investments
not otherwise permitted pursuant to this Section not exceeding $10,000,000
in the aggregate at any time 

 

84

 

outstanding plus the then
Available Amount plus the then Equity Proceeds Available Amount (determined
without regard to any write-downs or write-offs); provided, that all loans made pursuant to this clause shall (i) be
evidenced by promissory notes and such other documents as may be requested by
the Administrative Agent and in form and substance reasonably satisfactory to
the Administrative Agent and (ii) such promissory notes and related documents
shall be delivered to the Administrative Agent as Collateral in accordance with
the provisions of the Collateral Agreement.

 

Section 6.04.   Limitations
on Mergers and Liquidation.  Merge,
consolidate or enter into any similar combination with any other Person or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), except that if at the time thereof and immediately after giving
effect thereto no Event of Default or Default shall have occurred and be
continuing:

 

(a)        any wholly owned Subsidiary of the
Borrower may merge into or consolidate with the Borrower; provided that the Borrower shall be the
surviving entity;

 

(b)        any wholly owned Subsidiary of the
Borrower may merge into or consolidate with any other wholly owned Subsidiary
of the Borrower in a transaction in which the surviving entity is a wholly
owned Subsidiary of the Borrower and no person other than the Borrower or a
wholly owned Subsidiary of the Borrower receives any consideration (provided that if any party to any such
transaction is a Loan Party, the surviving entity of such transaction shall be
a Loan Party);

 

(c)        any wholly owned Subsidiary of the
Borrower may merge into the Person such wholly owned Subsidiary was formed to
acquire in connection with an acquisition permitted by Section 6.03(c);
and

 

(d)        any wholly owned Subsidiary of the
Borrower may dissolve, liquidate and wind-up into the Borrower or any
Subsidiary Guarantor.

 

Section 6.05.   Limitations
on Sale of Assets.  Convey,
sell, lease, assign, transfer or otherwise dispose of any of its property,
business or assets (including the sale of any receivables and leasehold
interests and any sale-leaseback or similar transaction), whether now owned or
hereafter acquired except:

 

(a)        the sale of inventory in the ordinary
course of business;

 

(b)        the sale in the ordinary course of
business of worn-out or obsolete assets no longer used or usable in the
business of the Borrower or any of its Subsidiaries;

 

(c)        (i) intercompany leases and
transfers of equipment and related assets among GGS Companies that are Loan
Parties, (ii) intercompany leases and 

 

85

 

transfers of equipment and
related assets among GGS Companies that are not Loan Parties, (iii) intercompany
leases of equipment and related assets by a Loan Party to a GGS Company that is
not a Loan Party in the ordinary course of business so long as such Loan Party
retains title to and ownership of such equipment and related assets at all
times, (iv) intercompany leases of equipment and related assets by a GGS
Company that is not a Loan Party to any other GGS Company in the ordinary
course of business, and (v) any transfer of assets or other transaction
permitted under Section 6.04;

 

(d)        the sale or discount without recourse of
accounts receivable arising in the ordinary course of business in connection
with the compromise or collection thereof;

 

(e)        subject to the requirements of Section 5.15,
the disposition of any Financial Hedging Agreement;

 

(f)         the sale, or series of related sales,
of any property, business or assets not otherwise permitted by this Section in
an aggregate amount not to exceed $1,000,000 for each such sale or series of
related sales and not to exceed $7,500,000 in the aggregate during the term of this
Agreement;

 

(g)        the sale of non-strategic assets
acquired as part of a Permitted Acquisition that the Borrower or such
Subsidiary intended to sell at the time of such Permitted Acquisition; provided that such assets are identified
in writing to the Administrative Agent within 60 days after the date of such
Permitted Acquisition; and

 

(h)        the lease by any Loan Party as lessor of
equipment to any third party that is not an Affiliate of such Loan Party in the
ordinary course of business so long as such Loan Party retains title to and
ownership of such equipment at all times; provided
that the book value of all such equipment subject to such leases may not
exceed, in the aggregate, $25,000,000 plus the sum of the then Available Amount
plus the then Equity Proceeds Available Amount;

 

provided that with
respect to any asset sale permitted under this Section (other than sales
or transfers permitted under Section 6.05(a) through 6.05(e) or Section 6.05(h))
(i) the Net Cash Proceeds from such asset sale shall be subject to Section 2.13(d),
(ii) such sale shall be made for consideration at least 75% of which is
cash and (iii) such consideration shall be at least equal to the fair
market value of such assets.

 

Section 6.06.   Limitations
on Dividends and Distributions.  Declare
or pay any dividends upon any of its Equity Interests or any other ownership
interests; purchase, redeem, retire or otherwise acquire, directly or
indirectly, any of its Equity Interests or other ownership interests, or,
directly or indirectly, make any distribution of cash, property or assets among
the holders of its Equity Interests or other ownership interests, or make any
change in its capital structure 

 

86

 

which such change in its
capital structure could reasonably be expected to have a Material Adverse
Effect; provided that:

 

(a)        the Borrower or any Subsidiary may pay
dividends in shares of its own capital stock;

 

(b)        any Subsidiary may pay cash dividends to
the Borrower;

 

(c)        transactions under Section 6.04(a),
Section 6.04(b), Section 6.04(d) and Section 6.05(c)(i) and
(ii) shall be permitted;

 

(d)        so long as no Default or Event of
Default shall exist or be continuing, the Borrower may purchase capital stock
or options from present or former employees, officers, directors or consultants
of the GGS Companies or their respective estates, spouses or family members
upon the death, disability or termination of employment of such employee,
officer, director or consultant, or make payments with respect to Debt used to
repurchase such capital stock or options (provided
that the aggregate amount of payments under this clause shall not exceed
$1,250,000 in any fiscal year plus
(A) proceeds of key-man life insurance maintained by the Borrower on the
life of the Person with respect to whom such repurchase is made and (B) notes
permitted to be issued pursuant to Section 6.01(k); provided further that (1) the
cancellation of Debt shall not constitute a redemption and (2) the
consideration for the purchase of capital stock or options pursuant to this
clause may include the issuance of another equity security);

 

(e)        so long as no Default or Event of
Default shall exist or be continuing, the Borrower may repurchase shares of its
Class A Common Stock and Class B Common Stock from its employees; provided that the aggregate amount
expended pursuant to this clause shall not exceed $10,000,000;

 

(f)         so long as no Default or Event of
Default shall exist or be continuing, the Borrower may make customary payments
of cash in lieu of fractional shares in connection with any transactions
otherwise permitted hereunder;

 

(g)        so long as no Default or Event of
Default shall exist or be continuing, (i) if the public corporate family
rating of the Borrower from Moody’s is the same or better than the public
corporate family rating of the Borrower from Moody’s as of the Closing Date, (ii) if
the public corporate credit rating of the Borrower from S&P is the same or
better than the public corporate credit rating of the Borrower from S&P as
of the Closing Date and (iii) if the Borrower will be in compliance with
the Financial Covenants after giving pro forma effect to the payment of such
dividends or other payments and to any Debt incurred in connection therewith,
then the Borrower may declare and pay dividends on, make distributions of cash
or other assets (valued at fair market value) on, or repurchase 

 

87

 

or otherwise acquire, its
Equity Interests from the then Available Amount, but not to exceed $10,000,000
during any fiscal year; and

 

(h)        so long as no Default or Event of
Default shall exist or be continuing and the Borrower will be in compliance
with the Financial Covenants after giving pro forma effect to the payment of
such dividends or other payments and to any Debt incurred in connection
therewith, the Borrower may declare and pay dividends on, make distributions of
cash on, or repurchase or otherwise acquire, its Equity Interests from the then
Equity Proceeds Available Amount.

 

Section 6.07.   Limitations
on Exchange and Issuance of Capital Stock. 
Issue, sell or otherwise dispose of any class or series of
any Equity Interests that, by its terms or by the terms of any security into
which it is convertible or exchangeable, is, or upon the happening of an event
or passage of time would be, (a) required to be redeemed or repurchased,
including at the option of the holder or at maturity, in whole or in part, or
has, or upon the happening of an event or passage of time would have, a redemption
or similar payment due, or requires payment of any cash dividend or any other
scheduled payment constituting a return of capital, in each case at any time on
or prior to the first anniversary of the Term Loan Maturity Date or (b) convertible
or exchangeable into Debt or any Equity Interest referred to in clause (a).

 

Section 6.08.  
Transactions with Affiliates.  (a) Except
to the extent expressly permitted pursuant to Section 6.03(a) or Section 6.06,
enter into, or be a party to, any transaction with any of its Affiliates, other
than:

 

(i)        pursuant to the
reasonable requirements of its business and upon fair and reasonable terms that
are no less favorable to it than it would obtain in a comparable arm’s length
transaction with a Person not its Affiliate; provided
that any transaction between a Loan Party and a GGS Company that is not a Loan
Party that is permitted under Section 6.05(c) shall be permitted
under this Section so long as such transaction is pursuant to the
reasonable requirements of the business of such Loan Party and is upon fair and
reasonable terms that are no less favorable to such Loan Party than such Loan
Party would obtain in a comparable arm’s length transaction with a Person not
its Affiliate;

 

(ii)       transactions between or
among the Loan Parties not involving any other Affiliate;

 

(iii)      the payment of
reasonable and customary fees and indemnities to members of the board of
directors (or similar governing body) of the Borrower and its Subsidiaries in
the ordinary course of business;

 

(iv)      reimbursement of
reasonable and customary out-of-pocket expenses of the members of the board of
directors (or similar governing 

 

88

 

body)
of the Borrower and its Subsidiaries in the ordinary course of business;

 

(v)      any employment agreements
entered into by the Borrower or any of the Subsidiaries in the ordinary course
of business, (B) any subscription agreement or similar agreement
pertaining to the repurchase of Equity Interests pursuant to put/call rights or
similar rights with employees, officers or directors, and (C) any employee
compensation, benefit plan or arrangement, any health, disability or similar
insurance plan which covers employees, and any reasonable employment contract
and transactions pursuant thereto;

 

(vi)     transactions between or
among GGS Companies not involving any Loan Party;

 

(vii)    the Transactions; and

 

(viii)   any reasonable
out-of-pocket expenses payable to the Sponsor and the Kelso Investors pursuant
to the Kelso Agreement.

 

Section 6.09.   Certain
Accounting Changes; Organizational Documents.  
(a)  Change its fiscal year end, or make any change in
its accounting treatment and reporting practices except as required by GAAP or (b) amend,
modify or change its articles of incorporation (or corporate charter or other
similar organizational documents) or amend, modify or change its bylaws (or
other similar documents) in any manner adverse in any material respect to the
rights or interests of the Lenders.

 

Section 6.10.   Amendments;
Payments and Prepayments of Certain Debt.  
(a)      (i) Amend
or modify (or permit the modification or amendment of) any of the terms or
provisions of the Second Lien Credit Agreement (other than in accordance with
the terms of the Intercreditor Agreement) or any Subordinated Debt or (ii) make
any distribution, whether in cash, property, securities or a combination
thereof, other than regular scheduled payments of principal and interest as and
when due (to the extent not prohibited by applicable subordination provisions),
in respect of, or pay, or offer or commit to pay, or directly or indirectly
redeem, repurchase, retire or otherwise acquire for consideration, or set apart
any sum for the aforesaid purposes, the Second Lien Credit Facility or any
Subordinated Debt (other than (x) to the extent permitted by Section 2.13(h)(iv),
(y) Subordinated Debt incurred pursuant to Section 6.01(s) and (z) intercompany
Subordinated Debt; provided that,
without limiting any subordination provisions applicable thereto, no payment or
other distribution shall be made in respect of Subordinated Debt incurred
pursuant to Section 6.01(s) if a Default or Event of Default shall
have occurred and be continuing at the time of such payment or other
distribution).

 

89

 

(b)        Amend, modify or waive any of its rights
under any Material Contract if such amendment, modification or waiver could
reasonably be expected to result in a Material Adverse Effect.

 

(c)        Make any payment or other distribution
in respect of earn-out provisions or similar purchase price adjustments in
connection with any Permitted Acquisition or other investment if a Default or
Event of Default shall have occurred and be continuing at the time of such
payment or other distribution.

 

Section 6.11.   Restrictive
Agreements.   (a)  Except
as permitted pursuant to Section 6.11(c) below, enter into any Debt
which contains any negative pledge on assets or any covenants more restrictive
than the provisions of Article 5 or 6 hereof, or which restricts, limits
or otherwise encumbers its ability to incur Liens on or with respect to any of
its assets or properties other than the assets or properties securing such
Debt; provided that the foregoing
shall not apply to the restrictions and conditions contained in the Second Lien
Credit Agreement.

 

(b)        Except as permitted pursuant to Section 6.11(c) below,
enter into or permit to exist any agreement which impairs or limits the ability
of any Subsidiary of the Borrower to pay dividends or intercompany advances to
the Borrower; provided that the
foregoing shall not apply to the restrictions and conditions contained in the
Second Lien Credit Agreement.

 

(c)        Notwithstanding the foregoing, the
restrictions and conditions provided in Sections 6.11(a) and (b) above
shall not prohibit or limit in any manner any restrictions (i) in
agreements evidencing Debt permitted by Sections 6.01(e) and (f) that
impose restrictions relating solely to the property so acquired with such Debt,
(ii) by reason of customary provisions restricting assignments, subletting
or other transfers contained in leases, licenses, joint venture agreements and
similar agreements entered into in the ordinary course of business, (iii)  customary
restrictions or conditions imposed by (x) law or (y) in any of the
Loan Documents or Financial Hedging Agreements, (iv) in any Lien permitted
under Section 6.02 or any document or instrument governing any such  Lien; provided
that any such restriction contained therein relates only to the
asset or assets subject to such Lien; (v) in any instrument governing Debt
or Equity Interests of a Person acquired by any GGS Company pursuant to a
Permitted Acquisition, which encumbrance or restriction was in existence at the
time of such acquisition (but not created in contemplation thereof or to
provide all or any portion of the funds or credit support utilized to
consummate such acquisition) and is not applicable to any Person, or the
properties or assets of any Person, other than the Person or the properties or
assets of the Person so acquired (including, but not limited to, such Person’s
direct and indirect subsidiaries), provided
that any such encumbrance or restriction contained therein relates only to such
Debt or Equity Interests so acquired and that any such encumbrances or
restrictions, individually or in the aggregate, shall not materially affect any
Loan Party’s ability to pay the Obligations; (vi) contained in the Second
Lien Credit Agreement or any other Second Lien Loan Document; (vii) in
agreements entered into in the 

 

90

 

ordinary course of business
in accordance with customary industry practice, provided that any such restrictions contained therein relate
only to such agreements and that any such restrictions, individually or in the
aggregate, shall not materially affect any Loan Party’s ability to pay the
Obligations; and (viii) on net worth imposed by customers or suppliers
under contracts entered into in the ordinary course of business in accordance
with customary industry practice.

 

Section 6.12.   Nature of
Business.   Engage in any
business other than the businesses engaged in on the Closing Date and similar
or related businesses and activities reasonably incidental thereto.

 

Section 6.13.   Capital
Expenditures.   Permit the
aggregate amount of Capital Expenditures made by the Borrower and its
Subsidiaries in any fiscal year set forth below to exceed the amount set forth
opposite such fiscal year:

 

	
  Fiscal Year

  	
   

  	
  Amount

  	
   

  
	
  2008

  	
   

  	
  $

  	
  100,000,000

  	
   

  
	
  2009

  	
   

  	
  $

  	
  110,000,000

  	
   

  
	
  2010 and each fiscal year
  thereafter

  	
   

  	
  $

  	
  90,000,000

  	
   

  

 

provided, however, that so long as no Default or
Event of Default has occurred and is continuing or would result from such
expenditure, any portion of any amount set forth above, if not expended in the
fiscal year for which it is permitted above, may be carried over for
expenditure in the next following fiscal year; provided,
further, if any such amount is so carried over, the amount set forth
opposite the applicable subsequent fiscal year above will be deemed used in
such subsequent fiscal year before the amount so carried over to such
subsequent fiscal year.

 

Section 6.14.   Sale and
Lease-Back Transactions.   Enter
into any arrangement, directly or indirectly, with any person whereby it shall
sell or transfer any property, real or personal, used or useful in its
business, whether now owned or hereafter acquired, and thereafter rent or lease
such property or other property which it intends to use for substantially the
same purpose or purposes as the property being sold or transferred unless (a) the
sale or transfer of such property is permitted by Section 6.05 and (b) any
obligations in respect of Capital Leases or Liens arising in connection
therewith are permitted by Sections 6.01 and 6.02, as the case may be.

 

Section 6.15.   Assets of
Non-Loan Parties.  Permit the
aggregate book value of the assets (other than (i) any prepaid expenses or
similar amounts required to be capitalized in accordance with GAAP and (ii) any
accounts receivable that are invoiced in the ordinary course of business and in
a manner consistent with customary industry practices and not outstanding for
more than 60 days from the applicable invoice due date) of all Subsidiaries
that are not Loan Parties to exceed $25,000,000 plus the sum of the then Equity
Proceeds Available Amount at any time.

 

91

 

Section 6.16.   Total
Leverage Ratio.   As of any
fiscal quarter end, permit the Total Leverage Ratio to exceed the corresponding
ratio set forth below:

 

	
  Fiscal Quarter Ending

  	
   

  	
  Ratio

  	
   

  
	
  March 31, 2008

  	
   

  	
  3.00:1.00

  	
   

  
	
  June 30, 2008

  	
   

  	
  2.75:1.00

  	
   

  
	
  September 30, 2008

  	
   

  	
  2.50:1.00

  	
   

  
	
  December 31, 2008

  	
   

  	
  2.25:1.00

  	
   

  
	
  March 31, 2009 and June 30, 2009

  	
   

  	
  2.00:1.00

  	
   

  
	
  September 30, 2009

  	
   

  	
  1.70:1.00

  	
   

  
	
  December 31, 2009

  	
   

  	
  1.60:1.00

  	
   

  
	
  March 31, 2010 and each fiscal quarter end thereafter

  	
   

  	
  1.50:1.00

  	
   

  

 

Section 6.17.   Interest
Coverage Ratio.   As of any
fiscal quarter end, permit the Interest Coverage Ratio to be less than the
corresponding ratio set forth below:

 

	
  Fiscal Quarter Ending

  	
   

  	
  Ratio

  	
   

  
	
  March 31, 2008

  	
   

  	
  3.25:1.00

  	
   

  
	
  June 30, 2008

  	
   

  	
  3.50:1.00

  	
   

  
	
  September 30, 2008

  	
   

  	
  3.75:1.00

  	
   

  
	
  December 31, 2008 through December 31, 2009

  	
   

  	
  4.00:1.00

  	
   

  
	
  March 31, 2010 and each fiscal quarter end thereafter

  	
   

  	
  5.00:1.00

  	
   

  

 

ARTICLE 7

EVENTS OF DEFAULT

 

Section 7.01.   Events of
Default.   In case of the
happening of any of the following events (“Events
of Default”) (whatever the reason for such event and whether it
shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment or order of any court or any order, rule or
regulation of any Governmental Authority or otherwise):

 

(a)        default shall be made in the payment of
any principal of any Loan or the reimbursement with respect to any L/C
Disbursement when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise;

 

(b)        default shall be made in the payment of
any interest on any Loan or any Fee or L/C Disbursement or any other amount
(other than an amount referred to in (a) above) due under any Loan
Document, when and as the same shall become due and payable, and such default
shall continue unremedied for a period of three Business Days;

 

92

 

(c)        any representation or warranty made or
deemed made in or in connection with any Loan Document or the borrowings or
issuances of Letters of Credit hereunder, or any representation, warranty, statement
or information contained in any report, certificate, financial statement or
other instrument furnished in connection with or pursuant to any Loan Document,
shall prove to have been false or misleading in any material respect when so
made, deemed made or furnished;

 

(d)        default shall be made in the due
observance or performance by the Borrower or any Subsidiary of any covenant,
condition or agreement contained in Section 5.01(a) though Section 5.01(d) (and
such default shall continue for a period of 15 days), Section 5.02(e)(i), Section 5.04
(with respect to preservation and maintenance of corporate existence), Section 5.14,
Section 5.16 or Article 6;

 

(e)        default shall be made in the due
observance or performance by the Borrower or any Subsidiary of any covenant,
condition or agreement contained in any Loan Document (other than those
specified in (a), (b) or (d) above) and such default shall continue
unremedied for a period of 30 days after notice thereof from the Administrative
Agent or any Lender to the Borrower;

 

(f)         any GGS Company (other than any
Inactive Subsidiary) shall default in the performance or observance of any
terms, covenant, condition or agreement (after giving effect to any applicable
grace or cure period) under any Financial Hedging Agreement and such default
causes the termination of such Financial Hedging Agreement or permits any
counterparty to such Financial Hedging Agreement to terminate such Financial
Hedging Agreement; provided that
the foregoing shall constitute an Event of Default only if the maximum
aggregate amount (giving effect to any netting agreements) that the GGS
Companies would be required to pay as a result of such defaults exceeds
$5,000,000;

 

(g)        the GGS Companies shall (i) default
in the payment of any Debt (other than the Loans and Letters of Credit) the
aggregate outstanding amount of which Debt is in excess of $5,000,000 beyond
the period of grace if any, provided in the instrument or agreement under which
such Debt was created, or (ii) default in the observance or performance of
any other agreement or condition relating to any Debt (other than the Loans and
Letters of Credit) the aggregate outstanding amount of which Debt is in excess
of $5,000,000 or contained in any instrument or agreement evidencing, securing
or relating thereto or any other event shall occur or condition exist, the
effect of which default or other event or condition is to cause, or to permit
the holder or holders of such Debt (or a trustee or agent on behalf of such
holder or holders) to cause, with the giving of notice if required, any such
Debt to become due prior to its stated maturity (any applicable grace period
having expired);

 

(h)        there shall have occurred a Change in
Control;

 

93

 

(i)         any GGS Company (other than any
Inactive Subsidiary) shall (i) commence a voluntary case under the federal
bankruptcy laws (as now or hereafter in effect), (ii) file a petition
seeking to take advantage of any other laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding up or composition for
adjustment of debts, (iii) consent to or fail to contest in a timely and
appropriate manner any petition filed against it in an involuntary case under
such bankruptcy laws or other laws, (iv) apply for or consent to, or fail
to contest in a timely and appropriate manner, the appointment of, or the
taking of possession by, a receiver, custodian, trustee, or liquidator or the
like of itself or of a substantial part of its property, domestic or foreign,
(v) become unable or admit in writing its inability to pay its debts as
they become due, (vi) make a general assignment for the benefit of
creditors, or (vii) take any corporate action for the purpose of
authorizing any of the foregoing;

 

(j)         a case or other proceeding shall be
commenced against any GGS Company (other than any Inactive Subsidiary) in any
court of competent jurisdiction seeking (i) relief in respect of such GGS
Company (other than any Inactive Subsidiary) or a substantial part of its
property under the federal bankruptcy laws (as now or hereafter in effect) or
under any other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or adjustment of debts, (ii) the appointment of
a trustee, receiver, custodian, liquidator or the like for any GGS Company
(other than any Inactive Subsidiary) or for all or any substantial part of
their respective assets, domestic or foreign or (iii) the winding-up or
liquidation of any GGS Company (other than any Inactive Subsidiary), and such
case or proceeding shall continue without dismissal or stay for a period of 60
consecutive days, or an order granting the relief requested in such case or
proceeding (including, but not limited to, an order for relief under such
federal bankruptcy laws) shall be entered;

 

(k)        any provision of this Agreement or any
provision of any other Loan Document shall for any reason cease to be valid and
binding on any GGS Company (other than any Inactive Subsidiary) party thereto
or any such Person shall so state in writing, or any Loan Document shall for
any reason cease to create a valid and perfected first priority Lien on, or
security interest in, any of the collateral purported to be covered thereby or
any GGS Company shall so state in writing, in each case other than in
accordance with the express terms hereof or thereof, or the Intercreditor
Agreement shall, in whole or in part, cease to be effective or cease to be
legally valid, binding and enforceable against the holders of any Debt under
the Second Lien Credit Agreement;

 

(l)         (i) any GGS Company (other than
any Inactive Subsidiary) or ERISA Affiliate fails to make full payment when due
of all amounts which, under the provisions of any Pension Plan or
Section 412 of the Code, any GGS Company (other than any Inactive
Subsidiary) or ERISA Affiliate is required to pay as contributions thereto,
(ii) an accumulated funding deficiency in excess of $5,000,000 occurs or
exists, whether or not waived, with respect to any Pension Plan, (iii) a
Termination Event or (iv) any GGS Company (other than any Inactive 

 

94

 

Subsidiary) or ERISA
Affiliate as employers under one or more Multiemployer Plans makes a complete
or partial withdrawal from any such Multiemployer Plan and the plan sponsor of
such Multiemployer Plans notifies such withdrawing employer that such employer
has incurred a withdrawal liability requiring payments in an amount exceeding
$5,000,000;

 

(m)       a judgment or order for the payment of
money which causes the aggregate amount of all such judgments not adequately
covered by insurance to exceed $5,000,000 in any fiscal year shall be entered
against any GGS Company by any court and such judgment or order shall continue
without discharge or stay for a period of 30 days;

 

(n)        any one or more Environmental Claims
shall have been asserted against any GGS Company; the GGS Companies would be
reasonable likely to incur liability as a result thereof; and such liability
would be reasonably likely, individually or in the aggregate, to have a
Material Adverse Effect; or

 

(o)        the Subordinated Debt shall cease (or
any GGS Company shall so assert), for any reason, to be validly subordinated to
the Obligations as provided in the agreements evidencing such Subordinated
Debt;

 

then, and in every such
event (other than an event with respect to the Borrower described in paragraph
(i) or (j) above), and at any time thereafter during the continuance
of such event, the Administrative Agent may, and at the request of the Required
Lenders shall, by notice to the Borrower, take either or both of the following
actions, at the same or different times: 
(i) terminate forthwith the Commitments and (ii) declare the
Loans then outstanding to be forthwith due and payable in whole or in part,
whereupon the principal of the Loans so declared to be due and payable,
together with accrued interest thereon and any unpaid accrued Fees and all
other liabilities of the Borrower accrued hereunder and under any other Loan
Document, shall become forthwith due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived by the Borrower, anything contained herein or in any other Loan Document
to the contrary notwithstanding; and in any event with respect to the Borrower
described in paragraph (i) or (j) above, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and any unpaid accrued Fees and all
other liabilities of the Borrower accrued hereunder and under any other Loan
Document, shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein or in any other
Loan Document to the contrary notwithstanding.

 

Section 7.02.   Borrower’s
Right to Cure.    Notwithstanding
anything to the contrary contained in this Article 7, in the event that
the Borrower fails to comply with the requirements of any Financial Covenant
with respect to any fiscal period, then, until the expiration of the tenth day
after the date on which the 

 

95

 

Borrower provides the
Administrative Agent notice that it intends to exercise its rights under this
Section (but only if such notice is provided on or before the date on
which financial statements are required to be delivered under Section 5.01
(without regard to any cure periods set forth in Section 7.01) with
respect to such fiscal period), the Sponsor (or any other holder of Equity
Interests of the Borrower) shall have the right to make cash contributions to
the common equity of the Borrower in an amount equal to (and no greater than)
the amount necessary to cure the relevant failure to comply with such covenant,
and upon the receipt by the Borrower of such cash (a “Specified Equity Contribution”), such
covenant shall be recalculated giving effect to the following pro forma adjustments:

 

(i)        EBITDA shall be
increased, solely for purposes of calculating the relevant Financial Covenant,
by the amount of such Specified Equity Contribution;

 

(ii)       if, after giving effect
to the foregoing recalculations, the Borrower shall be in compliance with the
Financial Covenants, the Borrower shall be deemed to have satisfied the
requirements of such covenants as of the relevant date of determination with
the same effect as though there had been no failure to comply therewith at such
date, and the applicable breach or default with respect to such covenants that
had occurred shall be deemed to be cured for all purposes of this Agreement and
the other Loan Documents; and

 

(iii)      to the extent the
amount of any Specified Equity Contribution is used to repay Debt, such Debt shall
not be deemed to have been repaid for purposes of calculating the Financial
Covenants for the period with respect to which such Specified Equity
Contribution is made;

 

provided that (x) in each period of four fiscal
quarters of the Borrower, there shall be at least two consecutive fiscal
quarters of the Borrower in which the right to cure set forth above is not
exercised, (y) in each period of eight fiscal quarters of the Borrower,
there shall be at least four consecutive fiscal quarters of the Borrower in
which the right to cure set forth above is not exercised and (z) amounts
contributed as Specified Equity Contributions shall be disregarded for all
purposes of the other covenants contained in Article 6 and for purposes of
adjusting the Applicable Percentage.

 

ARTICLE 8

THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT

 

Each of the Lenders and the
Issuing Bank hereby irrevocably appoints the Administrative Agent and the
Collateral Agent (for purposes of this Article 8, the Administrative Agent
and the Collateral Agent are referred to collectively as the “Agents”) its agent and authorizes the
Agents to take such actions on its behalf and to exercise such powers as are
delegated to such Agent by the terms of the 

 

96

 

Loan Documents, together
with such actions and powers as are reasonably incidental thereto.   Without limiting the generality of the
foregoing, the Agents are hereby expressly authorized to execute any and all
documents (including releases) with respect to the Collateral and the rights of
the Secured Parties with respect thereto, as contemplated by and in accordance
with the provisions of this Agreement and the Security Documents.  Each of the Lenders and the Issuing Bank
acknowledges and agrees that the Agent shall also act, subject to and in
accordance with the terms of the Intercreditor Agreement, as the collateral
agent for the lenders under the Second Lien Credit Agreement.  Each Lender and the Issuing Bank further
acknowledges that it has received a copy of the Intercreditor Agreement,
authorizes the Agent to enter into the same, and agrees to be bound by its
terms.  Each of the Lenders and the
Issuing Bank hereby agrees that Credit Suisse, in its various capacities
thereunder, may take such actions on its behalf as is contemplated by the terms
of the Intercreditor Agreement.   Each
Lender and the Issuing Bank hereby (i) acknowledges that Credit Suisse is
acting under the Intercreditor Agreement in multiple capacities as the
Administrative Agent, the Collateral Agent and the administrative agent and the
collateral agent pursuant to the Second Lien Loan Documents and
(ii) waives any conflict of interest, now contemplated or arising
hereafter, in connection therewith and agrees not to assert against Credit
Suisse any claims, causes of action, damages or liabilities of whatever kind or
nature relating thereto.

 

The bank serving as the
Administrative Agent and/or the Collateral Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not an Agent, and such bank and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Borrower or any Subsidiary or other Affiliate thereof
as if it were not an Agent hereunder.

 

Neither Agent shall have any
duties or obligations except those expressly set forth in the Loan
Documents.   Without limiting the
generality of the foregoing, (a) neither Agent shall be subject to any fiduciary
or other implied duties, regardless of whether a Default has occurred and is
continuing, (b) neither Agent shall have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that such Agent is instructed
in writing to exercise by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.08), and (c) except as expressly set forth in
the Loan Documents, neither Agent shall have any duty to disclose, nor shall it
be liable for the failure to disclose, any information relating to the Borrower
or any of the Subsidiaries that is communicated to or obtained by the bank
serving as Administrative Agent and/or Collateral Agent or any of its
Affiliates in any capacity.  Neither
Agent shall be liable for any action taken or not taken by it with the consent
or at the request of the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 9.08) or in the absence of its own gross 

 

97

 

negligence or willful
misconduct.  Neither Agent shall be
deemed to have knowledge of any Default unless and until written notice thereof
is given to such Agent by the Borrower or a Lender, and neither Agent shall be
responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with any Loan
Document, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth in any Loan Document, (iv) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth
in Article 4 or elsewhere in any Loan Document, other than to confirm
receipt of items expressly required to be delivered to such Agent.

 

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

 

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

 

Subject to the appointment
and acceptance of a successor Agent as provided below, either Agent may resign
at any time by notifying the Lenders, the Issuing Bank and the Borrower.  Upon any such resignation, the Required
Lenders shall have the right, in consultation with the Borrower, to appoint a
successor.  If no successor shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Agent gives notice of its
resignation, then the retiring Agent may, on behalf of the Lenders and the
Issuing Bank, appoint a successor Agent which shall be a bank with an office in
New York, New York, or an Affiliate of any such bank.  Upon the acceptance of its appointment as
Agent hereunder by a successor, such successor shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder.  The fees payable by the
Borrower to a successor Agent shall be the same as those payable to its 

 

98

 

predecessor unless otherwise
agreed between the Borrower and such successor. 
After an Agent’s resignation hereunder, the provisions of this
Article and Section 9.05 shall continue in effect for the benefit of
such retiring Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while acting
as Agent.

 

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

 

Anything herein to the
contrary notwithstanding, none of the syndication agents, documentation agents,
co-agents, book manager, lead managers, arrangers, lead arrangers or
co-arrangers listed on the cover page or signature pages hereof shall
have any powers, duties or responsibilities under this Agreement or any of the
other Loan Documents, except in its capacity, as applicable, as the
Administrative Agent, the Collateral Agent, a Lender or the Issuing Bank
hereunder.

 

ARTICLE 9

MISCELLANEOUS

 

Section 9.01.  
Notices.   Notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by fax, as follows:

 

(a)        if to the Borrower, to it at Global
Geophysical Services, Inc., 3535 Briarpark, Suite 200, Houston TX
77042, Attention of Craig A. 
Lindberg  (Fax No.  (713)
979-1529), with a copy to Craig Murrin (Fax No.  (713) 979-1560);

 

(b)        if to the Administrative Agent, the
Collateral Agent, the Swingline Lender or the Issuing Bank, to Credit Suisse,
Eleven Madison Avenue, New York, NY 10010, Attention of Agency Group (Fax
No.  (212) 325-8304); and

 

(c)        if to a Lender, to it at its address (or
fax number) set forth on Schedule 2.01, in its Administrative Questionnaire or
in the Assignment and Acceptance pursuant to which such Lender shall have
become a party hereto.

 

All notices and other
communications given to any party hereto in accordance with the provisions of
this Agreement shall be deemed to have been given on the date of receipt if
delivered by hand or overnight courier service or 

 

99

 

sent by fax or on the date
five Business Days after dispatch by certified or registered mail if mailed, in
each case delivered, sent or mailed (properly addressed) to such party as
provided in this Section 9.01 or in accordance with the latest unrevoked
direction from such party given in accordance with this Section 9.01.  As agreed to among the Borrower, the Administrative
Agent and the applicable Lenders from time to time, notices and other
communications may also be delivered by e-mail to the e-mail address of a
representative of the applicable person provided from time to time by such
person.

 

Section 9.02.   Survival of
Agreement.   All covenants,
agreements, representations and warranties made by the Borrower herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and the Issuing Bank and shall survive the
making by the Lenders of the Loans and the issuance of Letters of Credit by the
Issuing Bank, regardless of any investigation made by the Lenders or the Issuing
Bank or on their behalf, and shall continue in full force and effect as long as
the principal of or any accrued interest on any Loan or any Fee or any other
amount payable under this Agreement or any other Loan Document is outstanding
and unpaid or any Letter of Credit is outstanding and so long as the
Commitments have not been terminated. 
The provisions of Sections 2.14, 2.16, 2.20 and 9.05 shall remain
operative and in full force and effect regardless of the expiration of the term
of this Agreement, the consummation of the transactions contemplated hereby,
the repayment of any of the Loans, the expiration of the Commitments, the
expiration of any Letter of Credit, the invalidity or unenforceability of any
term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Administrative Agent, the Collateral
Agent, any Lender or the Issuing Bank.

 

Section 9.03.   Binding
Effect.   This Agreement shall
become effective when it shall have been executed by the Borrower and the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto.

 

Section 9.04.   Successors
and Assigns.   (a) Whenever
in this Agreement any of the parties hereto is referred to, such reference
shall be deemed to include the permitted successors and assigns of such party;
and all covenants, promises and agreements by or on behalf of the Borrower, the
Administrative Agent, the Collateral Agent, the Issuing Bank or the Lenders
that are contained in this Agreement shall bind and inure to the benefit of
their respective successors and assigns.

 

(b)        Each Lender may assign to one or more
assignees all or a portion of its interests, rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans at the
time owing to it), with the prior written consent of the Administrative Agent
(not to be unreasonably withheld or delayed); provided,
however, that (i) in the
case of an assignment of Term Loans, 

 

100

 

the Administrative Agent
shall use its commercially reasonable efforts to provide notice of any such
assignment to the Borrower (it being agreed that any failure to provide, or any
delay in providing, any such notice to the Borrower shall not affect the
validity of such assignment), (ii) in the case of an assignment of a
Revolving Credit Commitment, each of the Borrower, the Issuing Bank and the
Swingline Lender must also give its prior written consent to such assignment
(which consents shall not be unreasonably withheld or delayed) (provided, that the consent of the Borrower
shall not be required to any such assignment made (x) to another Lender or
an Affiliate of a Lender or an Approved Fund, (y) in connection with the
initial syndication of the Credit Facilities, or (z) after the occurrence
and during the continuance of any Event of Default), (iii) the amount of
the Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall be in an integral
multiple of, and not less than, $1,000,000 (or, if less, the entire remaining
amount of such Lender’s Commitment or Loans of the relevant Class); provided that simultaneous assignments by
or to two or more Related Funds shall be combined for purposes of determining
whether the minimum assignment requirement is met, (iv) the parties to
each assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance via an electronic settlement system acceptable to the
Administrative Agent (or, if previously agreed with the Administrative Agent,
manually), and shall pay to the Administrative Agent a processing and
recordation fee of $3,500 (which fee may be waived or reduced in the sole
discretion of the Administrative Agent), (v) the assignee, if it shall not
be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire and all applicable tax forms, (vi) each assignee shall be a
Lender, an Affiliate of a Lender or an Approved Fund or a commercial bank,
insurance company, investment or mutual fund or other entity that is an “accredited
investor” (as defined in Regulation D under the Securities Act of 1933, as
amended) that extends credit or invests in bank loans as one of its businesses,
and (vii) no such assignment may be made to the Borrower, the Sponsor or
any of their respective Affiliates or Subsidiaries or to a natural person.   Upon acceptance and recording pursuant to
paragraph (e) of this Section 9.04, from and after the effective date
specified in each Assignment and Acceptance, (A) the assignee thereunder
shall be a party hereto and, to the extent of the interest assigned by such
Assignment and Acceptance, have the rights and obligations of a Lender under
this Agreement and (B) the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment
and Acceptance covering all or the remaining portion of an assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections
2.14, 2.16, 2.20 and 9.05, as well as to any Fees accrued for its account and
not yet paid).

 

(c)        By executing and delivering an
Assignment and Acceptance, the assigning Lender thereunder and the assignee
thereunder shall be deemed to 

 

101

 

confirm to and agree with
each other and the other parties hereto as follows:  (i) such assigning Lender warrants that
it is the legal and beneficial owner of the interest being assigned thereby
free and clear of any adverse claim and that its Term Loan Commitment and
Revolving Credit Commitment, and the outstanding balances of its Term Loans and
Revolving Loans, in each case without giving effect to assignments thereof
which have not become effective, are as set forth in such Assignment and
Acceptance, (ii) except as set forth in (i) above, such assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, any other
Loan Document or any other instrument or document furnished pursuant hereto, or
the financial condition of the Borrower or any Subsidiary or the performance or
observance by the Borrower or any Subsidiary of any of its obligations under
this Agreement, any other Loan Document or any other instrument or document
furnished pursuant hereto; (iii) such assignee represents and warrants
that it is legally authorized to enter into such Assignment and Acceptance;
(iv) such assignee confirms that it has received a copy of this Agreement,
together with copies of the most recent financial statements referred to in
Section 3.15 or delivered pursuant to Section 5.01, the Intercreditor
Agreement and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such Assignment and
Acceptance; (v) such assignee will independently and without reliance upon
the Administrative Agent, the Collateral Agent, such assigning Lender or any
other Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (vi) such assignee agrees to be bound by the
terms of the Intercreditor Agreement; (vii) such assignee appoints and
authorizes the Administrative Agent and the Collateral Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Administrative Agent and the Collateral Agent,
respectively, by the terms hereof, together with such powers as are reasonably
incidental thereto; and (viii) such assignee agrees that it will perform
in accordance with their terms all the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.

 

(d)        The Administrative Agent, acting for
this purpose as an agent of the Borrower, shall maintain at one of its offices
in The City of New York a copy of each Assignment and Acceptance delivered to
it and a register for the recordation of the names and addresses of the Lenders,
and the Commitment of, and principal amount of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”).   The
entries in the Register shall be conclusive and the Borrower, the
Administrative Agent, the Issuing Bank, the Collateral Agent and the Lenders
may treat each person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary.  
The Register shall be available for inspection by the Borrower, the
Issuing Bank, the Collateral Agent 

 

102

 

and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.

 

(e)        Upon its receipt of, and consent to, a
duly completed Assignment and Acceptance executed by an assigning Lender and an
assignee, an Administrative Questionnaire completed in respect of the assignee
(unless the assignee shall already be a Lender hereunder), the processing and
recordation fee referred to in paragraph (b) above, if applicable, and the
written consent of the Administrative Agent and, if required, the Borrower, the
Swingline Lender and the Issuing Bank to such assignment and any applicable tax
forms, the Administrative Agent shall promptly (i) accept such Assignment
and Acceptance and (ii) record the information contained therein in the
Register.  No assignment shall be
effective unless it has been recorded in the Register as provided in this
paragraph (e).

 

(f)         Each Lender may without the consent of
the Borrower, the Swingline Lender, the Issuing Bank or the Administrative
Agent sell participations to one or more banks or other persons in all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans owing to it); provided, however,
that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the
participating banks or other persons shall be entitled to the benefit of the
cost protection provisions contained in Sections 2.14, 2.16 and 2.20 to the
same extent as if they were Lenders (but, with respect to any particular participant,
to no greater extent than the Lender that sold the participation to such
participant)and (iv) the Borrower, the Administrative Agent, the Issuing
Bank and the Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement, and such Lender shall retain the sole right to enforce the
obligations of the Borrower relating to the Loans or L/C Disbursements and to
approve any amendment, modification or waiver of any provision of this
Agreement (other than amendments, modifications or waivers decreasing any fees
payable to such participating bank or person hereunder or the amount of
principal of or the rate at which interest is payable on the Loans in which
such participating bank or person has an interest, extending any scheduled
principal payment date or date fixed for the payment of interest on the Loans
in which such participating bank or person has an interest, increasing or
extending the Commitments in which such participating bank or person has an
interest or releasing Subsidiary Guarantors which represent all or
substantially all of the value of the Guaranty Obligations or all or
substantially all of the Collateral). 
Each Lender that sells a participation shall, acting solely for this
purpose as a non-fiduciary agent of the Borrower, maintain a register on which
it enters the name and address of each participant and the amount of each
participant’s participation (the “Participant
Register”).  The entries in
the Participant Register shall be conclusive, absent manifest error, and such
Lender shall treat such Person whose name is recorded in 

 

103

 

the Participant Register as
the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary. 
To the extent permitted by law, each participant shall also be entitled
to the benefits of Section 9.06 as though it were a Lender, provided such
participant agrees to be subject to Section 2.18 as though it were a
Lender.

 

(g)        Any Lender or participant may, in
connection with any assignment or participation or proposed assignment or
participation pursuant to this Section 9.04, disclose to the assignee or
participant or proposed assignee or participant any information relating to the
Borrower furnished to such Lender by or on behalf of the Borrower; provided that, prior to any such
disclosure of information designated by the Borrower as confidential, each such
assignee or participant or proposed assignee or participant shall execute an
agreement whereby such assignee or participant shall agree (subject to
customary exceptions) to preserve the confidentiality of such confidential
information on terms no less restrictive than those applicable to the Lenders
pursuant to Section 9.16.

 

(h)        Any Lender may at any time assign all or
any portion of its rights under this Agreement to secure extensions of credit
to such Lender or in support of obligations owed by such Lender; provided that no such assignment shall
release a Lender from any of its obligations hereunder or substitute any such
assignee for such Lender as a party hereto.

 

(i)         Notwithstanding anything to the
contrary contained herein, any Lender (a “Granting
Lender”) may grant to a special purpose funding vehicle (an “SPC”), identified as such in writing from
time to time by the Granting Lender to the Administrative Agent and the
Borrower, the option to provide to the Borrower all or any part of any Loan
that such Granting Lender would otherwise be obligated to make to the Borrower
pursuant to this Agreement; provided
that (i) nothing herein shall constitute a commitment by any SPC to make
any Loan and (ii) if an SPC elects not to exercise such option or
otherwise fails to provide all or any part of such Loan, the Granting Lender
shall be obligated to make such Loan pursuant to the terms hereof.   The making of a Loan by an SPC hereunder
shall utilize the Commitment of the Granting Lender to the same extent, and as
if, such Loan were made by such Granting Lender.   Each party hereto hereby agrees that no SPC
shall be liable for any indemnity or similar payment obligation under this
Agreement (all liability for which shall remain with the Granting Lender).   In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior
indebtedness of any SPC, it will not institute against, or join any other
person in instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United
States or any State thereof.   In
addition, notwithstanding anything to the contrary contained in this
Section 9.04, any SPC may (i) with notice to, but without the prior
written consent of, the Borrower and the Administrative Agent and without
paying any processing fee therefor, assign all or a portion of its interests in
any 

 

104

 

Loans to the Granting Lender
or to any financial institutions (consented to by the Borrower and
Administrative Agent) providing liquidity and/or credit support to or for the
account of such SPC to support the funding or maintenance of Loans and
(ii) disclose on a confidential basis any non-public information relating
to its Loans to any rating agency, commercial paper dealer or provider of any
surety, guarantee or credit or liquidity enhancement to such SPC.

 

(j)         The Borrower shall not assign or
delegate any of its rights or duties hereunder without the prior written
consent of the Administrative Agent, the Issuing Bank and each Lender, and any
attempted assignment without such consent shall be null and void.

 

(k)        In the event that any Revolving Credit
Lender shall become a Defaulting Lender or S&P, Moody’s and Thompson’s
BankWatch (or InsuranceWatch Ratings Service, in the case of Lenders that are
insurance companies (or Best’s Insurance Reports, if such insurance company is
not rated by Insurance Watch Ratings Service)) shall, after the date that any
Lender becomes a Revolving Credit Lender, downgrade the long term certificate
deposit ratings of such Lender, and the resulting ratings shall be below BBB-,
Baa3 and C (or BB, in the case of a Lender that is an insurance company (or B,
in the case of an insurance company not rated by InsuranceWatch Ratings
Service)) (or, with respect to any Revolving Credit Lender that is not rated by
any such ratings service or provider, the Issuing Bank or the Swingline Lender
shall have reasonably determined that there has occurred a material adverse
change in the financial condition of any such Lender, or a material impairment
of the ability of any such Lender to perform its obligations hereunder, as
compared to such condition or ability as of the date that any such Lender
became a Revolving Credit Lender) then the Issuing Bank shall have the right,
but not the obligation, at its own expense, upon notice to such Lender and the
Administrative Agent, to replace such Lender with an assignee (in accordance
with and subject to the restrictions contained in paragraph (b) above),
and such Lender hereby agrees to transfer and assign without recourse (in
accordance with and subject to the restrictions contained in paragraph
(b) above) all its interests, rights and obligations in respect of its
Revolving Credit Commitment to such assignee; provided, however, that (i) no such assignment
shall conflict with any law, rule and regulation or order of any
Governmental Authority and (ii) the Issuing Bank or such assignee, as the
case may be, shall pay to such Lender in immediately available funds on the
date of such assignment the principal of and interest accrued to the date of
payment on the Loans made by such Lender hereunder and all other amounts
accrued for such Lender’s account or owed to it hereunder.

 

Section 9.05.   Expenses;
Indemnity.   (a) The
Borrower shall pay (i) all out of pocket expenses incurred by the
Administrative Agent, the Collateral Agent, the Issuing Bank, the Swingline
Lender, the Arrangers and their respective Affiliates (including the reasonable
fees, charges and disbursements of counsel thereof), in connection with the
syndication of the Credit Facilities, the preparation, negotiation, execution,
delivery and administration of this Agreement 

 

105

 

and the other Loan Documents
or any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out of pocket expenses incurred by the
Issuing Bank in connection with the issuance, amendment, renewal or extension
of any Letter of Credit or any demand for payment thereunder and (iii) all
out of pocket expenses incurred by the Administrative Agent, the Collateral
Agent, any Lender or the Issuing Bank (including the fees, charges and
disbursements of any counsel for the Administrative Agent, the Collateral
Agent, any Lender or the Issuing Bank), in connection with the enforcement or
protection of its rights (A) in connection with this Agreement and the
other Loan Documents, including its rights under this Section, or (B) in
connection with the Loans made or Letters of Credit issued hereunder, including
all such out of pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.

 

(b)        The Borrower shall indemnify the
Administrative Agent and the Collateral Agent (and any sub-agent thereof), each
Arranger, each Lender, the Issuing Bank and the Swingline Lender, and each
Related Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”) against, and hold
each Indemnitee harmless from, any and all losses, claims (including any
Environmental Claims or civil penalties or fines assessed by OFAC), damages,
liabilities and related expenses (including the reasonable fees, charges and
disbursements of any counsel for any Indemnitee), incurred by any Indemnitee or
asserted against any Indemnitee by any third party or by the Borrower or any
other GGS Company or any Affiliate thereof arising out of, in connection with,
or as a result of (i) the execution or delivery of this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby or thereby,
the performance by the parties hereto or thereto of their respective
obligations hereunder or thereunder or the consummation of the Transactions and
the other transactions contemplated hereby or thereby (including the
syndication of the Credit Facilities), (ii) any Loan or Letter of Credit
or the use or proposed use of the proceeds therefrom (including any refusal by
the Issuing Bank to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly comply with
the terms of such Letter of Credit), (iii) any actual or alleged presence
or release of Hazardous Materials on or from any property currently or
previously owned or operated by any GGS Company, or any Environmental Claim
related in any way to any GGS Company, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the
foregoing, whether based on contract, tort or any other theory, whether brought
by a third party or by the Borrower or any other GGS Company or any Affiliate
thereof, and regardless of whether any Indemnitee is a party thereto, provided that such indemnity shall not, as
to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses (x) are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted
primarily from the gross negligence, bad faith or willful misconduct of such
Indemnitee or any officer, director or

 

106

 

employee of such Indemnitee
or (y) result from a claim brought by the Borrower or any other GGS
Company against an Indemnitee for material breach in bad faith of such
Indemnitee’s obligations hereunder or under any other Loan Document, if the
Borrower or such GGS Company has obtained a final and nonappealable judgment in
its favor on such claim as determined by a court of competent jurisdiction.

 

(c)        To the extent that the Borrower for any
reason fails to indefeasibly pay any amount required under paragraph
(a) or (b) of this Section to be paid by it to the
Administrative Agent or the Collateral Agent (or any sub-agent thereof), the
Issuing Bank, the Swingline Lender or any Related Party of any of the foregoing
(and without limiting the Borrower’s obligation to do so), each Lender
severally agrees to pay to the Administrative Agent or the Collateral Agent (or
any such sub-agent), the Issuing Bank, the Swingline Lender or such Related
Party, as the case may be, such Lender’s pro rata share (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought)
of such unpaid amount, provided
that the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against the
Administrative Agent or the Collateral Agent (or any such sub-agent) or the
Issuing Bank or the Swingline Lender in its capacity as such, or against any
Related Party of any of the foregoing acting for the Administrative Agent or
the Collateral Agent (or any such sub-agent) or Issuing Bank or the Swingline
Lender in connection with such capacity.  
For purposes hereof, a Lender’s “pro
rata share” shall be determined based upon its share of the sum of
the Aggregate Revolving Credit Exposure, outstanding Term Loans and unused
Commitments at the time.

 

(d)        To the fullest extent permitted by
Applicable Law, no GGS Company shall assert, and each hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any
other Loan Document or any agreement or instrument contemplated hereby, the
Transactions or the other transactions contemplated hereby or thereby, any Loan
or Letter of Credit or the use of the proceeds thereof.  No Indemnitee shall be liable for any damages
arising from the use by unintended recipients of any information or other
materials distributed by it through telecommunications, electronic or other
information transmission systems in connection with this Agreement or the other
Loan Documents or the transactions contemplated hereby or thereby.

 

(e)        The provisions of this Section 9.05
shall remain operative and in full force and effect regardless of the
expiration of the term of this Agreement, the consummation of the transactions
contemplated hereby, the repayment of any of the Loans, the expiration of the
Commitments, the expiration of any Letter of Credit, the invalidity or
unenforceability of any term or provision of this Agreement or any other Loan
Document, or any investigation made by or on behalf of the Administrative
Agent, the Collateral Agent, any Lender or the 

 

107

 

Issuing Bank.   All amounts due under this Section 9.05
shall be payable on written demand therefor.

 

Section 9.06.   Right of
Setoff.  If an Event of
Default shall have occurred and be continuing, each Lender, the Issuing Bank
and each of their respective Affiliates is hereby authorized at any time and
from time to time, to the fullest extent permitted by applicable law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by such Lender, the
Issuing Bank or any such Affiliate to or for the credit or the account of the
Borrower or any other GGS Company against any and all of the obligations of the
Borrower or such GGS Company now or hereafter existing under this Agreement or
any other Loan Document to such Lender or the Issuing Bank, irrespective of
whether or not such Lender or the Issuing Bank shall have made any demand under
this Agreement or any other Loan Document and although such obligations of the
Borrower or such GGS Company may be contingent or unmatured or are owed to a
branch or office of such Lender or the Issuing Bank different from the branch
or office holding such deposit or obligated on such indebtedness.   The rights of each Lender, the Issuing Bank
and their respective Affiliates under this Section are in addition to
other rights and remedies (including other rights of setoff) that such Lender,
the Issuing Bank or their respective Affiliates may have.

 

Section 9.07.   Applicable
Law.   THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH
IN OTHER LOAN DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK.   EACH
LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE
WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS
OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY
CREDITS MOST RECENTLY PUBLISHED AND IN EFFECT, ON THE DATE SUCH LETTER OF
CREDIT WAS ISSUED, BY THE INTERNATIONAL CHAMBER OF COMMERCE (THE “UNIFORM CUSTOMS”) AND, AS TO MATTERS
NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW YORK.

 

Section 9.08.   Waivers;
Amendment.   (a) No
failure or delay of the Administrative Agent, the Collateral Agent, any Lender
or the Issuing Bank in exercising any power or right hereunder or under any
other Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power.   The rights and remedies of the
Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or 

 

108

 

remedies that they would
otherwise have.   No waiver of any
provision of this Agreement or any other Loan Document or consent to any
departure by the Borrower or any other Loan Party therefrom shall in any event
be effective unless the same shall be permitted by paragraph (b) below,
and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given.  
No notice or demand on the Borrower in any case shall entitle the
Borrower to any other or further notice or demand in similar or other
circumstances.

 

(b)        No Loan Document or provision thereof
may be waived, amended or modified except, in the case of this Agreement, by an
agreement or agreements in writing entered into by the Borrower and the
Required Lenders or, in the case of any other Loan Document, by an agreement or
agreements in writing entered into by the parties thereto with the consent of
the Required Lenders; provided, however, that no such agreement shall
(i) decrease the principal amount of, or extend the maturity of or any
scheduled principal payment date or date for the payment of any interest on any
Loan or any date for reimbursement of an L/C Disbursement, or waive or excuse
any such payment or any part thereof, or decrease the rate of interest on any
Loan or L/C Disbursement, without the prior written consent of each Lender
directly adversely affected thereby, (ii) increase or extend the
Commitment or decrease or extend the date for payment of any Fees of any Lender
without the prior written consent of such Lender, (iii) amend or modify
the pro rata requirements of Section 2.17, the provisions of
Section 9.04(j) or the provisions of this Section or release
Subsidiary Guarantors which represent all or substantially all of the value of the
Guaranty Obligations or all or substantially all of the Collateral, without the
prior written consent of each Lender, (iv) change the provisions of any
Loan Document in a manner that by its terms adversely affects the rights in
respect of payments due to Lenders holding Loans of one Class differently
from the rights of Lenders holding Loans of any other Class without the
prior written consent of Lenders holding a majority in interest of the
outstanding Loans and unused Commitments of each adversely affected Class, (v) modify
the protections afforded to an SPC pursuant to the provisions of
Section 9.04(i) without the written consent of such SPC or
(vi) reduce the percentage contained in the definition of the term “Required Lenders” without the prior written
consent of each Lender (it being understood that with the consent of the
Required Lenders, additional extensions of credit pursuant to this Agreement
may be included in the determination of the Required Lenders on substantially
the same basis as the Term Loan Commitments and Revolving Credit Commitments on
the date hereof); provided further
that no such agreement shall amend, modify or otherwise affect the rights or
duties of the Administrative Agent, the Collateral Agent, the Issuing Bank or
the Swingline Lender hereunder or under any other Loan Document without the
prior written consent of the Administrative Agent, the Collateral Agent, the
Issuing Bank or the Swingline Lender.

 

109

 

Section 9.09.   Interest
Rate Limitation.   Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan or participation in any L/C Disbursement, together with all fees,
charges and other amounts which are treated as interest on such Loan or
participation in such L/C Disbursement under applicable law (collectively the “Charges”), shall exceed the maximum lawful
rate (the “Maximum Rate”) which
may be contracted for, charged, taken, received or reserved by the Lender
holding such Loan or participation in accordance with applicable law, the rate
of interest payable in respect of such Loan or participation hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would
have been payable in respect of such Loan or participation but were not payable
as a result of the operation of this Section 9.09 shall be cumulated and
the interest and Charges payable to such Lender in respect of other Loans or
participations or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received
by such Lender.

 

Section 9.10.   Entire
Agreement.   This Agreement,
the Fee Letter and the other Loan Documents constitute the entire contract
between the parties relative to the subject matter hereof.   Any other previous agreement among the
parties with respect to the subject matter hereof is superseded by this
Agreement and the other Loan Documents.  
Nothing in this Agreement or in the other Loan Documents, expressed or
implied, is intended to confer upon any person (other than the parties hereto
and thereto, their respective successors and assigns permitted hereunder
(including any Affiliate of the Issuing Bank that issues any Letter of Credit)
and, to the extent expressly contemplated hereby, the Related Parties of each
of the Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders)
any rights, remedies, obligations or liabilities under or by reason of this
Agreement or the other Loan Documents.

 

Section 9.11.   WAIVER OF
JURY TRIAL.   EACH PARTY
HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS.   EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 9.11.

 

110

 

Section 9.12.  
Severability.   In the
event any one or more of the provisions contained in this Agreement or in any
other Loan Document should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected or impaired
thereby (it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction).  
The parties shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

 

Section 9.13.  
Counterparts.   This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original but all of
which when taken together shall constitute a single contract, and shall become
effective as provided in Section 9.03.  
Delivery of an executed signature page to this Agreement by
facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Agreement.

 

Section 9.14.  
Headings.   Article and
Section headings and the Table of Contents used herein are for convenience
of reference only, are not part of this Agreement and are not to affect the
construction of, or to be taken into consideration in interpreting, this
Agreement.

 

Section 9.15.  
Jurisdiction; Consent to Service of Process.   (a) The Borrower hereby
irrevocably and unconditionally submits, for itself and its property, to the
exclusive jurisdiction of any New York State court or Federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or the other Loan Documents, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court.   Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law.  
Nothing in this Agreement shall affect any right that the Administrative
Agent, the Collateral Agent, the Issuing Bank or any Lender may otherwise have
to bring any action or proceeding relating to this Agreement or the other Loan
Documents against the Borrower or its properties in the courts of any
jurisdiction.

 

(b)        The Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
the other Loan Documents in any New York State or Federal court.   Each of the parties hereto hereby
irrevocably 

 

111

 

waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

 

(c)        Each party to this Agreement irrevocably
consents to service of process in the manner provided for notices in
Section 9.01.   Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.

 

Section 9.16.  
Confidentiality.   Each
of the Administrative Agent, the Collateral Agent, the Issuing Bank and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its
Affiliates’ officers, directors, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to
the extent requested by any regulatory authority or quasi-regulatory authority
(such as the National Association of Insurance Commissioners), (c) to the
extent required by applicable laws or regulations or by any subpoena or similar
legal process, (d) in connection with the exercise of any remedies
hereunder or under the other Loan Documents or any suit, action or proceeding
relating to the enforcement of its rights hereunder or thereunder,
(e) subject to an agreement containing provisions substantially the same
as those of this Section 9.16, to (i) any actual or prospective
assignee of or participant in any of its rights or obligations under this
Agreement and the other Loan Documents or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating
to the Borrower or any Subsidiary or any of their respective obligations,
(f) with the consent of the Borrower or (g) to the extent such
Information becomes publicly available other than as a result of a breach of
this Section 9.16.   For the
purposes of this Section, “Information”
shall mean all information received from the Borrower and related to the
Borrower or its business, other than any such information that was available to
the Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender
on a nonconfidential basis prior to its disclosure by the Borrower; provided that, in the case of Information
received from the Borrower after the date hereof, such information is clearly
identified at the time of delivery as confidential.   Any person required to maintain the
confidentiality of Information as provided in this Section 9.16 shall be
considered to have complied with its obligation to do so if such person has
exercised the same degree of care to maintain the confidentiality of such
Information as such person would accord its own confidential information.

 

Section 9.17.   USA PATRIOT
ACT Notice.   Each Lender and
the Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act,
it is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow such Lender or the Administrative Agent, as
applicable, to identify the Borrower in accordance with the USA PATRIOT Act.

 

112

 

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

 

 

	
   

  	
  GLOBAL
  GEOPHYSICAL SERVICES,

  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  CREDIT SUISSE, CAYMAN
  ISLANDS

  BRANCH, individually and as

  Administrative Agent, Collateral Agent,

  Swingline Lender and Issuing Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  JEFFERIES
  FINANCE LLC, as Lender 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:  Carl A.
  Toriello

  
	
   

  	
   

  	
  Title:    Executive
  Vice President

  

 

 

	
   

  	
  ALLIED
  IRISH BANKS PLC, as Lender 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  WHITNEY NATIONAL BANK, as

  
	
   

  	
  Lender 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00145-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00145-of-00352.parquet"}]]