Document:

exv10w1

 

EXHIBIT 10.1

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

dated as of October 26, 2007

among

T-3 ENERGY SERVICES, INC.,

as US Borrower,

T3 ENERGY SERVICES

(FORMERLY KNOWN AS T-3 OILCO ENERGY SERVICES PARTNERSHIP),

as Canadian Borrower,

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as US Administrative Agent, US Issuing Lender and US Swingline Lender,

and as Lead Arranger,

COMERICA BANK, a Michigan banking corporation

and an authorized foreign bank under the Bank Act (Canada) acting

through its Canadian branch,

as Canadian Administrative Agent, Canadian Issuing Lender and Canadian Swingline Lender,

and

the Lenders

Revolving Credit Facility

(with Swing Lines and Letters of Credit)

 

 

 

Table of Contents

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	ARTICLE I Definitions	 	 	1	 
	 
	 	Section 1.1	 	Definitions	 	 	1	 
	 
	 	Section 1.2	 	Other Definitional Provisions	 	 	21	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE II Advances and Letters of Credit	 	 	21	 
	 
	 	Section 2.1	 	Aggregate Commitments	 	 	21	 
	 
	 	Section 2.2	 	The Notes	 	 	22	 
	 
	 	Section 2.3	 	Repayment of Advances	 	 	23	 
	 
	 	Section 2.4	 	Interest	 	 	23	 
	 
	 	Section 2.5	 	Use of Proceeds	 	 	23	 
	 
	 	Section 2.6	 	Commitment Fee	 	 	24	 
	 
	 	Section 2.7	 	Reduction or Termination of Aggregate Commitments	 	 	24	 
	 
	 	Section 2.8	 	Letters of Credit	 	 	24	 
	 
	 	Section 2.9	 	Payments and Reimbursement Under Letters of Credit	 	 	25	 
	 
	 	Section 2.10	 	Optional Commitment Increase	 	 	27	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE III Swing Line Advances	 	 	30	 
	 
	 	Section 3.1	 	Swing Line Advances	 	 	30	 
	 
	 	Section 3.2	 	Lenders' Funding of Swing Line Advances as Advances	 	 	31	 
	 
	 	Section 3.3	 	The Swing Line Notes	 	 	32	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE IV Borrowing Procedure: Payments; Facilities Fees;
Matters Related to Letters
of Credit; Matters Related to Advances; Designation of
Canadian Resident Lenders	 	 	32	 
	 
	 	Section 4.1	 	Borrowing Procedure	 	 	32	 
	 
	 	Section 4.2	 	Method of Payment	 	 	34	 
	 
	 	Section 4.3	 	Voluntary Prepayment	 	 	35	 
	 
	 	Section 4.4	 	Mandatory Prepayment	 	 	35	 
	 
	 	Section 4.5	 	Pro Rata Treatment	 	 	37	 
	 
	 	Section 4.6	 	Non-Receipt of Funds by the Administrative Agents	 	 	37	 
	 
	 	Section 4.7	 	Withholding Tax Exemption	 	 	37	 
	 
	 	Section 4.8	 	Computation of Interest	 	 	38	 
	 
	 	Section 4.9	 	Conversions and Continuation	 	 	38	 
	 
	 	Section 4.10	 	Letter of Credit Procedure	 	 	38	 
	 
	 	Section 4.11	 	Amendments to Letters of Credit	 	 	39	 
	 
	 	Section 4.12	 	Letter of Credit Fees	 	 	39	 
	 
	 	Section 4.13	 	Participation by Lenders	 	 	39	 
	 
	 	Section 4.14	 	Obligations Absolute	 	 	40	 
	 
	 	Section 4.15	 	Limitation of Liability	 	 	40	 
	 
	 	Section 4.16	 	Letter of Credit Agreements	 	 	41	 
	 
	 	Section 4.17	 	Replacement of either of the Issuing Lenders	 	 	41	 
	 
	 	Section 4.18	 	No Advances	 	 	41	 
	 
	 	Section 4.19	 	Special Provisions for Canadian Lenders	 	 	41	 

i 

 

Table of Contents

(continued)

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	ARTICLE V Yield Protection and Illegality	 	 	42	 
	 
	 	Section 5.1	 	Capital Adequacy	 	 	42	 
	 
	 	Section 5.2	 	Additional Costs	 	 	42	 
	 
	 	Section 5.3	 	Limitation on LIBOR Advances	 	 	43	 
	 
	 	Section 5.4	 	Illegality	 	 	44	 
	 
	 	Section 5.5	 	Treatment of Certain LIBOR Advances	 	 	44	 
	 
	 	Section 5.6	 	Compensation	 	 	45	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VI Security	 	 	45	 
	 
	 	Section 6.1	 	Collateral	 	 	45	 
	 
	 	Section 6.2	 	Setoff	 	 	46	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VII Conditions Precedent	 	 	47	 
	 
	 	Section 7.1	 	Conditions to Initial Advance	 	 	47	 
	 
	 	Section 7.2	 	All Advances	 	 	49	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VIII Representations and Warranties	 	 	50	 
	 
	 	Section 8.1	 	Corporate Existence	 	 	50	 
	 
	 	Section 8.2	 	Projections; Financial Statements	 	 	50	 
	 
	 	Section 8.3	 	Corporate Action: No Breach	 	 	51	 
	 
	 	Section 8.4	 	Operation of Business	 	 	51	 
	 
	 	Section 8.5	 	Litigation and Judgments	 	 	51	 
	 
	 	Section 8.6	 	Rights in Properties: Liens	 	 	51	 
	 
	 	Section 8.7	 	Enforceability	 	 	51	 
	 
	 	Section 8.8	 	Approvals	 	 	52	 
	 
	 	Section 8.9	 	Debt	 	 	52	 
	 
	 	Section 8.10	 	Taxes	 	 	52	 
	 
	 	Section 8.11	 	Use of Proceeds: Margin Securities	 	 	52	 
	 
	 	Section 8.12	 	ERISA	 	 	52	 
	 
	 	Section 8.13	 	Disclosure	 	 	53	 
	 
	 	Section 8.14	 	Subsidiaries	 	 	53	 
	 
	 	Section 8.15	 	Agreements	 	 	53	 
	 
	 	Section 8.16	 	Compliance with Laws	 	 	53	 
	 
	 	Section 8.17	 	Investment Company Act	 	 	53	 
	 
	 	Section 8.18	 	Environmental Matters	 	 	53	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE IX Affirmative Covenants	 	 	55	 
	 
	 	Section 9.1	 	Reporting Requirements	 	 	55	 
	 
	 	Section 9.2	 	Maintenance of Existence: Conduct of Business	 	 	57	 
	 
	 	Section 9.3	 	Maintenance of Properties	 	 	57	 
	 
	 	Section 9.4	 	Taxes and Claims	 	 	58	 
	 
	 	Section 9.5	 	Insurance	 	 	58	 
	 
	 	Section 9.6	 	Inspection Rights	 	 	58	 
	 
	 	Section 9.7	 	Keeping Books and Records	 	 	59	 

ii 

 

Table of Contents

(continued)

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 
	 	Section 9.8	 	Compliance with Laws	 	 	59	 
	 
	 	Section 9.9	 	Compliance with Agreements	 	 	59	 
	 
	 	Section 9.10	 	Further Assurances	 	 	59	 
	 
	 	Section 9.11	 	ERISA	 	 	59	 
	 
	 	Section 9.12	 	Additional Subsidiaries as Guarantors: Execution of Additional Security Agreements-Guarantors	 	 	59	 
	 
	 	Section 9.13	 	Continuity of Operations	 	 	60	 
	 
	 	Section 9.14	 	Intercompany Notes	 	 	60	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE X Negative Covenants	 	 	60	 
	 
	 	Section 10.1	 	Debt	 	 	60	 
	 
	 	Section 10.2	 	Limitation on Liens	 	 	62	 
	 
	 	Section 10.3	 	Mergers, Dissolutions, Etc	 	 	63	 
	 
	 	Section 10.4	 	Loans and Investments	 	 	64	 
	 
	 	Section 10.5	 	Transactions With Affiliates	 	 	64	 
	 
	 	Section 10.6	 	Disposition of Assets	 	 	65	 
	 
	 	Section 10.7	 	Sale and Leaseback	 	 	65	 
	 
	 	Section 10.8	 	Nature of Business	 	 	65	 
	 
	 	Section 10.9	 	Environmental Protection	 	 	65	 
	 
	 	Section 10.10	 	Accounting	 	 	66	 
	 
	 	Section 10.11	 	Changes to Subordinated Debt	 	 	66	 
	 
	 	Section 10.12	 	Restrictions on Certain Subsidiaries	 	 	66	 
	 
	 	Section 10.13	 	Restricted Payments	 	 	66	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XI Financial Covenants	 	 	67	 
	 
	 	Section 11.1	 	Interest Coverage Ratio	 	 	67	 
	 
	 	Section 11.2	 	Leverage Ratio	 	 	67	 
	 
	 	Section 11.3	 	Capital Expenditures	 	 	67	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XII Default	 	 	67	 
	 
	 	Section 12.1	 	Events of Default	 	 	67	 
	 
	 	Section 12.2	 	Remedies Upon Default	 	 	69	 
	 
	 	Section 12.3	 	Letter of Credit	 	 	70	 
	 
	 	Section 12.4	 	Performance by the Administrative Agents	 	 	70	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XIII The Administrative Agents	 	 	70	 
	 
	 	Section 13.1	 	Appointment, Powers and Immunities	 	 	70	 
	 
	 	Section 13.2	 	Certain Rights of Administrative Agents	 	 	72	 
	 
	 	Section 13.3	 	Sharing of Payments, Etc	 	 	73	 
	 
	 	Section 13.4	 	Indemnification	 	 	73	 
	 
	 	Section 13.5	 	Independent Credit Decisions	 	 	74	 
	 
	 	Section 13.6	 	Several Commitments	 	 	74	 
	 
	 	Section 13.7	 	Successor Administrative Agents	 	 	75	 

iii 

 

Table of Contents

(continued)

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	ARTICLE XIV Miscellaneous	 	 	75	 
	 
	 	Section 14.1	 	Expenses	 	 	75	 
	 
	 	Section 14.2	 	Indemnification	 	 	76	 
	 
	 	Section 14.3	 	Limitation of Liability	 	 	76	 
	 
	 	Section 14.4	 	No Duty	 	 	76	 
	 
	 	Section 14.5	 	Lender Not Fiduciary	 	 	77	 
	 
	 	Section 14.6	 	No Waiver; Cumulative Remedies	 	 	77	 
	 
	 	Section 14.7	 	Successors and Assigns	 	 	77	 
	 
	 	Section 14.8	 	Survival	 	 	80	 
	 
	 	Section 14.9	 	ENTIRE AGREEMENT; AMENDMENTS	 	 	80	 
	 
	 	Section 14.10	 	Maximum Interest Rate	 	 	81	 
	 
	 	Section 14.11	 	Notices; Electronic Communications	 	 	81	 
	 
	 	Section 14.12	 	GOVERNING LAW; VENUE; SERVICE OF PROCESS	 	 	82	 
	 
	 	Section 14.13	 	Counterparts; Facsimiles	 	 	83	 
	 
	 	Section 14.14	 	Severability	 	 	83	 
	 
	 	Section 14.15	 	Headings	 	 	83	 
	 
	 	Section 14.16	 	Non-Application of Chapter 346 of Texas Finance Code	 	 	83	 
	 
	 	Section 14.17	 	Construction	 	 	83	 
	 
	 	Section 14.18	 	Independence of Covenants	 	 	84	 
	 
	 	Section 14.19	 	Waiver of Trial By Jury	 	 	84	 
	 
	 	Section 14.20	 	Amendment and Restatement; Release	 	 	84	 
	 
	 	Section 14.21	 	Provisions Related to Canadian Loans	 	 	85	 
	 
	 	Section 14.22	 	Appointment	 	 	85	 

iv 

 

	 	 	 
	Schedules	 	 
	 
	1.1
	 	Aggregate Commitments
	1.2
	 	Existing Letters of Credit
	8.5
	 	Litigation
	8.10
	 	Tax Matters
	8.14
	 	Subsidiaries
	8.18
	 	Environmental Matters
	9.14
	 	Intercompany Notes
	10.1
	 	Existing Permitted Debt
	10.5
	 	Transactions with Affiliates
	14.11
	 	Addresses for Notice

	 	 	 
	Exhibits	 	 
	 
	A-1
	 	Revolving Credit Note
	A-2
	 	Canadian Note
	A-3
	 	US Swing Line Note
	A-4
	 	Canadian Swing Line Note
	B
	 	Advance Request Form (US)
	B-1
	 	Advance Request Form (Canadian)
	C
	 	Compliance Certificate
	D
	 	Assignment and Acceptance

v 

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

     THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of October 26, 2007 (this
“Agreement”), is among T-3 ENERGY SERVICES, INC., a Delaware corporation (the
“US Borrower”), T3 ENERGY SERVICES (formerly known as T-3 Oilco Energy Services
Partnership), an Alberta general partnership (the “Canadian Borrower”), each of the banks
or other lending institutions which is or which may from time to time become a signatory hereto or
any successor or assignee thereof, WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking
association, as administrative agent for itself and the other US Lenders (in such capacity,
together with its successors in such capacity, the “US Administrative Agent”) and COMERICA
BANK, a Michigan banking corporation and an authorized foreign bank under the Bank Act (Canada)
acting through its Canadian branch, as agent for itself and the other Canadian Lenders in
connection with the Canadian Advances (as defined herein) (in such capacity, together with its
successors in such capacity, the “Canadian Administrative Agent”).

RECITALS:

     A. The Borrowers, US Administrative Agent, and certain lenders have previously entered into
that certain First Amended and Restated Credit Agreement dated as of September 30, 2004 (as the
same has been amended, modified, or supplemented, the “Existing Credit Agreement”).

     B. The Borrowers have requested and the Administrative Agents and the Lenders have agreed to
restructure and increase the credit facilities provided under the Existing Credit Agreement to
provide for $180,000,000 of revolving credit facilities (with an option to increase such amount up
to an aggregate amount no greater than $250,000,000) and to amend and restate (but not extinguish)
the Existing Credit Agreement in its entirety upon the terms and conditions hereinafter set forth.

     C. It is the intention of the parties hereto that this Agreement is an amendment and
restatement of the Existing Agreement, not a new or substitute credit agreement or novation of the
Existing Credit Agreement.

     In consideration of the premises, covenants and agreements herein contained, and of the loans,
extensions of credit and commitments hereinafter referred to, the parties hereto agree that the
Existing Credit Agreement is amended and restated (but not substituted or extinguished) and further
as follows:

ARTICLE I

Definitions

     Section 1.1 Definitions. As used in this Agreement, the following terms have the
following meanings:

     “Additional Costs” is defined Section 5.2.

 

 

     “Additional Lender” is defined in Section 2.10(c).

     “Adjusted LIBOR Rate” means, for any LIBOR Advance for any Interest Period therefor,
the rate per annum (rounded upwards, if necessary, to the nearest 1/16 of 1%) determined by the US
Administrative Agent to be equal to (a) LIBOR for the applicable Interest Period divided by (b) the
difference of 1 minus the Reserve Requirement for such LIBOR Advance for such Interest Period.

     “Administrative Agent” means the US Administrative Agent or the Canadian
Administrative Agent, as the context may require.

     “Advance” means, as the context may require, (a) a US Revolving Credit Advance, (b) a
Swing Line Advance, (c) a Canadian Advance, (d) a payment under a US Letter of Credit, or (e) a
payment under a Canadian Letter of Credit.

     “Advance Request Form” means (a) in the case of US Revolving Credit Advances, US Swing
Line Advances, and payment under a US Letter of Credit, a certificate, in substantially the form
attached hereto as Exhibit B, properly completed and signed by an Authorized Representative
of the US Borrower and (b) in the case of Canadian Advances, Canadian Swing Line Advances, and a
payment under a Canadian Letter of Credit, a certificate, in substantially the form attached hereto
as Exhibit B-1, properly completed and executed by an Authorized Representative of the
Canadian Borrower.

     “Affiliate” means, as to any Person, any other Person (a) that directly or indirectly,
through one or more intermediaries, controls or is controlled by, or is under common control with,
such Person; (b) that directly or indirectly beneficially owns or holds 10% or more of any class of
voting stock of such Person; or (c) 10% or more of the voting stock of which is directly or
indirectly beneficially owned or held by the Person in question. The term “control” means the
possession, directly or indirectly, of the power to direct or cause direction of the management and
policies of a Person, whether through the ownership of voting securities, by contract, or
otherwise; provided, however, in no event shall any of the Administrative Agents, the Issuing
Lenders and the Lenders be deemed an Affiliate of the Borrowers or any of their Subsidiaries.

     “Aggregate Commitments” means, collectively, the US Revolving Credit Commitments and
the Canadian Commitments.

     “Applicable Lending Office” means for each Lender and each Type of Advance, the
Lending Office of such Lender (or of an Affiliate of such Lender) designated for such Type of
Advance below its name on the signature pages hereof or such other office of the Lender (or of an
Affiliate of such Lender) as such Lender may from time to time specify to the applicable one of the
Borrowers as the office by which its Advances of such Type are to be made and maintained.

     “Applicable Margin” means, on any date of determination of the interest rate for any
Base Rate Advance or LIBOR Advance or of the commitment fee described in Section 2.6, the
applicable percentage set forth in the table below for such Advance or fee, as appropriate, which
corresponds to the Leverage Ratio:

2

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Applicable	 	 	 	 
	 	 	Margin for	 	 	 	 
	 	 	Base Rate	 	Applicable	 	 
	 	 	Advances and	 	Margin for	 	Applicable Margin
	Leverage	 	Swing Line	 	LIBOR	 	for Commitment
	Ratio	 	Advances	 	Advances	 	Fee
	Greater than or
equal to 3.00 to
1.00
	 	 	1.25	%	 	 	2.25	%	 	 	0.375	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Greater than or
equal to 2.50 to
1.00, but less than
3.00 to 1.00
	 	 	1.00	%	 	 	2.00	%	 	 	0.375	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Greater than or
equal to 2.00 to
1.00, but less than
2.50 to 1.00
	 	 	0.75	%	 	 	1.75	%	 	 	0.350	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Greater than or
equal to 1.50 to
1.00, but less than
2.00 to 1.00
	 	 	0.50	%	 	 	1.50	%	 	 	0.300	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Greater than or
equal to 1.00 to
1.00, but less than
1.50 to 1.00
	 	 	0.25	%	 	 	1.25	%	 	 	0.250	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Less than 1.00 to
1.00
	 	 	0.00	%	 	 	1.00	%	 	 	0.200	%

     From the date hereof until the US Administrative Agent receives the US Borrower’s financial
statements for the Fiscal Quarter ending September 30, 2007, the Applicable Margin shall be deemed
to be (a) 1.25% for LIBOR Advances, (b) 0.25% for Base Rate Advances, and (c) 0.25% for the
commitment fee described in Section 2.6. Any change in the Leverage Ratio shall be
effective to adjust the Applicable Margin as of the date of the most recently delivered Compliance
Certificate. If the US Borrower fails to deliver the Compliance Certificate and financial
statements within the times specified in this Agreement, such ratio shall be deemed to be greater
than 3.00 to 1.00 until the US Borrower delivers such Compliance Certificate and financial
statements, but upon such delivery, the Applicable Margin shall be determined based on such
Compliance Certificate and the US Borrower’s financial statements.

     In the event that any financial statement delivered pursuant to Section 9.1(a) or
9.1(b) or any Compliance Certificate delivered pursuant to Section 9.1(c) is shown
to be inaccurate (regardless of whether this Agreement or the Aggregate Commitments are in effect
when such inaccuracy is discovered), and such inaccuracy, if corrected, would have lead to a higher
Applicable Margin for any period (an “Applicable Period”) than the Applicable Margin
applied for such Applicable Period, then (i) the US Borrower shall immediately deliver to the

3

 

US Administrative Agent a correct Compliance Certificate for such Applicable Period, (ii) the
Applicable Margin shall be determined using the Leverage Ratio applicable for such Applicable
Period based upon the corrected Compliance Certificate, and (iii) the Borrowers shall immediately
pay to the Administrative Agents the accrued additional interest and fees owing as a result of such
increased Applicable Margin for such Applicable Period, which payment shall be promptly applied by
the Administrative Agents in accordance with the terms hereof. This paragraph shall not limit the
rights of the Administrative Agents and the Lenders under Section 2.4 and
Article XII and other provisions of this Agreement. The obligations of each Borrower under
this paragraph shall survive termination of the Aggregate Commitments and the repayment of all
other Obligations hereunder.

     “Applicable Rate” means the sum of (a) the Base Rate or Adjusted LIBOR Rate, as the
case may be, plus (b) the Applicable Margin for the Base Rate or Adjusted LIBOR Rate, as the case
may be, from time to time in effect.

     “Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) any entity or an Affiliate of an entity that administers or manages a
Lender.

     “Asset Sale” means any sale, issuance, conveyance, transfer, lease or other
disposition (including, without limitation, by way of merger, consolidation or sale and leaseback
transaction) (collectively, a “transfer”) by the US Borrower or any of its Subsidiaries,
directly or indirectly, in one or a series of related transactions, to any Person other than the
US Borrower or any of its Subsidiaries of (a) any Capital Stock of any of US Borrower’s
Subsidiaries, (b) all or substantially all of the properties and assets of the US Borrower and its
Subsidiaries representing a division or line of business or (c) any other properties or assets of
the US Borrower or any of its Subsidiaries, other than in the ordinary course of business. For
purposes of this definition, the term “Asset Sale” does not include (i) any transfer of
properties or assets between or among the US Borrower and the Guarantors pursuant to transactions
that do not violate any provision of this Agreement, or (ii) the sale or issuance of the
US Borrower’s Capital Stock.

     “Assignee” is defined Section 14.7(b).

     “Assignee Group” means two or more Eligible Assignees that are Affiliates of one
another or two or more Approved Funds managed by the same investment advisor.

     “Assignment and Acceptance” means an Assignment and Acceptance, in substantially the
form attached hereto as Exhibit D with appropriate completions.

     “Authorized Representative” means any officer or employee who has been designated in
writing by a Borrower to the Administrative Agents to be an Authorized Representative of such
Borrower.

     “Base Rate” means (a) with respect to the Canadian Advances, the Canadian Prime Rate,
and (b) with respect to the US Revolving Credit Advances, for any day, a per annum interest rate
equal to the higher of (i) the sum of 0.50% plus the Federal Funds Rate on such day or (ii) the
Prime Rate on such day. The Base Rate shall be adjusted automatically as of the opening of

4

 

business on the effective date of each change in the Canadian Prime Rate, the Prime Rate or Federal
Funds Rate, as applicable, to account for such change.

     “Base Rate Advances” means Advances that bear interest at rates based upon the Base
Rate.

     “Borrowers” means, collectively, the US Borrower and the Canadian Borrower.

     “Business Day” means (a) any day on which commercial banks are not authorized or
required to close in Houston, Texas, (b) with respect to all borrowings, payments, Conversions,
Continuations, Interest Periods, and notices in connection with LIBOR Advances, any day which is a
Business Day described in clause (a) above and which is also a day on which dealings in
Dollar deposits are carried out in the London interbank market, and (c) if such day also relates to
the fundings, disbursements, settlements and payments under the Canadian Notes, means any such day
on which banks are not required or authorized by law to close in Toronto, Canada.

     “Calculation Date” means the last Business Day of each month.

     “Calculation Period” means the period of four Fiscal Quarters ended as of the last day
of any Fiscal Quarter, or, if a calculation is performed on a date other than the last day of any
Fiscal Quarter, the period of 12 months ending on such date.

     “Canadian Administrative Agent” means Comerica Bank, a Michigan banking corporation
and an authorized foreign bank under the Bank Act (Canada) acting through its Canadian branch.

     “Canadian Advance” means an advance of funds by the Canadian Lenders to the Canadian
Borrower pursuant to Section 2.1(b), and includes, as applicable, a Canadian Prime Rate
Advance or a LIBOR Advance.

     “Canadian Borrower” means T3 Energy Services (formerly known as T-3 Oilco Energy
Services Partnership), an Alberta general partnership.

     “Canadian Collateral” is referred-to in Section 6.1(b).

     “Canadian Commitment” means, as to each Canadian Lender, the obligation to make
Canadian Advances and incur or participate in Canadian Letter of Credit Liabilities in an aggregate
principal amount at any one time outstanding up to (but not exceeding) the amount, if any, set
forth opposite each Canadian Lender’s name on Schedule 1.1 as its Canadian Commitment, as
such amount may be reallocated pursuant to Section 2.1(c), reduced pursuant to
Section 2.7 or terminated pursuant to Section 2.7 or 12.2.

     “Canadian Dollars” or “C$" means lawful money of Canada.

     “Canadian Issuing Lender” means the Canadian Administrative Agent in respect of the
Canadian Letters of Credit.

     “Canadian Lender Party” is defined in Section 4.19.

5

 

     “Canadian Lenders” means Lenders having a Canadian Commitment or if such Canadian
Commitments have been terminated, Lenders that are owed Canadian Advances. Each Canadian Lender at
all times shall be a Canadian Resident Lender.

     “Canadian Letter of Credit Liabilities” means, at any time, the aggregate undrawn face
amounts of all outstanding Canadian Letters of Credit.

     “Canadian Letters of Credit” means letters of credit issued under the Canadian
Commitments under Article II.

     “Canadian Note” means those certain promissory notes dated as of the date hereof,
executed by the Canadian Borrower and payable to the order of the Canadian Lenders, and all
extensions, renewals, replacements, modifications, supplements or rearrangements thereof from time
to time, in substantially the form attached hereto as Exhibit A-2.

     “Canadian Obligations” means, as at any date of determination thereof and without
duplication, a portion of the Obligations that is the sum of the following (determined without
duplication): (a) the aggregate principal amount of Canadian Advances outstanding hereunder on
such date, plus (b) the aggregate amount of Canadian Letter of Credit Liabilities outstanding on
such date. For purposes of calculating the aggregate amount of Canadian Obligations, all amounts
or values expressed in Canadian Dollars shall be converted into Dollars at the Exchange Rate in
effect as of the date of determination.

     “Canadian Prime Loans” means Canadian Advances bearing interest based on the Canadian
Prime Rate and Canadian Swing Line Advances.

     “Canadian Prime Rate” means, on any day, the greater of (a) the annual rate of
interest announced from time to time by the Canadian Administrative Agent as its prime rate then in
effect at its Principal Office, being the reference rate used by the Canadian Administrative Agent
for determining interest rates on commercial loans denominated in Canadian Dollars to borrowers in
Canada, and (b) an annual rate of interest equal to the sum of (i) the CDOR Rate and (ii) 1.00% per
annum. The Canadian Prime Rate is a reference rate and does not necessarily represent the lowest
or best rate or a favored rate, and the Canadian Administrative Agent and each Canadian Lender
disclaims any statement, representation or warranty to the contrary. The Canadian Administrative
Agent or any Canadian Lender may make commercial loans or other loans at rates of interest at,
above or below the Canadian Prime Rate.

     “Canadian Resident Lender” is defined in Section 4.19.

     “Canadian Security Agreement” means that certain First Amended and Restated Canadian
General Pledge and Security Agreement dated of even date, executed by and among the Canadian
Borrower, the Foreign Subsidiaries and the Canadian Administrative Agent for the benefit of the
Canadian Lenders, as the same may hereafter be amended, restated, supplemented or otherwise
modified from time to time.

     “Canadian Swing Line Advance” means any Advance made by the Canadian Administrative
Agent under Section 3.1(b).

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     “Canadian Swing Line Note” means the promissory note of the Canadian Borrower payable
to the order of the Canadian Administrative Agent, in substantially the form attached hereto as
Exhibit A-4 with appropriate completions, and all extensions, renewals, replacements,
modifications, supplements or rearrangements thereof from time to time.

     “Canadian Withholding Tax” is defined in Section 4.19.

     “Capital Expenditures” means, for any Person, all expenditures for assets which, in
accordance with GAAP, are properly classified as equipment, real property, improvements, fixed
assets or a similar type of capitalized asset and which would be required to be capitalized and
shown on the balance sheet of such Person.

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

     “Capital Stock” of any Person means any and all shares, interests, partnership
interests, participations, rights in or other equivalents (however designated) of such Person’s
equity interest (however designated).

     “Cash Equivalent Investment” means, at any time, (a) any evidence of Debt, maturing
not more than one year after such time, issued or guaranteed by the United States government or any
agency thereof, (b) commercial paper, maturing not more than one year from the date of issue,
corporate demand notes or other debt securities having a maturity or tender right less than one
year from the date of issuance thereof, in each case (unless issued by a Lender or its holding
company) rated in one of the two highest rating categories by Standard & Poor’s Ratings Group or
Moody’s Investors Service, Inc., (c) any certificate of deposit (or time deposits represented by
such certificates of deposit) or bankers acceptance, maturing not more than one year after such
time, or overnight Federal Funds transactions that are issued or sold by a commercial banking
institution that is a member of the Federal Reserve System and has a combined capital and surplus
and undivided profits of not less than $500,000,000, (d) any repurchase agreement entered into with
any Lender (or other commercial banking institution of the stature referred to in
clause (c)) which (i) is secured by a fully perfected security interest in any obligation
of the type described in any of clauses (a) through (c) and (ii) has a market value
at the time such repurchase agreement is entered into of not less than 100% of the repurchase
obligation of such Lender (or other commercial banking institution) thereunder and (e) investments
in short-term asset management accounts offered by any Lender for the purpose of investing in
investment grade loans to any corporation (other than the Borrowers or an Affiliate of the
Borrowers), state or municipality, in each case organized under the laws of any state of the United
States or of the District of Columbia.

     “CDOR Rate” means, on any day, an annual rate of interest equal to the average 30 day
rate applicable to Canadian Dollar bankers’ acceptances appearing on the “Reuters Screen CDOR Page”
on such day, plus 0.10% or if such day is not a Business Day, then on the immediately

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preceding Business Day; provided, however, if such rate does not appear on the Reuters Screen
CDOR Page as contemplated, then the CDOR Rate on any day shall be calculated as the 30 day rate
applicable to Canadian Dollar bankers’ acceptances quoted by the Canadian Administrative Agent as
of 10:00 a.m. (Toronto, Ontario time) on such day, or if such day is not a Business Day, then on
the immediately preceding Business Day.

     “Change of Control” means the occurrence of any transaction or event by which any
Person, or two or more Persons acting in concert, acquire beneficial ownership (within the meaning
of Rule 13d-3 of the Securities and Exchange Act of 1934, as amended) of more than 50% of the
outstanding shares of the US Borrower’s voting stock.

     “Code” means the Internal Revenue Code of 1986, as amended, and the regulations
promulgated and rulings issued thereunder.

     “Collateral” is defined in Section 6.1.

     “Commitment Increase” is defined in Section 2.10.

     “Communications” is defined in Section 14.11(b).

     “Compliance Certificate” means a certificate, in substantially the form of
Exhibit C attached hereto, properly completed and signed.

     “Contingent Liabilities” means, as applied to any Person, those direct or indirect
liabilities of that Person which, in conformity with GAAP, would be included as liabilities of that
Person on a consolidated balance sheet of such Person, with respect to any Debt, lease, dividend,
letter of credit or other obligation (the “primary obligations”) of another Person (the
“primary obligor”) including, without limitation, any obligation of such Person upon the
occurrence of certain circumstances, (a) to purchase, repurchase or otherwise acquire such primary
obligations or any property constituting direct or indirect security therefor, or (b) to advance or
provide funds (i) for the payment or discharge of any such primary obligation, or (ii) to maintain
working capital or equity capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial condition of the primary obligor,
or (c) to purchase property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make payment of such
primary obligation, or (d) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof. The amount of any Contingent Liabilities shall be
deemed to be an amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Liabilities are made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined by the Borrowers in good
faith.

     “Continue,” “Continuation,” and “Continued” shall refer to the
continuation pursuant to Section 4.9 of a LIBOR Advance as a LIBOR Advance from one
Interest Period to the next Interest Period.

     “Convert,” “Conversion,” and “Converted” shall refer to a conversion
pursuant to Section 4.9 or Article V of one Type of Advance into another Type of
Advance.

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     “Credit Request” is defined in Section 4.10.

     “Debt” means as to any Person at any time (without duplication as to such Person on a
consolidated basis): (a) all obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, notes, debentures, or other similar instruments, (c) all
obligations of such Person to pay the deferred purchase price of property or services, except trade
accounts payable of such Person arising in the ordinary course of business that are not past due by
more than 90 days or which are being contested in good faith and for which adequate reserves have
been established, (d) all Capital Lease Obligations of such Person, (e) all obligations secured by
a Lien existing on property owned by such Person, whether or not the obligations secured thereby
have been assumed by such Person or are non-recourse to the credit of such Person, (f) all
reimbursement obligations of such Person (whether contingent or otherwise and whether or not a
request for funding has been made) in respect of letters of credit, bankers’ acceptances, surety or
other bonds and similar instruments, (g) all liabilities of such Person in respect of unfunded
vested benefits under any Plan, (h) all Contingent Liabilities and (i) all obligations under
Hedging Agreements.

     “Default” means the occurrence of an event or condition which with notice or lapse of
time or both would become an Event of Default.

     “Default Rate” means the lesser of (a) the sum of (i) the Base Rate, plus the
Applicable Margin for the Base Rate, plus 2.00% per annum and (b) the Maximum Rate.

     “de minimus Subsidiary” means, from time to time, a Subsidiary, including its
Subsidiaries, the assets of which, when aggregated with each other de minimus
Subsidiary, do not exceed three percent (3%) of the total assets of the US Borrower and its
Subsidiaries and the revenue from continuing operations of which, when aggregated with each other
de minimus Subsidiary, do not exceed three percent (3%) of the revenue of the US
Borrower and its Subsidiaries for the preceding four Fiscal Quarters most recently ended.

     “Dollars”, “US$” and “$" means lawful money of the United
States of America.

     “Domestic Subsidiary” means any Subsidiary of the US Borrower which is organized and
existing under the laws of the United States of America or any state thereof.

     “EBITDA” means as to any Person, for any period, the sum of (a) consolidated Net
Income for such period, plus (b) without duplication and to the extent deducted in determining
consolidated Net Income for such period (i) Interest Expense for such period, (ii) Tax Expense for
such period, (iii) Non-Cash Charges for such period, (iv) the amount of any amortization of, or
write-downs or write-offs of intangibles (including but not limited to, goodwill) for such period,
(v) any charges taken in connection with the prepayment, redemption or repurchase of Debt, minus
(c) without duplication and to the extent included in determining consolidated Net Income for such
period, any extraordinary gains and extraordinary non-cash credits for such period, plus
(d) historical EBITDA of acquired entities for periods included in the applicable Calculation
Period in which such acquired entities were not Subsidiaries of the US Borrower, so long as the
financial statements of such acquired entities are in form and detail satisfactory to the US
Administrative Agent, minus (e) historical EBITDA of sold entities for periods included in

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the applicable Calculation Period in which such sold entities were Subsidiaries of the
US Borrower.

     “Effective Date” means the date on which all the conditions precedent set forth in
Sections 7.1 and 7.2 have been satisfied or waived in writing by the Administrative
Agent.

     “Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved
Fund, and (d) any other Person (other than a natural person) approved by (i) the US Administrative
Agent and the US Issuing Lender in the case of any assignment of a US Revolving Credit Commitment,
(ii) the Canadian Administrative Agent in the case of any assignment of a Canadian Commitment,
(iii) unless an Event of Default has occurred and is continuing at the time any assignment is
effected, the US Borrower with respect to any assignment of a US Revolving Commitment, and
(iv) unless an Event of Default has occurred and is continuing at the time any assignment, the
Canadian Borrower with respect to any assignment of a Canadian Commitment (each such approval not
to be unreasonably withheld or delayed); provided, however, that neither the Company nor an
Affiliate of the Company shall qualify as an Eligible Assignee; and provided further, however, that
in the case of any assignment of a Canadian Commitment, such Lender must also satisfy Section
4.19.

     “Environmental Law” means any and all foreign, federal, state, and local laws,
regulations, requirements, ordinances, rules, orders, decrees, or governmental restrictions
pertaining to health, safety, the environment, pollution and the protection of the environment, or
the release of any materials into the environment, including those related to hazardous substances
or wastes, air emissions and discharges to waste or public systems including, without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9601
et. seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901
et seq., the Occupational Safety and Health Act, 29 U.S.C. § 651 et
seq., the Clean Air Act, 42 U.S.C. § 7401 et seq., the Clean Water Act, 33
U.S.C. § 1251 et seq., and the Toxic Substances Control Act, 15 U.S.C. § 2601
et seq., as such laws, regulations, and requirements may be amended or supplemented
from time to time.

     “Environmental Liabilities” means, as to any Person, all liabilities (contingent or
otherwise), obligations, responsibilities, Remedial Actions, losses, damages, punitive damages,
consequential damages, treble damages, costs, and expenses (including, without limitation, all
reasonable fees, disbursements and expenses of counsel, expert and consulting fees and costs of
investigation and feasibility studies), fines, penalties, indemnities, sanctions, and interest
incurred directly or indirectly as a result of any claim or demand, by any Person, whether based in
contract, tort, implied or express warranty, strict liability, criminal or civil statute, including
any Environmental Law, permit, order or agreement with any Governmental Authority or other Person,
arising from (a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any
Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement pursuant to which
liability is assumed or imposed with respect to any of the foregoing.

     “Equity Interests” means, with respect to any Person, all of the shares of Capital
Stock of (or other ownership or equity interests in) such Person, all of the warrants, options or
other rights

10

 

for the purchase or acquisition from such Person of shares of Capital Stock of (or other
ownership or equity interests in) such Person, all of the securities convertible into or
exchangeable for shares of Capital Stock of (or other ownership or equity interests in) such Person
or warrants, rights or options for the purchase or acquisition from such Person of such shares (or
such other interests), and all of the other ownership or profit interests in such Person (including
partnership, member or trust interests therein), whether voting or nonvoting, and whether or not
such shares, warrants, options, rights or other interests are outstanding on any date of
determination.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time, and the regulations and published interpretations thereunder.

     “ERISA Affiliate” means any corporation or trade or business which is or has been a
member of the same controlled group of corporations (within the meaning of Section 414 (b) of the
Code) as the US Borrower or is or has been under common control with the US Borrower within the
meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes
of provisions relating to Section 412 of the Code).

     “Event of Default” is defined in Section 12.1.

     “Exchange Rate” means, on any day, with respect to any foreign currency in relation to
Dollars or Dollars in relation to any foreign currency, the noon buying rate quoted by the Bank of
Canada; provided, however, that in the event that any applicable exchange rate cannot be determined
on any day by the foregoing procedure, then such exchange rate shall be determined for such day in
accordance with such commercially reasonable procedures as the Canadian Administrative Agent may
elect.

     “Existing Credit Agreement” is defined in Recital A to this Agreement.

     “Existing LCs” means those letters of credit described on Schedule 1.2 issued
pursuant to the Existing Credit Agreement.

     “Federal Funds Rate” means, for any day, the rate per annum, (rounded upwards, if
necessary, to the nearest 1/16 of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (a) if the day for which such rate is to be determined is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day, and (b) if such
rate is not so published on such next succeeding Business Day, the Federal Funds Rate for any day
shall be the average rate charged to the US Administrative Agent on such day on such transactions
as determined by the US Administrative Agent.

     “Fee Letter” means that certain letter agreement dated as of August 10, 2007, executed
by and between the US Borrower and the US Administrative Agent, setting forth certain fees to be
paid by the US Borrower to the US Administrative Agent in connection with this Agreement.

     “Fiscal Quarter” means a fiscal quarter of a Fiscal Year.

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     “Fiscal Year” means the fiscal year of the US Borrower and its Subsidiaries, which
period is the 12-month period ending on December 31 of each year.

     “Foreign Subsidiary” means any Subsidiary of the Canadian Borrower.

     “Fund” means any Person (other than a natural person) 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.

     “GAAP” means generally accepted accounting principles, applied on a consistent basis,
as set forth in Opinions of the Accounting Principles Board of the American Institute of Certified
Public Accountants and/or in statements of the Financial Accounting Standards Board and/or their
respective successors and which are applicable in the circumstances as of the date in question.
Accounting principles are applied on a “consistent basis” when the accounting principles applied in
a current period are comparable in all material respects to those accounting principles applied in
a preceding period.

     “Governmental Authority” means any nation or government, any state or political
subdivision thereof and any entity exercising executive, legislative, judicial, regulatory, or
administrative functions of or pertaining to government.

     “Guarantors” means, collectively, the Domestic Subsidiaries, the Foreign Subsidiaries
and the Non-domestic Guarantors, in each case other than de minimus Subsidiaries.

     “Guaranty Agreement” means a Guaranty Agreement–Domestic, a Guaranty Agreement–Foreign
or a Guaranty Agreement-Non-domestic, and “Guaranty Agreements” means, collectively, the
Guaranty Agreements-Domestic, the Guaranty Agreements-Foreign and the Guaranty
Agreements-Non-domestic.

     “Guaranty Agreement–Domestic” means the Second Amended and Restated Guaranty
Agreement-Domestic Guarantors dated of even date herewith executed by each Domestic Subsidiary in
favor of the US Administrative Agent for the benefit of the Lenders, as the same may be amended,
restated, supplemented, or modified from time to time.

     “Guaranty Agreement–Foreign” means the First Amended and Restated Guaranty
Agreement-Foreign Guarantors dated of even date herewith executed by the US Borrower and each
Foreign Subsidiary in favor of the Canadian Administrative Agent for the benefit of the Canadian
Lenders, as the same may be amended, supplemented, or modified from time to time.

     “Guaranty Agreement-Non-domestic” means a Guaranty Agreement in form and substance
satisfactory to the US Administrative Agent executed by a Non-domestic Guarantor in favor of the US
Administrative Agent, as the same may be amended, supplemented or modified from time to time, as
the same may be amended, supplemented or modified from time to time.

     “Hazardous Material” means any substance, product, waste, pollutant, material,
chemical, contaminant, constituent, or other material which is or becomes listed, regulated, or
addressed under any Environmental Law, including, without limitation, asbestos, petroleum, and
polychlorinated biphenyls.

12

 

     “Hedging Agreements” shall mean any commodity, interest rate or currency swap, cap,
floor, collar, forward agreement or other exchange or protection agreement or any option with
respect to any such transaction.

     “ITA” means the Income Tax Act (Canada), as amended, and any successor thereto, and
any regulations promulgated thereunder.

     “Increase Amount” is defined in Section 2.10(a).

     “Increase Effective Date” is defined in Section 2.10(d).

     “Increase Request” is defined in Section 2.10(a).

     “Increasing Lender” is defined in Section 2.10(c).

     “Intercompany Notes” means those certain promissory notes described on
Schedule 9.14 and any other intercompany note executed at any time after the Effective
Date, as each such promissory note may be renewed, extended, amended, restated, replaced, or
otherwise modified from time to time. The term “Intercompany Note” means any one of the
Intercompany Notes.

     “Intercreditor Agreement (Canadian Facility)” means that certain Intercreditor
Agreement (Canadian Facility) dated as of even date herewith executed by and among the Borrowers
and Administrative Agents, in form and substance satisfactory to the Administrative Agents, as the
same may hereafter be amended, restated, supplemented, or otherwise modified from time to time.

     “Interest Coverage Ratio” means as to any Person, at any date, the ratio of (a) EBITDA
for the Calculation Period, divided by (b) cash Interest Expense for the Calculation Period.

     “Interest Expense” means the sum of all interest expense (whether cash or non-cash)
paid or required by its terms to be paid during the period in question, as determined in accordance
with GAAP, with respect to the Debt of a Person or any portion thereof.

     “Interest Period” means, with respect to LIBOR Advances, each period commencing on the
date such Advances are made or Converted from Advances of another Type or, in the case of each
subsequent, successive Interest Period applicable to a LIBOR Advance, the last day of the next
preceding Interest Period with respect to such Advance, and ending on that day which is one, two,
three, or six months thereafter, as the applicable Borrower may select as provided in
Section 4.1 or 4.9 hereof. Notwithstanding the foregoing: (a) each Interest Period
which would otherwise end on a day which is not a Business Day shall end on the next succeeding
Business Day unless the result of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period shall end on the preceding Business Day;
(b) any Interest Period which would otherwise extend beyond the applicable Termination Date shall
end on such Termination Date; (c) no more than eight Interest Periods for each LIBOR Advance shall
be in effect at the same time; and (d) no Interest Period for any LIBOR Advances shall have a
duration of less than one month and, if the Interest Period for any LIBOR Advance would otherwise
be a shorter period, such Advance shall be a Base Rate Advance.

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     “Issuing Lenders” means, collectively, the US Issuing Lender and the Canadian Issuing
Lender.

     “Lenders” means, collectively, the Canadian Lenders and the US Lenders.

     “Letters of Credit” means, collectively, the US Letters of Credit and the Canadian
Letters of Credit.

     “Letter of Credit Agreements” means the application and letter of credit agreements
and other documents, if any, then required by an Issuing Lender now or hereafter executed by a
Borrower, such agreements to be on such Issuing Lender’s standard form (with such changes thereto
as such Borrower and such Issuing Lender may agree from time to time) and completed in form and
substance satisfactory to such Issuing Lender.

     “Letter of Credit Liabilities” means, at any time, the aggregate undrawn face amounts
of all outstanding Letters of Credit.

     “Leverage Ratio” means, as to any Person, at any date, the ratio of (a) Total Debt as
of the last day of the Calculation Period divided by (b) EBITDA for the Calculation Period.

     “LIBOR” means, with respect to each Interest Period:

     (a) the rate per annum equal to the rate determined by the US Administrative Agent
equal the British Bankers Association LIBO Rate (or any successor thereto), as set forth on
Reuters Reference LIBOR01 as the London Interbank Offered Rate for deposits in Dollars (for
delivery on the first day of such Interest Period) with a term equivalent to such Interest
Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period, or

     (b) if the rate referenced in the preceding subsection (a) does not appear on
such page or service or such page or service shall cease to be available, the rate per annum
equal to the rate determined by the US Administrative Agent to be the offered rate on such
other page or other service that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period,
or

     (c) if the rates referenced in the preceding subsections (a) and (b)
are not available, the rate per annum (rounded upwards, if necessary, to the nearest 1/16 of
1%) offered to the US Administrative Agent at approximately 11:00 a.m. London time (or as
soon thereafter as practicable) two Business Days prior to the first day of the Interest
Period for such Advance by leading banks in the London interbank market for Dollar deposits
having a term comparable to such Interest Period and in an amount comparable to the
principal amount of the LIBOR Advance to be made by the Lenders for such Interest Period.

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     “LIBOR Advances” means Advances the interest rates on which are determined on the
basis of the rates referred to in the definition of “Adjusted LIBOR Rate”.

     “Lien” means any lien, mortgage, security interest, tax lien, financing statement,
pledge, charge, hypothecation, assignment, preference, priority, or other encumbrance of any kind
or nature whatsoever (including, without limitation, any conditional sale or title retention
agreement), whether arising by contract, operation of law, or otherwise.

     “Loan Documents” means (a) this Agreement, the Intercreditor Agreement (Canadian
Facility), the Guaranty Agreements, Notes, the Pledge and Security Agreement and all promissory
notes, security agreements, deeds of trust, assignments, guaranties, and other instruments,
documents, and agreements executed and delivered pursuant to or in connection with this Agreement,
as such instruments, documents, and agreements may be amended, restated, modified, renewed,
extended, or supplemented from time to time, and (b) any interest rate Hedging Agreements between
the US Borrower and any Lender or its Affiliate.

     “Material Adverse Effect” means (a) a material adverse effect on (i) the business,
condition (financial or otherwise), operations, prospects, or properties of the Borrowers and their
Subsidiaries, taken as a whole, (ii) the ability of the Borrowers and their Subsidiaries, taken as
a whole, to perform their respective obligations under this Agreement or any of the other Loan
Documents, or (iii) the validity or enforceability of this Agreement or any of the other Loan
Documents, or the rights or remedies of the Administrative Agents, the Lenders or the Issuing
Lenders hereunder or thereunder or (b) civil or criminal liability for the Administrative Agents or
the Lenders under Environmental Laws.

     “Maximum Canadian Available Amount” means, at any date, US$5,000,000 or the subject
adjusted amount pursuant to Section 2.1(c). In connection with the application of any
provision hereof using the term “Maximum Canadian Available Amount”, any amounts denominated in
Canadian Dollars shall be converted to Dollars using the then current Exchange Rate.

     “Maximum Rate” means, with respect to any Lender and the holder of any Swing Line
Note, any Canadian Note, or any US Revolving Credit Note, the maximum nonusurious interest rate, if
any, that at any time, or from time to time, may be contracted for, taken, reserved, charged or
received on the indebtedness created under this Agreement, the Canadian Notes, the US Revolving
Credit Notes, any Swing Line Note or any other Loan Document under the laws which are presently in
effect in the United States and the State of Texas applicable to the Lenders, such holders and such
indebtedness or, to the extent permitted by law, under such applicable laws of the United States
and the State of Texas which may hereafter be in effect and which allow a higher maximum
nonusurious interest rate than applicable laws now allow, or, in the case of Canadian Advances made
in Canada by the Canadian Lenders to the Canadian Borrower, under applicable Canada federal law or
under applicable laws of the Province of Ontario (or the laws of any other jurisdiction whose usury
laws are deemed to apply to the Canadian Notes or any other Loan Documents despite the intention
and desire of the express choice of law provisions set forth herein). To the extent that Chapter
303 of the Texas Finance Code (the “Finance Code”), is relevant to any Lender or any holder
of any Swing Line Note, any Canadian Note, or any US Revolving Credit Note for the purposes of
determining the Maximum

15

 

Rate, each such Person shall determine such applicable legal rate under the Finance Code
pursuant to the “weekly ceiling,” from time to time in effect, as referred to and defined in
Chapter 303 of the Finance Code; subject, however, to the limitations on such applicable ceiling
referred to and defined in Chapter 303 of the Finance Code, and further subject to any right such
Person may have subsequently, under applicable law, to change the method of determining the Maximum
Rate. If no Maximum Rate is established by applicable law, then the Maximum Rate shall be equal to
18%, per annum.

     “Multiemployer Plan” means a multiemployer plan defined as such in Section 3(37) of
ERISA to which contributions have been made by the US Borrower or any predecessor thereto or any
ERISA Affiliate and which is covered by Title IV of ERISA.

     “Net Cash Proceeds” means, with respect to (a) any Asset Sale or (b) any other
transfer or disposition of any asset to a third-party, the aggregate amount of cash and Cash
Equivalent Investments received by such Person in connection with such transaction minus reasonable
fees, costs and expenses and related taxes paid or payable as a result of such transaction.

     “Net Income” means, for any period, the net income (or loss) determined in conformity
with GAAP of the US Borrower.

     “Net Worth” means, with respect to any Person and as of the date of its determination,
the excess of the assets of such Person over the sum of the liabilities of such Person and the
minority interests of such Person, as determined in accordance with GAAP.

     “Non-Cash Charges” means as to any Person, for any period, depreciation, amortization
and other non-cash charges, determined in accordance with GAAP.

     “Non-domestic Guarantors” means all of the Subsidiaries which are Non-domestic
Subsidiaries and which have executed a Guaranty Agreement, provided that, (a) no
Non-domestic Subsidiary shall become a Non-domestic Guarantor if delivery of a Guaranty
Agreement-Non-domestic by such Non-domestic Subsidiary would result in material increased tax or
similar liabilities for the US Borrower and its Subsidiaries on a consolidated basis, (b) no
Non-domestic Subsidiary shall become a Non-domestic Guarantor if such Non-domestic Subsidiary is a
de minimus Subsidiary and (c) the Canadian Borrower shall not be required to be a Non-domestic
Guarantor so long as delivery of a Guaranty Agreement-Non-domestic would result in material
increased tax or similar liabilities for the US Borrower and its Subsidiaries on a consolidated
basis.

     “Non-domestic Subsidiary” means any Subsidiary of the US Borrower which is organized
and existing under the laws of a jurisdiction other than the United States of America or any state
thereof.

     “Notes” means, collectively, the US Revolving Credit Notes, the Canadian Notes and the
Swing Line Notes, and “Note” means one of the Notes.

     “Notice” is defined in Section 14.11(b)(ii).

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     “Obligated Party” means each Guarantor or any other Person who is or becomes party to
any agreement pursuant to which such Person guarantees or secures payment and performance of the
Obligations or any part thereof.

     “Obligations” means, without duplication, all obligations, indebtedness and
liabilities of each of the Borrowers and their respective Subsidiaries to the Administrative
Agents, the Issuing Lenders, the Lenders, the Secured Parties, any of their respective Affiliates,
or any or some of them, arising pursuant to this Agreement, any of the Loan Documents, or any
Hedging Agreements with Lenders or Affiliates of Lenders now existing or hereafter arising, whether
direct, indirect, related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several,
or joint and several. For purposes of calculating the aggregate amount of Obligations, all amounts
or values expressed in Canadian Dollars shall be converted into Dollars at the applicable Exchange
Rate in effect as of the date of determination.

     “Payment Date” means, (a) in the case of Base Rate Advances, the last Business Day of
each September, December, March and June, commencing December 28, 2007, (b) in the case of LIBOR
Advances the last day of each Interest Period therefor (and, in the case of six-month Interest
Periods, on the last day of the third month following the date of such Advance), and (c) in the
case of all Advances, the Termination Date.

     “Payor” is defined in Section 4.6.

     “PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to all
or any of its functions under ERISA.

     “Percentage” means at any time with respect to any Lender, such Lender’s portion,
expressed as a percentage, of the aggregate US Revolving Credit Commitments or Canadian
Commitments, as applicable.

     “Permitted Liens” is defined in Section 10.2.

     “Person” means any individual, corporation, business trust, association, company,
partnership, joint venture, Governmental Authority, or other entity.

     “Plan” means any employee benefit or other plan established or maintained by the
US Borrower or any ERISA Affiliate.

     “Platform” is defined in Section 14.11(b).

     “Pledge and Security Agreement” means, (a) with respect to the US Borrower and the
Domestic Subsidiaries, the Second Amended and Restated Pledge and Security Agreement dated of even
date herewith executed by the US Borrower and each Domestic Subsidiary (other than a de
minimus Subsidiary) in favor of the US Administrative Agent for the benefit of the Lenders,
and (b) with respect to each Non-domestic Guarantor, a pledge and security agreement executed by
such Non-domestic Guarantor in favor of the US Administrative Agent in form and substance
satisfactory to the US Administrative Agent, in each case as the same may be amended, restated,
supplemented, or modified from time to time.

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     “Prime Rate” means, at any time, the rate of interest per annum most recently
announced by the US Administrative Agent at its principal office in San Francisco as its prime
rate, with the understanding that such prime rate is one of its base rates and serves as the basis
upon which effective rates of interest are calculated for those loans making reference thereto, and
is evidenced by the recording thereof after its announcement in such internal publication or
publications as US Administrative Agent may designate.

     “Principal Office” means the principal office of the Administrative Agents, the
Issuing Lenders, and the Lenders presently located for such Persons at the addresses shown under
the signature line of such Persons in this Agreement.

     “Prohibited Transaction” means any transaction set forth in Section 406 of ERISA or
Section 4975 of the Code.

     “Property” means any interest in any kind of property or asset, whether real, personal
or mixed, or tangible or intangible.

     “Quarterly Fee Payment Date” means the last Business Day of each September, December,
March and June of each year, the first of which shall be December 31, 2007.

     “Refunded Swing Line Advance” is defined in Section 3.2.

     “Register” is defined in Section 14.7(d).

     “Regulation D” means Regulation D of the Board of Governors of the Federal Reserve
System as the same may be amended or supplemented from time to time.

     “Regulatory Change” means, with respect to a Lender, any change after the date of this
Agreement in United States federal, state, or foreign laws or regulations (including Regulation D)
or the adoption or making after such date of any interpretations, directives, or requests applying
to a class of banks, including such Lender, of or under any United States federal or state, or any
foreign, laws or regulations (whether or not having the force of law) by any court or governmental
or monetary authority charged with the interpretation or administration thereof.

     “Release” means, as to any Person, any release, spill, emission, leaking, pumping,
injection, deposit, disposal, disbursement, leaching, or migration of Hazardous Materials into the
indoor or outdoor environment or into or out of property owned by such Person, including, without
limitation, the movement of Hazardous Materials through or in the air, soil, surface water, ground
water, or property.

     “Remedial Action” means all actions required to (a) clean up, remove, treat, or
otherwise address Hazardous Materials in the indoor or outdoor environment, (b) prevent the Release
or threat of Release or minimize the further Release of Hazardous Materials so that they do not
migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor
environment, or (c) perform pre-remedial studies and investigations in post-remedial monitoring and
care.

     “Replacement Lender” is defined in Section 5.5.

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     “Reportable Event” means any of the events set forth in Section 4043 of ERISA.

     “Required Lenders” means (a) at any time while no Advances are outstanding, two or
more Lenders holding at least 50% of the Aggregate Commitments, and (b) at any time while Advances
are outstanding, two or more Lenders holding at least 50% of the outstanding aggregate principal
amount of the Advances (without regard to any sale by a Lender of a participation in any Advance
under Section 14.7(a)). For purposes of this definition, Swing Line Advances shall not
constitute “Advances.”

     “Reserve Requirement” means, for any LIBOR Advance for any Interest Period therefor,
the average maximum rate at which reserves (including any marginal, supplemental or emergency
reserves) are required to be maintained during such Interest Period under Regulation D by member
banks of the Federal Reserve System in New York City with deposits exceeding one billion Dollars
against “Eurocurrency Liabilities” as such term is used in Regulation D. Without limiting the
effect of the foregoing, the Reserve Requirement shall reflect any other reserves required to be
maintained by such member banks by reason of any Regulatory Change against (a) any category of
liabilities which includes deposits by reference to which the Adjusted LIBOR Rate is to be
determined, or (b) any category of extensions of credit or other assets which include LIBOR
Advances.

     “Reset Date” is defined in Section 4.2(c).

     “Response Date” is defined in Section 2.10(b).

     “Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Capital Stock or other Equity Interest of the
US Borrower or any Subsidiary, or any payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such Capital Stock or other Equity Interest, or on
account of any return of capital to the US Borrower’s stockholders.

     “SEC” means the Securities and Exchange Commission of the United States of America,
and includes any successor agency.

     “Secured Parties” means the Administrative Agents, the Lenders and any Affiliates of a
Lender that has entered into a Hedging Agreement with the US Borrower.

     “Stockholders Equity” has the meaning given to such term under GAAP.

     “Subordinated Debt” means Debt of a Person which has been subordinated to the
Obligations in form and substance and upon terms satisfactory to the Administrative Agents and the
Required Lenders.

     “Subsidiary” means any Person of which or in which either of the Borrowers and their
other Subsidiaries own or control, directly or indirectly, more than 50% of (a) the combined voting
power of all classes having general voting power under ordinary circumstances to elect a majority
of the directors or equivalent body of such Person, if it is a corporation, (b) the capital
interest or profits interest of such Person, if it is a partnership, limited liability company,
joint

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venture or similar entity, or (c) the beneficial interest of such Person, if it is a trust,
association or other unincorporated association or organization.

     “Swing Line Advance” means any Advance made by the US Administrative Agent or Canadian
Administrative Agent under Article III.

     “Swing Line Note” means the US Swing Line Note or the Canadian Swing Line Note, as
applicable.

     “Taxable Payment” is defined in Section 4.19.

     “Tax Expense” means, for any period, all expenses incurred during such period by the
US Borrower and its Subsidiaries, on a consolidated basis, in connection with income tax
obligations, all as determined in accordance with GAAP.

     “Termination Date” means October 26, 2012, or such earlier date on which the Aggregate
Commitments terminate as provided in this Agreement.

     “Total Debt” means, as of the date of determination, all Debt of the US Borrower and
its consolidated Subsidiaries, excluding, however, for calculation of the Leverage Ratio
obligations under Hedging Agreements other than unwind and termination payments.

     “Type” means any type of Advance (i.e., Base Rate Advance or LIBOR Advance).

     “UCC” means the Uniform Commercial Code as in effect in the State of Texas from time
to time.

     “US Administrative Agent” means Wells Fargo Bank, National Association.

     “US Borrower” means T-3 Energy Services, Inc., a Delaware corporation.

     “US Collateral” is referred-to in Section 6.1(a).

     “US Issuing Lender” means the US Administrative Agent (or any of its Affiliates) and
any other Lender (or any of its Affiliates) appointed by the US Borrower and approved by the
US Administrative Agent that agrees to issue US Letters of Credit under the US Revolving Credit
Commitment.

     “US Lenders” means Lenders having a US Revolving Credit Commitment or if such US
Revolving Credit Commitments have been terminated, Lenders that are owed US Revolving Credit
Advances.

     “US Letters of Credit” means, at any time, the aggregate undrawn face amount of all
outstanding Existing LCs and letters of credit issued under the US Revolving Credit Commitment
pursuant to Article II.

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     “US Revolving Credit Advance” means an advance of funds by the US Administrative Agent
on behalf of the US Lenders to a US Borrower pursuant to Section 2.1(a) and includes, as
applicable, a Base Rate Advance or a LIBOR Advance.

     “US Revolving Credit Commitment” means, as to each US Lender, the obligation to
(a) make Advances (other than Canadian Advances) and (b) subject to applicable sublimits, purchase
participations in US Letters of Credit pursuant to Section 4.13, in an aggregate principal
amount at any one time outstanding up to but not exceeding the amount set forth opposite the name
of such US Lender on Schedule 1.1 as its US Revolving Credit Commitment, or on the signature pages
of an Assignment and Acceptance, as the case may be, as such amount may be reduced pursuant to
Section 2.7, increased pursuant to Section 2.10, or terminated pursuant to
Section 2.7 or Section 12.2.

     “US Revolving Credit Notes” means the promissory notes of the US Borrower payable to
the order of the Lenders, in substantially the form attached hereto as Exhibit A-1 with
appropriate completions, and all extensions, renewals, replacements, modifications, supplements or
rearrangements thereof from time to time.

     “US Swing Line Advance” means any Advance made by the US Administrative Agent under
Section 3.1(a).

     “US Swing Line Note” means the promissory note of the US Borrower payable to the order
of the US Administrative Agent, in substantially the form attached hereto as Exhibit A-3
with appropriate completions, and all extensions, renewals, replacements, modifications,
supplements or rearrangements thereof from time to time.

     Section 1.2 Other Definitional Provisions. All definitions contained in this
Agreement are equally applicable to the singular and plural forms of the terms defined. The words
“hereof”, “herein”, and “hereunder” and words of similar import referring to this Agreement refer
to this Agreement as a whole and not to any particular provision of this Agreement. Unless
otherwise specified, all Article and Section references pertain to this Agreement. All accounting
terms not specifically defined herein shall be construed in accordance with GAAP. Terms used
herein that are defined in the UCC, unless otherwise defined herein, shall have the meanings
specified in the UCC.

ARTICLE II

Advances and Letters of Credit

     Section 2.1 Aggregate Commitments.

     (a) Subject to the terms and conditions of this Agreement, each US Lender severally
agrees to make one or more US Revolving Credit Advances to the US Borrower from time to time
from the Effective Date to and including the Termination Date in an aggregate principal
amount at any time outstanding up to but not exceeding the amount of such US Lender’s
Revolving Credit Commitment, provided that the aggregate amount of all US Revolving Credit
Advances and US Swing Line Advances at any time outstanding shall not exceed (i) the
aggregate of the US Revolving Credit Commitments, minus

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(ii) the outstanding Letter of Credit Liabilities under US Letters of Credit. Subject
to the foregoing limitations, and the other terms and provisions of this Agreement, the
US Borrower may borrow, repay, and reborrow hereunder the aggregate amount of the US
Revolving Credit Commitments by means of US Revolving Credit Advances. Each US Revolving
Credit Advance made by each US Lender shall be made and maintained at such US Lender’s
Principal Office.

     (b) Subject to the terms and conditions of this Agreement, each Canadian Lender agrees
to make one or more Canadian Advances to the Canadian Borrower from time to time from the
Effective Date to and including the Termination Date in an aggregate principal amount at any
time outstanding up to but not exceeding the amount of such Canadian Lender’s Canadian
Commitment, provided that the aggregate amount of all Canadian Advances and Canadian Swing
Line Advances at any time outstanding shall not exceed (i) the aggregate of the Canadian
Commitments, minus (ii) the outstanding Letter of Credit Liabilities under Canadian Letters
of Credit. Subject to the foregoing limitations, and the other terms and provisions of this
Agreement, the Canadian Borrower may borrow, repay, and reborrow hereunder the aggregate
amount of the Canadian Commitments by means of Canadian Advances. Each Canadian Advance
made by each Canadian Lender shall be made and maintained at such Canadian Lender’s
Principal Office. Each Canadian Advance made under this Section 2.1(b) shall be
made and denominated in Canadian Dollars.

     (c) Reallocation of Commitments. Any Lender may agree with the Borrowers to
reallocate its existing US Revolving Credit Commitment or Canadian Commitment so long as the
sum of such US Revolving Credit Commitment and Canadian Commitment remains unchanged;
provided that, the aggregate amount of all Canadian Commitments, after giving effect to any
reallocation, shall not exceed $15,000,000. In addition, any Lender may agree with the
Borrowers to convert a portion of its US Revolving Credit Commitment into a Canadian
Commitment, and any Lender may agree with the Borrowers to convert a portion of its Canadian
Commitment into a US Revolving Credit Commitment, in each case so long as (i) the sum of
such Lender’s US Revolving Credit Commitment and Canadian Commitment remains equal to the
aggregate amount of such Lender’s US Revolving Credit Commitment and Canadian Commitment, as
the case may be, prior to such reallocation and (ii) the aggregate amount of all Canadian
Commitments, after giving effect to any reallocation, shall not exceed $15,000,000. The
Borrowers shall give written notice to the Administrative Agents of any reallocation
pursuant to this provision at least 10 Business Days prior to the effective date of any such
reallocation. No applicable Lender affected by such reallocation shall be required to agree
to any such reallocation, but may do so at its option, in its sole absolute discretion.

     Section 2.2 The Notes.

     (a) The obligation of the US Borrower to repay the US Revolving Credit Advances (other
than US Swing Line Advances) and interest thereon shall be evidenced by a US Revolving
Credit Note executed by the US Borrower, payable to the order of each US Lender, in the
principal amount of such US Lender’s US Revolving Credit

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Commitment as originally in effect and dated the date hereof or such later date as may
be required with respect to transactions contemplated by Section 14.7.

     (b) The obligation of the Canadian Borrower to repay the Canadian Advances (other than
Canadian Swing Line Advances) and interest thereon shall be evidenced by a Canadian Note
executed by the Canadian Borrower, payable to the order of each Canadian Lender, in the
principal amount of such Canadian Lender’s Canadian Commitment as originally in effect and
dated the date hereof or such later date as may be required with respect to transactions
contemplated by Section 14.7.

     Section 2.3 Repayment of Advances.

     (a) The US Borrower shall repay the unpaid principal amount of all US Revolving Credit
Advances on the Termination Date.

     (b) The Canadian Borrower shall repay the unpaid principal amount of all Canadian
Advances on the Termination Date.

     Section 2.4 Interest. The unpaid principal amount of the Advances shall bear interest
prior to maturity at a varying rate per annum equal from day to day to the lesser of (a) the
Maximum Rate, and (b) the Applicable Rate. If at any time the Applicable Rate for any Advance
shall exceed the Maximum Rate, thereby causing the interest accruing on such Advance to be limited
to the Maximum Rate, then any subsequent reduction in the Applicable Rate for such Advance shall
not reduce the rate of interest on such Advance below the Maximum Rate until the aggregate amount
of interest accrued on such Advance equals the aggregate amount of interest which would have
accrued on such Advance if the Applicable Rate had at all times been in effect. Accrued and unpaid
interest on the Advances shall be due and payable as follows:

     (a) on each Payment Date; and

     (b) on the Termination Date.

Notwithstanding the foregoing, after an Event of Default and during any continuance thereof, at the
US Administrative Agent’s election or at the request of the Required Lenders, the Obligations shall
bear interest at a rate per annum equal to the Default Rate. Such interest shall be payable on the
earlier of demand or the Termination Date, and shall accrue until the earlier of (i) waiver or cure
of the applicable Event of Default, (ii) agreement by the Required Lenders to rescind the charging
of interest at the Default Rate, or (iii) payment in full of the Obligations. The Lenders shall
not be required to accelerate the maturity of the Advances or to exercise any other rights or
remedies under the Loan Documents.

     Section 2.5 Use of Proceeds. The proceeds of the US Revolving Credit Advances shall
be used by the US Borrower (a) to refinance certain existing Debt of the Borrowers, (b) for
acquisition of assets or Equity Interests in other Persons permitted under this Agreement (or as
otherwise agreed in writing by the Required Lenders), (c) for general corporate and working capital
purposes in the ordinary course of business and (d) to finance fees and expenses incurred in
connection with the closing of the credit transaction described in this Agreement. The proceeds of
the Canadian Advances shall be used by the Canadian Borrower for (i) general

23

 

corporate and working capital purposes in the ordinary course of business, and (ii) one or
more acquisitions of Canadian Persons or assets located in Canada.

     Section 2.6 Commitment Fee. The Borrowers agree to pay to the US Administrative Agent
for the account of each Lender a commitment fee on the daily average unused amount of such Lender’s
Aggregate Commitments for the period from and including the Effective Date to and including the
Termination Date at the rate per annum equal to the Applicable Margin in effect on the date such
payment is due, based on a 360 day year and the actual number of days elapsed; provided that (a)
the amount of any Swing Line Advances that may be outstanding from time to time shall not be
considered usage of the Aggregate Commitments and (b) the face amount of outstanding Letters of
Credit shall be considered usage of the Aggregate Commitments. The accrued commitment fee shall be
payable in arrears on each Quarterly Fee Payment Date and on the Termination Date.

     Section 2.7 Reduction or Termination of Aggregate Commitments. Each of the Borrowers
shall have the right to terminate in whole or reduce in part the unused portion of the US Revolving
Credit Commitments (or the Canadian Commitments, as the case may be) upon at least three Business
Days’ prior notice (which notice shall be irrevocable) to the Administrative Agents specifying the
effective date thereof, whether a termination or reduction is being made, and the amount of any
partial reduction; provided, however, that (a) the Aggregate Commitments shall never be reduced
below an amount equal to the aggregate outstanding Letter of Credit Liabilities unless cash
collateralized, (b) the US Revolving Credit Commitments shall never be reduced below an amount
equal to the aggregate outstanding Letter of Credit Liabilities under the US Letters of Credit and
(c) the Canadian Commitments shall never be reduced below an amount equal to the aggregate
outstanding Letter of Credit Liabilities under the Canadian Letters of Credit. Each partial
reduction in the US Revolving Credit Commitments shall be in the amount of $1,000,000 or a greater
integral multiple of $500,000. Each partial reduction in the Canadian Commitments shall be in an
amount of $150,000 or a greater integral multiple of $100,000. The US Borrower shall
simultaneously prepay the US Revolving Credit Advances by the amount by which the unpaid principal
amount of the US Revolving Credit Advances, plus the Letter of Credit Liabilities under the US
Letters of Credit exceeds the US Revolving Credit Commitments after giving effect to such notice,
plus accrued and unpaid interest on the principal amount so prepaid. The Canadian Borrower shall
simultaneously prepay the Canadian Advances by the amount by which the unpaid principal amount of
the Canadian Advances, plus the Letter of Credit Liabilities under the Canadian Letters of Credit
exceeds the Canadian Commitments after giving effect to such notice, plus accrued and unpaid
interest on the principal amount so prepaid. Subject to Section 2.10 with respect to the
Aggregate Commitments only, neither the US Revolving Credit Commitments nor the Canadian
Commitments may be reinstated after either such commitment has been terminated or reduced to zero.

     Section 2.8 Letters of Credit.

     (a) Subject to, and upon the terms, conditions, covenants and agreements contained
herein and in the Letter of Credit Agreements, prior to the Termination Date, the US Issuing
Lender agrees to issue irrevocable, standby and commercial US Letters of Credit, for the
account of the US Borrower or any Domestic Subsidiary other than a de minimus Subsidiary (as
the context may require). The US Issuing Lender agrees with

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respect to US Letters of Credit issued under the US Revolving Credit Commitment, that
(i) the Letter of Credit Liabilities under the US Letters of Credit shall not at any time
exceed $50,000,000 in respect of US Letters of Credit issued under the US Revolving Credit
Commitments, and (ii) with respect to the US Revolving Credit Commitments, the aggregate
principal amount outstanding of all US Revolving Credit Advances, the Letter of Credit
Liabilities under the US Letters of Credit, and the aggregate principal amount outstanding
of all US Swing Line Advances may at no time exceed the aggregate US Revolving Credit
Commitments. In the event of an actual conflict between the terms and conditions of this
Agreement and the terms and conditions of any Letter of Credit Agreement, then the terms and
conditions of this Agreement shall prevail. US Letters of Credit shall expire no later than
three years after the date of issuance (but may include provision for automatic one year
renewals unless notice of non-renewal is timely sent by US Issuing Lender), must be
satisfactory in form to the US Issuing Lender, and must be issued pursuant to a Letter of
Credit Agreement.

     (b) Subject to, and upon the terms, conditions, covenants and agreements contained
herein and in the Letter of Credit Agreements, prior to the Termination Date, the Canadian
Issuing Lender agrees to issue irrevocable, standby and commercial Canadian Letters of
Credit, for the account of the Canadian Borrower or any Foreign Subsidiary (as the context
may require). The Canadian Issuing Lender agrees with respect to Canadian Letters of Credit
issued under the Canadian Commitments, that (i) the Letter of Credit Liabilities under the
Canadian Letters of Credit shall not at any time exceed $5,000,000 in respect of Canadian
Letters of Credit issued under the Canadian Commitments, and (ii) with respect to the
Canadian Commitments, the aggregate principal amount outstanding of all Canadian Advances,
the Letter of Credit Liabilities under the Canadian Letters of Credit, and the aggregate
principal amount outstanding of all Canadian Swing Line Advances may at no time exceed the
aggregate Canadian Commitments. In the event of an actual conflict between the terms and
conditions of this Agreement and the terms and conditions of any Letter of Credit Agreement,
then the terms and conditions of this Agreement shall prevail. Canadian Letters of Credit
shall expire no later than three years after the date of issuance (but may include provision
for automatic one year renewals unless notice of non-renewal is timely sent by the Canadian
Issuing Lender), must be satisfactory in form to the Canadian Issuing Lender, and must be
issued pursuant to a Letter of Credit Agreement.

     (c) On or before five days prior to the Termination Date, each Borrower agrees to
deposit with and pledge to the applicable Administrative Agent for the ratable benefit of
the applicable Lenders cash or Cash Equivalent Investments in an amount equal to 110% of all
outstanding Letter of Credit Liabilities.

Section 2.9 Payments and Reimbursement Under Letters of Credit.

     (a) Payments. Each Issuing Lender shall promptly notify the Administrative
Agents and the applicable Borrower of the date and amount of any draft presented for honor
under any Letter of Credit (but failure to give notice will not affect the applicable
Borrower’s obligations under this Agreement). Each Issuing Lender shall pay the requested
amount upon presentment of a draft unless presentment on its face does not

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comply with the terms of the applicable Letter of Credit. When making payment, each
Issuing Lender may disregard (i) any default or potential default that exists under any
other agreement and (ii) obligations under any other agreement that have or have not been
performed by the beneficiary or any other Person (and such Issuing Lender is not liable for
any of those obligations absent gross negligence or willful misconduct). Each Issuing
Lender shall promptly pay to the applicable Administrative Agent for such Administrative
Agent to promptly distribute reimbursement payments received from the applicable Borrower to
all applicable Lenders according to their Percentages.

     (b) Reimbursement Obligation of the Borrowers. To induce each Issuing Lender
to issue and maintain Letters of Credit, and to induce the Lenders to participate in issued
Letters of Credit, each Borrower agrees to pay or reimburse such Issuing Lender (or cause
another Obligated Party to pay or reimburse such Issuing Lender) (i) the amount paid by such
Issuing Lender pursuant to a draw on a Letter of Credit issued by such Issuing Lender on the
same day such payment is made, and (ii) on demand, the amount of any additional reasonable
fees such Issuing Lender customarily charges for amending Letter of Credit Agreements, for
honoring drafts under the Letters of Credit, and for taking similar action in connection
with Letters of Credit. If a Borrower or another Obligated Party has not reimbursed an
Issuing Lender for any drafts when reimbursement is required under this section, then the
applicable Administrative Agent is irrevocably authorized to fund such Borrower’s
reimbursement obligations as a Base Rate Advance if proceeds are available under the
US Revolving Credit Commitments or the Canadian Commitments (as the context may require) and
if the conditions in this Agreement for such an Advance (other than any notice requirements
or minimum funding amounts) have, to such Administrative Agent’s knowledge, been satisfied.
The proceeds of that Advance shall be advanced directly to such Issuing Lender to pay such
Borrower’s unpaid reimbursement obligations. If funds cannot be advanced under the
US Revolving Credit Commitments or the Canadian Commitments (as the context may require),
then such Borrower’s reimbursement obligation shall constitute a demand obligation. Each
Borrower’s obligations under this section are absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim, or defense to payment that such
Borrower may have at any time against any Issuing Lender or any other Person. From the date
that an Issuing Lender pays a draft under a Letter of Credit until the applicable Borrower
or another Obligated Party either reimburses or is obligated to reimburse such Issuing
Lender for that draft under this section, the amount of that draft bears interest payable to
such Issuing Lender at the rate then applicable to Base Rate Advances. From the due date of
the respective amounts due under this section, to the date paid (including any payment from
proceeds of a Base Rate Advance), unpaid reimbursement amounts accrue interest that is
payable on demand at the Default Rate.

     (c) Obligation of Lenders. If a Borrower or an Obligated Party fails to
reimburse any Issuing Lender as provided herein by the date on which reimbursement is due
hereunder, and funds cannot be advanced under the US Revolving Credit Commitments or the
Canadian Commitments (as the context may require) to satisfy the reimbursement obligations,
then the applicable Administrative Agent shall promptly notify each Lender of such failure,
of the date and amount paid, and of each Lender’s Percentage of the unreimbursed amount as a
participation in such unreimbursed amounts.

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Each Lender shall promptly and unconditionally make available to the applicable
Administrative Agent in immediately available funds its Percentage of the unpaid
reimbursement obligation, subject to the limitations of Section 2.1. Funds are due
and payable to the applicable Administrative Agent before the close of business on the
Business Day when such Administrative Agent gives notice to each Lender of such
reimbursement failure (if notice is given before 11:00 a.m. (Houston time)) or on the next
succeeding Business Day (if notice is given after 11:00 a.m. (Houston time)). All amounts
payable by any Lender accrue interest after the due date at the Federal Funds Rate from the
day the applicable draft or draw is paid by the applicable Administrative Agent to (but not
including) the date the amount is paid by such Lender to such Administrative Agent. Upon
receipt of those funds, such Administrative Agent shall make them available to the
applicable Issuing Lender.

     (d) Duties of Issuing Lenders. Each Issuing Lender agrees with each Lender
that it will exercise and give the same care and attention to each Letter of Credit as it
gives to its other letters of credit. Each Lender and each Borrower agree that, in paying
any draft under any Letter of Credit, no Issuing Lender has any responsibility to obtain any
document (other than any documents expressly required by the respective Letter of Credit) or
to ascertain or inquire as to any document’s validity, enforceability, sufficiency,
accuracy, or genuineness or the authority of any Person delivering it. No Issuing Lender
nor any of its representatives will be liable to any Lender, any Borrower, or any Obligated
Party for any Letter of Credit’s use or for any beneficiary’s acts or omissions. Any
action, inaction, error, delay, or omission taken or suffered by any Issuing Lender or any
of its representatives in connection with any Letter of Credit, applicable drafts or
documents, or the transmission, dispatch, or delivery of any related message or advice, if
in good faith and in conformity with applicable laws and in accordance with the standards of
care specified in the Uniform Customs and Practices for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500 (as amended or modified), is binding
upon any Borrower, the Obligated Parties and Lenders and, except as expressly provided
herein, does not place any Issuing Lender or any of its representatives under any resulting
liability to any Borrower, any Obligated Party or any Lender. With respect to any Letter of
Credit issued under the US Revolving Credit Commitments or any Canadian Letter of Credit
issued under the Canadian Commitments, the applicable Administrative Agent is not liable to
any Borrower, any Obligated Party or any Lender for any action taken or omitted, in the
absence of gross negligence or willful misconduct, by any Issuing Lender or its
representative in connection with any Letter of Credit.

     Section 2.10 Optional Commitment Increase.

     (a) Optional Increase Request. The US Borrower may, at any time and from time
to time prior to the Termination Date, so long as no Default or Event of Default exists,
request that the US Revolving Credit Commitments be increased (the “Increase
Amount”) in an aggregate amount not to exceed $70,000,000 (each, a “Commitment
Increase”), provided that any such request shall be made in writing (an “Increase
Request”) by the US Borrower and delivered to the US Administrative Agent. Promptly

27

 

upon receipt of an Increase Request, the US Administrative Agent shall notify the
US Lenders of such request.

     (b) US Lenders’ Response to Increase Request. Each US Lender shall have the
right, but not the obligation, to elect to increase its respective US Revolving Credit
Commitment by an amount not to exceed the Increase Amount, which election shall be made by
notice from each US Lender to the US Administrative Agent given not later than 15 days after
the date notified of the Increase Request by US Administrative Agent (the “Response
Date”), and shall specify the amount of the proposed increase in such US Lender’s
US Revolving Credit Commitment. If any US Lender shall fail to give such notice to
US Administrative Agent by the Response Date, such US Lender shall be deemed to have elected
not to increase its US Revolving Credit Commitment in connection with such Increase Request.

     (c) Joinder of Additional US Lenders. If the aggregate amount of the proposed
increases in the US Revolving Credit Commitments of all US Lenders making an election to
increase their respective US Revolving Credit Commitment (each, an “Increasing
Lender”) does not equal or exceed the Increase Amount, then the US Borrower may seek one
or more lenders (which must be Eligible Assignees reasonably satisfactory to the US Borrower
and the US Administrative Agent) as US Lenders (each an “Additional Lender”), which
Additional Lenders shall have aggregate US Revolving Credit Commitments not greater than an
amount equal to (i) the Increase Amount, less (ii) any increases in the US Revolving Credit
Commitments of the Increasing Lenders.

     (d) Increase Effective Date and Allocations. If the US Revolving Credit
Commitments are increased in accordance with this Section, the US Administrative Agent and
the US Borrower shall determine the effective date (the “Increase Effective Date”)
and final allocation of such increase. The US Administrative Agent shall promptly notify
the US Borrower and the US Lenders of the final allocation of such increase amount, the
Increase Effective Date and the resulting Percentages.

     (e) Notes. Upon any increase in the US Revolving Credit Commitments pursuant
to this Section, the US Borrower will execute and deliver (i) a replacement US Revolving
Credit Note to each Increasing Lender, each in the principal amount of the US Revolving
Credit Commitment of such Increasing Lender, as increased in accordance with
subsection (d) of this Section 2.10, and (ii) a new US Revolving Credit Note
to each Additional Lender made party to this Agreement in connection therewith, each in the
principal amount of such Additional Lender’s US Revolving Credit Commitment.

     (f) Documentation. The US Borrower and the US Administrative Agent shall
execute appropriate documentation to add each Additional Lender as a party to this
Agreement, whereupon such Additional Lender shall have all of the rights and obligations of
a US Lender hereunder and under the other Loan Documents. The US Borrower and the Obligated
Parties shall execute and deliver appropriate documentation in connection with a Commitment
Increase to preserve and protect the Liens of the Administrative Agents in the Collateral
and the perfection and priority of such Liens.

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     (g) Payment; Amortization. (i) Each Additional Lender shall pay to the
US Administrative Agent for the account of the other US Lenders an amount equal to its
Percentage of outstanding US Revolving Credit Advances, (ii) each Increasing Lender shall
pay to the US Administrative Agent for the account of the other US Lenders the amount
necessary so that such Increasing Lender has advanced an amount equal to its Percentage (as
adjusted in accordance with subsection (d) of this Section 2.10) of
outstanding US Revolving Credit Advances, and (iii) such amount so paid by each Additional
Lender and each Increasing Lender shall constitute a US Revolving Credit Advance by such
Additional Lender or Increasing Lender under its US Revolving Credit Note and a payment of
principal to the other US Lenders under their respective US Revolving Credit Notes and the
outstanding principal balances of the respective US Revolving Credit Notes shall be
increased or reduced accordingly.

     (h) Effects of Increase. Upon and as of the date of the addition of any
Additional Lender to this Agreement or the increase of the US Revolving Credit Commitment of
any Increasing Lender, (i) the US Revolving Credit Commitments of the other US Lenders
(other than other Increasing Lenders) shall remain unchanged, and (ii) solely with respect
to US Revolving Credit Commitments, each of the other US Lenders shall be deemed to have
sold and transferred to such Additional Lender or such Increasing Lender, as the case may
be, and such Additional Lender or Increasing Lender shall be deemed irrevocably and
unconditionally to have purchased and received from each such other US Lenders (on a pro
rata basis, based on such other US Lenders’ respective Percentages, as adjusted in
accordance with this Section) a portion of such other US Lenders’ participation shares under
Section 4.13 in all US Letters of Credit outstanding on such date and related
rights, in an aggregate amount equal to such Additional Lender’s or such Increasing Lender’s
Percentage of such outstanding US Letters of Credit. The addition of any Additional Lender
or the increase of the US Revolving Credit Commitment of an Increasing Lender and the
effects thereof as described in this Section shall occur automatically upon satisfaction of
the requirements specified in this Section, without the necessity for further documentation
to be executed by the other Lenders.

     (i) Acknowledgments Regarding Obligation to Increase. The US Borrower
acknowledges that (i) no Administrative Agent nor any US Lender has made any representations
to the US Borrower regarding its intent to agree to any increases to the US Revolving Credit
Commitments described in this Section, (ii) no US Lender shall have any obligation to
increase its US Revolving Credit Commitment, (iii) any US Lender’s agreement to one or more
increases shall not commit such US Lender to any additional increases, and (iv) no
Administrative Agent, nor any US Lender, nor any of their respective Affiliates shall have
any obligation to find or arrange for any Additional Lender.

     (j) Compensation. The US Borrower acknowledges that nothing herein shall
constitute a waiver of the US Borrower’s obligation set forth in Section 5.6 hereof
to provide compensation to the US Lenders if any circumstance arising in connection with any
increase in the US Revolving Credit Commitments results in a LIBOR Advance

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being paid on a day other than the last day of an Interest Period for such LIBOR
Advance.

ARTICLE III

Swing Line Advances

     Section 3.1 Swing Line Advances. (a) For the convenience of the parties, the
US Administrative Agent, solely for its own account, may make any requested Advance under the
US Revolving Credit Commitments (which request must be made before 1:00 p.m. (Houston time) on the
Business Day the Advance is to be made and may be telephonic if confirmed in writing within two
Business Days) in the minimum amount of $500,000 (or a greater integral multiple of $100,000)
directly to the US Borrower as a US Swing Line Advance without requiring each other US Lender to
fund its Percentage thereof on such Business Day. US Swing Line Advances are subject to the
following conditions:

     (i) Each US Swing Line Advance must occur on a Business Day before the
Termination Date;

     (ii) The aggregate principal outstanding of all US Swing Line Advances
may not exceed $25,000,000; the aggregate principal amount outstanding of
all US Swing Line Advances, the aggregate principal amount of all
US Revolving Credit Advances, and the Letter of Credit Liabilities under the
US Letters of Credit may at no time exceed the aggregate US Revolving Credit
Commitments; and no US Swing Line Advance shall be made which would cause
the aggregate principal outstanding of US Administrative Agent’s percentage
of all US Revolving Credit Advances (including US Swing Line Advances) to
exceed the US Administrative Agent’s US Revolving Credit Commitment;

     (iii) Each US Swing Line Advance shall be paid in full or Converted by
the US Borrower no later than the 15th day and the last day of
each calendar month, and if such US Swing Line Advance is not paid within
such time, then such US Swing Line Advance shall be paid in full by the
funding of a Base Rate Advance; and

     (iv) Each US Swing Line Advance shall accrue interest at the Base Rate
plus the Applicable Margin for Base Rate Advances and Swing Line Advances.

     (b) For the convenience of the parties, the Canadian Administrative Agent, solely for
its own account, may make any requested Advance under the Canadian Commitments (which
request must be made before 1:00 p.m. (Toronto, Ontario time) on the Business Day the
Advance is to be made and may be telephonic if confirmed in writing within two Business
Days) in the minimum amount of $500,000 (or a greater integral multiple of $100,000)
directly to the Canadian Borrower as a Canadian Swing Line Advance without requiring each
other Canadian Lender to fund its Percentage

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thereof on such Business Day. Canadian Swing Line Advances are subject to the
following conditions:

     (i) Each Canadian Swing Line Advance must occur on a Business Day
before the Termination Date;

     (ii) The aggregate principal outstanding of all Canadian Swing Line
Advances may not exceed $5,000,000; the aggregate principal amount
outstanding of all Canadian Swing Line Advances, the aggregate principal
amount of all Canadian Advances, and the Letter of Credit Liabilities under
the Canadian Letters of Credit may at no time exceed the aggregate Canadian
Commitments; and no Canadian Swing Line Advance shall be made which would
cause the aggregate principal outstanding of Canadian Administrative Agent’s
percentage of all Canadian Advances (including Canadian Swing Line Advances)
to exceed the Canadian Administrative Agent’s Canadian Commitment;

     (iii) Each Canadian Swing Line Advance shall be paid in full or
Converted by the Canadian Borrower no later than the 15th and
last day of each calendar month, and if such Canadian Swing Line Advance is
not paid within such time, then such Canadian Swing Line Advance shall be
paid in full by the funding of a Base Rate Advance; and

     (iv) Each Canadian Swing Line Advance shall accrue interest at the Base
Rate plus the Applicable Margin for Base Rate Advances and Swing Line
Advances.

     Section 3.2 Lenders’ Funding of Swing Line Advances as Advances. If a Borrower fails
to repay any Swing Line Advance within 10 Business Days after the making thereof, the applicable
Administrative Agent shall promptly notify the applicable Lenders of such failure and the unpaid
amount, which notice shall, on behalf of such Borrower (and for such purpose such Borrower hereby
irrevocably directs such Administrative Agent to act on its behalf), request each such Lender to
make, and each such Lender hereby agrees to make, an Advance in an amount equal to such Lender’s
Percentage of the aggregate amount of such unpaid Swing Line Advance (each a “Refunded Swing
Line Advance”), to repay such Administrative Agent. Each Lender shall make the amount of such
Advance available to the applicable Administrative Agent in immediately available funds, not later
than 10:00 a.m. Houston time or Toronto, Ontario time one Business Day after the date of such
notice. The proceeds of such Advance shall be immediately made available to the applicable
Administrative Agent for application by such Administrative Agent to the repayment of the Refunded
Swing Line Advance. Each Borrower irrevocably authorizes the applicable Administrative Agent to
charge such Borrower’s accounts with such Administrative Agent in order to immediately pay the
amount of such Refunded Swing Line Advance to the extent amounts received from the Lenders are not
sufficient to repay in full such Refunded Swing Line Advance (with notice of such charge being
provided to such Borrower, provided that the failure to give such notice shall not affect the
validity of such charge). All such Refunded Swing Line Advances shall be subject to all provisions
of this Agreement concerning Advances, except that such Advances shall be made without regard to

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satisfaction of the conditions precedent to Advances (including the existence of a Default or
Event of Default). If prior to the time an Advance would otherwise have been made pursuant to this
paragraph, Advances may not be made as contemplated by this paragraph, each such Lender shall
irrevocably and unconditionally purchase and receive from the applicable Administrative Agent a
ratable participation in such Swing Line Advance and shall make available to such Administrative
Agent in immediately available funds its Percentage of such unpaid amount, together with interest
from the date when its payment was due to, but not including, the date of payment. If a Lender
does not promptly pay its amount upon such Administrative Agent’s demand, and until such Lender
makes the required payment, such Administrative Agent is deemed to continue to have outstanding a
Swing Line Advance in the amount of such Lender’s unpaid obligation. Each Borrower shall make each
payment of all or any part of any Swing Line Advance to the applicable Administrative Agent for the
ratable benefit of such Administrative Agent and those Lenders who have funded their participations
in Swing Line Advances under this section (but all interest accruing on Swing Line Advances before
the funding date of any Advance to repay such Swing Line Advance or any participation is payable
solely to such Administrative Agent for its own account).

     Section 3.3 The Swing Line Notes. The obligation of the US Borrower to repay the
US Swing Line Advances and interest thereon shall be evidenced by the US Swing Line Note in the
principal amount of $25,000,000. The obligation of the Canadian Borrower to repay the Canadian
Swing Line Advances and interest thereon shall be evidenced by the Canadian Swing Line Note in the
principal amount of $5,000,000.

ARTICLE IV

Borrowing Procedure: Payments; Facilities Fees;

Matters Related to Letters of Credit; Matters Related to Advances;

Designation of Canadian Resident Lenders

     Section 4.1 Borrowing Procedure.

     (a) The US Borrower shall give the US Administrative Agent notice by means of an
Advance Request Form of each requested US Revolving Credit Advance (other than US Swing Line
Advances) at least one Business Day before the requested date of a Base Rate Advance, and at
least three Business Days before the requested date of a LIBOR Advance, specifying: (a) the
requested date of such US Revolving Credit Advance (which shall be a Business Day), (b) the
amount of such US Revolving Credit Advance, (c) the Type of the US Revolving Credit Advance,
and (d) in the case of a LIBOR Advance, the duration of the Interest Period for such
US Revolving Credit Advance. The US Administrative Agent at its option may accept
telephonic requests for US Revolving Credit Advances, provided that such acceptance shall
not constitute a waiver of the US Administrative Agent’s right to delivery of the
appropriate Advance Request Form in connection with subsequent advances. Any telephonic
request for a US Revolving Credit Advance by the US Borrower shall be promptly continued by
submission of a properly completed Advance Request Form to the US Administrative Agent.
Each Base Rate Advance shall be in a minimum principal amount of $500,000 or a greater
integral multiple of $100,000. Each LIBOR Advance shall be in a minimum

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principal amount of $3,000,000 or a greater integral multiple of $1,000,000. The
US Administrative Agent shall notify each US Lender of the contents of each such notice on
the date such notice is given by the US Borrower. Not later than 11:00 a.m. Houston, Texas
time on the date specified for each US Revolving Credit Advance hereunder, each US Lender
will make available to the US Administrative Agent at its Principal Office in immediately
available funds, for the account of the US Borrower, its Percentage of each US Revolving
Credit Advance. After the US Administrative Agent’s receipt of such funds and subject to
the other terms and conditions of this Agreement, the US Administrative Agent will make each
US Revolving Credit Advance available to the US Borrower by depositing the same, in
immediately available funds, in an account of the US Borrower (designated by the
US Borrower) maintained with the US Administrative Agent at the US Administrative Agent’s
Principal Office. All notices under this Section shall be irrevocable and shall be given
not later than 11:00 a.m. Houston, Texas, time on the day which is not less than the number
of Business Days specified above for such notice.

     (b) The following borrowing procedures shall apply with respect to the Canadian
Advances. The Canadian Borrower shall give the Canadian Administrative Agent notice by
means of an Advance Request Form of each requested Canadian Advance (other than Canadian
Swing Line Advances) at least one Business Day before the requested date of a Base Rate
Advance, and at least three Business Days before the requested date of a LIBOR Advance,
specifying: (a) the requested date of such Canadian Advance (which shall be a Business Day),
(b) the amount of such Canadian Advance, (c) the Type of the Canadian Advance, and (d) in
the case of a LIBOR Advance, the duration of the Interest Period for such Canadian Advance.
The Canadian Administrative Agent at its option may accept telephonic requests for Canadian
Advances, provided that such acceptance shall not constitute a waiver of the Canadian
Administrative Agent’s right to delivery of the appropriate Advance Request Form in
connection with subsequent advances. Any telephonic request for a Canadian Advance by the
Canadian Borrower shall be promptly continued by submission of a properly completed Advance
Request Form to the Canadian Administrative Agent. Each Base Rate Advance shall be in a
minimum principal amount of $250,000 or a greater integral multiple of $100,000. Each LIBOR
Advance shall be in a minimum principal amount of $250,000 or a greater integral multiple of
$100,000. The Canadian Administrative Agent shall notify each Canadian Lender of the
contents of each such notice on the date such notice is given by the Canadian Borrower. Not
later than 1:00 p.m., Toronto, Ontario time on the date specified for each Canadian Advance
hereunder, and subject to the other terms and conditions of this Agreement, each Canadian
Lender will make available to the Canadian Administrative Agent at its Principal Office in
immediately available funds, for the account of the Canadian Borrower, its Percentage of
each Canadian Advance. After the Canadian Administrative Agent’s receipt of such funds and
subject to the other terms and conditions of this Agreement, the Canadian Administrative
Agent will make each Canadian Advance available to the Canadian Borrower by depositing the
same, in immediately available funds, in an account of the Canadian Borrower (designated by
the Canadian Borrower) maintained with the Canadian Administrative Agent at the Canadian
Administrative Agent’s Principal Office. All notices under this Section shall be

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irrevocable and shall be given not later than 1:00 p.m., Toronto, Ontario time on the
day which is not less than the number of Business Days specified above for such notice.

     Section 4.2 Method of Payment.

     (a) All payments of principal, interest, and other amounts to be made by the
US Borrower under this Agreement and the other Loan Documents shall be made to the
US Administrative Agent at its Principal Office for the account of each US Lender’s
Principal Office in Dollars and in immediately available funds, without setoff, deduction,
or counterclaim, not later than 11:00 a.m., Houston, Texas time on the date on which such
payment shall become due (each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Business Day). The US Borrower shall, at
the time of making each such payment, specify to the US Administrative Agent the sums
payable by the US Borrower under this Agreement and the other Loan Documents to which such
payment is to be applied (and in the event that the US Borrower fails to so specify, or if
an Event of Default has occurred and is continuing, the US Administrative Agent may apply
such payment to the Obligations in such order and manner as it may elect in its sole
discretion, subject to Section 4.5 hereof). Each payment received by the
US Administrative Agent under this Agreement or any other Loan Document for the account of a
US Lender shall be paid promptly to such US Lender, in immediately available funds, for the
account of such US Lender’s Principal Office. Whenever any payment under this Agreement or
any other Loan Document shall be stated to be due 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 the payment of interest and commitment fee, as
the case may be.

     (b) The following shall apply with respect to methods of payment for the Canadian
Advances. All payments of principal, interest, and other amounts to be made by the Canadian
Borrower under this Agreement and the other Loan Documents shall be made to the Canadian
Administrative Agent at its Principal Office for the account of each Canadian Lender’s
Principal Office in Canadian Dollars and in immediately available funds, without setoff,
deduction, or counterclaim, not later than 1:00 p.m., Toronto, Ontario time on the date on
which such payment shall become due (each such payment made after such time on such due date
to be deemed to have been made on the next succeeding Business Day). The Canadian Borrower
shall, at the time of making each such payment, specify to the Canadian Administrative Agent
the sums payable by the Canadian Borrower under this Agreement and the other Loan Documents
to which such payment is to be applied (and in the event that the Canadian Borrower fails to
so specify, or if an Event of Default has occurred and is continuing, the Canadian
Administrative Agent may apply such payment to the Canadian Obligations in such order and
manner as it may elect in its sole discretion, subject to Section 4.5 hereof). Each
payment received by the Canadian Administrative Agent under this Agreement or any other Loan
Document for the account of a Canadian Lender shall be paid promptly to such Canadian
Lender, in immediately available funds, for the account of such Canadian Lender’s Principal
Office. Whenever any payment under this Agreement or any other Loan Document shall be
stated to be due on a day that is not a Business Day, such payment

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may be made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of the payment of interest and commitment fee, as
the case may be.

     (c) Not later than 1:00 p.m., Toronto, Ontario time on each Calculation Date, the
Canadian Administrative Agent shall determine the Exchange Rate applicable to Canadian
Dollars as of such Calculation Date. For purposes of this Agreement, the Exchange Rate so
determined shall become effective on the first Business Day immediately following the
relevant Calculation Date (a “Reset Date”).

     Section 4.3 Voluntary Prepayment. The Borrowers may prepay the Base Rate Advances in
whole at any time or from time to time in part without premium or penalty upon not less than one
Business Day’s prior notice to the applicable Administrative Agent (which shall promptly notify the
applicable Lenders), which notice shall specify the prepayment date (which shall be a Business Day)
and the amount of the prepayment (which shall be at least $3,000,000 or any whole multiple of
$1,000,000 in the case of the US Revolving Credit Advances and at least $150,000 or any whole
multiple of $100,000 in the case of Canadian Advances, or, if less, the remaining aggregate
principal balance outstanding on the applicable Note) and shall be irrevocable and effective only
upon receipt by the applicable Administrative Agent, provided that interest on the principal
prepaid, accrued to the prepayment date, shall be paid on the prepayment date. Each Borrower may
prepay LIBOR Advances on the same conditions as for Base Rate Advances (except that prior notice to
the applicable Administrative Agent shall be not less than three Business Days for LIBOR Advances)
and in addition such prepayments of LIBOR Advances shall not relieve the US Borrower or the
Canadian Borrower of its respective obligations under Section 5.2 or 5.6 hereof.

     Section 4.4 Mandatory Prepayment.

     (a) If at any time the amount equal to the sum of (i) the aggregate principal amount of
all US Revolving Credit Advances, plus (ii) the Letter of Credit Liabilities under the US
Letters of Credit, plus (iii) the aggregate principal amount outstanding of all US Swing
Line Advances exceeds the aggregate US Revolving Credit Commitments, the US Borrower shall
promptly prepay the outstanding US Revolving Credit Advances by the amount of the excess or,
if no US Revolving Credit Advances are outstanding, the US Borrower shall immediately pledge
to the US Administrative Agent cash or Cash Equivalent Investments in an amount equal to the
excess as cash collateral for the outstanding Letter of Credit Liabilities under the US
Letters of Credit. Additionally, if at any time the amount equal to the sum of (A) the
aggregate principal amount of all Canadian Advances, plus (B) the Letter of Credit
Liabilities under the Canadian Letters of Credit exceeds the aggregate Canadian Commitments,
the Canadian Borrower shall promptly prepay the outstanding Canadian Advances by the amount
of the excess or, if no Canadian Advances are outstanding, the Canadian Borrower shall
immediately pledge to the Canadian Administrative Agent for the ratable benefit of the
Canadian Lenders with respect to the Canadian Commitments cash or Cash Equivalent
Investments in an amount equal to the excess as cash collateral for the outstanding Letter
of Credit Liabilities under the Canadian Letters of Credit.

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     (b) Promptly upon receipt of the Net Cash Proceeds from any Asset Sale or
sale/leaseback transaction with respect to either Borrower’s or any of their Subsidiaries’
Property, or receipt of any insurance proceeds with respect to properties or assets of any
Borrower or any of their Subsidiaries, such Borrower, shall prepay Advances and permanently
reduce the US Revolving Credit Commitments or the Canadian Commitments, as applicable, in
accordance with Section 4.4(c) in a principal amount equal to 100% of the amount by
which aggregate Net Cash Proceeds received from such Asset Sales or insurance proceeds
during any twelve month period exceeds 10 percent of US Borrower’s consolidated Net Worth,
and 100% of the amount of Net Cash Proceeds received from any such sale/leaseback
transaction.

     (c) (i)  Subject to the Intercreditor Agreement (Canadian Facility), any prepayment
made by the US Borrower under Sections 4.4(a) or (b) shall (i) include
accrued interest to the date of such prepayment on the principal amount prepaid, (ii) not be
subject to (A) any minimum payment provisions contained in this Agreement or (B) the
requirement set forth in Section 5.6 hereof to provide compensation to the
US Lenders if such prepayment results in a LIBOR Advance being paid on a day other than the
last day of an Interest Period for such LIBOR Advance, and (iii) be applied first, to repay
outstanding US Revolving Credit Advances, with a corresponding permanent reduction in the
US Revolving Credit Commitments (other than in respect of prepayments under
Section 4.4(a) above), and second, at any time there are no Advances outstanding
under the US Revolving Credit Commitments, to provide cash collateral for the outstanding
Letter of Credit Liabilities under the US Letters of Credit, provided that, in any event
there shall be a permanent reduction in the US Revolving Credit Commitments in an amount
equal to the applicable amount of Net Cash Proceeds from the applicable transaction which,
but for the principal amount of Advances outstanding on the date of receipt thereof, would
be required to prepay Advances under this Section.

     (ii) Subject to the Intercreditor Agreement (Canadian Facility), any prepayment
made by Canadian Borrower under Sections 4.4(a), (b), and
(c) shall (i) include accrued interest to the date of such prepayment on the
principal amount prepaid, (ii) not be subject to (A) any minimum payment provisions
contained in this Agreement or (B) the requirement set forth in Section 5.6
hereof to provide compensation to the Canadian Lenders if such prepayment results in
a LIBOR Advance being paid on a day other than the last day of an Interest Period
for such LIBOR Advance, and (iii) be applied first, to repay outstanding Canadian
Advances, with a corresponding permanent reduction in the Canadian Commitments
(other than in respect of prepayments under Section 4.4(a) above), and
second, at any time there are no Advances outstanding under the Canadian
Commitments, to provide cash collateral for the outstanding Letter of Credit
Liabilities under the Canadian Letters of Credit, provided that, in any event there
shall be a permanent reduction in the Canadian Commitments in an amount equal to the
applicable amount of Net Cash Proceeds from the applicable transaction which, but
for the principal amount of Advances outstanding on the date of receipt thereof,
would be required to prepay Advances under this Section.

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     Section 4.5 Pro Rata Treatment. Except to the extent otherwise provided herein:
(a) each Advance shall be made by the Lenders pro rata in accordance with their respective
Percentages; (b) each payment of fees under Section 2.6 and letter of credit fees under
Section 4.12 shall be made for the account of the Lenders pro rata in accordance with their
respective Percentages; (c) each termination or reduction of the Aggregate Commitments under
Section 2.7 shall be applied to the Aggregate Commitments pro rata according to the
respective unused US Revolving Credit Commitments or Canadian Commitments, as applicable; (d) each
Letter of Credit shall be deemed participated in by the Lenders, pro rata in accordance with their
respective Percentages; and (e) each payment and prepayment of principal of or interest on the
Advances by the applicable Borrower shall be made to the Administrative Agents for the account of
the Lenders pro rata in accordance with the respective unpaid principal amounts of the Advances
held by such Lenders.

     Section 4.6 Non-Receipt of Funds by the Administrative Agents. Unless the applicable
Administrative Agent shall have been notified by a Lender or the US Borrower or the Canadian
Borrower, as applicable (the “Payor”) prior to the date on which such Lender is to make
payment to such Administrative Agent of the proceeds of an Advance to be made or participated in as
applicable, by it hereunder or the US Borrower or the Canadian Borrower, as applicable is to make a
payment to the applicable Administrative Agent for the account of one or more of the Lenders, as
the case may be (such payment being herein called the “Required Payment”), which notice
shall be effective upon receipt, that the Payor does not intend to make the Required Payment to
such Administrative Agent, such Administrative Agent may assume that the Required Payment has been
made and may, in reliance upon such assumption (but shall not be required to), make the amount
thereof available to the intended recipient on such date and, if the Payor has not in fact made the
Required Payment to such Administrative Agent, the recipient of such payment shall, on demand, pay
to such Administrative Agent the amount made available to it together with interest thereon in
respect of the period commencing on the date such amount was so made available by such
Administrative Agent until the date such Administrative Agent recovers such amount at a rate per
annum equal to the Federal Funds Rate for such period.

     Section 4.7 Withholding Tax Exemption. Each Lender that is not incorporated under the
laws of the United States of America or a state thereof agrees that it will deliver to the
Borrowers and the Administrative Agents two duly completed copies of Form W-8BEN or W-8ECI,
certifying in either case that such Lender is entitled to receive payments from the US Borrower or
the Canadian Borrower, as applicable under any Loan Document without deduction or withholding of
any United States federal income taxes. Each US Lender which so delivers a Form W-8BEN or W-8ECI
further undertakes to deliver to the US Borrower or the Canadian Borrower, as applicable and the
Administrative Agents two additional copies of such form (or a successor form) on or before the
date such form expires or becomes obsolete or after the occurrence of any event requiring a change
in the most recent form so delivered by it, and such amendments thereto or extensions or renewals
thereof as may be reasonably requested by the US Borrower or the Canadian Borrower, or the
Administrative Agents, in each case certifying that such Lender is entitled to receive payments
from the US Borrower or the Canadian Borrower, as applicable under any Loan Document without
deduction or withholding of any United States federal income taxes, unless an event (including
without limitation any change in treaty, law or regulation) has occurred prior to the date on which
any such delivery would

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otherwise be required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with respect to it and such Lender advises
the US Borrower or the Canadian Borrower, as applicable and the Administrative Agents that it is
not capable of receiving such payments without any deduction or withholding of United States
federal income tax. Notwithstanding any provisions of this agreement to the contrary, the
US Borrower or the Canadian Borrower, as applicable shall make payments net of, and after
deductions for, taxes and shall not be required to increase any such amount payable to any
non-US Lender that fails to comply with this Section.

     Section 4.8 Computation of Interest. Interest on the LIBOR Advances and all other
amounts payable by the Borrowers hereunder shall be computed on the basis of a year of 360 days and
the actual number of days elapsed (including the first day but excluding the last day) unless such
calculation would result in a usurious rate, in which case interest shall be calculated on the
basis of a year of 365 or 366 days, as the case may be. Interest on the Base Rate Advances shall
be computed on the basis of a year of 365 or 366 days, as the case may be.

     Section 4.9 Conversions and Continuation. The US Borrower or the Canadian Borrower,
as applicable shall have the right from time to time to Convert all or part of an Advance of one
Type into an Advance of another Type or to Continue LIBOR Advances of one Type as Advances of the
same Type by giving the applicable Administrative Agent, written notice at least one Business Day
before Conversion into a Base Rate Advance, and at least three Business Days before Conversion into
or Continuation of a LIBOR Advance, specifying: (a) the Conversion or Continuation date, (b) the
amount of the Advance to be Converted or Continued, (c) in the case of Conversions, the Type of
Advance to be Converted into, and (d) in the case of a Continuation of or Conversion into a LIBOR
Advance, the duration of the Interest Period applicable thereto; provided that (i) LIBOR Advances
may only be Converted on the last day of the applicable Interest Period, and (ii) except for
Conversions into Base Rate Advances, no Conversions shall be made while a Default or an Event of
Default has occurred and is continuing. All notices under this Section shall be irrevocable and
shall be given not later than 11:00 a.m. Houston, Texas time on the day which is not less than the
number of Business Days specified above for such notice. The Administrative Agents shall promptly
notify the Lenders of each such notice received. If the US Borrower or the Canadian Borrower, as
applicable, shall fail to give the applicable Administrative Agent, the notice as specified above
for Continuation or Conversion of a LIBOR Advance prior to the end of the Interest Period with
respect thereto, such LIBOR Advance shall be Converted automatically into a Base Rate Advance on
the last day of the then current Interest Period for such LIBOR Advance.

     Section 4.10 Letter of Credit Procedure. Each Letter of Credit shall be issued upon
receipt by the applicable Issuing Lender of a written request of the US Borrower or the Canadian
Borrower, as applicable (a “Credit Request”), together with a duly executed Letter of
Credit Agreement, not later than 11:00 a.m. (Houston, Texas time), three Business Days prior to the
date set for the issuance of such Letter of Credit. Each Credit Request shall contain or specify,
among other things:

     (a) the proposed date of the issuance of the Letter of Credit, which shall be a
Business Day;

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     (b) the stated amount of the Letter of Credit;

     (c) the date of expiration of the Letter of Credit;

     (d) the name and address of the beneficiary of the Letter of Credit;

     (e) the documents to be presented by the beneficiary of the Letter of Credit in case of
any drawing thereunder;

     (f) the full text of any certificate to be presented by the beneficiary in case of any
drawing thereunder;

     (g) the purpose of the Letter of Credit; and

     (h) the aggregate amount of Letter of Credit Liabilities (including the requested
Letter of Credit) to be existing on the date of issuance of such requested Letter of Credit.

     Section 4.11 Amendments to Letters of Credit. Any request for amendment to or
extension of the expiry date of any previously issued Letter of Credit shall be submitted pursuant
to a Credit Request to the applicable Issuing Lender not later than three Business Days prior to
the date of the proposed amendment or extension. No Issuing Lender shall amend or extend the
expiry date of any Letter of Credit if the issuance of a new Letter of Credit having the same terms
and conditions as such Letter of Credit as so amended or extended would be prohibited by any
provision of this Agreement.

     Section 4.12 Letter of Credit Fees. The applicable Borrower agrees in all instances,
to pay (a) to the applicable Administrative Agent a non-refundable letter of credit fee, due and
payable quarterly in arrears on each Quarterly Fee Payment Date and on the applicable Termination
Date, for the account of the Lenders, which fee shall be equal to the Applicable Margin for LIBOR
Advances on the date of payment multiplied by the Dollar equivalent (at the applicable Exchange
Rate) of the undrawn amount of each Letter of Credit (with a $600 minimum letter of credit fee per
Letter of Credit issued), and based on a year of 360 days, and (b) to the applicable Issuing Lender
a fronting fee, due and payable on the date of issuance of any Letter of Credit, for the sole
account of such Issuing Lender, which fee shall be equal to 0.125% of the face amount of each such
Letter of Credit (with a $600 minimum fronting fee per Letter of Credit issued). Additionally, the
applicable Borrower agrees to pay the applicable Issuing Lender, on a demand basis, all other fees
(including without limitation amendment, transfer, or negotiation fees) due and payable in
accordance with such Issuing Lender’s then current fee policy, which fee policy has previously been
provided to the Borrowers.

     Section 4.13 Participation by Lenders. By the issuance of any Letter of Credit and
without any further action on the part of the applicable Issuing Lender or any of the Lenders in
respect thereof, (a) the US Issuing Lender hereby grants to each US Lender and each US Lender
hereby agrees to acquire from the US Issuing Lender a participation in each US Letter of Credit and
the related Letter of Credit Liabilities, effective upon the issuance thereof without recourse or
warranty, equal to such US Lender’s Percentage of such US Letter of Credit and Letter of Credit
Liabilities under the US Letters of Credit and (b) the Canadian Issuing Lender hereby

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grants to each Canadian Lender and each Canadian Lender hereby agrees to acquire from the
Canadian Issuing Lender a participation in each such Canadian Letter of Credit and the related
Letter of Credit Liabilities, effective upon the issuance thereof without recourse or warranty,
equal to such Canadian Lender’s Percentage of such Canadian Letter of Credit and Letter of Credit
Liabilities under Canadian Letters of Credit. The Issuing Lenders shall provide a copy of each
Letter of Credit to each other Lender promptly after issuance. This agreement to grant and acquire
participations is an agreement between the Issuing Lenders and the Lenders, and neither the
Borrowers nor any beneficiary of a Letter of Credit or Lender Guaranty shall be entitled to rely
thereon. The Borrowers agree that each Lender purchasing a participation from an Issuing Lender
pursuant to this Section 4.13 may exercise all its rights to payment against the applicable
Borrower including the right of setoff, with respect to such participation as fully as if such
Lender were the direct creditor of such Borrower in the amount of such participation.

     Section 4.14 Obligations Absolute. The obligations of the applicable Borrowers and
the Guarantors under this Agreement and the other Loan Documents (including without limitation the
obligation of the applicable Borrower to reimburse the applicable Issuing Lender for draws under
any Letter of Credit) shall be joint and several, absolute, unconditional, and irrevocable, and
shall be performed strictly in accordance with the terms of this Agreement and the other Loan
Documents under all circumstances whatsoever, including without limitation the following
circumstances (provided that nothing in this Agreement constitutes a waiver of the Borrowers’
rights to assert any claim or defense based upon the gross negligence or willful misconduct of any
Lender):

     (a) Any lack of validity or enforceability of any Letter of Credit or any other Loan
Document;

     (b) Any amendment or waiver of or any consent to departure from any Loan Document;

     (c) The existence of any claim, set-off, counterclaim, defense or other rights which
the Borrowers, any Obligated Party, or any other Person may have at any time against any
beneficiary of any Letter of Credit, any Issuing Lender, or any other Person, whether in
connection with this Agreement or any other Loan Document or any unrelated transaction
except for any Administrative Agent’s, Issuing Lender’s, or any Lender’s gross negligence or
willful misconduct;

     (d) The occurrence of any Default or Event of Default; or

     (e) Any statement, draft, or other document presented under any 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 whatsoever except for any Administrative
Agent’s, any Issuing Lender’s, or any Lender’s gross negligence or willful misconduct.

     Section 4.15 Limitation of Liability. The applicable Borrower assumes all risks of
the acts or omissions of any beneficiary of any Letter of Credit with respect to its use of such
Letter of Credit. None of the Issuing Lenders, the Administrative Agents, the Lenders nor any of
their

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officers or directors shall have any responsibility or liability to any Borrower or any other
Person for: (a) errors, omissions, interruptions, or delays in transmission or delivery of any
messages, or (b) the validity, sufficiency, or genuineness of any draft or other document, or any
endorsement(s) thereon, even if any such draft, document or endorsement should in fact prove to be
in any and all respects invalid, insufficient, fraudulent, or forged or any statement therein is
untrue or inaccurate in any respect, provided that in each case such actions taken or omitted by
any Issuing Lender, any Administrative Agent or any Lender are done or omitted in the absence of
gross negligence or willful misconduct. The Issuing Lenders 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.

     Section 4.16 Letter of Credit Agreements. Certain additional provisions regarding the
obligations, liabilities, rights, remedies and agreements of the applicable Borrower and the
applicable Issuing Lender relative to the Letters of Credit are set out in the Letter of Credit
Agreements.

     Section 4.17 Replacement of either of the Issuing Lenders. Either of the Borrowers
may, with the approval of the Required Lenders, appoint an applicable successor Issuing Lender
hereunder upon the condition precedent that such successor Issuing Lender shall become a party to
this Agreement and expressly agree to be bound by the terms and conditions contained in this
Agreement pertaining to such Issuing Lender. Upon the appointment of a successor Issuing Lender,
such Issuing Lender replaced by such successor Issuing Lender shall cease to issue Letters of
Credit but shall continue to carry out its obligations hereunder and shall continue to have the
benefit of this Agreement and the other Loan Documents with respect to the outstanding Letters of
Credit issued by it until all such Letters of Credit have expired and any drawings thereunder have
been reimbursed in full.

     Section 4.18 No Advances. None of the Administrative Agents, Issuing Lenders or the
Lenders shall have any obligation to make any Advance, if a Default or an Event of Default has
occurred and is continuing.

     Section 4.19 Special Provisions for Canadian Lenders. Notwithstanding anything herein
to the contrary, so long as no Default exists, each Canadian Lender, the Canadian Administrative
Agent, the Canadian Issuing Lender and Canadian Swingline Lender (each a “Canadian Lender
Party”) shall be a resident of Canada for the purposes of the ITA in that it shall either be
incorporated under the laws of Canada or a province thereof or be an “authorized foreign bank” as
defined under the ITA that will receive all amounts paid or credited to it with respect to the
Canadian Facilities in respect of its “Canadian banking business” for the purposes of the ITA (a
“Canadian Resident Lender”). In the event that a Canadian Lender Party does not qualify as
a Canadian Resident Lender, the Canadian Lender Party shall deliver to the Canadian Borrower and
the Canadian Administrative Agent on the date on which such Canadian Lender Party becomes a
Canadian Lender Party hereunder or otherwise does not qualify as a Canadian Resident Lender, notice
that it is not a Canadian Resident Lender. It is acknowledged that there may be Canadian tax
imposed under Part XIII of the ITA (“Canadian Withholding Tax”) on any payments as, on
account or in lieu of payment of, or in satisfaction of, interest and other fees paid by the
Canadian Borrower with respect to the Canadian Facilities to persons who are not Canadian Resident
Lenders (such payments a “Taxable Payment”). So long as no Default exists,

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the Canadian Borrower and the Canadian Administrative Agent shall have no obligation to make
any additional or increased payment under this Agreement in respect of any Canadian Withholding Tax
on a Taxable Payment, and the Canadian Borrower shall be entitled to deduct and remit to the proper
Canadian taxing authorities any Canadian Withholding Tax on any Taxable Payment.

ARTICLE V

Yield Protection and Illegality

     Section 5.1 Capital Adequacy. If after the date hereof, any adoption or
implementation of any applicable law, rule, or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any central bank or other
Governmental Authority charged with the interpretation or administration thereof, or compliance by
any Lender (or its parent) with any guideline, request, or directive regarding capital adequacy
(whether or not having the force of law) of any such central bank or other Governmental Authority,
has or would have the effect of reducing the rate of return on such Lender’s (or its parent’s)
capital as a consequence of its obligations hereunder or the transactions contemplated hereby
(whether in respect of Advances, Letters of Credit or otherwise) to a level below that which such
Lender (or its parent) could have achieved but for such adoption, implementation, change, or
compliance (taking into consideration such Lender’s policies with respect to capital adequacy) by
an amount deemed by such Lender to be material, then from time to time, within 10 Business Days
after demand by such Lender (with a copy to the applicable Administrative Agent), the applicable
Borrower agrees to pay to such Lender (or its parent) such additional amount or amounts as will
compensate such Lender for such reduction. Any such demand shall be accompanied by a certificate
of such Lender claiming compensation under this Section and setting forth in reasonable detail the
calculation of the additional amount or amounts to be paid to it hereunder shall be conclusive
(absent manifest error), provided that the determination thereof is made on a reasonable basis. In
determining such amount or amounts, such Lender may use any reasonable averaging and attribution
methods.

     Section 5.2 Additional Costs. The applicable Borrower shall pay (without duplication
of amounts owing under other Sections of this Article V) directly to each Lender from time
to time such amounts as such Lender may determine to be necessary to compensate it for any costs
incurred by such Lender which such Lender determines are attributable to its making or maintaining
of any LIBOR Advances hereunder, to its issuing Letters of Credit or to its obligation to issue
Letters of Credit or make any of such Advances hereunder, or any reduction in any amount receivable
by such Lender hereunder in respect of any such Advances or Letters of Credit or such obligation
(such increases in costs and reductions in amounts receivable being herein called “Additional
Costs”), resulting from any Regulatory Change which:

     (a) changes the basis of taxation, of any amounts payable to such Lender under this
Agreement, any of its Notes in respect of any of such Advances or in respect of any Letters
of Credit (other than taxes imposed on the overall net income of such Lender or its
Applicable Lending Office for any of such Advances by the jurisdiction in which such Lender
has its principal office or such Applicable Lending Office);

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     (b) imposes or modifies any reserve, special deposit, minimum capital, capital ratio,
or similar requirement relating to any extensions of credit or other assets of, or any
deposits with or other liabilities or commitments of, such Lender (including any of such
Advances, Letters of Credit or any deposits referred to in the definition of “LIBOR” in
Section 1.1); or

     (c) imposes any other condition affecting this Agreement, the Notes, the Letters of
Credit or any of such extensions of credit or liabilities or commitments.

Each Lender will notify the applicable Borrower of any event occurring after the date of this
Agreement which will entitle such Lender to compensation pursuant to this Section 5.2 as
promptly as practicable after it obtains knowledge thereof and determines to request such
compensation, and will designate a different Applicable Lending Office for the Advances affected by
such event if such designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the sole opinion of such Lender, violate any law, rule, or regulation or be in any
way disadvantageous to such Lender, provided that such Lender shall have no obligation to so
designate an Applicable Lending Office located in the United States of America or Canada. Each
Lender will furnish the applicable Borrower with a certificate setting forth in reasonable detail
the basis and the amount of each request of such Lender for compensation under this
Section 5.2, and such Borrower shall not be obligated to pay under this Section 5.2
prior to receipt of such certificate. If a Lender requests compensation from a Borrower under this
Section 5.2, such Borrower may, by notice to such Lender and the applicable Administrative
Agent suspend the obligation of such Lender to make or Continue making, or Convert Advances into,
Advances of the Type with respect to which such compensation is requested until the Regulatory
Change giving rise to such request ceases to be in effect (in which case the provisions of
Section 5.5 hereof shall be applicable). Determinations and allocations by a Lender for
purposes of this Section 5.2 of the effect of any Regulatory Change on its costs of
maintaining its obligations to make Advances or of making or maintaining Advances or on amounts
receivable by it in respect of Advances, and of the additional amounts required to compensate such
Lender in respect of any Additional Costs, shall be conclusive absent manifest error, provided that
such determinations and allocations are made on a reasonable basis and in good faith.

     Section 5.3 Limitation on LIBOR Advances. Anything herein to the contrary
notwithstanding, if with respect to any LIBOR Advances for any Interest Period therefor:

     (a) The US Administrative Agent determines (which determination shall be conclusive
absent manifest error) that quotations of interest rates for the relevant deposits referred
to in the definition of “LIBOR” in Section 1.1 hereto are not being provided in the
relative amounts or for the relative maturities for purposes of determining the rate of
interest for such Advances as provided in this Agreement; or

     (b) A Lender determines (which determination shall be conclusive absent manifest error)
that the relevant rates of interest referred to in the definition of “LIBOR” in Section
1.1 hereto on the basis of which the rate of interest for such Advances for such
Interest Period is to be determined do not accurately reflect the cost to such Lender of
making or maintaining such Advances for such Interest Period; then such Lender shall

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give the applicable Borrower prompt notice thereof and the relevant amounts or periods,
and so long as such condition remains in effect, such Lender shall be under no obligation to
make additional LIBOR Advances or to Convert Base Rate Advances into LIBOR Advances and such
Borrower shall, on the last day(s) of the then current Interest Period(s) for, the
outstanding LIBOR Advances, either prepay such Advances or Convert such Advances into Base
Rate Advances in accordance with the terms of this Agreement.

     Section 5.4 Illegality. Notwithstanding any other provision of this Agreement, in the
event that it becomes unlawful for a Lender or its Applicable Lending Office to (a) honor its
obligation to make LIBOR Advances hereunder or (b) maintain LIBOR Advances hereunder, then such
Lender shall promptly notify the applicable Borrower thereof and such Lender’s obligation to make
or maintain LIBOR Advances and to Convert Base Rate Advances into LIBOR Advances hereunder shall be
suspended until such time as such Lender may again make and maintain LIBOR Advances (in which case
the provisions of Section 5.5 hereof shall be applicable).

     Section 5.5 Treatment of Certain LIBOR Advances. If the LIBOR Advances of a Lender
are to be Converted pursuant to Section 5.2, 5.3 or 5.4 hereof, such
Lender’s LIBOR Advances shall be automatically Converted into Base Rate Advances on the last
day(s)of the then current Interest Period(s) for the LIBOR Advances (or, in the case of a
Conversion required by Section 5.4 hereof, on such earlier date as such Lender may specify
to the applicable Borrower, such earlier date to be not earlier than the date such Lender gives
notice thereof to such Borrower) and, unless and until such Lender gives notice as provided below
that the circumstances specified in Section 5.2, 5.3 or 5.4 hereof which
gave rise to such Conversion no longer exist:

     (a) To the extent that such Lender’s LIBOR Advances have been so Converted, all
payments and prepayments of principal which would otherwise be applied to such Lender’s
LIBOR Advances shall be applied instead to its Base Rate Advances; and

     (b) All Advances which would otherwise be made or Continued by a Lender as LIBOR
Advances shall be made as or Converted into Base Rate Advances and all Advances of such
Lender which would otherwise be Converted into LIBOR Advances shall be Converted instead
into (or shall remain as) Base Rate Advances.

If a Lender gives notice to a Borrower that the circumstances specified in Section 5.2,
5.3 or 5.4 hereof which gave rise to the Conversion of such Lender’s LIBOR Advances
pursuant to this Section 5.5 no longer exist (which such Lender agrees to do promptly upon
such circumstances ceasing to exist) at a time when any LIBOR Advances are outstanding, such
Lender’s Base Rate Advances shall be automatically Converted to LIBOR Advances, on the first day(s)
of the next succeeding Interest Period(s) for such outstanding LIBOR Advances to the extent
necessary so that, after giving effect thereto, all Advances held by such Lender holding LIBOR
Advances and by such Lenders are held pro rata (as to principal amounts, Types, and Interest
Periods) in accordance with their respective Percentages. In the event any Lender invokes
Section 5.2, 5.3 or 5.4 or either Borrower becomes obligated to pay any
additional amounts to any Lender pursuant such Sections, then, unless such Lender has removed or
cured the conditions actuating

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such Sections, such Borrower may designate a substitute lender which is an Eligible Assignee (such
Lender referred to in this Agreement as a “Replacement Lender”) to purchase such Lender’s
rights and obligations with respect to its Percentage of the Aggregate Commitments. Any such
purchase shall have a purchase price equal to the outstanding principal amounts payable to such
Lender with respect to all Advances outstanding under this Agreement on the date of purchase, plus
any accrued and unpaid interest, fees and charges (including breakage charges, if any, up to such
date) in respect of such Lender’s Percentage of the Aggregate Commitments, and on other terms
reasonably satisfactory to the US Administrative Agent. Upon such purchase by the Replacement
Lender and payment of all other amounts owing to such Lender being replaced, such exiting Lender
shall no longer be a party to this Agreement or any rights or obligations under this Agreement and
the Replacement Lender shall succeed to the rights and obligations of the exiting Lender with
respect to the exiting Lender’s Percentage of the Aggregate Commitments.

     Section 5.6 Compensation. The applicable Borrower shall pay (without duplication of
amounts owing under other Sections of this Article V) to the Lenders, upon the request of
any Lender, such amount or amounts as shall be sufficient (in the reasonable opinion of the
US Administrative Agent) to compensate the Lenders for any actual loss, cost, or expense incurred
by them as a result of:

     (a) Any payment, prepayment or Conversion of a LIBOR Advance for any reason (including,
without limitation, the acceleration of the outstanding Advances pursuant to Section
12.2 or any payment pursuant to Section 5.5) on a date other than the last day
of an Interest Period for such Advance; or

     (b) Any failure by a Borrower for any reason (including, without limitation, the
failure of any conditions precedent specified in Article VII to be satisfied) to
borrow, Convert, or prepay a LIBOR Advance on the date for such borrowing, Conversion, or
prepayment, specified in the relevant notice of borrowing, prepayment, or Conversion under
this Agreement.

The US Administrative Agent shall furnish the applicable Borrower with a certificate setting forth
in reasonable detail the basis and amount of each request for compensation under this Section
5.6, and such Borrower shall not be obligated to pay under this Section 5.6 prior to
receipt of such certificate.

ARTICLE VI

Security

     Section 6.1 Collateral. To secure full and complete payment and performance of the
Obligations, the Borrowers and the Guarantors (as the case may be) have executed and delivered the
documents described below covering the property and collateral described in this Section
6.1 (which, together with any other property and collateral which may now or hereafter secure
the Secured Obligations or any part thereof, is sometimes herein called the “Collateral”):

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     (a) The US Borrower and the Domestic Subsidiaries (other than de minimus Subsidiaries)
have respectively executed the Pledge and Security Agreement pursuant to which such Persons
have granted to the US Administrative Agent for its benefit and for the benefit of the
Lenders a first priority security interest in (i) all of such Persons’ accounts accessions,
chattel paper, commercial tort claims, commodity accounts, commodity contracts, deposit
accounts, documents, equipment, financial assets, fixtures, general intangibles, goods,
instruments, intellectual property, inventory, investment property, letters of credit,
letter of credit rights, payment intangibles, licenses, permits, securities, securities
accounts, security entitlements, software, supporting obligations, cash and cash accounts,
(ii) 100% of the Capital Stock issued to such Persons by any Domestic Subsidiary or
Non-domestic Guarantor, (iii) 65% of the Capital Stock issued to such Persons by any
Non-domestic Subsidiary that is not a Non-domestic Guarantor; (iv) promissory notes made by
any Subsidiary payable to the order of the US Borrower or such Domestic Subsidiary, and
(v) all products and proceeds related to any of the above.

     (b) Collateral Securing Canadian Loans. The Canadian Borrower and the Foreign
Subsidiaries have respectively executed the Canadian Security Agreement, pursuant to which
such Persons have granted to the Canadian Administrative Agent for the benefit of the
Canadian Lenders a first priority security interest in (i) all of such Persons’ accounts
accessions, chattel paper, commercial tort claims, commodity accounts, commodity contracts,
deposit accounts, documents, equipment, financial assets, fixtures, general intangibles,
goods, instruments, intellectual property, inventory, investment property, letters of
credit, letter of credit rights, payment intangibles, licenses, permits, securities,
securities accounts, security entitlements, software, supporting obligations, cash and cash
accounts, (ii) 100% of the Capital Stock issued to such Persons by any Foreign Subsidiary,
(iii) promissory notes made by any Subsidiary payable to the order of the Canadian Borrower
or such Foreign Subsidiary, and (iv) all products and proceeds related to any of the above.

     (c) The Borrowers and the Guarantors shall execute or authenticate and cause to be
executed or authenticated, such further agreements, documents and instruments, including
without limitation, as applicable, financing statements under the UCC, as the
US Administrative Agent, in its sole discretion, deems necessary or desirable to create,
preserve, evidence, and perfect its liens and security interests in the Collateral.

     Section 6.2 Setoff. If an Event of Default shall have occurred and is continuing, the
Administrative Agents, the Issuing Lenders and the Lenders are each hereby authorized at any time
and from time to time, without notice to the Borrowers, (any such notice being hereby expressly
waived by the Borrowers), to set off and apply any and all deposits (general, time or demand,
provisional or final) at any time held and other indebtedness at any time owing by such Issuing
Lender, such Administrative Agent or such Lender to or for the credit or the account of the
US Borrower or the Canadian Borrower, as applicable against any and all of the obligations of the
US Borrower or the Canadian Borrower, as applicable now or hereafter existing under this Agreement,
the US Revolving Credit Notes, Canadian Notes, the Swing Line Notes or any other Loan Document,
irrespective of whether or not such Administrative Agent, such Issuing Lender or such Lender shall
have made any demand under this Agreement, the US Revolving Credit Notes, Canadian Notes, the Swing
Line Notes or any other Loan Document and although such

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Obligations may be unmatured. Each of the Issuing Lenders, the Administrative Agents and the
Lenders agree promptly to notify the US Borrower or the Canadian Borrower, as applicable (with a
copy to the Administrative Agents) after any such setoff and application, provided that the failure
to give such notice shall not affect the validity of such setoff and application. The rights and
remedies of the Issuing Lenders, the Administrative Agents and the Lenders hereunder are in
addition to other rights and remedies (including, without limitation, other rights of setoff) which
any Issuing Lender, any Administrative Agent and any Lender may have.

ARTICLE VII

Conditions Precedent

     Section 7.1 Conditions to Initial Advance. This Agreement is not effective, and the
obligation of any Lender to make the initial Advance or of any Issuing Lender to issue the initial
Letter of Credit is subject to the condition precedent that the US Administrative Agent shall have
received (or waived or postponed in writing the requirement that it receive) on or before the day
of such Advance or Letter of Credit issuance all of the items set forth below, in each case, in
form and substance satisfactory to the US Administrative Agent.

     (a) Certificate – US Borrower. A certificate of the Secretary or an Assistant
Secretary or other appropriate officer of the US Borrower certifying (i) resolutions of the
Board of Directors of the US Borrower which authorize the execution, delivery and
performance by the US Borrower of this Agreement and the other Loan Documents to which the
US Borrower is or is to be a party hereunder, (ii) the names and signatures of the officers
of the US Borrower authorized to sign this Agreement and each of the other Loan Documents to
which the US Borrower is or is to be a party hereunder, and (iii) that the attached
certificate of incorporation and the bylaws of the US Borrower are correct and complete
copies. The US Administrative Agent and the Lenders may conclusively rely on such
certificate until the US Administrative Agent receives notice in writing from the
US Borrower to the contrary.

     (b) Certificate – Canadian Borrower. A certificate of the Secretary or an
Assistant Secretary or other appropriate officer of the Canadian Borrower certifying (i)
resolutions of the general partner of the Canadian Borrower which authorize the execution,
delivery and performance by the Canadian Borrower of this Agreement and the other Loan
Documents to which the Canadian Borrower is or is to be a party hereunder, (ii) the names
and signatures of the officers of the Canadian Borrower authorized to sign this Agreement
and each of the other Loan Documents to which the Canadian Borrower is or is to be a party
hereunder, and (iii) that the attached certificate of incorporation and the bylaws of the
Canadian Borrower are correct and complete copies. The Canadian Administrative Agent and
the Canadian Lenders may conclusively rely on such certificate until the Canadian
Administrative Agent receives notice in writing from the Canadian Borrower to the contrary.

     (c) Certificate — Guarantors. A certificate of the Secretary or an Assistant
Secretary or other appropriate officer of each Guarantor certifying (i) resolutions of the
Board of Directors of such Guarantor or actions of any other body which authorize the

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execution, delivery and performance by such Guarantor of the Loan Documents to which
such Guarantor is or is to be a party hereunder, (ii) the names and signatures of the
officers of such Guarantor authorized to sign the Loan Documents to which such Guarantor is
or is to be a party hereunder, and (iii) that the articles or certificate of incorporation,
bylaws, partnership agreements, or other organizational documents of such Guarantor have not
been modified in any respect from the copies previously provided to the US Administrative
Agent and the Lenders in connection with the Existing Credit Agreement. The Administrative
Agents and the Lenders may conclusively rely on such certificate until they receive notice
in writing from such Guarantor to the contrary.

     (d) Governmental Certificates — Borrowers. Certificates of the appropriate
government officials of the state, province or territory of organization of each Borrower as
to the existence and good standing of such Borrower.

     (e) Governmental Certificates — Guarantors. Certificates of the appropriate
government officials of the jurisdiction of organization of each Guarantor as to the
existence and good standing of such Guarantor.

     (f) US Revolving Credit Notes. The US Revolving Credit Notes executed by the
US Borrower.

     (g) Canadian Notes. The Canadian Notes executed by the Canadian Borrower.

     (h) Swing Line Notes. The Swing Line Notes executed by the applicable
Borrower.

     (i) Pledge and Security Agreement. The Second Amended and Restated Pledge and
Security Agreement executed by the US Borrower and each Domestic Subsidiary other than
de minimus Subsidiaries and a Pledge and Security Agreement executed by each
Non-domestic Guarantor, if any.

     (j) Second Amended and Restated Guaranty Agreement — Domestic Guarantors. The
Second Amended and Restated Guaranty Agreement — Domestic Guarantors executed by each
Domestic Subsidiary other than de minimus Subsidiaries.

     (k) First Amended and Restated Guaranty Agreement — Foreign Guarantors. The
First Amended and Restated Guaranty Agreement — Foreign Guarantors executed by the US
Borrower and each Foreign Subsidiary.

     (l) Canadian Security Agreement. The Canadian Security Agreement executed by
the Canadian Borrower and the Foreign Subsidiaries.

     (m) Compliance Certificate. A Compliance Certificate, duly and properly
executed by an authorized officer of the US Borrower and dated as of the date of the initial
Advance.

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     (n) Opinion of US Borrower’s Counsel. A favorable opinion of legal counsel to
the US Borrower and the Guarantors organized in the United States in such form as the
US Administrative Agent may request, including without limitation opinions relating to the
Loan Documents.

     (o) Opinion of Canadian Borrower’s Counsel. A legal opinion of solicitors of
the Canadian Borrower and each Obligated Party domiciled in Canada or any province thereof
in such form as the US Administrative Agent may request.

     (p) Financial Statements. Projected consolidated financial statements of the
US Borrower and its Subsidiaries, including income statements, statements of cash flow, and
balance sheets, for the following five 12-month periods after the end of the immediately
preceding Fiscal Year (including the current Fiscal Year).

     (q) Fees. Payment of all fees required by the Fee Letter to be paid on or
prior to the Effective Date.

     (r) Insurance Certificates. Certificates showing the existence of all
insurance policies required by Section 9.5, naming the applicable Administrative
Agent as lender loss payee and additional insured.

     (s) UCC Searches. Uniform Commercial Code searches (as US Administrative Agent
shall deem necessary or appropriate) showing all financing statements on file against those
Domestic Subsidiaries that have changed their names or jurisdictions of organization since
December 17, 2001.

     (t) Landlord Waivers. Landlord lien waivers or subordinations, as the case may
be, with respect to each location of equipment and inventory of each of the Borrowers and
the Guarantors which is leased by either Borrower or any such Guarantor and for which a
landlord lien waiver or subordination is required by the US Administrative Agent in its sole
discretion, to the extent not previously delivered to the US Administrative Agent in
connection with the Existing Credit Agreement.

     (u) Stock Certificates. Stock certificates and blank stock powers with respect
to the Domestic Subsidiaries, to the extent not previously delivered to the US
Administrative Agent in connection with the Existing Credit Agreement.

     (v) Repay Debt. All outstanding Debt (other than that created under the
Existing Credit Agreement) shall have been repaid.

     Section 7.2 All Advances. The obligation of each Lender to make any Advance
(including the initial Advance) and of the Issuing Lenders to issue any Letter of Credit is subject
to the additional conditions precedent set forth below.

     (a) Items Required by Agreement. The US Administrative Agent shall have
received the items required by Section 4.1 and 4.10, as applicable.

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     (b) No Default. No Default or Event of Default shall have occurred and be
continuing, or would result from such Advance and/or Letter of Credit issuance, as
applicable.

     (c) Representations and Warranties. All of the representations and warranties
contained in Article VIII hereof and in the other Loan Documents shall be true and
correct on and as of the date of such Advance and/or Letter of Credit issuance, as
applicable with the same force and effect as if such representations and warranties had been
made on and as of such date, except for those that relate solely to a specific date or have
changed as a result of transactions permitted by this Agreement.

     (d) Material Adverse Effect. No Material Adverse Effect has occurred since the
effective date of the most current financial statements delivered to the US Administrative
Agent in accordance with Section 9.1 below.

     (e) Additional Documentation. The US Administrative Agent shall have received
such additional approvals, opinions, documents, agreements, instruments, or information as
the US Administrative Agent or its legal counsel may reasonably request.

Each request for a borrowing or issuance, renewal, extension or reissuance of a Letter of Credit by
either Borrower hereunder shall constitute a certification by such Borrower to the effect set forth
in Section 7.2(c) (as of the date of such notice).

ARTICLE VIII

Representations and Warranties

     To induce the Administrative Agents, the Issuing Lenders and the Lenders to enter into this
Agreement, the US Borrower represents and warrants to each such Person that:

     Section 8.1 Corporate Existence. Each Borrower and each Obligated Party (a) is a
corporation, partnership or limited liability company duly organized, validly existing, and in good
standing to the extent applicable under the laws of the jurisdiction of its incorporation or
organization; (b) has all requisite organizational power and authority to own its assets and carry
on its business as now being or as proposed to be conducted; and (c) is qualified to do business in
all jurisdictions in which the nature of its business makes such qualification necessary and where
failure to so qualify would have a Material Adverse Effect. Each Borrower and each Guarantor has
the corporation, partnership or limited liability company, as applicable, power and authority to
execute, deliver and perform its obligations under this Agreement and the other Loan Documents to
which it is or may become a party.

     Section 8.2 Projections; Financial Statements. All financial information delivered by
the US Borrower to the US Administrative Agent before the date of this Agreement has been prepared
by the US Borrower in good faith based upon reasonable assumptions consistent with each other and
all facts then known to the US Borrower. The US Borrower has delivered to the US Administrative
Agent audited consolidated financial statements of the US Borrower and its Subsidiaries as at and
for the Fiscal Year ended December 31, 2006 and its unaudited consolidated and consolidating
financial statements for the six month period ended June 30,

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2007. Such financial statements have been prepared in accordance with GAAP except as
expressly noted therein, and fairly present, on a consolidated basis, the financial condition of
the US Borrower and its Subsidiaries as of the respective dates indicated therein and the results
of operations for the respective periods indicated therein. Neither the US Borrower nor any of its
Subsidiaries has any material contingent liabilities, liabilities for taxes, unusual forward or
long-term commitments, or unrealized or anticipated losses from any unfavorable commitments except
as referred to or reflected on such financial statements. Since June 30, 2007, there has been no
event, occurrence or circumstance that has had a Material Adverse Effect.

     Section 8.3 Corporate Action: No Breach. The execution, delivery, and performance by
each Borrower and its Subsidiaries of the Loan Documents to which such Persons are or may become a
party and compliance with the terms and provisions hereof and thereof have been duly authorized by
all requisite organizational action on the part of such Persons and do not (a) violate or conflict
with, or result in a breach of, or require any consent under (i) the articles of incorporation or
bylaws or other organizational documents of such Persons, (ii) any applicable law, rule, or
regulation or any order, writ, injunction, or decree of any Governmental Authority or arbitrator,
or (iii) any material agreement or instrument to which the Borrowers or any of their Subsidiaries
is a party or by which any of them or any of their property is bound or subject, or (b) constitute
a default under any such agreement or instrument, or result in the creation or imposition of any
Lien (except as provided in Article VI) upon any of the revenues or assets of any Borrower
or any Subsidiary.

     Section 8.4 Operation of Business. Each Borrower and each of its Subsidiaries possess
all material licenses, permits, franchises, patents, copyrights, trademarks, and trade names, or
rights thereto, material necessary to conduct their respective businesses substantially as now
conducted and as presently proposed to be conducted, and each Borrower and each of its Subsidiaries
are not in violation of any valid rights of others with respect to any of the foregoing in any
respect that could reasonably be expected to have a Material Adverse Effect.

     Section 8.5 Litigation and Judgments. Except as disclosed on Schedule 8.5
hereto, there is no action, suit, investigation, or proceeding before or by any Governmental
Authority or arbitrator pending (in respect of which process has been served on either of the
Borrowers or any of their Subsidiaries), or to the knowledge of the President, Chief Executive
Officer or any Vice President of the US Borrower, threatened against or affecting the Borrowers or
any Subsidiary, that would, if adversely determined, have a Material Adverse Effect. There are no
outstanding judgments against either of the Borrowers or any Subsidiary, except as disclosed on
Schedule 8.5 hereto.

     Section 8.6 Rights in Properties: Liens. Each Borrower and each Subsidiary has good
and indefeasible title to or valid leasehold interests in all material respects in their respective
properties and assets, real and personal, including the properties, assets and leasehold interests
reflected in the financial statements described in Section 8.2, and none of the properties,
assets or leasehold interests of either of the Borrowers or any Subsidiary is subject to any Lien,
except as permitted by Section 10.2.

     Section 8.7 Enforceability. This Agreement constitutes, and the other Loan Documents
to which the Borrowers and their Subsidiaries are party, when delivered, shall

51

 

constitute legal, valid, and binding obligations of each of the Borrowers and their
Subsidiaries as applicable, enforceable against such Borrowers and its Subsidiaries as applicable,
in accordance with their respective terms, except as limited by bankruptcy, insolvency, or other
laws of general application relating to the enforcement of creditors’ rights and by general
equitable principles.

     Section 8.8 Approvals. No authorization, approval, or consent of, and no filing or
registration with, any Governmental Authority or third party is or will be necessary for the
execution, delivery, or performance by the Borrowers and their Subsidiaries of the Loan Documents
to which such Borrower and its Subsidiaries are or may become a party or the validity or
enforceability thereof, except for filings and recordings in respect of the Liens created pursuant
to Loan Documents and appropriate filings with the SEC.

     Section 8.9 Debt. The Borrowers and their Subsidiaries have no Debt, except Debt
permitted by Section 10.1.

     Section 8.10 Taxes. Each Borrower and each Subsidiary have filed all tax returns
(federal, state, local and foreign) required to be filed, including all income, franchise,
employment, property, and sales tax returns, and have paid all of their respective liabilities for
taxes, assessments, governmental charges and other levies that are due and payable, in each case
except for those contested in good faith by appropriate proceedings and for which appropriate
reserves in accordance with GAAP are being maintained. Except as set forth on Schedule
8.10, neither of the Borrowers know of any pending investigation of either of the Borrowers or
any Subsidiary by any taxing authority or of any pending but unassessed tax liability of either of
the Borrowers or any Subsidiary.

     Section 8.11 Use of Proceeds: Margin Securities. Neither of the Borrowers nor any
Subsidiary is engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock (within the meaning of
Regulations U, or X of the Board of Governors of the Federal Reserve System), and no part of the
proceeds of any Advance will be used to purchase or carry any margin stock or to extend credit to
others for the purpose of purchasing or carrying margin stock.

     Section 8.12 ERISA. The US Borrower and each Subsidiary are in compliance with all
applicable provisions of ERISA and the applicable provisions of the Code relating thereto. No
Reportable Event which is required to be reported to the PBGC pursuant to Section 4043(b) of ERISA
or Prohibited Transaction which could reasonably be expected to have a Material Adverse Effect has
occurred and is continuing with respect to any Plan. No notice of intent to terminate a Plan has
been filed, nor has any Plan been terminated. No circumstances exist which constitute grounds
entitling the PBGC to institute proceedings to terminate, or appoint a trustee to administer, a
Plan, nor has the PBGC instituted any such proceedings. Neither the US Borrower nor any ERISA
Affiliate (nor any predecessor to the US Borrower or any ERISA Affiliate) has completely or
partially withdrawn from a Multiemployer Plan. The US Borrower and each ERISA Affiliate have met
their minimum funding requirements under ERISA with respect to all of their Plans, and the present
value of all vested benefits under each Plan do not exceed the fair market value of all Plan assets
allocable to such benefits, as determined on the most recent valuation date of the Plan and in
accordance with ERISA. Neither the US Borrower nor any ERISA Affiliate has incurred any liability
to the PBGC under ERISA.

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     Section 8.13 Disclosure. No statement, information, report, representation, or
warranty made by either of the Borrowers or any of their Subsidiaries in this Agreement or in any
other Loan Document or furnished to any Administrative Agent or any Lender in connection with this
Agreement or any of the transactions contemplated hereby (but excluding all projections and pro
forma financial statements which shall have been prepared in good faith and based upon reasonable
assumptions) contains any untrue statement of a material fact and all such statements, information,
reports, representations and warranties, taken as a whole, do not omit to state any material fact
necessary to make the statements herein or therein not materially misleading. There is no fact
known to either of the Borrowers or any of their Subsidiaries which has a Material Adverse Effect,
or which could reasonably be expected to have, in the reasonable judgment of the US Borrower, in
the future a Material Adverse Effect, that has not been disclosed in writing to the
US Administrative Agent.

     Section 8.14 Subsidiaries. Neither Borrower has any Subsidiary other than those
listed on Schedule 8.14 hereto, and Schedule 8.14 lists the jurisdiction of
organization or incorporation of each Subsidiary and the percentage of such Borrower’s and its
Subsidiaries’ ownership of the outstanding voting stock or other similar interests of each such
Subsidiary. All of the outstanding Capital Stock of each Subsidiary has been validly issued, is
fully paid, and is nonassessable.

     Section 8.15 Agreements. Except as disclosed in SEC filings, neither the US Borrower
nor any Guarantor is a party to any indenture, loan, or credit agreement, or to any lease or other
agreement or instrument, or subject to any charter or corporate restriction which could reasonably
be expected to have a Material Adverse Effect. Neither the US Borrower nor any Guarantor is in
default in any respect in the performance, observance, or fulfillment of any of the obligations,
covenants, or conditions contained in any agreement or instrument material to its business to which
it is a party where such default or the effect thereof could reasonably be expected to result in a
Material Adverse Effect.

     Section 8.16 Compliance with Laws. Neither of the Borrowers nor any Subsidiary is in
violation of any law, rule, regulation, order, or decree of any Governmental Authority or
arbitrator except where such Person’s failure to do so could not reasonably be expected to result
in a Material Adverse Effect.

     Section 8.17 Investment Company Act. Neither the US Borrower nor any Subsidiary is an
“investment company” within the meaning of, or “controlled by” an “investment company” within the
meaning of, the Investment Company Act of 1940, as amended.

     Section 8.18 Environmental Matters. Except as disclosed on Schedule 8.18
hereto:

               (a) The US Borrower, each Subsidiary, and all of their respective properties, assets,
and operations are in full compliance with all Environmental Laws, except for occurrences of
noncompliance which could not in the aggregate, reasonably be expected to have a Material
Adverse Effect. The US Borrower is not aware of, nor has the US Borrower received notice
of, any past, present, or future conditions, events, activities, practices, or incidents
which may interfere with or prevent the compliance or continued compliance of the
US Borrower and its Subsidiaries with all Environmental Laws, except

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for occurrences of noncompliance which could not in the aggregate, reasonably be
expected to have a Material Adverse Effect;

               (b) The US Borrower and each Subsidiary have obtained all permits, licenses, and
authorizations that are required under applicable Environmental Laws, and all such permits
are in effect and the US Borrower and its Subsidiaries are in compliance with all of the
terms and conditions of such permits, except where failure to obtain or comply with such
permits, licenses or authorizations could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect;

               (c) No Hazardous Materials exist on, about, or within or have been used, generated,
stored, transported, disposed of on, or Released from any of the properties or assets of the
US Borrower or any Subsidiary except (i) in amounts that, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect and (ii) for dynamite and
other explosives for which such Person possesses all licenses and permits necessary to
comply with all Environmental Laws and other federal, state, local and foreign laws,
regulations and requirements pertaining to the use, possession, disposal, storage or sale
thereof, and such use, possession, disposal, storage or sale thereof is in compliance with
Environmental Laws and such other laws, regulations and requirements except where failure to
obtain or comply with such licenses or permits or to comply with such laws, regulations or
requirements could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect;

               (d) Neither the US Borrower nor any of its Subsidiaries nor any of their respective
currently or previously owned or leased properties or operations is subject to any
outstanding or, to the best of its knowledge, threatened order from or agreement with any
Governmental Authority or other Person or subject to any judicial or docketed administrative
proceeding with respect to (i) failure to comply with Environmental Laws, (ii) Remedial
Action, or (iii) any Environmental Liabilities arising from a Release or threatened Release,
which, in the aggregate, could reasonably be expected to have a Material Adverse Effect;

               (e) There are no conditions or circumstances associated with the currently or
previously owned or leased properties or operations of the US Borrower or any of its
Subsidiaries that could reasonably be expected to have a Material Adverse Effect;

               (f) Neither the US Borrower nor any of its Subsidiaries is a treatment, storage, or
disposal facility requiring a permit under the Resource Conservation and Recovery Act, 42
U.S.C. § 6901 et. seq. regulations thereunder or any comparable provision of state
law. The US Borrower and its Subsidiaries are in compliance with all applicable financial
responsibility requirements of all Environmental Laws except where failure to be in such
compliance could not reasonably be expected to have a Material Adverse Effect;

               (g) Neither the US Borrower nor any of its Subsidiaries has filed or failed to file any
notice required under applicable Environmental Law reporting a Release, which

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Release or any aggregation thereof, or failure to file, could reasonably be expected to
have a Material Adverse Effect; and

               (h) To the best of the US Borrower’s knowledge, no Lien arising under any Environmental
Law has attached to any property or revenues of the US Borrower or its Subsidiaries.

ARTICLE IX

Affirmative Covenants

     The US Borrower covenants and agrees that, as long as the Obligations or any part thereof are
outstanding or any Lender has any commitment to lend hereunder or any Issuing Lender has any
obligation to issue any Letter of Credit hereunder or any Letter of Credit Liabilities exist, the
US Borrower will perform and observe, or cause to be performed and observed, the following
covenants:

     Section 9.1 Reporting Requirements. The US Borrower will furnish the items set forth
below to the US Administrative Agent for distribution to the Lenders:

               (a) Annual Financial Statements. As soon as available, but in any event no
later than the earlier of (i) five days after filing the US Borrower’s Form 10—K Annual
Report with the SEC, or (ii) 90 days after the end of the US Borrower’s Fiscal Year, the
US Borrower’s Form 10-K Annual Report, including (i) the consolidated balance sheets of the
US Borrower and its Subsidiaries, as of the end of such Fiscal Year and (ii) the
consolidated statements of earnings of the US Borrower and its Subsidiaries and consolidated
statements of changes in shareholders’ equity of the US Borrower and its Subsidiaries, and
statements of changes in cash flows of the US Borrower and its Subsidiaries as of and
through the end of such Fiscal Year, all of which are prepared in accordance with GAAP, and
certified by independent certified public accountants acceptable to the US Administrative
Agent, whose opinion shall be in scope and substance in accordance with generally accepted
auditing standards and shall be unqualified. Additionally, concurrent with delivery of the
information described above, the US Borrower shall deliver (A) the unaudited consolidating
balance sheets of the US Borrower and its Subsidiaries, as of the end of such Fiscal Year
and (B) the unaudited consolidating statements of earnings of the US Borrower and its
Subsidiaries and consolidating statements of changes in shareholders’ equity of the
US Borrower and its Subsidiaries and statements of changes in cash flows of the US Borrower
and its Subsidiaries as of and through the end of such Fiscal Year, all of which are
prepared in accordance with GAAP, and certified by the chief financial officer, chief
accounting officer, or another officer of the US Borrower acceptable to the
US Administrative Agent.

               (b) Quarterly 10-Q of the US Borrower. As soon as available, but in any event
no later than the earlier of (i) five days after filing the US Borrower’s Form 10-Q
Quarterly Report with the SEC, or (ii) 45 days after the end of each Fiscal Quarter of the
US Borrower, the US Borrower’s Form 10-Q Quarterly Report, including (i) the

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consolidated and consolidating balance sheets of the US Borrower and its Subsidiaries,
as of the end of such Fiscal Quarter and (ii) the consolidated and consolidating statements
of earnings of the US Borrower and its Subsidiaries and consolidated and consolidating
statements of changes in shareholders’ equity of the US Borrower and its Subsidiaries, and
statements of changes in cash flows of the US Borrower and its Subsidiaries as of and
through the end of such Fiscal Quarter, all of which are prepared in accordance with GAAP,
and certified by the chief financial officer, chief accounting officer, or another officer
of the US Borrower acceptable to the US Administrative Agent.

               (c) Compliance Certificate. Concurrently with the delivery of the Form 10-K’s
or Form 10-Q’s, as applicable, referred to in subsections 9.1(a) and 9.1(b),
a Compliance Certificate of the chief financial officer, the chief accounting officer, the
treasurer or the assistant treasurer of the US Borrower or another officer of the
US Borrower acceptable to the US Administrative Agent (i) stating, among other things, that
no Default or Event of Default has occurred and is continuing, or if a Default or Event of
Default has occurred and is continuing, a statement as to the nature thereof and the action
which is proposed to be taken with respect thereto, and (ii) showing in reasonable detail
the calculations demonstrating compliance with Article XI.

               (d) Annual Projected Financial Statements and Capital Expenditure Projections.
As soon as available, but in any event no later than 90 days after the end of each Fiscal
Year of the US Borrower, projected financial statements for the upcoming Fiscal Year of the
US Borrower and its Subsidiaries and for each Fiscal Year thereafter through and including
the Fiscal Year in which the Termination Date occurs, including projected Capital
Expenditures, in form and detail satisfactory to the US Administrative Agent and prepared
under the supervision of the chief financial officer or the chief accounting officer of the
US Borrower or another officer of the US Borrower acceptable to the US Administrative Agent.

               (e) Notice of Litigation. Promptly after the service of process or notice
thereof, notice of all actions, suits, and proceedings before any Governmental Authority or
arbitrator affecting either Borrower or any Subsidiary which could reasonably be expected to
have a Material Adverse Effect.

               (f) Notice of Default. As soon as possible and in any event within two days
after any of the chief executive officer, the chief financial officer, the chief accounting
officer, the treasurer or any other employee serving in a comparable capacity (regardless of
title) of either of the Borrowers or any Guarantor obtains any knowledge, becomes aware or
should have known through the exercise of prudent business judgment of the occurrence of any
Default, a written notice setting forth the details of such Default and the action that the
US Borrower has taken and proposes to take with respect thereto.

               (g) ERISA Reports. Upon the request of the US Administrative Agent from time
to time copies of all reports, including annual reports, and notices which the US Borrower
or any Subsidiary files with or receives from the PBGC, the US Department of Labor under
ERISA or the Internal Revenue Service under the Code; and as soon as possible and in any
event within five days after the US Borrower or any

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Subsidiary knows or has reason to know that any Reportable Event which is required to
be reported to the PBGC pursuant to Section 4043 (b) of ERISA or Prohibited Transaction
which could be reasonably expected to have a Material Adverse Effect has occurred with
respect to any Plan or that the PBGC or the US Borrower or any Subsidiary has instituted or
will institute proceedings under Title IV of ERISA to terminate any Plan, a certificate of
the chief financial officer of the US Borrower setting forth the details as to such
Reportable Event or Prohibited Transaction or Plan termination and the action that the
US Borrower proposes to take with respect thereto.

               (h) Notice of Material Adverse Effect. As soon as possible and in any event
within two days after any of the chief executive officer, the chief financial officer, the
chief accounting officer, the treasurer or any other employee serving in a comparable
capacity (regardless of title) of either of the Borrowers or any Guarantor obtains any
knowledge, becomes aware or should have known through the exercise of prudent business
judgment of the occurrence thereof, written notice of any matter that could reasonably be
expected to have a Material Adverse Effect.

               (i) Notice of Actual or Contingent Liabilities. As soon as possible, and in
any event within two Business Days after any of the chief executive officer, the chief
financial officer, the chief accounting officer, the treasurer or any other employee serving
in a comparable capacity (regardless of title) of either of the Borrowers or any Guarantor
obtains any knowledge, becomes aware or should have known through the exercise of prudent
business judgment of the occurrence thereof, written notice of any actual or contingent
liabilities which, if resolved adversely to such Person could reasonably be expected to have
a Material Adverse Effect.

               (j) General Information. Within such a time period as US Administrative Agent
may reasonably request, such additional information and statements, lists of assets and
liabilities, tax returns, financial statements, reporting statements and any other reports
with respect to the US Borrower’s or any Subsidiary’s financial condition, business
operations and properties as the US Administrative Agent may reasonably request from time to
time.

     Section 9.2 Maintenance of Existence: Conduct of Business. Except as provided in
Section 10.3, each Borrower will preserve and maintain, and will cause each Guarantor to
preserve and maintain, its corporate existence and all of its leases, privileges, licenses,
permits, franchises, qualifications, and rights that are necessary or desirable in the ordinary
conduct of its business. Each Borrower will conduct, and will cause each Subsidiary to conduct,
its businesses in an orderly and efficient manner in accordance with good business practices.

     Section 9.3 Maintenance of Properties. Subject to Sections 10.3 and
10.6, each Borrower will maintain, keep, and preserve, and cause each Subsidiary to
maintain, keep, and preserve, in all material respects, all of its properties (tangible and
intangible) necessary in the proper conduct of its business in good working order and condition
(ordinary wear and tear excepted).

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     Section 9.4 Taxes and Claims. Each Borrower will pay or discharge, and will cause
each Subsidiary to pay or discharge, at or before maturity or before becoming delinquent all
material taxes, levies, assessments, and governmental charges imposed on it or its income or
profits or any of its property; provided, however, that neither of the Borrowers nor any Subsidiary
shall be required to pay or discharge any tax, levy, assessment, or governmental charge which is
being contested in good faith by appropriate proceedings diligently pursued, and for which adequate
reserves have been established to the extent required by GAAP.

     Section 9.5 Insurance.

               (a) Each Borrower will maintain, and will cause each Subsidiary to maintain, insurance
with financially sound and reputable insurance companies in such amounts and covering such
risks as is usually carried by corporations engaged in similar businesses and owning similar
properties in the same general areas in which the Borrowers and their Subsidiaries operate,
provided that in any event each Borrower will maintain and will cause each Subsidiary to
maintain workmen’s compensation insurance, property insurance, comprehensive general
liability insurance, and business interruption insurance with respect to processing centers
in accordance with such Borrower’s and such Subsidiaries’ current practices reasonably
satisfactory to the US Administrative Agent.

               (b) Certificates of insurance, and endorsements and renewals thereof shall be delivered
by each Borrower to and retained by the US Administrative Agent. All policies of
(i) property insurance with respect to the US Collateral either shall have attached thereto
a lender’s loss payable endorsement in favor of the US Administrative Agent for its benefit
and the ratable benefit of the US Lenders or name the US Administrative Agent as loss payee
for its benefit and the ratable benefit of the Secured Parties, in either case, in form
reasonably satisfactory to the US Administrative Agent, (ii) property insurance with respect
to the Canadian Collateral either shall have attached thereto a lender’s loss payable
endorsement in favor of the Canadian Administrative Agent for its benefit and the ratable
benefit of the Canadian Lenders or name the Canadian Administrative Agent as loss payee for
its benefit and the ratable benefit of the Secured Parties, in either case, in form
reasonably satisfactory to the Canadian Administrative Agent, and (iii) liability insurance
shall name the US Administrative Agent for its benefit and the ratable benefit of the
US Lenders as an additional insured. All certificates of insurance shall set forth the
coverage, the limits of liability, the name of the carrier, the policy number, and the
period of coverage. All such policies shall contain a provision that notwithstanding any
contrary agreements between a Borrower, its Subsidiaries, and the applicable insurance
company, such policies will not be canceled or allowed to lapse without renewal without at
least 30 days’ prior written notice to the applicable Administrative Agent. In the event
that, notwithstanding the “lender’s loss payable endorsement” requirement of this section,
the proceeds of any insurance policy described above are paid to a Borrower or a Guarantor,
such Borrower shall deliver, or cause to be delivered, such proceeds to the applicable
Administrative Agent immediately upon receipt.

     Section 9.6 Inspection Rights. At any reasonable time during business hours and from
time to time, each Borrower will permit, and will cause each Subsidiary to permit,

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representatives of the Administrative Agents, the Lenders and the Issuing Lenders to examine,
copy, and make extracts from its books and records, to visit and inspect its properties, and to
discuss its business, operations, and financial condition with its officers, employees, and
independent certified public accountants. So long as no Default or Event of Default is then
existing, the applicable Administrative Agent shall provide prior notice of such inspection to
Borrowers.

     Section 9.7 Keeping Books and Records. Each Borrower will maintain, and will cause
each Subsidiary to maintain, proper books of record and account in which full, true, and correct
entries in conformity with GAAP shall be made of all dealings and transactions in relation to its
business and activities.

     Section 9.8 Compliance with Laws. Each Borrower will comply, and will cause each
Subsidiary to comply with all applicable laws, rules, regulations, orders, and decrees of any
Governmental Authority or arbitrator if its failure to comply could reasonably be expected to
result in a Material Adverse Effect.

     Section 9.9 Compliance with Agreements. Each Borrower will comply, and will cause
each Subsidiary to comply with all agreements, contracts, and instruments binding on it or
affecting its properties or business if its failure to comply could reasonably be expected to
result in a Material Adverse Effect.

     Section 9.10 Further Assurances. Each Borrower will, and will cause each Subsidiary
to, execute and deliver such further agreements and instruments and take such further action as may
be requested by the either Administrative Agent or any Lender to carry out the provisions and
purposes of this Agreement and the other Loan Documents to create, preserve, and perfect the Liens
of the Administrative Agents in the Collateral.

     Section 9.11 ERISA. The US Borrower will comply, and will cause each Subsidiary to
comply, with all minimum funding requirements, and all other material requirements of ERISA and the
applicable provisions of the Code relating thereto, if applicable, so as not to give rise to any
liability thereunder if its failure to comply could reasonably be expected to result in a Material
Adverse Effect.

     Section 9.12 Additional Subsidiaries as Guarantors: Execution of Additional Security
Agreements–Guarantors.

               (a) Each Borrower will cause each Subsidiary created or acquired after the Effective
Date, or which after the Effective Date is no longer a de minimus
Subsidiary, to execute a Guaranty Supplement in substantially the form of Exhibit A
to the Guaranty Agreement–Domestic if such Subsidiary is a Domestic Subsidiary, a Guaranty
Agreement–Foreign if such Subsidiary is a Foreign Subsidiary or a Guaranty
Agreement-Non-domestic if such Subsidiary is a Non-domestic Subsidiary. Each Borrower will
cause each such Subsidiary to deliver such Guaranty Agreement to the applicable
Administrative Agent.

               (b) Contemporaneously with the delivery by any Subsidiary of a Guaranty Agreement
pursuant to paragraph (a) of this Section 9.12, such Subsidiary will execute

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and deliver to the US Administrative Agent (i) a Security Agreement Supplement in
substantially the form of Exhibit G to the Pledge and Security Agreement if such
Subsidiary is a Domestic Subsidiary or a Non-domestic Guarantor and on a form satisfactory
to the Canadian Administrative Agent if the Subsidiary is a Foreign Subsidiary, and
(ii) uniform commercial code or other applicable financing statements or documents with
respect to security interest granted by the document executed in connection with clause (i)
or (ii) of this Section 9.12(c), as applicable. Any such Subsidiary shall be deemed
a Guarantor five Business Days following the date on which such Subsidiary delivers the
documents described above to the applicable Administrative Agent.

     Section 9.13 Continuity of Operations. Subject to Sections 10.3 and
10.6, each Borrower will continue to conduct, and will cause each of the Guarantors to
continue to conduct, its primary businesses as conducted as of the Effective Date and to continue
its operations in such businesses.

     Section 9.14 Intercompany Notes.

               (a) All loans and other advances made by either of the Borrowers or any of their
Subsidiaries to either of the Borrowers or any of such Borrower’s other Subsidiaries shall
be evidenced by an Intercompany Note.

               (b) Each Intercompany Note shall be (i)  subordinated to the Notes on terms and
conditions reasonably satisfactory to the Required Lenders; and (ii) collaterally assigned
to the US Administrative Agent (as agent for the other Lenders).

               (c) No Intercompany Note shall be renewed, extended, amended, restated, replaced, or
otherwise modified without the Required Lenders’ prior written consent.

ARTICLE X

Negative Covenants

     The US Borrower covenants and agrees that, as long as the Obligations or any part thereof are
outstanding or any Lender has any commitment to lend hereunder or any Issuing Lender has any
obligation to issue any Letter of Credit hereunder or any Letter of Credit Liabilities exist, the
US Borrower will perform and observe, or cause to be performed and observed, the following
covenants:

     Section 10.1 Debt. The US Borrower will not incur, create, assume, or permit to
exist, and will not permit any Subsidiary to incur, create, assume, or permit to exist, any Debt,
except:

               (a) Debt and Contingent Liabilities pursuant to the Loan Documents;

               (b) Extensions, renewals, refundings, amendments or replacements of Debt permitted by
clause (a) above or clause (c) below provided that no such extension, renewal, refunding or
replacement shall (i) if such Debt is Subordinated Debt, amend or modify any subordination
provisions, if any, contained in the original Debt so that the

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Debt, as extended, renewed or replaced, is no longer Subordinated Debt, (ii) shorten
the fixed maturity the Debt being refinanced, (iii) increase the principal amount of the
Debt being refinanced by an amount greater than the lesser of (A) reasonable fees and
expenses incurred in connection with such refinancing and (B) an amount equal to five
percent (5.00%) of the principal amount of the Debt being refinanced, or (iv) increase the
rate of interest to a rate greater than the current market rate at the time of the
extension, renewal, refunding, or replacement of the original Debt;

               (c) Senior unsecured Debt and Subordinated Debt so long as (i) the US Borrower has
delivered a Compliance Certificate concurrently with the issuance thereof demonstrating pro
forma compliance with Sections 11.1, 11.2 and 11.3 of this
Agreement, (ii) the covenants and financial ratios under instruments or agreements governing
such Debt are not more restrictive than such covenants under this Agreement as reasonably
determined by the US Administrative Agent, (iii) the scheduled maturity of such Debt is at
least 30 days past the scheduled Termination Date and no amortization payments, mandatory
prepayments, or repurchases of such Debt are required thereunder other than at the scheduled
maturity thereof, and (iv) the US Borrower and its Subsidiaries are in compliance with the
covenants set forth in this Agreement, both before and after giving effect to each
incurrence of such Debt;

               (d) The following secured Debt: provided that, the aggregate principal amount of all
such Debt shall not exceed 10% of the US Borrower’s consolidated Net Worth at any time and
neither the US Borrower nor any Subsidiary may enter into additional Debt of the type
described in this clause (d) if a Default or Event of Default is continuing or entering into
the additional Debt could reasonably be expected to cause or result in a Default or Event of
Default:

                    (i) purchase money Debt or Capital Leases; and

                    (ii) Existing Debt and Contingent Liabilities described on Schedule
10.1 hereto;

               (e) Debt of the US Borrower to a Guarantor that is a Domestic Subsidiary other than a
de minimus Subsidiary or of a Guarantor to the US Borrower, so long as such
Debt is evidenced by an Intercompany Note;

               (f) Debt of the US Borrower to a Subsidiary which is not a Domestic Subsidiary and a
Guarantor or of a Subsidiary to another Subsidiary which is not a Domestic Subsidiary and a
Guarantor so long as such Debt is evidenced by an Intercompany Note and does not exceed
$2,000,000, in the aggregate outstanding at any time;

               (g) Obligations of the US Borrower or any Subsidiary under real estate leases entered
into in the ordinary course of business;

               (h) Contingent Obligations under any guaranty by the US Borrower or any Subsidiary of
obligations as lessee under any lease which is otherwise permitted under this Agreement;

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               (i) Debt constituting deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and appeal bonds and
performance bonds and other obligations of a like nature that are incurred in the ordinary
course of business, not to exceed $2,000,000 in the aggregate at any time outstanding;

               (j) Indemnities arising under agreements entered into by the US Borrower or any
Obligated Party in the ordinary course of business; and

               (k) Debt arising on account of deferred Taxes, deferred workers compensation
liabilities or deferred employee medical liabilities.

     Section 10.2 Limitation on Liens. The US Borrower will not incur, create, assume, or
permit to exist, and will not permit any Obligated Party to incur, create, assume, or permit to
exist, any Lien upon any of their respective properties, assets, or revenues, whether now owned or
hereafter acquired, except the following (herein referred to as “Permitted Liens”):

               (a) Liens in favor of the Administrative Agents for the Secured Parties;

               (b) Encumbrances consisting of minor easements, zoning restrictions, or other
restrictions on the use of property that do not (individually or in the aggregate)
materially affect the value of the assets encumbered thereby or materially impair the
ability of the US Borrower or any Obligated Party to use such assets in their respective
businesses;

               (c) Liens for taxes, assessments, or other governmental charges which are not
delinquent for longer than 90 days or which are being contested in good faith and for which
adequate reserves have been established;

               (d) Liens of landlords, tenants, vendors, mechanics, materialmen, warehousemen,
carriers, or other similar statutory Liens securing obligations that are not delinquent for
longer than 90 days and are incurred in the ordinary course of business or which are being
contested in good faith and for which adequate reserves have been established;

               (e) Liens resulting from good faith deposits to secure payments of workmen’s
compensation or other social security programs or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, or contracts (other than for payment
of Debt), or leases made in the ordinary course of business;

               (f) Liens incurred in connection with Debt permitted under Section 10.1(d), so
long as such Liens only extend to the assets being acquired with the proceeds of such Debt
and do not extend to any inventory;

               (g) Inchoate Liens arising under ERISA;

               (h) Rights of set-off or banker’s liens created by law in favor of commercial banks;

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               (i) Liens to be discharged and released on the Effective Date; and

               (j) precautionary UCC filings regarding operating leases entered into in the ordinary
course of business.

     Section 10.3 Mergers, Dissolutions, Etc. The US Borrower will not, and will not
permit any Subsidiary to, be a party to any merger or consolidation, or purchase or otherwise
acquire all or substantially all of the assets or any stock of any class of, or any partnership or
joint venture interest in, any other Person, or sell, transfer, convey or lease all or any
substantial part of its assets, or sell or assign with or without recourse any receivables, except
for the following:

               (a) any other such merger or consolidation, sale, transfer, conveyance, lease or
assignment of or by any Subsidiary of the US Borrower into the US Borrower or into, with or
to any other Subsidiary of the US Borrower; provided that (i) if such event involves the
US Borrower, the US Borrower shall be the surviving entity, (ii) if such event involves a
Guarantor, a Guarantor shall be the surviving entity and shall guarantee the Obligations
that were guaranteed by the prior entity, and (iii) no Default or Event of Default shall
exist at such time;

               (b) any such purchase or other acquisition by the US Borrower of the assets or stock of
any Guarantor or any Subsidiary of the US Borrower, or by any Guarantor of the assets or
stock of any Subsidiary of the US Borrower;

               (c) any such merger or consolidation of the US Borrower or a Subsidiary of the
US Borrower into, with or to any other Person or any such purchase or other acquisition by
the US Borrower or any Subsidiary of the US Borrower of the assets or stock of any other
Person in similar or related businesses where (i) the transaction is not hostile;
(ii) immediately before and immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing; (iii) the US Borrower and its
Subsidiaries, taken as a whole, are in pro forma compliance with all the terms and
conditions of this Agreement, including without limitation the financial covenants set forth
in Article XI taking into account such purchase or acquisition; (iv) such Person (or
its board of directors or similar body) has approved such acquisition or other purchase; and
(v) if, after giving effect to such purchase or other acquisition, the Leverage Ratio is
greater than 2.50 to 1.00 (based on the most recent financial statements in Administrative
Agents’ possession), then for such transactions under this clause (v) taking into account
and including all such transactions in any Fiscal Year, the aggregate consideration to be
paid or Debt incurred (or assumed) by the US Borrower and its Subsidiaries in connection
with all such purchases or acquisitions is not greater than $50,000,000; and (vi) prior to
the consummation of any such purchase or acquisition, the US Borrower delivers to the
US Administrative Agent evidence satisfactory to the US Administrative Agent that, after
giving effect to such purchase or acquisition, the amount available to be borrowed pursuant
to Section 2.1 of this Agreement shall be greater than or equal to $15,000,000;

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               (d) investments in joint ventures, partnerships and other entities not exceeding in the
aggregate $20,000,000; and

               (e) transactions permitted under Section 10.6.

     Section 10.4 Loans and Investments. The US Borrower will not make, and will not
permit any Subsidiary to make, any advance, loan, extension of credit, or capital contribution to
or investment in, or purchase, or permit any Subsidiary to purchase, any stock, bonds, notes,
debentures or other securities of, any Person, except:

               (a) advances or loans to, or investments in, Subsidiaries (other than the US Borrower
and the Guarantors), so long as such advances, loans, or investments made after the
Effective Date do not exceed, in the aggregate, $500,000;

               (b) any bonds or other obligations of the United States of America which, as to
principal and interest, constitute direct obligations or are guaranteed by the United States
of America;

               (c) any bonds, debentures, participation certificates, notes or other obligations of
any agency or corporation or instrumentality of the United States of America, the
obligations of which are unconditionally guaranteed by the United States of America;

               (d) interest bearing accounts, interest bearing deposits, Eurodollar investments, or
certificates of deposit issued by or bankers acceptances drawn or accepted by, banks or
trust companies, including the Administrative Agents, organized under the laws of the United
States or any state thereof, but only with institutions whose capital and surplus is in
excess of $500,000,000;

               (e) investments described in Section 10.3(d); and

               (f) advances or loans to any employee of the US Borrower or any Subsidiary (i) in the
ordinary course of business consistent with past practices for travel and entertainment
expenses, relocation costs and similar purposes of up to $150,000 for any employee and up to
$500,000 in the aggregate at any one time outstanding, and (ii) to finance the exercise of
stock options up to $200,000 for any employee and up to $500,000 in the aggregate at any one
time outstanding.

     Section 10.5 Transactions With Affiliates. Except as disclosed on Schedule
10.5, the US Borrower will not enter into, and will not permit any Subsidiary to enter into,
any transaction, including, without limitation, the purchase, sale, or exchange of property or the
rendering of any service, with any Affiliate of the US Borrower or any Subsidiary, except in the
ordinary course of and pursuant to the reasonable requirements of the US Borrower’s or such
Subsidiary ‘s business and upon fair and reasonable terms no less favorable to the US Borrower or
such Subsidiary than would be obtained in a comparable arm’s-length transaction with a Person not
an Affiliate of the US Borrower or such Subsidiary; provided that the foregoing shall not prohibit
the US Borrower or the Subsidiaries from entering into management contracts with Affiliates upon
fair and reasonable terms in the ordinary course of business or from entering into transactions
permitted by this Agreement.

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     Section 10.6 Disposition of Assets. Subject to Sections 9.2, 9.3 and
10.3, the US Borrower will not sell, lease, assign, transfer, or otherwise dispose of any
of its assets, nor permit any Subsidiary to do so with any of its assets, except (a) dispositions
of inventory in the ordinary course of business, (b) transfers of condemned Property to the
Governmental Authority that has condemned such Property, (c) transfers of Property that have been
subject to casualty, (d) licenses or sublicenses of software in the ordinary course of business,
and (e) without duplication of clauses (a) through (d) above, dispositions of Property of the
US Borrower and the Subsidiaries made in the best business judgment of the US Borrower, if (i) no
Event of Default has occurred and is continuing, (ii) no Event of Default would arise as a result
of any such disposition, (iii) the aggregate book value of all such assets disposed of in reliance
on this Section 10.6(e) shall not exceed in any Fiscal Year 10% of the US Borrower’s
consolidated Net Worth, and (iv) the US Borrower shall have delivered to the US Administrative
Agent (a) a summary of (x) the terms of the proposed disposition, including without limitation, a
description of the Property to be sold, the current book value of such Property by class, and the
consideration received for such Property, and (y) the effect of such disposition on the
US Borrower’s trailing twelve-month financial performance; and (b) to the extent such disposition
consists of a sale of a Subsidiary (or a division of any Subsidiary), consolidating,
company-prepared financial statements of US Borrower and its Subsidiaries (both including and
excluding the Subsidiary or division that is to be sold) for the latest Fiscal Year end and for the
year-to-date, which financial statements shall include, without limitation, balance sheets,
statements of income and retained earnings and of cash flows, all of which shall be prepared in
accordance with GAAP.

     Section 10.7 Sale and Leaseback. Other than a sale/leaseback arrangement with respect
to all of the US Borrower’s and its Subsidiaries’ motor vehicles, the US Borrower will not enter
into, and will not permit any Subsidiary to enter into, any arrangement or series or arrangements
with any Person or group of Persons pursuant to which any of them leases from such Person real or
personal property that has been or is to be sold or transferred, directly or indirectly, by any of
them to such Person, except that the US Borrower and the Subsidiaries may enter into such
arrangements as long as the aggregate book value of the property sold and which at any time remains
subject to a lease does not exceed $10,000,000.

     Section 10.8 Nature of Business. The US Borrower will not, and will not permit any
Guarantor to, engage in any business other than the businesses in which they are engaged as of the
date hereof and other businesses reasonably related thereto.

     Section 10.9 Environmental Protection. If, as a result thereof, a Material Adverse
Effect could be reasonably be expected to result therefrom, the US Borrower will not, and will not
permit any Subsidiary to, (a) use (or permit any tenant to use) any of their respective properties
or assets for the handling, processing, storage, transportation, or disposal of any Hazardous
Material except in compliance with Environmental Law, (b) generate any Hazardous Material except in
compliance with Environmental Law, (c) conduct any activity that is likely to cause a Release or
threatened Release of any Hazardous Material, or (d) otherwise conduct any activity or use any of
their respective properties or assets in any manner that is likely to violate in any material
respect any Environmental Law or create any Environmental Liabilities for which the US Borrower or
any of its Subsidiaries would be responsible.

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     Section 10.10 Accounting. The US Borrower will not, and will not permit any of its
Subsidiaries to, make any material change (a) in accounting treatment or reporting practices,
except as required or permitted by GAAP, or (b) in tax reporting treatment, except as required or
permitted by law.

     Section 10.11 Changes to Subordinated Debt. The US Borrower will not agree, and will
not permit any of its Subsidiaries to agree, to any change or amendment to the terms of any
agreement, document or instrument evidencing or executed in connection with any Subordinated Debt
if the effect of such change or amendment is to: (a) increase the interest rate on such
Subordinated Debt, (b) change the dates upon which payments of principal or interest are due on
such Subordinated Debt other than to extend such dates, (c) change any default or event of default
or covenant other than to delete or make less restrictive any default or covenant provision
therein, or add any covenant with respect to such Subordinated Debt, (d) change the redemption or
prepayment provisions of such Subordinated Debt other than to extend the dates therefor or to
reduce the premiums (if any) payable in connection therewith, (e) grant any security, collateral or
guaranty (or additional security, collateral or guaranty, as the case may be) to secure payment of
such Subordinated Debt, (f) change any of the terms of subordination thereof, or (g) change or
amend any other term if such change or amendment would materially increase the obligations of the
obligor or confer additional material rights to the holder of such Subordinated Debt in a manner
adverse to the US Borrower or US Lenders. Neither the US Borrower nor any of its Subsidiaries will
make any voluntary prepayment on any Subordinated Debt.

     Section 10.12 Restrictions on Certain Subsidiaries. Notwithstanding any other
provision of the Agreement, the US Borrower will not permit (a) any of T-3 Management LP, Inc.,
Cor-Val LP, Inc., Preferred Industries LP, Inc., or O&M Equipment LP, Inc. to: (i) incur, create
or assume any Debt, (ii) grant any Liens on its assets, (iii) incur, create or assume any
liabilities other than liabilities arising by operation of law and the costs of maintaining its
corporate existence, or (iv) engage in any trade or business other than acting as a limited partner
in the limited partnership in which it currently acts as a limited partner, (b) T-3 Investment
Corporation IV, The Rex Group, Inc., Landreth Metal Forming, Inc., T-3 Investment Corporation V,
T-3 Investment Corporation VI, and T-3 Machine Tools, Inc. to: (i) incur, create or assume any
Debt, (ii) grant any Liens on its assets, (iii) incur, create or assume any liabilities other than
liabilities arising by operation of law or the costs of maintaining its corporate existence, and
(c) T-3 Investment Corporation IV to engage in any trade or business other than acting as a
stockholder in T-3 Investment Corporation III.

     Section 10.13 Restricted Payments. The US Borrower will not, nor will it permit any
Subsidiary to, declare or make, directly or indirectly, any Restricted Payment, or incur any
obligation (contingent or otherwise) to do so, or issue or sell any Equity Interests, except that
(i) each Subsidiary may make Restricted Payments to the US Borrower or any Guarantor, ratably
according to their respective holdings of the type of Equity Interest in respect of which such
Restricted Payment is being made, and (ii) so long as no Default or Event of Default shall have
occurred and be continuing at the time of any action described below or would result therefrom:

               (a) the US Borrower and each Subsidiary may declare and make dividend payments or other
distributions payable solely in the common stock or other common Equity Interests of such
Person;

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               (b) the US Borrower may purchase, redeem or otherwise acquire Equity Interests issued
by it with the proceeds received from the substantially concurrent issue of new shares of
its common stock or other common Equity Interests; and

               (c) the US Borrower may issue and sell shares of its common stock.

ARTICLE XI

Financial Covenants

     The US Borrower covenants and agrees that, as long as the Obligations or any part thereof are
outstanding or any Lender has any commitment to lend hereunder or any Issuing Lender has any
obligation to issue Letters of Credit hereunder or any Letter of Credit Liabilities exist, the
US Borrower will observe and perform the following financial covenants:

     Section 11.1 Interest Coverage Ratio. The US Borrower and its Subsidiaries will at
all times maintain, on a consolidated basis, an Interest Coverage Ratio of not less than 3.00 to
1.00. The Interest Coverage Ratio shall be calculated and tested quarterly as of the last day of
each Fiscal Quarter for the Calculation Period ending on the last day of such Fiscal Quarter.

     Section 11.2 Leverage Ratio. The US Borrower and its Subsidiaries will maintain at
all times, on a consolidated basis, a Leverage Ratio of not greater than (a) for Fiscal Quarters
ending during the period commencing on the date hereof and ending on June 30, 2008, 3.25 to 1.00,
and (b) for the Fiscal Quarter ending September 30, 2008 and for each Fiscal Quarter thereafter,
3.00 to 1.00. The Leverage Ratio shall be calculated and tested quarterly as of the last day of
each Fiscal Quarter for the Calculation Period ending on the last day of such Fiscal Quarter.

     Section 11.3 Capital Expenditures. The US Borrower will not make Capital Expenditures
during any single Fiscal Year that exceed, in the aggregate, 75% of EBITDA for such Fiscal Year.

ARTICLE XII

Default

     Section 12.1 Events of Default. Each of the following shall be deemed an “Event of
Default”:

               (a) Either Borrower shall fail to pay (i) any interest or principal portion of the
Obligations when due or (ii) any other portion of the Obligations.

               (b) Any representation or warranty made or deemed made by the US Borrower or any
Obligated Party (or any of their respective officers) in any Loan Document or in any
certificate, report, notice, or financial statement furnished at any time in connection with
this Agreement shall be false, misleading, or erroneous in any material respect when made or
deemed to have been made.

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               (c) Any Borrower or any Obligated Party shall fail to perform, observe, or comply with
(i) any covenant, agreement, or term contained in Sections 9.2, 9.3,
9.4, 9.7, 9.8, 9.9, 9.11, 9.13 and
9.14 of this Agreement and such failure shall continue for twenty 20 days after the
occurrence thereof, or (ii) any other covenant, agreement, or term contained in this
Agreement or in any other Loan Document.

               (d) Either Borrower or any Subsidiary shall commence a voluntary proceeding seeking
liquidation, reorganization, or other relief with respect to itself or its debts under any
bankruptcy, insolvency, or other similar law nor or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian, or other similar official of it
or a substantial part of its property or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case or other
proceeding commenced against it or shall make a general assignment for the benefit of
creditors or shall generally fail to pay its debts as they become due or shall take any
corporate action to authorize any of the foregoing.

               (e) An involuntary proceeding shall be commenced against the either Borrower or any
Subsidiary seeking liquidation, reorganization, or other relief with respect to it or its
debts under any bankruptcy, insolvency, or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian, or other similar
official for its or a substantial part of its property, and such involuntary proceeding
shall remain undismissed and unstayed for a period of 60 days.

               (f) Either Borrower or any Subsidiary shall fail to discharge within a period of 30
days after the commencement thereof any attachment, sequestration, or similar proceeding or
proceedings involving an aggregate amount in excess of $2,250,000 against any of its assets
or properties.

               (g) A final judgment or judgments for the payment of money in excess of $2,250,000, in
the aggregate, shall be rendered by a court or courts against either Borrower, any of their
Subsidiaries, or any Obligated Party and the same shall not be discharged (or provision
shall not be made for such discharge), or a stay of execution thereof shall not be procured,
within 30 days from the date of entry thereof and the relevant Borrower or the relevant
Subsidiary or Obligated Party shall not, within said period of 30 days, or such longer
period during which execution of the same shall have been stayed, appealed therefrom and
cause the execution thereof to be stayed during such appeal.

               (h) Either Borrower, any Subsidiary, or any Obligated Party shall be in default under
any agreement, instrument or other document evidencing or in any way related to any Debt
(other than the Obligations) in excess of $2,250,000, which default permits any holder of
such Debt to accelerate the maturity of such Debt or require all or any portion of such Debt
to be prepaid prior to the stated maturity thereof, whether or not the maturity of such Debt
shall actually have been accelerated or such prepayment shall actually have been demanded.

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               (i) This Agreement or any other Loan Document shall cease to be in full force and
effect or shall be declared null and void or the validity or enforceability thereof shall be
contested or challenged by either Borrower, any Subsidiary, any Obligated Party or any of
their respective shareholders, or either Borrower or any Obligated Party shall deny that it
has any further liability or obligation under any of the Loan Documents, or any lien or
security interest created by the Loan Documents shall for any reason cease to be a valid,
first priority perfected security interest in and lien upon any of the Collateral purported
to be covered thereby.

               (j) The US Borrower, any of its Subsidiaries, or any Obligated Party, or any of their
properties, revenues, or assets, shall become subject to an order of forfeiture, seizure, or
divestiture and the same shall not have been discharged within 30 days from the date of
entry thereof.

               (k) A Change of Control shall have occurred.

               (l) Any of the following events shall occur or exist with respect to the US Borrower or
any ERISA Affiliate: (i) any Prohibited Transaction involving any Plan; (ii) any Reportable
Event with respect to any Plan; (iii) the filing under Section 4041 of ERISA of a notice of
intent to terminate any Plan or the termination of any Plan; (iv) any event or circumstance
that might constitute grounds entitling the PBGC to institute proceedings under Section 4042
of ERISA for the termination of, or for the appointment of a trustee to administer, any
Plan, or the institution by the PBGC of any such proceedings; or (v) complete or partial
withdrawal under Section 4201 or 4204 of ERISA from a Multiemployer Plan or the
reorganization, insolvency, or termination of any Multiemployer Plan; and in each case
above, such event or condition, together with all other events or conditions, if any, have
subjected or could in the reasonable opinion of Required Lenders subject the US Borrower to
any tax, penalty, or other liability to a Plan, a Multiemployer Plan, the PBGC, or otherwise
(or any combination thereof) which in the aggregate exceed or could reasonably be expected
to exceed $2,250,000.

               (m) Any event or circumstance shall occur or exist that causes a Material Adverse
Effect.

     Section 12.2 Remedies Upon Default. If any Event of Default shall occur and be
continuing, the US Administrative Agent and the Canadian Administrative Agent, as applicable may
(and if directed by Required Lenders, shall) without notice terminate the US Revolving Credit
Commitments and the Canadian Commitments and declare the Obligations or any part thereof to be
immediately due and payable, and the same shall thereupon become immediately due and payable,
without notice, demand, presentment, notice of dishonor, notice of acceleration, notice of intent
to accelerate, notice of intent to demand, protest, or other formalities of any kind, all of which
are hereby expressly waived by the Borrowers; provided, however, that upon the occurrence of an
Event of Default under Section 12.1(d) or Section 12.1(e), the US Revolving Credit
Commitments and Canadian Commitment shall automatically terminate, and the Obligations shall become
immediately due and payable without notice, demand, presentment, notice of dishonor, notice of
acceleration, notice of intent to accelerate, notice of intent to demand, protest, or other
formalities of any kind, all of which are hereby expressly waived by

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the Borrowers. Except as otherwise expressly set forth herein, if any Event of Default shall
occur and be continuing, the Administrative Agents may exercise all rights and remedies available
to it in law or in equity, under the Loan Documents, or otherwise.

     Section 12.3 Letter of Credit. If any Event of Default shall occur and be continuing,
the Borrowers shall, if requested by the Administrative Agents, immediately deposit with and pledge
to the Administrative Agents cash or Cash Equivalent Investments in an amount equal to 110 percent
of the outstanding Letter of Credit Liabilities.

     Section 12.4 Performance by the Administrative Agents. If either of the Borrowers
shall fail to perform any covenant or agreement contained in any of the Loan Documents, the
Administrative Agents may, at the direction of the Required Lenders, perform or attempt to perform
such covenant or agreement on behalf of such Borrower. In such event, the Borrowers shall, at the
request of the Administrative Agents, promptly pay any amount expended by the Administrative Agents
or the Lenders in connection with such performance or attempted performance to the Administrative
Agents, together with interest thereon at the Default Rate from and including the date of such
expenditure to but excluding the date such expenditure is paid in full. Notwithstanding the
foregoing, it is expressly agreed that none of the Administrative Agents, the Issuing Lenders and
the Lenders shall have any liability or responsibility for the performance of any obligation of
either of the Borrowers under this Agreement or any other Loan Document except for either of the
Administrative Agent’s gross negligence or willful misconduct.

ARTICLE XIII

The Administrative Agents

     Section 13.1 Appointment, Powers and Immunities. In order to expedite the various
transactions contemplated by this Agreement, the Lenders and the Issuing Lenders hereby irrevocably
appoint and authorize the US Administrative Agent and Canadian Administrative Agent, as applicable,
to act as their Administrative Agent hereunder and under each of the other Loan Documents and the
US Administrative Agent and Canadian Administrative Agent consents to such appointment and agrees
to perform the duties of the US Administrative Agent and Canadian Administrative Agent as specified
herein. The Lenders and the Issuing Lenders authorize and direct the applicable Administrative
Agent to take such action in their name and on their behalf under the terms and provisions of the
Loan Documents and to exercise such rights and powers thereunder as are specifically delegated to
or required of the applicable Administrative Agent for the Lenders and the Issuing Lenders,
together with such rights and powers as are reasonably incidental thereto.

               (a) To receive on behalf of each of the Lenders, the Issuing Lenders and the
Administrative Agents any payment of principal, interest, fees or other amounts paid
pursuant to this Agreement, the US Revolving Credit Notes, the Canadian Notes and the Swing
Line Notes and to distribute to each Lender, the Issuing Lenders and the Administrative
Agents, or any or some of them its share of all payments so received as provided in this
Agreement;

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               (b) To receive all documents and items to be furnished under the Loan Documents;

               (c) To act as nominee for and on behalf of the Lenders, the Issuing Lenders and the
Administrative Agents in and under the Loan Documents.

               (d) To arrange for the means whereby the funds of the Lenders are to be made available
to the applicable Borrower;

               (e) To distribute to the Lenders and the Issuing Lenders information, requests,
notices, payments, prepayments, documents and other items received from either Borrower, the
other Obligated Parties, and other Persons;

               (f) To execute and deliver to the US Borrower, the other Obligated Parties, and other
Persons, all requests, demands, approvals, notices, and consents received from the Lenders
and the Issuing Lenders;

               (g) To the extent permitted by the Loan Documents, to exercise on behalf of itself,
each Lender and the Issuing Lenders all rights and remedies of the Lenders upon the
occurrence of any Event of Default;

               (h) To enter into the Intercreditor Agreement (Canadian Facility);

               (i) To accept, execute, and deliver any security documents as the secured party,
including, without limitation all financing statements;

               (j) To take such other actions as may be requested by Required Lenders.

               (k) To appoint from time to time, with the US Borrower’s consent, such additional
Administrative Agents and co-agents as the US Administrative Agent deems appropriate,
including without limitation, a syndication agent, a documentation agent and a collateral
agent.

     Notwithstanding the express permission granted to the Administrative Agents in Section
13.1(g) hereof or anything else to the contrary, the Administrative Agents shall not, without
the prior written consent of each Lender, (i) appoint one or more members of the Board of Directors
(or similar governing body) of the Borrowers or any of its Affiliates, or (ii) exercise any rights
or remedies with respect to any Capital Stock pledged to secure any or all of the Obligations;
provided, however, if any Lender does not, within 30 days after such Lender’s
receipt of a written request from the US Administrative Agent for a consent to one or more of the
actions described in clause (i) or (ii) of this sentence, respond to any such written request, such
Lender shall, for the purposes of this sentence, be deemed to have consented to such request.

     Neither the US Administrative Agent, nor the Canadian Administrative Agent, nor any of its
Affiliates, officers, directors, employees, attorneys, of the Administrative Agents shall be liable
for any action taken or omitted to be taken by any of them hereunder or otherwise in connection
with this Agreement or any of the other Loan Documents except for its or their own gross negligence
or willful misconduct. Without limiting the generality of the preceding

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sentence, the Administrative Agents (i) may treat the payee of any US Revolving Credit Note or
Canadian Note as the holder thereof until the US Administrative Agent receives written notice of
the assignment or transfer thereof signed by such payee and in form satisfactory to the
US Administrative Agent; (ii) shall have no duties or responsibilities except those expressly set
forth in this Agreement and the other Loan Documents, and shall not by reason of this Agreement or
any other Loan Document be a trustee or fiduciary for any Lender or the Issuing Lenders;
(iii) shall not be required to initiate any litigation or collection proceedings hereunder or under
any other Loan Document except to the extent hereunder or under any other Loan Document except to
the extent requested by the Required Lenders; (iv) shall not be responsible to the Lenders or the
Issuing Lenders for any recitals, statements, representations or warranties contained in this
Agreement or any other Loan Document, or any certificate or other document referred to or provided
for in, or received by any of them under, this Agreement or any other Loan Document or for the
value, validity, effectiveness, enforceability, or sufficiency of this Agreement or any other Loan
Document or any other document referred to or provided for herein or therein or for any failure by
any Person to perform any of its obligations hereunder or thereunder; (v) may consult with legal
counsel (including counsel for the Borrowers), independent public accountants, and other experts
selected by it and shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants, or experts; and (vi) shall incur no
liability under or in respect of any Loan Document by acting upon any notice, consent, certificate,
or other instrument or writing believed by it to be genuine and signed or sent by the proper party
or parties. As to any matters not expressly provided for by this Agreement, the Administrative
Agents shall in all cases be fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions signed by the Required Lenders, and such instructions of the Required
Lenders and any action taken or failure to act pursuant thereto shall be binding on all of the
Lenders; provided, however, that the Administrative Agents shall not be required to take any action
which exposes the Administrative Agents to personal liability or which is contrary to this
Agreement or any other Loan Document or applicable law.

     Section 13.2 Certain Rights of Administrative Agents. (a) With respect to its
commitment to lend hereunder, the Advances made by it and the US Revolving Credit Note and US Swing
Line Note issued to it, the US Administrative Agent in its capacity as a US Lender hereunder shall
have the same rights and powers hereunder as any other US Lender and may exercise the same as
though it were not acting as the US Administrative Agent or the US Issuing Lender and the term
“Lender” or “Lenders” shall, unless the context otherwise indicates, include the US Administrative
Agent in its individual capacity. The US Administrative Agent and its Affiliates may (without
having to account therefor to any Lender or any Issuing Lender) accept deposits from, lend money
to, act as trustee under indentures of, provide merchant banking services to, and generally engage
in any kind of business with the Borrowers, any of their Subsidiaries, any other Obligated Party,
and any other Person who may do business with or own securities of either of the Borrowers, any
Subsidiary, or any other Obligated Party, all as if it were not acting as the US Administrative
Agent and without any duty to account therefor to the Lenders or the Issuing Lenders.

               (a) Rights of Canadian Administrative Agent as a Canadian Lender. With respect
to its commitment to lend hereunder, the Advances made by it and the Canadian Note and
Canadian Swing Line Note issued to it, the Canadian Administrative

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Agent in its capacity as a Canadian Lender hereunder shall have the same rights and
powers hereunder as any other Canadian Lender and may exercise the same as though it were
not acting as the Canadian Administrative Agent or the Canadian Issuing Lender and the term
“Lender” or “Lenders” shall, unless the context otherwise indicates, include the
Canadian Administrative Agent in its individual capacity. The Canadian Administrative Agent
and its Affiliates may (without having to account therefor to any Lender or any Issuing
Lender) accept deposits from, lend money to, act as trustee under indentures of, provide
merchant banking services to, and generally engage in any kind of business with the
Borrowers, any of their Subsidiaries, any other Obligated Party, and any other Person who
may do business with or own securities of either of the Borrowers, any Subsidiary, or any
other Obligated Party, all as if it were not acting as the Canadian Administrative Agent and
without any duty to account therefor to the Lenders or the Issuing Lenders.

     Section 13.3 Sharing of Payments, Etc. If any Lender shall obtain any payment of any
principal of or interest on any Advance made by it under this Agreement or payment of any other
obligation under the Loan Documents then owed by the Borrowers or any other Obligated Party to such
Lender, whether voluntary, involuntary, through the exercise of any right of setoff, banker’s lien,
counterclaim or similar right, or otherwise, in excess of its pro rata share, such Lender shall
promptly purchase from the other Lenders participations in the Advances held by them hereunder in
such amounts, and make such other adjustments from time to time as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of the other Lenders in accordance
with its pro rata portion thereof. To such end, all of the Lenders shall make appropriate
adjustments among themselves (by the resale of participations sold or otherwise) if all or any
portion of such excess payment is thereafter rescinded or must otherwise be restored. The
Borrowers agree, to the fullest extent it may effectively do so under applicable law, that any
Lender so purchasing a participation in the Advances made by the other Lenders may exercise all
rights of setoff, banker’s lien, counterclaim, or similar rights with respect to such participation
as fully as if such Lender were a direct holder of Advances to the Borrowers in the amount of such
participation. Nothing contained herein shall require any Lender to exercise any such right or
shall affect the right of any Lender to exercise, and retain the benefits of exercising, any such
right with respect to any other indebtedness or obligation of the Borrowers.

     Section 13.4 Indemnification. THE LENDERS HEREBY AGREE TO INDEMNIFY THE
US ADMINISTRATIVE AGENT AND CANADIAN ADMINISTRATIVE AGENT FROM AND HOLD THE ADMINISTRATIVE AGENTS
AND THE ISSUING LENDERS HARMLESS AGAINST (TO THE EXTENT NOT REIMBURSED UNDER SECTIONS 14.1
AND 14.2, BUT WITHOUT LIMITING THE OBLIGATIONS OF THE BORROWERS UNDER SECTIONS 14.1
AND 14.2), RATABLY IN ACCORDANCE WITH THEIR RESPECTIVE COMMITMENTS, ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS,
COSTS, EXPENSES (INCLUDING ATTORNEYS’ FEES), AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER
WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THE ADMINISTRATIVE AGENTS OR THE ISSUING
LENDERS IN ANY WAY RELATING TO OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY ACTION TAKEN OR
OMITTED TO BE TAKEN BY THE ADMINISTRATIVE AGENTS OR THE ISSUING LENDERS UNDER OR IN RESPECT OF ANY
OF THE LOAN

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DOCUMENTS; PROVIDED, THAT NO LENDER SHALL BE LIABLE FOR ANY PORTION OF THE FOREGOING
TO THE EXTENT CAUSED BY EITHER ADMINISTRATIVE AGENT’S OR EITHER OF THE ISSUING LENDER’S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT LIMITATION OF THE FOREGOING, IT IS THE EXPRESS INTENTION
OF THE LENDERS THAT THE ADMINISTRATIVE AGENTS AND THE ISSUING LENDERS SHALL BE INDEMNIFIED
HEREUNDER FROM AND HELD HARMLESS AGAINST ALL OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES (INCLUDING ATTORNEYS’ FEES),
AND DISBURSEMENTS OF ANY KIND OR NATURE DIRECTLY OR INDIRECTLY ARISING OUT OF OR RESULTING FROM THE
SOLE OR CONTRIBUTORY NEGLIGENCE OF EITHER OF THE ADMINISTRATIVE AGENTS OR EITHER OF THE ISSUING
LENDERS. WITHOUT LIMITING ANY OTHER PROVISION OF THIS SECTION, EACH LENDER AGREES TO REIMBURSE
EACH ADMINISTRATIVE AGENT AND EACH ISSUING LENDER PROMPTLY UPON DEMAND FOR ITS PRO RATA SHARE
(CALCULATED ON THE BASIS OF THE COMMITMENTS) OF ANY AND ALL OUT-OF-POCKET EXPENSES (INCLUDING
ATTORNEYS’ FEES) INCURRED BY EITHER ADMINISTRATIVE AGENT OR EITHER ISSUING LENDER IN CONNECTION
WITH THE PREPARATION, EXECUTION, DELIVERY, ADMINISTRATION, MODIFICATION, AMENDMENT OR ENFORCEMENT
(WHETHER THROUGH NEGOTIATIONS, LEGAL PROCEEDINGS, OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF
RIGHTS OR RESPONSIBILITIES UNDER, THE LOAN DOCUMENTS, TO THE EXTENT THAT THE ADMINISTRATIVE AGENTS
OR THE ISSUING LENDERS ARE NOT REIMBURSED FOR SUCH EXPENSES BY THE BORROWERS.

     Section 13.5 Independent Credit Decisions. Each Lender agrees that it has
independently and without reliance on any of Administrative Agents, the Issuing Lenders, or any
other Lender, and based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Borrowers and the Obligated Parties and decision to enter into this
Agreement and that it will, independently and without reliance upon the Administrative Agents, the
Issuing Lenders, or any other Lender, and based upon such documents and information as it shall
deem appropriate at the time, continue to make its own analysis and decisions in taking or not
taking action under this Agreement or any of the other Loan Documents. Neither Administrative
Agent shall be required to keep itself informed as to the performance or observance by either
Borrower or any Obligated Party of this Agreement or any other Loan Document or to inspect the
properties or books of either Borrower or any Obligated Party. Except for notices, reports and
other documents and information expressly required to be furnished to the Lenders by the
Administrative Agents hereunder or under the other Loan Documents, the Administrative Agents shall
not have any duty or responsibility to provide the Issuing Lenders or any Lender with any credit or
other financial information concerning the affairs, financial condition or business of either
Borrower or any Obligated Party (or any of their Affiliates) which may come into the possession of
either Administrative Agent or any of its Affiliates.

     Section 13.6 Several Commitments. The commitments to lend and other obligations of
the Lenders under this Agreement are several. The default by the Lender in making an Advance in
accordance with its commitment hereunder shall not relieve the other Lenders of their

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obligations under this Agreement. In the event of any default by any Lender in making any
Advance, each nondefaulting Lender shall be obligated to make its Advance but shall not be
obligated to advance the amount which the defaulting Lender was required to advance hereunder. In
no event shall any Lender be required to advance an amount or amounts which shall in the aggregate
exceed such Lender’s US Revolving Credit Commitment or Canadian Commitment. No Lender shall be
responsible for any act or omission of any other Lender.

     Section 13.7 Successor Administrative Agents. Subject to the appointment and
acceptance of a successor Administrative Agent as provided below, either of the Administrative
Agents may resign at any time by giving notice thereof to the Lenders and the Borrowers and either
Administrative Agent may be removed at any time with or without cause by the Required Lenders.
Upon any such resignation or removal, the Required Lenders (with the consent of the US Borrower,
which consent will not be unreasonably withheld) will have the right to appoint a successor
Administrative Agent. If no successor Administrative Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after the retiring
Administrative Agent giving notice of resignation or the Required Lenders’ removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of the Lenders, appoint
a successor Administrative Agent, which shall be a commercial bank organized under the laws of the
United States of America or any State thereof and having combined capital and surplus of at least
$500,000,000.00. Upon the acceptance of its appointment as successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with all rights,
powers, privileges, immunities, and duties of the resigning or removed Administrative Agent, and
the resigning or removed Administrative Agent shall be discharged from its duties and obligations
under this Agreement and the other Loan Documents. After any Administrative Agent’s resignation or
removal as Administrative Agent, the provisions of this Article XIII shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by it while it was
the Administrative Agent.

ARTICLE XIV

Miscellaneous

     Section 14.1 Expenses. Each Borrower hereby agrees to pay on demand (a) all
reasonable costs and expenses of the Administrative Agents in connection with the preparation,
negotiation, execution, and delivery of this Agreement and the other Loan Documents and any and all
amendments, modifications, renewals, extensions, and supplements thereof and thereto, including,
without limitation, the reasonable fees and expenses of outside legal counsel for the
Administrative Agents, the Issuing Lenders and the Lenders, (b) all reasonable costs and expenses
of the Administrative Agents, the Issuing Lenders and the Lenders in connection with any Default or
Event of Default and the enforcement of this Agreement or any other Loan Document, including,
without limitation, the reasonable fees and expenses of outside legal counsel for the
Administrative Agents, the Issuing Lenders and the Lenders, (c) all transfer, stamp, documentary,
or other similar taxes, assessments, or charges levied by any Governmental Authority in respect of
this Agreement or any of the other Loan Documents, (d) all costs, expenses, assessments, and other
charges incurred in connection with any filing, registration, recording, or perfection of any
security interest or Lien contemplated by this Agreement or any other Loan Document, and (e) all
other reasonable costs and expenses incurred by the

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Administrative Agents, the Issuing Lenders and the Lenders in connection with this Agreement
or any other Loan Document, including, without limitation, all costs, expenses, and other charges
incurred in connection with obtaining audit, or appraisal in respect of the Collateral.

     Section 14.2 Indemnification. EACH BORROWER SHALL INDEMNIFY EACH OF THE
ADMINISTRATIVE AGENTS, THE ISSUING LENDERS, AND THE LENDERS AND EACH AFFILIATE THEREOF AND THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, AND ADMINISTRATIVE AGENTS FROM, AND HOLD EACH
OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENT,
DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING ATTORNEYS’ FEES) TO WHICH ANY OF THEM MAY BECOME
SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO (A) THE NEGOTIATION, EXECUTION,
DELIVERY, PERFORMANCE, ADMINISTRATION, OR ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS, (B) ANY OF THE
TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS, (C) ANY BREACH BY EITHER OF THE BORROWERS OF ANY
REPRESENTATION, WARRANTY, COVENANT, CONTAINED IN ANY OF THE LOAN DOCUMENTS, (D) THE PRESENCE,
RELEASE, THREATENED RELEASE, DISPOSAL, REMOVAL, OR CLEANUP OF ANY HAZARDOUS MATERIAL LOCATED ON,
ABOUT, WITHIN, OR AFFECTING ANY OF THE PROPERTIES OR ASSETS OF THE BORROWERS OR ANY SUBSIDIARY, OR
(E) ANY INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY
THREATENED INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, RELATING TO ANY OF THE FOREGOING.

     Section 14.3 Limitation of Liability. Neither the Administrative Agents, the Issuing
Lenders or the Lenders nor any Affiliate, officer, director, employee, attorney, of Administrative
Agents of the Administrative Agents, the Issuing Lenders or the Lenders shall have any liability
with respect to, and the Borrowers hereby waive, release, and agree not to sue any of them upon,
any claim for any special, indirect, incidental, or consequential damages suffered or incurred by
either Borrower in connection with, arising out of, or in any way related to, this Agreement or any
of the other Loan Documents, or any of the transactions contemplated by this Agreement or any of
the other Loan Documents. The Borrowers hereby waive, release, and agree not to sue the
Administrative Agents, the Issuing Lenders or the Lenders or any of such Person’s Affiliates,
officers, directors, employees, attorneys, or agents for punitive damages in respect of any claim
in connection with, arising out of, or in any way related to, this Agreement or any of the other
Loan Documents, or any of the transactions contemplated by this Agreement or any of the other Loan
Documents. Nothing contained in this Section shall affect the rights of either Borrower to collect
actual damages awarded to them against any of the Administrative Agents, the Issuing Lenders, the
Lenders or any Affiliate of any of the foregoing Persons.

     Section 14.4 No Duty. All attorneys, accountants, appraisers, and other professional
Persons and consultants retained by any of the Administrative Agents, the Issuing Lenders or the
Lenders shall have the right to act exclusively in the interest of such Persons and shall have no
duty of disclosure, duty of loyalty, duty of care, or other duty or obligation of any type or
nature whatsoever to either Borrower or any Borrower’s shareholders or any other Person.

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     Section 14.5 Lender Not Fiduciary. The relationship between the Borrowers, on one
hand, and the Administrative Agents, the Issuing Lenders and the Lenders, on the other hand, is
solely that of debtor and creditor, and no such Person has any fiduciary or other special
relationship with the Borrowers, and no term or condition of any of the Loan Documents shall be
construed so as to deem the relationship between the Borrowers and such Persons to be other than
that of debtor and creditor.

     Section 14.6 No Waiver; Cumulative Remedies. No failure on the part of any of the
Administrative Agents, the Issuing Lenders or the Lenders to exercise and no delay in exercising,
and no course of dealing with respect to, any right, power, or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any right, power, or
privilege under this Agreement preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. The rights and remedies provided for in this Agreement and
the other Loan Documents are cumulative and not exclusive of any rights and remedies provided by
law.

     Section 14.7 Successors and Assigns.

     (a) This Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Neither Borrower may assign or transfer any of
its rights or obligations hereunder without the prior written consent of the
US Administrative Agent and all of the Lenders. Any Lender may sell participations to one
or more banks or other institutions in or to all or a portion of its rights and obligations
under this Agreement and the other Loan Documents (including, without limitation, all or a
portion of its Commitment and the Advances owing to it); provided, however, that (i) such
Lender’s obligations under this Agreement and the other Loan Documents (including, without
limitation, its Commitment) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the Borrowers for the performance of such obligations, (iii) such Lender
shall remain the holder of its Notes for all purposes of this Agreement, and (iv) the
Borrowers shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement and the other Loan Documents.
Participants have no rights under the Loan Documents except as provided below. Subject to
the following, each Lender may obtain, on behalf of its participants, the benefits of
Article V with respect to all participations in its part of the Obligations
outstanding from time to time, so long as neither Borrower is not obligated to pay any
amount in excess of the amount that would be due to that Lender under Article V
calculated as though no participations have been made. No Lender may sell any participating
interest under which the participant has any rights to approve any amendment, modification,
or waiver of any Loan Document except as to matters in Section 14.9(a), (b)
and (c).

     (b) The Borrowers and each of the Lenders agree that any Lender (the “Assigning
Lender”) may, with the US Administrative Agent’s consent (which consent shall not be
unreasonably withheld or delayed) and unless an Event of Default has occurred, the
US Borrower’s consent, which consent of the US Borrower shall not be unreasonably withheld
or delayed, at any time assign to one or more Eligible Assignees all, or a proportionate
part of all, of its rights and obligations under this Agreement and

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the other Loan Documents (including, without limitation, its Aggregate Commitments and
Advances) (each an “Assignee”); provided, however, that (i) each such assignment
shall be of a consistent, and not a varying, percentage of all of the Assigning Lender’s
Commitments, rights and obligations under this Agreement and the other Loan Documents,
(ii) except in the case of an assignment of all of a Lender’s rights and obligations under
this Agreement and the other Loan Documents, the amount of the Aggregate Commitments of the
Assigning Lender being assigned pursuant to each assignment (determined as of the date of
the Assignment and Acceptance with respect to such assignment) shall in no event be less
than $5,000,000 in the aggregate, and (iii) the parties to each such assignment shall
execute and deliver to the US Administrative Agent for its acceptance and recording in the
Register (as defined below), an Assignment and Acceptance, together with the Notes (and the
Swing Line Notes, if applicable) subject to such assignment, and a processing and
recordation fee of $5,000 to be paid by the Assignee or Assignee Group. Upon such
execution, delivery, acceptance, and recording, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least five Business Days
after the execution thereof, or, if so specified in such Assignment and Acceptance, the date
of acceptance thereof by the US Administrative Agent, (x) the assignee thereunder shall be a
party hereto as a “Lender” and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and under the Loan Documents and (y) the Lender that is an
assignor thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement and the other Loan Documents (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of a Lender’s
rights and obligations under the Loan Documents, such Lender shall cease to be a party
thereto); provided that the obligations of the Borrowers under Article V and
Section 14.1 and 14.2 shall continue to apply to such Lender.

     (c) By executing and delivering an Assignment and Acceptance, the Lender that is an
assignor thereunder and the assignee thereunder confirm to and agree with each other and the
other parties hereto as follows: (i) other than as provided in such Assignment and
Acceptance, 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 the Loan Documents or the execution, legality, validity, and enforceability,
genuineness, sufficiency, or value of the Loan Documents or any other instrument or document
furnished pursuant thereto; (ii) such Assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of either of the
Borrowers or any Obligated Party or the performance or observance by either of the Borrowers
or any Obligated Party of its obligations under the Loan Documents; (iii) such assignee
confirms that it has received a copy of the other Loan Documents, together with copies of
the current financial statements dated a date acceptable to such assignee 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; (iv) such assignee will,
independently and without reliance upon the Administrative Agents or such assignor and based
on such documents and information as it shall deem appropriate at the time, continue to make
its

78

 

own credit decisions in taking or not taking action under this Agreement and the other
Loan Documents; (v) such assignee confirms that it is an Eligible Assignee; (vi) such
assignee appoints and authorizes the applicable Administrative Agent to take such action as
such Administrative Agent on its behalf and exercise such powers under the Loan Documents as
are delegated to such Administrative Agent by the terms thereof, together with such powers
as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the Loan Documents
are required to be performed by it as a Lender.

     (d) The US Administrative Agent shall maintain at its Principal Office a copy of each
Assignment and Acceptance delivered to and accepted by it and a register for the recordation
of the names and addresses of the Lenders and the Commitments of, and principal amount of
the US Revolving Credit Advances or Canadian Advance owing to, each Lender from time to time
(the “Register”). The entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and the Borrowers, the Administrative Agents, the
Issuing Lenders and the Lenders may treat each Person whose name is recorded in the Register
as a Lender hereunder for all purposes under the Loan Documents. The Register shall be
available for inspection by any Borrower, any Issuing Lender or any Lender at any reasonable
time and from time to time upon reasonable prior notice.

     (e) Upon its receipt of an Assignment and Acceptance executed by an Assigning Lender
and assignee representing that it is an Eligible Assignee, together with any Note (and the
Swing Line Notes, if applicable) subject to such assignment, the US Administrative Agent
shall, if such Assignment and Acceptance has been completed and is in the form satisfactory
to the US Administrative Agent in its sole discretion, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register, and (iii) give
prompt written notice thereof to the Borrowers. Within five Business Days after its receipt
of such notice, the applicable Borrower, at its expense, shall execute and deliver to the
US Administrative Agent in exchange for the surrendered Note (and Swing Line Note, if
applicable), new Notes (and Swing Line Note, if applicable) to the order of such Eligible
Assignee in an amount equal to the Commitment assumed by it pursuant to such Assignment and
Acceptance and, if the Assigning Lender has retained a portion of its Commitment, new Notes
to the order of the Assigning Lender in an amount equal to the Commitments retained by it
hereunder (each such promissory note shall constitute a “US Revolving Credit Note” or
“Canadian Note” for purposes of the Loan Documents). Such new Notes (and Swing Line Notes,
if applicable) shall be in an aggregate principal amount of the surrendered Notes (and Swing
Line Notes, if applicable), shall be dated the last interest payment date prior to the
effective date of such Assignment and Acceptance, and shall otherwise be in substantially
the form of the appropriate Notes (and Swing Line Notes, if applicable) initially issued
pursuant hereto with appropriate changes.

     (f) Any Lender may, in connection with any assignment or participation or proposed
assignment or participation pursuant to this Section, disclose to the assignee or
participant or proposed assignee or participant, any information relating to either of the

79

 

Borrowers or their Subsidiaries furnished to such Lender by or on behalf of either of
the Borrowers or their Subsidiaries.

     (g) Any Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to secure obligations of such Lender, including
any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

     Section 14.8 Survival. All representations and warranties made in this Agreement or
any other Loan Documents or in any document, statement, or certificate furnished in connection with
this Agreement shall survive the execution and delivery of this Agreement and the other Loan
Documents, and no investigation by any of the Administrative Agents, the Issuing Lenders or the
Lenders or any closing shall affect the representations and warranties or the right of any such
Person to rely upon them. Without prejudice to the survival of any other obligation of the
Borrowers hereunder, the obligations of the Borrowers under Article V and
Sections 14.1 and 14.2 shall survive repayment of the Notes and the Swing Line
Notes and termination of the Lenders’ commitments to lend hereunder.

     Section 14.9 ENTIRE AGREEMENT; AMENDMENTS. THIS AGREEMENT, THE NOTES, THE SWING LINE
NOTES AND THE OTHER LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR
DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO. No
amendment, modification or waiver of, or consent with respect to, any provision of this Agreement,
the Notes, or the Swing Line Notes shall in any event be effective unless the same shall be in
writing and signed and delivered by the Borrowers and the Required Lenders, and then any such
amendment, modification, waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given. Subject to Section 2.10 with respect to the Increase
Amount, no amendment, modification, waiver or consent shall change the Percentage of any Lender
without the consent of such Lender. No amendment, modification, waiver or consent shall (a) extend
or, subject to Section 2.10, increase the amount of Aggregate Commitments, (b) extend the
date for payment of any principal of or interest on the Advances or any fees or other amounts
payable hereunder, (c) reduce the principal amount of any Advances, the rate of interest thereof or
any fees or other amounts payable hereunder, (d) release a Guaranty Agreement or all or
substantially all of the Collateral, or (e) reduce the aggregate Percentage required to effect an
amendment, modification, waiver or consent without, in each case, the consent of all Lenders. No
provisions of Article XIII or other provision of this Agreement affecting the
Administrative Agents in their capacity as such shall be amended, modified or waived without the
consent of the Administrative Agents. No provision of this Agreement relating to the rights or
duties of an Issuing Lender in its capacity as

80

 

such shall be amended, modified or waived without the consent of such Issuing Lender. If, in
connection with any proposed amendment, waiver or consent (a “Proposed Change”):

     (i) requiring the consent of all Lenders, the consent of Required Lenders is obtained, but the
consent of other Lenders is not obtained (any such Lender whose consent is not obtained as
described in this clause (i) and in clause (ii) below being referred to as a “Non-Consenting
Lender”), or

     (ii) requiring the consent of Required Lenders, the consent of Required Lenders is obtained,

then, so long as the applicable Administrative Agent is not a Non-Consenting Lender, at the
US Borrower’s request, the applicable Administrative Agent or an Eligible Assignee shall have the
right (but not the obligation) with the US Administrative Agent’s approval, to purchase from the
Non-Consenting Lenders’ Commitments for an amount equal to the principal balances thereof and all
accrued interest and fees with respect thereto through the date of sale pursuant to Assignment and
Acceptance(s), without premium or discount.

     Section 14.10 Maximum Interest Rate. No provision of this Agreement or any other Loan
Document shall require the payment or the collection of interest in excess of the maximum amount
permitted by applicable law. If any excess of interest in such respect is hereby provided for, or
shall be adjudicated to be so provided, in any Loan Document or otherwise in connection with this
loan transaction, the provisions of this Section shall govern and prevail and neither the Borrowers
nor the sureties, guarantors, successors, or assigns of the Borrowers shall be obligated to pay the
excess amount of such interest or any other excess sum paid for the use, forbearance, or detention
of sums loaned pursuant hereto. In the event any of the Administrative Agents, the Issuing Lenders
or the Lenders ever receives, collects, or applies as interest any such sum, such amount which
would be in excess of the maximum amount permitted by applicable law shall be applied as a payment
and reduction of the principal of the indebtedness evidenced by the Notes or the Swing Line Notes,
as applicable; and, if the principal of the Notes and the Swing Line Notes has been paid in full,
any remaining excess shall forthwith be paid to the applicable Borrowers. In determining whether
or not the interest paid or payable exceeds the Maximum Rate, the Borrowers and the Administrative
Agents, the Issuing Lenders and the Lenders shall, to the extent permitted by applicable law,
(a) characterize any non-principal payment as an expense, fee, or premium rather than as interest,
(b) exclude voluntary prepayments and the effects thereof; and (c) amortize, prorate, allocate, and
spread in equal or unequal parts the total amount of interest throughout the entire contemplated
term of the indebtedness evidenced by the Revolving Credit Notes and the Swing Line Notes so that
interest for the entire term does not exceed the Maximum Rate.

     Section 14.11 Notices; Electronic Communications. (a) All notices and other
communications provided for in this Agreement and the other Loan Documents to which either Borrower
is a party shall be in writing and may be telecopied (faxed), mailed by certified mail return
receipt requested, or delivered to the intended recipient at the address specified in
Schedule 14.11; or, as to any party at such other address as shall be designated by such
party in a notice to the other party given in accordance with this Section. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been duly given when

81

 

transmitted by telecopy, subject to telephone confirmation of receipt, or when personally
delivered to, in the case of a mailed notice, when duly deposited in the mails, in each case given
or addressed as aforesaid; provided, however, notices to either of the Administrative Agents
pursuant to Articles II, III and IV shall not be effective until received
by the applicable Administrative Agents.

     (b) (i) The Borrowers and the Lenders agree that the Administrative Agents may make any
material delivered by any Borrower to any Administrative Agent, as well as any amendments,
waivers, consents, and other written information, documents, instruments and other materials
relating to the Company, any of its Subsidiaries, or any other materials or matters relating
to this Agreement, the Notes or any of the transactions contemplated hereby (collectively,
the “Communications”) available to the Lenders by posting such notices on an electronic
delivery system (which may be provided by any Administrative Agent, an Affiliate of an
Administrative Agent, or any Person that is not an Affiliate of an Administrative Agent),
such as IntraLinks, or a substantially similar electronic system (the “Platform”). The
Borrowers acknowledge that (1) the distribution of material through an electronic medium is
not necessarily secure and that there are confidentiality and other risks associated with
such distribution, (2) the Platform is provided “as is” and “as available” and (3) none of
the Administrative Agents nor any of their respective Affiliates warrants the accuracy,
completeness, timeliness, sufficiency, or sequencing of the Communications posted on the
Platform. The Administrative Agents and their respective Affiliates expressly disclaim with
respect to the Platform any liability for errors in transmission, incorrect or incomplete
downloading, delays in posting or delivery, or problems accessing the Communications posted
on the Platform and any liability for any losses, costs, expenses or liabilities that may be
suffered or incurred in connection with the Platform. No warranty of any kind, express,
implied or statutory, including, without limitation, any warranty of merchantability,
fitness for a particular purpose, non-infringement of third party rights or freedom from
viruses or other code defects, is made by either Administrative Agent or any of their
respective Affiliates in connection with the Platform.

     (ii) Each Lender agrees that notice to it (as provided in the next sentence) (a
“Notice”) specifying that any Communication has been posted to the Platform shall
for purposes of this Agreement constitute effective delivery to such Lender of such
information, documents or other materials comprising such Communication. Each Lender
agrees (1) to notify, on or before the date such Lender becomes a party to this
Agreement, the Applicable Agent in writing of such Lender’s e-mail address to which
a Notice may be sent (and from time to time thereafter to ensure that the
Administrative Agents have on record an effective e-mail address for such Lender)
and (2) that any Notice may be sent to such e-mail address.

     Section 14.12 GOVERNING LAW; VENUE; SERVICE OF PROCESS. 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. THIS AGREEMENT HAS BEEN ENTERED INTO IN HARRIS COUNTY, TEXAS, AND
IT SHALL BE PERFORMABLE FOR ALL PURPOSES IN

82

 

HARRIS COUNTY, TEXAS. SUBJECT TO SECTION 14.19, ANY ACTION OR PROCEEDING AGAINST
EITHER BORROWER UNDER OR IN CONNECTION WITH ANY OF THE LOAN DOCUMENTS MAY BE BROUGHT IN ANY STATE
OR FEDERAL COURT IN HARRIS COUNTY, TEXAS. EACH BORROWER HEREBY IRREVOCABLY (A) SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURTS, AND (B) WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE
AS TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT OR THAT ANY SUCH COURT
IS AN INCONVENIENT FORUM. EACH BORROWER AGREES THAT SERVICE OF PROCESS UPON IT MAY BE MADE BY
CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT ITS ADDRESS SPECIFIED OR DETERMINED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 14.11. NOTHING HEREIN OR IN ANY OF THE OTHER
LOAN DOCUMENTS SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENTS, THE ISSUING LENDERS OR THE
LENDERS TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR, SUBJECT TO SECTION 14.19,
SHALL LIMIT THE RIGHT OF SUCH PERSONS TO BRING ANY ACTION OR PROCEEDING AGAINST EITHER BORROWER OR
WITH RESPECT TO ANY OF ITS PROPERTY IN COURTS IN OTHER JURISDICTIONS. SUBJECT TO
SECTION 14.19, ANY ACTION OR PROCEEDING BY EITHER BORROWER AGAINST ANY OF THE
ADMINISTRATIVE AGENTS, THE ISSUING LENDERS OR THE LENDERS SHALL BE BROUGHT ONLY IN A COURT LOCATED
IN HARRIS COUNTY, TEXAS; PROVIDED, HOWEVER, THAT EXCEPT AS MAY BE REQUIRED UNDER APPLICABLE LAWS,
THE USURY LAWS OF THE STATE OF TEXAS OR THE UNITED STATES OF AMERICA SHALL NOT APPLY TO THE
CANADIAN LOANS BUT RATHER THE USURY LAWS IN EFFECT IN CANADA SHALL GOVERN IN SUCH CONTEXT.

     Section 14.13 Counterparts; Facsimiles. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Facsimiles of signatures shall be binding and effective as originals.

     Section 14.14 Severability. Any provision of this Agreement by a court of competent
jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this
Agreement and the effect thereof shall be confined to the provision held to be invalid or illegal.

     Section 14.15 Headings. The headings, captions, and arrangements used in this
Agreement are for convenience only and shall not affect the interpretation of this Agreement.

     Section 14.16 Non-Application of Chapter 346 of Texas Finance Code. The provisions of
Chapter 346 of the Texas Finance Code are specifically declared by the parties hereto not to be
applicable to this Agreement or any of the other Loan Documents or to the transactions contemplated
hereby.

     Section 14.17 Construction. The Borrowers, the Administrative Agents, the Issuing
Lenders and the Lenders acknowledge that each of them has had the benefit of legal counsel of its
own choice and has been afforded an opportunity to review this Agreement and the other Loan
Documents with its legal counsel and that this Agreement and the other Loan Documents

83

 

shall be construed as if jointly drafted by the Borrowers, the Administrative Agents, the
Issuing Lenders and the Lenders.

     Section 14.18 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or be otherwise within the
limitations of, another covenant shall not avoid the occurrence of a Default if such action is
taken or such condition exists.

     Section 14.19 WAIVER OF TRIAL BY JURY. TO THE FULLEST EXTENT PERMITTED, BY APPLICABLE
LAW, EACH OF THE BORROWERS, THE ADMINISTRATIVE AGENTS AND THE LENDERS HEREBY VOLUNTARILY,
KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING
ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG EITHER BORROWER AND
ANY OTHER PARTY TO THIS AGREEMENT ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, ANY OTHER
LOAN DOCUMENTS, OR ANY RELATIONSHIP BETWEEN ANY OTHER PARTY TO THIS AGREEMENT AND THE BORROWERS.
THIS PROVISION IS A MATERIAL INDUCEMENT TO THE LENDERS TO PROVIDE THE FINANCING DESCRIBED IN THIS
AGREEMENT.

     Section 14.20 Amendment and Restatement; Release. This Agreement amends and restates
in its entirety the Existing Credit Agreement. The execution of this Agreement and the other Loan
Documents executed in connection herewith does not extinguish the indebtedness outstanding in
connection with the Existing Credit Agreement nor does it constitute a novation with respect to
such indebtedness. EACH BORROWER REPRESENT AND WARRANT THAT AS OF THE DATE HEREOF THERE ARE NO
CLAIMS OR OFFSETS AGAINST OR DEFENSES OR COUNTERCLAIMS TO ITS OR ANY OBLIGATED PARTIES’ OBLIGATIONS
UNDER THE EXISTING CREDIT AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE DOCUMENTATION RELATING TO THE
DEPOSIT AND CASH MANAGEMENT SERVICES. TO INDUCE THE ADMINISTRATIVE AGENTS, THE ISSUING LENDERS AND
THE LENDERS TO ENTER INTO THIS AGREEMENT, EACH BORROWER AND, BY THE EXECUTION OF THE LOAN DOCUMENTS
TO WHICH IT IS A PARTY, EACH GUARANTOR WAIVES ANY AND ALL CLAIMS, OFFSETS, DEFENSES OR
COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN, ARISING PRIOR TO THE DATE HEREOF AND HEREBY RELEASES THE
ADMINISTRATIVE AGENTS, THE LENDERS, THE ISSUING LENDERS AND THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS AND ATTORNEYS (COLLECTIVELY, THE “RELEASED PARTIES”) FROM ANY AND ALL
OBLIGATIONS, INDEBTEDNESS, LIABILITY, CLAIMS, RIGHTS, CAUSES OF ACTION OR DEMANDS WHATSOEVER,
WHETHER KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED WHICH SUCH BORROWER OR ANY GUARANTOR EVER HAD,
NOW HAS, CLAIMS TO HAVE OR MAY HAVE AGAINST ANY RELEASED PARTY ARISING PRIOR TO THE DATE HEREOF OR
FROM OR IN CONNECTION WITH THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY DOCUMENTATION RELATING TO
THE DEPOSIT AND

84

 

CASH MANAGEMENT SERVICES OR THE TRANSACTIONS CONTEMPLATED THEREBY.

     Section 14.21 Provisions Related to Canadian Loans.

     (a) Income Tax Act (Canada). Neither the Canadian Administrative Agent nor any
Canadian Lender is a non-resident of Canada for purposes of the ITA.

     (b) Interest Act (Canada). Whenever interest is calculated on the basis of a
year of 360 or 365 days, for the purposes of the Interest Act (Canada), the yearly rate of
interest which is equivalent to the rate payable hereunder is the rate payable multiplied by
the actual number of days in the year and divided by 360 or 365, as the case may be. All
interest will be calculated using the nominal rate method and not the effective rate method
and the deemed reinvestment principle shall not apply to such calculations.

     (c) Judgment Currency. The obligation of the Canadian Borrower to make
payments on any Obligation to the Canadian Administrative Agent or to the US Administrative
Agent hereunder in any currency (the “first currency”) shall not be discharged or satisfied
by any tender or recovery pursuant to any judgment expressed in or converted into any other
currency (the “second currency”) except to the extent to which such tender or recovery shall
result in the effective receipt by the Canadian Administrative Agent or the
US Administrative Agent of the full amount of the first currency payable, and accordingly
the primary obligation of the Canadian Borrower shall be enforceable as an alternative or
additional cause of action for the purpose of recovery in the second currency of the amount
(if any) by which such effective receipt shall fall short of the full amount of the first
currency payable and shall not be affected by a judgment being obtained for any other sum
due hereunder.

     Section 14.22 Appointment. Each of the Lenders hereby irrevocably appoints the
applicable Administrative Agent as its agent for purposes of the Intercreditor Agreement (Canadian
Facility) and irrevocably authorizes and instructs the applicable Administrative Agent to enter
into and perform the Intercreditor Agreement (Canadian Facility). Each of the Lenders agrees to be
bound by the terms and provisions of the Intercreditor Agreement (Canadian Facility) applicable to
it.

85

 

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

	 	 	 	 	 	 	 
	 	 	US BORROWER:	 	 
	 
	 	 	 	 	 	 
	 	 	T-3 ENERGY SERVICES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael T. Mino
	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	     Name: Michael T. Mino

     Title: Vice President	 	 

(Signature Page to Second Amended and Restated Credit Agreement)

 

 

	 	 	 	 	 	 	 	 	 
	 	 	CANADIAN BORROWER:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	T3 ENERGY SERVICES (formerly known as T-3

Oilco Energy Services Partnership)	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	T-3 Energy Services Canada, Inc.,

its partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Michael T. Mino
	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael T. Mino

Title: Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	T-3 Oilco Partners ULC,

its partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Michael T. Mino	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael T. Mino

Title: Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	US ADMINISTRATIVE AGENT and

US LENDER:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	WELLS FARGO BANK, NATIONAL

ASSOCIATION, as the US Administrative Agent,

the US Issuing Lender and a US Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Michael Janak	 	 
	 	 	 	 	 	 	 
	 	 	 	 	     Name: Michael Janak

     Title: Vice President	 	 

(Signature Page to Second Amended and Restated Credit Agreement)

 

 

	 	 	 	 	 	 	 
	 	 	CANADIAN ADMINISTRATIVE AGENT, 

US LENDER and CANADIAN LENDER	 	 
	 
	 	 	 	 	 	 
	 	 	COMERICA BANK, a Michigan banking

corporation and an authorized foreign bank under

the Bank Act (Canada) acting through its

Canadian branch	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Omer Ahmed
	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	     Name: Omer Ahmed

     Title: Portfolio Manager	 	 

(Signature Page to Second Amended and Restated Credit Agreement)

 

 

	 	 	 	 	 	 	 
	 	 	COMERICA BANK,

as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Gary Culbertson
	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	     Name: Gary Culbertson

     Title: Vice President, Texas Division	 	 
	 
	 	 	 	 	 	 
	 	 	DNB NOR BANK ASA,

as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Sanjiv Nayar	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	     Name: Sanjiv Nayar

     Title: Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jack Sun	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	     Name: Jack Sun

     Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.,

as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Thomas Okamoto	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	     Name: Thomas Okamoto

     Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	ROYAL BANK OF CANADA,

as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Linda M. Stephens	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	     Name: Linda M. Stephens

     Title: Authorized Signatory	 	 

(Signature Page to Second Amended and Restated Credit Agreement)

 

 

Schedule 1.1

Aggregate Commitments

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	US Revolving	 	Canadian	 	Aggregate
	Bank	 	Credit Commitments	 	Commitments	 	Commitments
	 
	Wells Fargo Bank, National Association
	 	$	50,000,000	 	 	$	0	 	 	$	50,000,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Comerica Bank
	 	$	30,000,000	 	 	$	5,000,000	 	 	$	35,000,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	DnB NOR Bank ASA
	 	$	35,000,000	 	 	$	0	 	 	$	35,000,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	JPMorgan Chase Bank, N.A.
	 	$	35,000,000	 	 	$	0	 	 	$	35,000,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Royal Bank of Canada
	 	$	25,000,000	 	 	$	0	 	 	$	25,000,000	 
	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	$	175,000,000	 	 	$	5,000,000	 	 	$	180,000,000	 
	 

Schedule 1.1 to Second Amended and Restated Credit Agreementexv10w1

 

Exhibit 10.1

PURCHASE AND SALE AGREEMENT

By and among

GRANT PRIDECO, INC.

(“Seller”)

and

VALLOUREC S.A.

and

VALLOUREC & MANNESMANN HOLDINGS, INC.

(collectively, “Buyer”)

October 29, 2007

 

 

Table of Contents

	 	 	 	 	 
	Article 1 Certain Definitions
	 	 	1	 
	1.1 Certain Defined Terms
	 	 	1	 
	1.2 References, Gender, Number
	 	 	2	 
	Article 2 Purchase and Sale
	 	 	2	 
	2.1 Purchase and Sale
	 	 	2	 
	2.2 Assumed and Excluded Liabilities
	 	 	2	 
	2.3 Conveyance of Certain Assets to Tubular Business LP
	 	 	2	 
	2.4 Conveyance of Tube-Alloy Corporation
	 	 	3	 
	2.5 Conveyance of Canadian Assets
	 	 	3	 
	Article 3 Purchase Price and Payment
	 	 	3	 
	3.1 Purchase Price
	 	 	3	 
	3.2 Closing Statement
	 	 	4	 
	3.3 Payment
	 	 	4	 
	3.4 Post-Closing Adjustment to the Purchase Price
	 	 	4	 
	3.5 Allocation of Purchase Price
	 	 	6	 
	Article 4 Representations and Warranties
	 	 	7	 
	4.1 Representations and Warranties of Seller
	 	 	7	 
	4.2 Representations and Warranties of Buyer
	 	 	19	 
	Article 5 Access and Confidentiality
	 	 	21	 
	5.1 General Access
	 	 	21	 
	5.2 Confidential Information
	 	 	21	 
	Article 6 Taxes and Employee Benefits
	 	 	22	 
	6.1 Tax Matters
	 	 	22	 
	6.2 Employee Matters
	 	 	25	 
	Article 7 Covenants of Seller and Buyer
	 	 	28	 
	7.1 Conduct of Business Pending Closing
	 	 	28	 
	7.2 Qualifications on Conduct
	 	 	31	 
	7.3 Public Announcements
	 	 	31	 
	7.4 Actions by Parties
	 	 	32	 
	7.5 Notice of Developments; Schedules
	 	 	32	 
	7.6 Further Assurances
	 	 	32	 

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	7.7 Records
	 	 	32	 
	7.8 Obligations of the Acquired Entity
	 	 	33	 
	7.9 Use of Names; Removal
	 	 	33	 
	7.10 Governmental Filings
	 	 	34	 
	7.11 Computer Hardware and Software
	 	 	34	 
	7.12 Seller Obligations
	 	 	35	 
	7.13 Cooperation
	 	 	36	 
	7.14 Noncompetition
	 	 	36	 
	7.15 License Back of Intellectual Property
	 	 	37	 
	7.16 Certain Insurance Matters
	 	 	38	 
	7.17 Intercompany Accounts
	 	 	39	 
	7.18 Non-Solicitation of Transferred Employees
	 	 	39	 
	7.19 Fulfillment of Certain Contractual Commitments
	 	 	39	 
	Article 8 Closing Conditions
	 	 	39	 
	8.1 Seller’s Closing Conditions
	 	 	39	 
	8.2 Buyer’s Closing Conditions
	 	 	40	 
	Article 9 Closing
	 	 	41	 
	9.1 Closing
	 	 	41	 
	9.2 Seller’s Closing Obligations
	 	 	41	 
	9.3 Buyer’s Closing Obligations
	 	 	42	 
	Article 10 Indemnification
	 	 	43	 
	10.1 Indemnification By Seller
	 	 	43	 
	10.2 Indemnification By Buyer
	 	 	43	 
	10.3 Third Party Claims
	 	 	44	 
	10.4 Limitation of Seller’s Liability
	 	 	45	 
	10.5 Mitigation
	 	 	45	 
	10.6 Survival and Time Limitation
	 	 	45	 
	10.7 Sole and Exclusive Remedy
	 	 	46	 
	10.8 Releases, Disclaimers, and Limitations on Liability
	 	 	46	 
	10.9 Disclaimer of Warranties
	 	 	46	 
	10.10 Waiver of Certain Damages
	 	 	47	 
	10.11 Tax Indemnity
	 	 	47	 
	Article 11 Termination; Remedies; Limitations
	 	 	48	 

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	11.1 Termination
	 	 	48	 
	11.2 Effect of Termination
	 	 	48	 
	Article 12 Other Provisions
	 	 	48	 
	12.1 Counterparts
	 	 	48	 
	12.2 Governing Law; Jurisdiction; Process
	 	 	48	 
	12.3 Entire Agreement
	 	 	49	 
	12.4 Expenses
	 	 	49	 
	12.5 Notices
	 	 	49	 
	12.6 Successors and Assigns
	 	 	50	 
	12.7 Amendments and Waivers
	 	 	51	 
	12.8 Appendices, Annexes, Schedules and Exhibits
	 	 	51	 
	12.9 Interpretation and Rules of Construction
	 	 	51	 
	12.10 Agreement for the Parties’ Benefit Only
	 	 	51	 
	12.11 Severability
	 	 	52	 
	12.12 Time of Essence
	 	 	52	 

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	Appendix A

	 	Definitions
	Annex A

	 	Acquired Assets and Assets Owned by Acquired Entity
	Annex A-1

	 	Real Estate
	Annex A-2

	 	Acquired Intellectual Property
	Annex A-3

	 	Contracts
	Annex A-4

	 	Transferred Bank Accounts
	Annex B

	 	Working Capital Calculation Guideline
	Schedule 2.1(c)

	 	Excluded Assets
	Schedule 2.2

	 	Assumed and Excluded Liabilities
	Schedule 4.1(a)

	 	Sufficiency of Material Assets
	Schedule 4.1(b)

	 	Financial Statements
	Schedule 4.1(c)

	 	Jurisdictions
	Schedule 4.1(d)

	 	Subsidiaries
	Schedule 4.1(g)

	 	Seller’s Ownership of Acquired Entity
	Schedule 4.1(h)

	 	Capitalization
	Schedule 4.1(i)

	 	Violations or Breaches
	Schedule 4.1(k)

	 	Tax Matters
	Schedule 4.1(l)

	 	Governmental Permits
	Schedule 4.1(m)

	 	Significant Contracts
	Schedule 4.1(n)

	 	Environmental Matters
	Schedule 4.1(o)

	 	Liens on Acquired Personal Property
	Schedule 4.1(p)

	 	Liens on Real Property
	Schedule 4.1(q)

	 	Leases
	Schedule 4.1(r)

	 	Intellectual Property Matters
	Schedule 4.1(s)

	 	Consents
	Schedule 4.1(t)

	 	Known Litigation
	Schedule 4.1(v)

	 	Events Subsequent to Balance Sheet Date
	Schedule 4.1(w)(i)

	 	Business Employees
	Schedule 4.1(w)(ii)

	 	Benefit Plans
	Schedule 4.1(w)(iii)

	 	Employee Benefit Plans – Title IV of ERISA, COBRA,
Excess Parachute Payments
	Schedule 4.1(w)(vi)

	 	Contributions to Benefit Plans
	Schedule 4.1(w)(vii)

	 	Employee Benefit Events Triggered
	Schedule 4.1(x)

	 	Insurance
	Schedule 4.1(y)

	 	Labor Agreements
	Schedule 4.1(bb)

	 	Condition of Equipment
	Schedule 4.1(ee)

	 	Warranties
	Schedule 4.1(ff)

	 	Compliance with Laws
	Schedule 4.1(hh)

	 	Health and Safety Matters
	Schedule 4.1(jj)

	 	Arm’s-Length Transactions
	Schedule 4.1(mm)

	 	Licenses to Tenaris
	Schedule 6.2(c)

	 	Severance Policy
	Schedule 6.2(g)

	 	Lab Technicians
	Schedule 7.1

	 	Conduct of Business Pending Closing
	Schedule 7.11

	 	Computer Hardware and Software
	Schedule 7.12

	 	Selling Obligations

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	Schedule 7.14

	 	Noncompetition
	Schedule 7.15

	 	Licensed Back Intellectual Property
	Schedule 8.2(h)

	 	Required Consents
	Exhibit 7.15(d)

	 	Form of MTLA Letter Agreement
	Exhibit 9.2(d)

	 	Form of Transition Services Agreement
	Exhibit 9.2(e)

	 	Form of Heat Treat Supply Agreement

v 

 

PURCHASE AND SALE AGREEMENT

     THIS PURCHASE AND SALE AGREEMENT (this “Agreement”), dated as of October 29, 2007, is by and
among Grant Prideco, Inc., a Delaware corporation (“Seller”), Vallourec S.A., a corporation
organized under the laws of France, and Vallourec & Mannesmann Holdings, Inc., a Delaware
corporation (collectively, “Buyer”).

Recital

     WHEREAS, Seller’s tubular technology and services division is engaged through certain of its
Subsidiaries, in the business of manufacturing and supplying high performance tubular products and
services;

     WHEREAS, on the terms and subject to the conditions herein, Seller desires to sell or cause to
be sold to Buyer and Buyer desires to purchase or cause to be purchased from Seller, Seller’s
tubular technology and services division, including the following business lines within such
division: premium threading, semi-premium threading, all Atlas Bradford product lines regardless of
size, Tubular Corporation of America (“TCA”), and Tube-Alloy Corporation, but excluding the
Seller’s and Seller’s Affiliates’ XL Systems Business and other Excluded Assets (collectively, the
“Business”); and

     WHEREAS, in order to effect the sale of the Business to Buyer, subject to the terms and
conditions described herein, Seller, individually or by an Affiliate of Seller designated by Seller
(“Affiliated Seller”), will sell or cause to be sold to Buyer and Buyer, individually or by one or
more Affiliates of Buyer designated by Buyer (“Affiliated Buyer”), will purchase or cause to be
purchased from Seller or an Affiliated Seller:

     (i) 100% of the issued and outstanding equity interests of Tube-Alloy Corporation, a Louisiana
corporation (the “Acquired Entity”) pursuant to the structure described in Section 2.4; and

     (ii) substantially all of the assets of the Business owned by Seller and its Affiliates (to
the extent such assets are not owned by the Acquired Entity), either by conveyance of such assets
directly to Buyer or one or more Affiliated Buyers or by conveyance to Buyer or one or more
Affiliated Buyers of all of the general and limited partner interests of Tubular Business LP in
accordance with Section 2.3.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements described in this
Agreement, the parties hereto agree as follows:

Article 1

Certain Definitions

     1.1 Certain Defined Terms. Unless the context otherwise requires, the respective
terms defined in Appendix A attached hereto and incorporated herein shall, when used herein, have
the respective meanings therein specified, with each such definition to be equally applicable both
to the singular and the plural forms of the term so defined.

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     1.2 References, Gender, Number. All references in this Agreement to an “Article,”
“Section” or “subsection” shall be to an Article, Section, or subsection of this Agreement, unless
the context requires otherwise. Unless the context otherwise requires, the words “this Agreement,”
“hereof,” “hereunder,” “herein,” “hereby” or words of similar import shall refer to this Agreement
as a whole and not to a particular Article, Section, subsection, clause or other subdivision
hereof. Whenever the context requires, the words used herein shall include the masculine, feminine
and neuter gender, and the singular and the plural.

Article 2

Purchase and Sale

     2.1 Purchase and Sale. On the terms and subject to conditions described in this Agreement,
at the Closing, but effective as of the Effective Time, Seller agrees to, and to cause the
Affiliated Sellers to, sell, convey, assign, transfer and deliver, or cause to be sold, conveyed,
assigned, transferred and delivered, to Buyer or Affiliated Buyers, and Buyer agrees to, or to
cause the Affiliated Buyers to, purchase and acquire, or cause to be purchased and acquired, from
Seller and the Affiliated Sellers, the assets and equity interests described in this Section 2.1:

     (a) Purchase of Acquired Assets. With respect to the Business, all of Seller’s and
Affiliated Sellers’ right, title and interest in the assets set forth on Annex A hereto to
the extent such assets are not owned by the Acquired Entity (the “Acquired Assets”), by
conveyance of such assets directly to Buyer or one or more of the Affiliated Buyers and by
conveyance to Buyer or one or more Affiliated Buyers of all of the general and limited
partner interests of each Tubular Business LP in accordance with Section 2.3.

     (b) Purchase of Equity Interests. 100% of the equity interests of the Acquired
Entity, in accordance with Section 2.4.

     (c) Excluded Assets. Notwithstanding anything contained in this Agreement or any
schedule or any other document executed in connection with the transactions contemplated
hereby, Seller and its Affiliates shall retain and shall not convey to Buyer, any of
Seller’s or its Affiliates’ right, title and interest to the assets listed on Schedule
2.1(c) (collectively, the “Excluded Assets”), and to the extent any such assets are owned
by the Acquired Entity, such Excluded Assets shall be transferred from the Acquired Entity
prior to Closing.

     2.2 Assumed and Excluded Liabilities. Effective as of the Effective Time, Buyer or
Affiliated Buyers shall assume all Assumed Liabilities for the Business and no other.
Notwithstanding any other provision of this Agreement, Buyer shall not (nor shall the Acquired
Entity following the Closing) assume or otherwise be responsible for any Excluded Liabilities.

     2.3 Conveyance of Certain Assets to Tubular Business LP. On or prior to the Closing
Date, Seller shall convey or cause to be conveyed all of the Acquired Assets and Assumed
Liabilities (other than the Acquired Assets and Assumed Liabilities associated with the Canadian
operations of the Business, which are addressed in Section 2.5 below) to two newly formed Delaware
limited partnerships (collectively, “Tubular Business LP”), each of which shall be jointly owned by
Seller and an Affiliated Seller and each of which shall be disregarded as a

2

 

separate entity for federal income tax purposes. The division of such Acquired Assets and
Assumed Liabilities between the two limited partnerships shall be at the direction of Buyer. At
Closing, Seller and any applicable Affiliated Seller shall sell, convey, assign, transfer and
deliver to Buyer, or one or more Buyer Affiliates designated by Buyer, all outstanding general and
limited partner interests of each Tubular Business LP. Each Tubular Business LP shall be
considered an Acquired Entity for purposes of this Agreement.

     2.4 Conveyance of Tube-Alloy Corporation. 

     (a) Conversion of Tube-Alloy Corporation to Tube-Alloy LP. If requested by Buyer in
writing within 30 days after the date hereof, Seller shall cause Tube-Alloy Corporation to
be merged into a newly formed Delaware limited partnership (“Tube-Alloy LP”), in a form
that meets Buyer’s reasonable approval, which shall be jointly owned by Seller or
Affiliated Sellers and which shall be treated as a partnership for federal income Tax
purposes. One hundred percent (100%) of the partnership interests in Tube-Alloy LP shall
be conveyed by Seller and its Affiliated Sellers to Buyer at Closing and shall be
considered an Acquired Entity.

     (b) Code Section 338(h)(10) Election. Notwithstanding Section 2.4(a) above, if
requested by Buyer, Buyer and Seller shall join in making an election under Code Section
338(h)(10) (and any corresponding election under state, local, or foreign Tax Law)
(collectively, a “338(h)(10) Election”) with respect to any purchase and sale of the stock
of Tube-Alloy Corporation and any of its subsidiaries hereunder.

     2.5 Conveyance of Canadian Assets. All of the Acquired Assets and Assumed Liabilities
related to the Canadian operations of the Business shall be conveyed directly by Seller or its
Affiliates to an Affiliate of Buyer designated by Buyer.

Article 3

Purchase Price and Payment

     3.1 Purchase Price.

     (a) Purchase Price. The purchase price for the sale of the Acquired Assets and the
Acquired Entity to Buyer and Affiliated Buyers is eight hundred million U.S. dollars
(US$800,000,000.00) (the “Purchase Price”), subject to adjustment in accordance with the
terms of this Agreement, plus the assumption by Buyer of the Assumed Liabilities.

     (b) Adjustment Amount. The “Adjusted Purchase Price” shall be the Purchase Price
increased or decreased, as the case may be, by an amount equal to the Adjustment Amount.
The “Adjustment Amount” shall be equal to: (i) the net increase to, or net decrease from,
the Working Capital between the Balance Sheet Date and the Closing Date; minus (ii) the
actual amount of Net Debt at Closing Date. For purposes of clarity, an increase in Working
Capital under the preceding sentence shall be represented by a positive number and a
decrease in Working Capital shall be represented by a negative number, and a positive Net
Debt would reduce the Purchase Price and a negative Net Debt position would result in an
increase of the Purchase Price.

3

 

“Working Capital” shall be the arithmetic sum of (i) a positive amount equal to the
total current assets of the Business (including inventory and accounts receivable), and
(ii) a negative amount equal to the total current liabilities of the Business, in each case
as such assets and liabilities are included on the Balance Sheet, or would be included on a
pro forma balance sheet of the Business (as of the Closing Date) prepared in accordance
with GAAP applied on a basis consistent with the Balance Sheet of the Business. Buyer and
Seller each acknowledge and agree that, for purposes of this calculation the amount of the
Working Capital as of the Balance Sheet Date is US$62,000,000.00. A schedule and guideline
for calculating Working Capital at the Closing Date is set forth on Annex B. The Balance
Sheet as of the Closing Date is referred to as the “Closing Balance Sheet.” In addition,
Buyer and Seller each acknowledge and agree that, for purposes of the calculation of the
Working Capital on the Closing Date, the following principles shall apply:

     (i) Excluded Assets and any assets not purchased by Buyer shall not be
reflected in the Closing Balance Sheet;

     (ii) Excluded Liabilities and any liabilities not assumed by Buyer or
extinguished by Seller and its Affiliates prior to the Closing Date shall not be
reflected in the Closing Balance Sheet;

     (iii) prepaid intercompany corporate and divisional allocations and
intercompany accounts between the Business and Seller and its Affiliates shall not
be reflected in the Closing Balance Sheet, and all such balances shall be released
in connection with the Closing pursuant to Section 7.17; and

     (iv) Accrued Vacation (Section 6.2(e)), Health Care Costs (Section 6.2(d)),
federal and state income taxes (Sections 6.1(a) and (b)) and prepaid insurance
premiums shall not be included in Working Capital on the Balance Sheet or the
Closing Balance Sheet. For the avoidance of doubt, the Parties agree that any Taxes
relating to a pre-closing period that will be the responsibility of Buyer or its
Affiliates shall be accrued as a current liability on the Closing Balance Sheet and
shall reduce the Purchase Price.

     3.2 Closing Statement. Not later than three Business Days prior to the Closing Date,
Seller shall prepare and deliver to Buyer a detailed statement (the “Closing Statement”) of the
estimated purchase price adjustments and the estimated Adjusted Purchase Price (the “Estimated
Adjusted Purchase Price”) for each of the Acquired Assets and for the Acquired Entity.

     3.3 Payment. At the Closing, Buyer shall, or shall cause its Affiliated Buyer(s) to, wire
transfer the Estimated Adjusted Purchase Price, in immediately available funds for the account of
Seller or one or more Affiliates of Seller, as specified by Seller to Buyer at least five Business
Days preceding the Closing Date.

     3.4 Post-Closing Adjustment to the Purchase Price.

     (a) Revised Closing Statement. After the Closing, Buyer (or Buyer’s external auditors
(at Buyer’s cost and expense), if it so desires) shall determine the Adjustment

4

 

Amount. On or before the date that is 30 days after the Closing Date, Buyer shall
deliver to Seller a Closing Balance Sheet and revised Closing Statement setting forth the
actual Adjustment Amount and such supporting documentation reasonably necessary to support
the Adjustment Amount. To the extent reasonably requested by Buyer, Seller shall assist in
the preparation of the revised Closing Statement. Buyer shall provide to Seller such data
and information as Seller may reasonably request supporting the amounts reflected on the
revised Closing Statement to permit Seller (or Seller’s external auditors (at Seller’s cost
and expense), if it so desires) to perform or cause to be performed a review of the revised
Closing Statement. Seller and Buyer shall conduct or cause to be conducted a physical
inventory of the inventory reflected on the Closing Statement in a manner mutually agreed
upon between Buyer and Seller immediately following the Closing Date, which inventory must
be completed no later than fourteen days after the Closing Date. Buyer and Seller may
each, at their respective options and own expense, have one or more representatives
(including outside auditors, if it so desires) present at such physical inventory. The
results of the physical inventory will be taken into account in the Closing Statement. The
revised Closing Statement shall become final and binding upon the parties on the date (the
“Final Settlement Date”) that is 30 days following receipt thereof by Seller unless Seller
gives written notice of its disagreement (“Notice of Disagreement”) to Buyer prior to such
date. Any Notice of Disagreement shall specify in reasonable detail the dollar amount,
nature and basis of any disagreement so asserted and Seller’s alternative calculations of
each amount. If a Notice of Disagreement is received by Buyer in a timely manner, then the
Closing Statement (as revised in accordance with paragraph (b) or (c) below) shall become
final and binding on the parties on, and the Final Settlement Date shall be, the earlier of
(i) the date upon which Seller and Buyer agree in writing with respect to all matters
specified in the Notice of Disagreement or (ii) the date upon which the Final Closing
Statement is issued by the Closing Statement Arbitrator.

     (b) Final Closing Statement. During the 30 days following the date upon which Buyer
receives the Notice of Disagreement, Seller and Buyer shall attempt to resolve in writing
any differences that they may have with respect to all matters specified in the Notice of
Disagreement. If at the end of such 30-day period (or earlier by mutual agreement to
arbitrate) Buyer and Seller have not reached agreement on such matters, the matters that
remain in dispute (and only such matters) shall be submitted to an arbitrator (the “Closing
Statement Arbitrator”) for review and final and binding resolution conducted in Houston,
Texas. The Closing Statement Arbitrator shall be PricewaterhouseCoopers L.L.P. (Houston
office), or if such firm is unable or unwilling to act, such other nationally recognized
independent public accounting firm as shall be agreed upon by Buyer and Seller in writing.
If the parties have not agreed upon an accounting firm by the date that is 30 days after
the date upon which Buyer received the Notice of Disagreement, then the Closing Statement
Arbitrator shall be selected, upon application of Buyer and Seller, by the accounting firm
of PricewaterhouseCoopers L.L.P. (Houston office) within ten days of receipt of such
application. Each party shall, not later than seven days prior to the hearing date set by
the Closing Statement Arbitrator (which hearing shall take place within 30 days after
selection of the Closing Statement Arbitrator, unless otherwise agreed to in writing by the
Parties), submit a brief with dollar figures for settlement of the disputes as to the
amount of the Adjusted

5

 

Purchase Price (together with a proposed Closing Statement that reflects such
figures). The hearing shall be conducted on a confidential basis. The Closing Statement
Arbitrator shall render a decision resolving the matters in dispute (which decision shall
include a written statement of findings and conclusions) within ten days after the
conclusion of the hearing, unless the parties reach agreement prior thereto and withdraw
the dispute from arbitration. The Closing Statement Arbitrator shall provide to the
parties explanations in writing of the reasons for its decisions regarding the Adjusted
Purchase Price (including a worksheet setting forth all material calculations) and shall
issue the Final Closing Statement of the Closing Statement Arbitrator reflecting such
decisions (the “Arbitrator’s Closing Statement”). The decision of the Closing Statement
Arbitrator shall be final and binding on the parties. The cost of any arbitration
(including the fees and expenses of the Closing Statement Arbitrator) pursuant to this
Section 3.4(b) shall be borne equally by Buyer and Seller. The fees and disbursements of
Buyer’s independent auditors incurred in connection with the services performed with
respect to the Closing Statement shall be borne by Buyer and the fees and disbursements of
Seller’s independent auditors incurred in connection with their preparation of the Notice
of Disagreement shall be borne by Seller. As used in this Agreement, the term “Final
Closing Statement” shall mean the revised Closing Statement described in this Section
3.4(b), as prepared by Buyer and as may be subsequently adjusted to reflect any subsequent
written agreement between the parties with respect thereto, or if submitted to the Closing
Statement Arbitrator, the Arbitrator’s Closing Statement as described in this Section
3.4(b).

     (c) Final Settlement. If the amount of the Adjusted Purchase Price as described on
the Final Closing Statement exceeds the amount paid by Buyer pursuant to Section 3.3, then
Buyer shall pay to Seller, within five Business Days after the Final Settlement Date, the
amount by which the Adjusted Purchase Price as described on the Final Closing Statement
exceeds the amount paid by Buyer pursuant to Section 3.3, together with interest at the
Agreed Rate on such excess amount from the Closing Date until paid. If the amount of the
Adjusted Purchase Price as described on the Final Closing Statement is less than the amount
paid by Buyer pursuant to Section 3.3, then Seller shall pay to Buyer, within five Business
Days after the Final Settlement Date, the amount by which the Adjusted Purchase Price as
described on the Final Closing Statement is less than the amount paid by Buyer pursuant to
Section 3.3, together with interest at the Agreed Rate on such deficiency amount from the
Closing Date until paid. Any post-Closing payment made pursuant to this Section 3.4(c)
shall be made by means of a wire transfer of immediately available funds to a bank account
designated by the party receiving the funds.

     3.5 Allocation of Purchase Price. Buyer shall cause an independent appraiser selected by
Buyer and at Buyer’s expense and reasonably acceptable to Seller (the “Appraiser”) to conduct and
deliver to Buyer and Seller a preliminary allocation of the Purchase Price at least 10 Business
Days prior to the Closing Date. Each party shall bear the fees, costs and expenses of its own
accountants and shall permit each other and each other’s accountants and the Appraiser reasonable
access to the books and records necessary to perform the analysis contemplated by this Section.
Based upon the Appraiser’s preliminary allocation and three Business days prior to the Closing, the
Buyer and Seller shall mutually agree upon a preliminary allocation of the

6

 

Purchase Price among the Acquired Assets and among the assets of the Acquired Entity in accordance
with the relative fair market value of such assets in a manner which shall comply with Sections
1060 and 338 of the Code and the regulations thereunder. No later than thirty days after the date
of the Final Closing Statement, the Seller and the Buyer shall mutually agree upon the final
allocation of the Purchase Price (the “Final Purchase Price Allocation”) among the Acquired Assets
and among the assets of the Acquired Entity to reflect any adjustment in the Purchase Price
provided by Section 3.4. The Final Purchase Price Allocation shall be made in a manner which shall
comply with Sections 1060 and 338 of the Code and the regulations thereunder, and the Purchase
Price shall be allocated among the Acquired Assets and among the assets of the Acquired Entity in
accordance with the relative fair market value of such assets. The parties shall each report the
federal, state, local and other Tax consequences of the purchase and sale contemplated hereby in a
manner consistent with such allocation. Each of the Seller and the Buyer warrant and agree that
such allocation has been determined through arm’s-length negotiations. If the Buyer and the Seller
are unable to agree upon the Final Purchase Price Allocation within the thirty-day period set forth
above, the parties shall resolve such dispute pursuant to the mechanism set forth in Section
3.4(b).

Article 4

Representations and Warranties

     4.1 Representations and Warranties of Seller. As of the date of this Agreement,
Seller on behalf of itself and each Affiliated Seller, represents and warrants to Buyer (as
qualified by the appropriate schedule with respect to the Business, as applicable) as follows:

     (a) Transfer of Assets. Except as described in Schedule 4.1(a), and except for the
Excluded Assets and such assets that would not be material in the operation of the
Business, the Acquired Assets and the assets owned by the Acquired Entity constitute all of
the assets, real and personal, tangible and intangible, including, but not limited to,
Intellectual Property, necessary or held for use to operate the Business in the manner
presently conducted.

     (b) Financial Statements. Attached hereto as Schedule 4.1(b) is (i) an unaudited
balance sheet and statement of income as of and for the year ended December 31, 2006 and an
unaudited statement of income for the six months ended June 30, 2007, for the Business and
(ii) an unaudited balance sheet, as of June 30, 2007 (the “Balance Sheet Date”), for the
Business (the “Balance Sheet”). Such financial statements have been, in the opinion of the
management of Seller, prepared in accordance with GAAP applied on a consistent basis during
the periods involved, and present fairly, in all material respects, the financial position
and results of operations of the Business taken as a whole as of such date, except for the
matters disclosed in Schedule 4.1(b). Except as disclosed on Schedule 4.1(b), the Business
has no liabilities except for liabilities reflected or reserved against in the Balance
Sheet and current liabilities incurred in the ordinary course of business of the Business
since the Balance Sheet Date and liabilities that, in the aggregate, would not constitute a
Material Adverse Effect.

     (c) Organization. The Seller, each Affiliated Seller and the Acquired Entity (which,
for the avoidance of doubt, includes each entity listed on Schedule 4.1(d)) are

7

 

each duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization (if such concept of existence and good standing exists in
such jurisdiction). The Acquired Entity has all requisite corporate or other entity power
and authority to carry on its business as currently conducted. The Acquired Entity is duly
qualified or licensed to do business and in good standing, in each case, in the
jurisdictions listed on Schedule 4.1(c), which jurisdictions constitute each jurisdiction
where the ownership, lease or operation of its property or the conduct of its business
requires such license or qualification, except where the failure to be so licensed or
qualified would not result in a liability to the Business of more than $100,000
individually or in the aggregate. The Seller has delivered or will, prior to the Closing
Date, deliver to Buyer a true and correct copy of the certificate of incorporation and
bylaws (or other applicable governing documents) of the Acquired Entity (collectively, the
“Charter Documents”), in each case as amended to the date hereof, and each of such
documents is in full force and effect.

     (d) Subsidiaries. Schedule 4.1(d) sets forth a list of each Acquired Entity that is a
Subsidiary of the Acquired Entity and the ownership thereof. Except as set forth on
Schedule 4.1(d), the Acquired Entity does not own or hold, directly or indirectly, any
equity interest or other ownership interest in any corporation, limited liability company,
partnership, joint venture or other entity or Person.

     (e) Authority. Seller has all requisite corporate power and authority to execute and
deliver this Agreement and the Seller Related Agreements, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby and
thereby. The execution, delivery, and performance of this Agreement and the Seller Related
Agreements and the transactions contemplated hereby and thereby have been duly and validly
authorized by all requisite corporate action on the part of Seller. As of the Closing
Date, the performance by each Affiliated Seller of the transactions contemplated by this
Agreement and the Seller Related Agreements will have been duly and validly authorized by
all requisite corporate or other action on the part of such Affiliated Seller.

     (f) Enforceability. Each of this Agreement and the Seller Related Agreements has been
duly and validly executed and delivered by Seller and constitutes a valid, legal and
binding agreement of Seller enforceable against it in accordance with its terms, subject to
(i) applicable bankruptcy, insolvency, reorganization, moratorium, and other similar U.S.
or non-U.S. laws of general application from time to time in effect that affect creditors’
rights generally, (ii) general principles of equity, and (iii) the power of a court to deny
enforcement of remedies generally based upon public policy.

     (g) Seller’s Ownership of the Acquired Entity. Seller or its Affiliates owns,
directly or indirectly, all outstanding equity interests of the Acquired Entity, free and
clear of any Liens (except as created by this Agreement or Liens that will be extinguished
on or prior to the Closing). Upon the purchase of the equity interests of the Acquired
Entity as contemplated by this Agreement, the Buyer or Affiliated Buyer will obtain good
and valid title to such equity interests, free and clear of any Liens (other than those
created by, through or under Buyer). There are no options, warrants,

8

 

purchase rights, or other contracts or commitments (other than this Agreement) that
would require Seller or its Affiliates to sell, transfer, or otherwise dispose of any
equity interests of the Acquired Entity. Except as disclosed on Schedule 4.1(g), Seller or
its Affiliates is not a party to any voting trust, proxy, or other agreement or
understanding with respect to the voting of the equity interests of the Acquired Entity.

     (h) Capitalization. Schedule 4.1(h) sets forth the authorized equity interests of the
Acquired Entity. All of the issued and outstanding equity interests of the Acquired Entity
have been duly authorized and are validly issued and are fully paid and nonassessable to
the extent applicable to and were not issued in violation of the preemptive rights of any
Person. Except as described on Schedule 4.1(h), the Acquired Entity has no outstanding
convertible security, call, preemptive right, option, warrant, purchase right, or other
contract or commitment that would, directly or indirectly, require the Acquired Entity to
sell, issue, or otherwise dispose of any of its equity interests.

     (i) No Violation or Breach. Except as described in Schedule 4.1(i), neither the
execution and delivery of this Agreement or the Seller Related Agreements nor the
consummation of the transactions contemplated hereby or thereby and performance of its
obligations hereof or thereof by Seller or Affiliated Seller will (i) result in a violation
or breach of any provision of the governing documents of Seller or the Charter Documents of
the Acquired Entity, (ii) result in a violation or breach of any of the terms and
provisions of, or constitute a default under, or conflict with, or give any party thereto a
right to terminate or modify any material agreement, indenture or other instrument under
which Seller or the Acquired Entity is bound, other than the third-party consents to
assignment as described herein and such breaches or violations of, defaults under, or
conflicts with, agreements, indentures, or other instruments as would not reasonably be
expected to have a Material Adverse Effect or (iii) violate any material Law applicable to
Seller, the Business, the Acquired Entity or the Acquired Assets, except for violations
that would not reasonably be expected to have a Material Adverse Effect.

     (j) Bankruptcy. There are no bankruptcy or reorganization proceedings pending, or to
the knowledge of Seller threatened, against Seller or the Acquired Entity.

     (k) Tax Matters. Except as described in Schedule 4.1(k) or as would not have a
Material Adverse Effect:

     (i) All Tax Returns required to be filed by or with respect to the Acquired
Entity or the Acquired Assets on or before the Closing Date have been or will be
timely filed with the appropriate taxing authorities in all jurisdictions in which
such Tax Returns are required to be filed; and all Taxes owed (whether or not shown
on any Tax Return) have been paid on or before their due date (including any
extensions);

     (ii) The Acquired Entity has not, and Seller has not with respect to the
Acquired Entity or Acquired Assets, extended or waived the application of any

9

 

statute of limitations of any jurisdiction regarding the assessment or
collection of any Tax nor entered into any closing agreement or other agreement
related to Taxes;

     (iii) There are no audits, claims, assessments, levies, administrative
proceedings or lawsuits pending or threatened against or with respect to the
Acquired Entity or the Acquired Assets by any taxing authority and no deficiency for
any Taxes has been proposed, asserted or assessed against the Acquired Entity or the
Acquired Assets that has not been resolved and paid in full;

     (iv) The Acquired Entity is not a party to any Tax allocation, sharing or
indemnity agreement or arrangement and Seller is not a party to any Tax allocation,
sharing or indemnity agreement or arrangement with respect to the Acquired Assets;
and

     (v) Seller is not a foreign person within the meaning of Section 1445 of the
Code.

     (l) Governmental Permits. Each of Seller and the Acquired Entity has all material
permits, franchises, approvals, consents, licenses, concessions, certificates or other
authorizations (“Governmental Permits”) of Governmental Authorities required to own, lease
or operate the Acquired Assets and to conduct and operate its Business as currently
conducted and operated. Each of Seller and the Acquired Entity has, and as of the Closing
Date will have, fulfilled and performed in all material respects all its obligations with
respect to such Governmental Permits relating to the Business which are or will be due to
have been fulfilled and performed by such date. Each such Governmental Permit is in full
force and effect and, to the knowledge of Seller, no event has occurred that would prevent
any such Governmental Permit from being renewed or reissued or which permits, or with or
without the giving of notice or the passage of time or both would permit, the revocation or
termination thereof, or results or would result in any material impairment of the rights of
the holder of any such material Governmental Permit. Schedule 4.1(l) lists each material
Governmental Permit reasonably necessary to operate the Business as currently conducted,
and (i) each such Governmental Permit is in full force and effect and, to the knowledge of
Seller, no event has occurred that would prevent any such Governmental Permit from being
renewed or reissued or which permits, or with or without the giving of notice or the
passage of time or both would permit, the revocation or termination thereof, or results or
would result in any material impairment of the rights of the holder and (ii) except as set
forth on Schedule 4.1(l) and except for Governmental Permits that will be available to or
obtainable by Buyer at little or no cost in the ordinary course without any interruption of
the operation of the Business following the Effective Time, assuming timely application
therefor, and reasonable diligence in pursuit thereof, by Buyer, such material Governmental
Permits are transferable without the consent of any Governmental Authority.

     (m) Significant Contracts. Annex A-3 sets forth a list of all Significant Contracts
for the Business. Except as described in Schedule 4.1(m), all the Significant Contracts
are being assigned or transferred to and assumed by Buyer, and are assignable

10

 

by Seller or Seller’s Affiliate, as applicable, to Buyer without the consent of any
other Person. Except as set forth on Schedule 4.1(m), (i) none of the Seller or Seller’s
Affiliates that is a party to the Significant Contracts is in material breach or default
under any Significant Contract, (ii) each Significant Contract is in full force and effect,
and is a valid binding agreement of Seller or Seller’s Affiliates, enforceable against
Seller or Seller’s Affiliates in accordance with its terms, and to Seller’s knowledge, is a
valid agreement, arrangement or commitment of each other party thereto, enforceable against
such party in accordance with its terms, and (iii) to Seller’s knowledge, no other Person
that is a party to any Significant Contract is in material breach or default under any such
Significant Contract and no event has occurred which with the notice or lapse of time or
both would constitute a material breach or default, or permit termination, modification or
acceleration under any Significant Contract, and (iv) those Significant Contracts that
represent licenses do not conflict with any other license or agreement that is being
retained by Seller or its Affiliates following the Closing or that is granted by Buyer to
Seller. Seller has made available to Buyer copies of each Significant Contract and all
amendments thereto.

     (n) Environmental Matters. Except as described in Schedule 4.1(n) or as would not
reasonably be expected to have a Material Adverse Effect, there is and has been no
violation of any Environmental Law or other grounds for Environmental Liability at any site
or facility owned or operated by the Acquired Entity or included in the Acquired Assets or
otherwise relating to the Business. Except as described on Schedule 4.1(n) and other than
those matters that would not reasonably be expected to have a Material Adverse Effect,
during the last three years, to Seller’s knowledge, there have been no written notices
received by the Seller or its Affiliates with respect to a violation of an Environmental
Law at any site or facility owned or operated by the Acquired Entity, the Acquired Assets
or otherwise relating to the Business. To Seller’s knowledge, there is no fact,
circumstance or condition related to the Acquired Entity, the Acquired Assets or the
Business that could reasonably be expected to impose an Environmental Liability having a
Material Adverse Effect. To Seller’s knowledge, the environmental reports previously
provided or made available to Buyer that relate to the Business contain all material
information (or summaries thereof) regarding the Acquired Entity, the Acquired Assets and
the Business and their respective compliance with or liability under any Environmental Law
that are in the Seller’s possession, custody, or control.

     (o) Personal Property. Each of the Acquired Entity, Seller or an Affiliate of Seller
owns good and transferable title to and, upon execution and delivery of the applicable
bills of sale or other transfer documents at Closing, Buyer or its Affiliates (including
the Acquired Entity) will own good and transferable title to, the Acquired Assets (other
than such of the Acquired Assets constituting Real Estate which are addressed in 4.1(p)
below) free and clear of all Liens except: (a) Liens described on Schedule 4.1(o), (b)
Liens arising by operation of Law for Taxes not yet due and payable; (c) the rights of
customers, suppliers and subcontractors in the ordinary course of business under general
principles of commercial law; and (d) Liens the aggregate value of which does not exceed
$250,000.

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     (p) Real Property. The real property described as owned on Annex A-1 describes as of
the date of this Agreement all real property owned by Seller and its Affiliates that is
used primarily in the operation of the Business, and upon execution and delivery of the
applicable deeds and other transfer documents at Closing, Buyer or its Affiliates
(including the Acquired Entity) will own such real property free and clear of all Liens,
except: (a) as described on Schedule 4.1(p); (b) Liens arising by operation of Law for
Taxes not yet due and payable; (c) zoning, planning, and other restrictions of record and
(d) imperfections or irregularities of title that would not reasonably be expected to
materially affect the use of such property as currently utilized in the Business.

     (q) Leases. Annex A-1 describes all real property that is used in the operation of
the Business referred to therein that is leased by Seller or its Affiliates and primarily
used in the operation of the Business (the “Significant Leases”). Except as described on
Schedule 4.1(q), (i) none of the Acquired Entity, Seller or Seller’s Affiliates that is a
party to any Significant Lease is in material breach or default under any Significant
Lease, (ii) to Seller’s knowledge, no other Person that is a party to a Significant Lease
is in material breach or default under any Significant Lease and no event has occurred
which with the notice or lapse of time or both would constitute a material breach or
default, or permit termination, modification or acceleration under any Significant Lease
and (iii) such Significant Leases to which the Acquired Entity is not a party are
assignable to Buyer without the consent of a third party.

     (r) Patents and Other Intellectual Property.

     (i) Annex A-2 describes all issued, pending and subsisting patents, trademarks
and copyrights owned by Seller and its Affiliates and used in the operation of the
Business referred to therein. Except as otherwise indicated on Annex A-2 or in the
ordinary course of business, neither the Seller nor any Affiliate has granted to any
other Person or entity any license to use any such Intellectual Property that would
interfere with Buyer’s ability to conduct the business of the Business as currently
conducted.

     (ii) Except as described in Schedules 4.1(r) or 4.1(t), or otherwise disclosed
in writing by Seller to Buyer, there is no Action pending, or to the knowledge of
Seller, threatened in writing against, Seller or its Affiliates by a third party
claiming that any product sold or marketed by the Business during the past three
years violates the intellectual property rights of such third party. Except as
described on Schedule 4.1(t), to Seller’s knowledge, no third party is currently
infringing on any of Seller’s Intellectual Property.

     (iii) The Seller and the Acquired Entity possess all right, title and interest
in the patents, trademark registrations (together with the goodwill associated with
such trademarks and tradenames), and copyright rights listed on Annex A-2, free and
clear of any Lien, license or other restriction, except as set forth on Annex A-2.

12

 

     (iv) Except for licenses set forth on Annex A-2 (the “Material Licenses”),
there are no licenses of Intellectual Property by a third party to Seller or its
Affiliates that are material to the operation of the Business referred to therein as
currently conducted by Seller and its Affiliates. Except as described on Annex A-2,
(i) none of the Seller or Seller’s Affiliates that is a party to a Material License
is in material breach or default under any such Material License, (ii) to Seller’s
knowledge, no other party to a Material License is in material breach or default
under any Material License and no event has occurred which with notice or lapse of
time would constitute a breach or default, or permit termination, modification or
acceleration under any Material License and (iii) such Material Licenses to which
the Acquired Entity is not a party are assignable to Buyer without the consent of a
third party.

     (v) Neither Seller, nor any of its Affiliates has received any written, or to
the knowledge of the Seller, oral notice of invalidity of any of the Intellectual
Property owned by Seller and its Affiliates and listed on Annex A-2. Seller
represents that, to Seller’s knowledge, all Intellectual Property owned by, or
licensed to Seller and its Affiliates that will be transferred to Buyer at the
Closing is valid and enforceable.

     (s) Consents. Except (a) for consents to assignments described in Sections 4.1(l),
4.1(m), 4.1(q), and 4.1(r) (and the annexes and schedules referred to in such Sections),
(b) for Customary Post-Closing Consents, (c) compliance with any applicable requirements
under the HSR Act or as described on Schedule 4.1(s) and (d) for consents, filings, or
notices that, if not obtained or made, will not have a material effect on the Business or
the Acquired Assets, no consent, approval, authorization or permit of, or filing with or
notification to, any Person is required for or in connection with the execution and
delivery of the Seller Related Agreements or for or in connection with the consummation of
the transactions and performance of Seller’s obligations contemplated hereby by Seller and
under the Seller Related Agreements.

     (t) Actions. Except as described on Schedule 4.1(t), there is no Action pending or,
to Seller’s knowledge, threatened in writing, against (i) the Acquired Entity, or (ii) the
Seller or any of its Affiliates with respect to the Business, except for Actions that are
not reasonably expected to have a Material Adverse Effect (any such Actions collectively,
the “Known Litigation”).

     (u) Brokerage Fees and Commissions. Neither Seller nor any Affiliate of Seller has
incurred any obligation or entered into any agreement for any investment banking, brokerage
or finder’s fee or commission in respect of the transactions contemplated by this Agreement
or the Seller Related Agreements for which Buyer or the Acquired Entity or any Affiliated
Buyer will incur any liability.

     (v) Events Subsequent to Balance Sheet Date. Except in each case as described in
Schedule 4.1(v) or as otherwise disclosed in the Balance Sheet or any Schedule to Section
4.1, since the Balance Sheet Date, to the knowledge of Seller there has not been any of the
following events related to the Business:

13

 

     (i) destruction, damage to, or loss of any properties of the Acquired Entity or
any Acquired Assets that (after giving effect to any insurance coverage with regard
thereto) is reasonably expected to have a Material Adverse Effect;

     (ii) change in material accounting policies or practices (including, without
limitation, any change in depreciation or amortization policies) used with respect
to the Business, except as required under GAAP;

     (iii) sale or other disposition of the Acquired Assets or the properties or
assets of the Acquired Entity, except (a) assets sold, leased, or otherwise
transferred in the ordinary course of business or (b) the sale or disposition of any
item of personal property or equipment having a value of less than $100,000
individually or $250,000 in the aggregate or otherwise not prohibited under Section
7.1;

     (iv) dividend or other distribution in respect of, or issuance of, any equity
interests of the Acquired Entity, other than a dividend to Seller or its Affiliates
of any or all of the cash held by the Acquired Entity;

     (v) settlement entered into or consent made to any order, decree, or judgment
relating to or arising out of any Action (other than an Action included as an
Excluded Liability) relating to the Business which is reasonably expected to have a
Material Adverse Effect; or

     (vi) sale, exclusive licensing or other disposition of any Intellectual
Property, except for Intellectual Property licensed to customers on a nonexclusive
basis in the ordinary course of business.

     (w) Employee Benefit Plans.

     (i) Schedule 4.1(w)(i) lists each Business Employee (including the laboratory
technicians who will remain with Seller pursuant to Section 6.2(g)). Seller has
separately provided to Buyer the current annual salary for each Business Employee.

     (ii) Schedule 4.1(w)(ii) lists and describes each of Seller’s and the Acquired
Entity’s Benefit Plans applicable to the Business Employees that are written, and a
written description of all such Benefit Plans that are not in written form. The
Acquired Entity does not serve as the “administrator” or “plan sponsor” (within the
meaning of Section 3(16) of ERISA) of any Benefit Plan.

     (iii) Except as disclosed on Schedule 4.1(w)(iii), neither Seller, its
Affiliates nor the Acquired Entity sponsors, maintains or contributes to any Benefit
Plan that (A) is subject to Title IV of ERISA (including for this purpose only, any
Benefit Plan that was so sponsored, maintained or contributed to during the past and
with respect to which Seller, its Affiliates or the Acquired Entity may have any
liability, contingent or otherwise); (B) provides medical, health, or life insurance
to retired or terminated Business Employees (or any spouse or other

14

 

dependent thereof) other than in accordance with Part 6 of Subtitle B of Title
I of ERISA and Section 4980B of the Code (“COBRA”) or other applicable Law or at the
sole expense of such Business Employees; or (C) would entitle any Business Employee
to any amount that is or can be construed as an “excess parachute payment” under
Section 280G of the Code as a result of this transaction.

     (iv) All of the Benefit Plans of Seller, its Affiliates and the Acquired Entity
have complied in both form and operation with their terms and all applicable Laws in
all material respects.

     (v) All Benefit Plans sponsored, maintained or contributed to by Seller, any of
its Affiliates, or the Acquired Entity or in which any Business Employee
participates that are intended to qualify under Section 401(a) of the Code are so
qualified in both form and operation. The trusts maintained pursuant thereto are
exempt from federal income taxation under Section 501 of the Code. To the knowledge
of Seller, nothing has occurred with respect to such Benefit Plans that would cause
the loss of such qualification or exemption or the imposition of any liability,
penalty or tax under ERISA or the Code, except to the extent that such loss or
imposition would not reasonably be expected to have a Material Adverse Effect.

     (vi) Except as described in Schedule 4.1(w)(vi), with respect to each Benefit
Plan that is subject to Title IV of ERISA or Section 412 of the Code, there was not
an accumulated funding deficiency (within the meaning of Section 302 of ERISA or
Section 412 of the Code), whether or not waived, as of the most recently ended plan
year. Except as otherwise described in Section 3.1(b), all accrued obligations of
the Acquired Entity, whether arising by operation of Law, by contract, or by past
custom, for compensation and employee benefits, including, but not limited to,
bonuses, accrued vacation, and contributions to or benefits payable under Benefit
Plans, have been paid, or adequate accruals for such obligations have been and are
being made, and will be reflected on the Closing Balance Sheet.

     (vii) Except as described in Schedule 4.1(w)(vii) or as contemplated in Section
6.2(c), neither the execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby will (either alone or in conjunction with any
other event, such as termination of employment): (A) result in any payment
(including, without limitation, severance, unemployment compensation, parachute or
otherwise) becoming due by Buyer or Buyer’s Affiliate (or Seller, its Affiliates or
the Acquired Entity after the Closing) to any Transferred Employee under the terms
of any Benefit Plan, (B) increase any benefits otherwise payable under any Benefit
Plan or (C) result in any acceleration of the time of payment or vesting of benefits
under the terms of any Benefit Plan.

15

 

     (viii) There have been no “prohibited transactions” (as described in Section
406 of ERISA or Section 4975 of the Code with respect to any Benefit Plan that could
result in any liability to the Acquired Entity or Buyer.

     (ix) The Acquired Entity has not used the services of third party contract
labor suppliers, temporary or leased employees, independent contractors or other
contingent workers to an extent that could result in the disqualification of any
Benefit Plan or the imposition of any penalty or Tax with respect thereto by any
Governmental Authority.

     (x) Insurance. With respect to the Business, Seller and Seller’s Affiliates
(including the Acquired Entity), have the fire, liability, casualty and other insurance
coverage described on Schedule 4.1(x). Seller shall maintain or cause to be maintained in
full force and effect all such insurance policies until the Closing (other than renewals of
such insurance in the ordinary course, with such changes in carriers, deductibles and
coverage limits that would not be material). Schedule 4.1(x) sets forth all material
claims of Seller pending under any of such policies, none of which coverage has been denied
or disputed in writing to Seller by the underwriters of such policies or in respect of
which such underwriters have reserved their rights. Seller and its Affiliates, the
Business and the Acquired Assets, have at all times been and are adequately insured with
reputable insurers or self-insurance practices that are reasonable with respect to the
Business against accident, damage, injury, third party loss, loss of profits and any other
risk normally insured against by a prudent person operating the types of business similar
to the Business and have at all times effected such insurances as required by Law and any
Significant Contract. No policy limits for the Seller and its Affiliates have been
exhausted or materially reduced. There have been no gaps in insurance coverage since
January 1, 2002.

     (y) Labor Agreements. Except as described on Schedule 4.1(y), (i) there are no
collective bargaining agreements or other labor union contracts related to the Business
Employees; (ii) during the past three years, there has not been, there is not presently
pending or existing, and, to Seller’s knowledge there is not threatened (x) any strike or
work stoppage relating to the operation of the Business, (y) any Action against or
affecting Seller or its Affiliates pertaining to labor relations or employment matters that
relates to the Business that would not reasonably be expected to have a Material Adverse
Effect or (z) any application for certification of a collective bargaining agent with
respect to any of the Business Employees; (iii) there is no lockout of any Business
Employees by Seller or its Affiliates and no such action is contemplated by Seller or its
Affiliates; (iv) to Seller’s knowledge, during the past three years, there has been no
charge of discrimination filed against or threatened in writing against Seller or its
Affiliates with the Equal Employment Opportunity Commission or similar Governmental
Authority that relates to the operation of the Business; (iv) with respect to the operation
of the Business during the past three years, Seller and its Affiliates have complied in all
material respects with all Laws relating to employment, equal employment opportunity,
nondiscrimination, immigration, wages, hours, benefits, collective bargaining, occupational
safety and health, and plant closing laws; and (v) neither Seller nor its Affiliates has
incurred any liability or obligation under the Workers

16

 

Adjustment and Retraining Notification Act of 1988, as amended (“WARN”) or any similar
state or local law within the last six months with respect to the Business which remains
unsatisfied.

     (z) Books and Records. The books, accounts, ledgers, records and files of Seller and
its Affiliates related to the Business are true and complete in all material respects and
have been maintained in accordance with good business and bookkeeping practices in all
material respects. The minute books and other similar records of the Acquired Entity are
true and complete in all material respects.

     (aa) No Material Adverse Change. Since the Balance Sheet Date, there has not been any
material adverse change in the business, operations, properties, assets or financial
condition of the Business, taken as a whole, and no event has occurred or circumstance
exists that is reasonably likely to result in such a material adverse change; provided,
however, that in no event shall any of the following constitute a material adverse change
in the business, operations, properties, assets or financial condition of the Business: (i)
any change resulting from conditions affecting the industry in which the Business operates
or from changes in general business or economic conditions unless such change materially
disproportionately impacts the Business; (ii) any change resulting from the announcement or
pendency of any of the transactions contemplated by this Agreement; (iii) any change
resulting from compliance by Seller and its Affiliates with the terms of, or the taking of
any action required by, this Agreement; or (iv) any change resulting from fluctuations in
exchange rates.

     (bb) Condition of Assets. Except as set forth on Schedule 4.1(bb), all equipment,
vehicles or other tangible assets owned by the Acquired Entity or used in the Business are
in good operating condition and in a good state of maintenance and repair, ordinary wear
and tear excepted, and are usable in the ordinary course of business.

     (cc) Accounts Receivable. All accounts and notes receivable shown on the Balance
Sheet or otherwise relating to the Business, and the accounts receivable outstanding on the
Closing Date, represent sales actually made or services actually performed in the ordinary
course of business in bona fide transactions completed in accordance with the terms and
provisions contained in any agreement relating thereto. Except as will be accrued for on
the Closing Balance Sheet and result in a reduction of the Purchase Price, Seller does not
have knowledge of any fact or circumstance (including, but not limited to, the existence of
any valid counterclaim or set-off) that would lead it to believe that any material account
receivable or any material note receivable relating to the Business is not collectible in
the ordinary course of business, without any set-off or counterclaim.

     (dd) Suppliers. No Material Supplier has canceled in writing or otherwise terminated
in writing, or threatened in writing to cancel or otherwise terminate, its relationship
with the Business during the six months immediately preceding the date hereof or the six
months immediately preceding the Closing Date or has, during such period, materially
decreased, or threatened in writing to materially decrease or materially limit, its
services, supplies or materials to the Business, except for such

17

 

reductions relating to (i) decreased orders by the Business attributable to changes in
Business volumes in the ordinary course or (ii) the Business electing to use alternative
vendors.

     (ee) Warranties. Seller has not given or made any material warranties or guarantees
in connection with the sale of its products or maintenance services, including without
limitation, warranties covering customer losses, except as set forth in Schedule 4.1(ee).
Except as set forth on Schedule 4.1(ee), Seller has not received written notification from
any customers of any claim (except claims that have been resolved or that will be accrued
for on the Closing Balance Sheet) that would reasonably be expected to exceed $100,000
against Seller with respect to warranties relating to the Business.

     (ff) Compliance with Laws. Except as set forth in Schedule 4.1(ff), none of Seller,
its Affiliates or the Acquired Entity is in violation of, or during the last three years
has violated, any applicable Law in any material respect with respect to the ownership or
operation of the Acquired Assets or the Acquired Entity or the Business.

     (gg) Product Liability. Neither Seller nor any Affiliate of Seller has any liability
or obligation, whether known or unknown, asserted or unasserted, absolute or contingent,
matured or unmatured, conditional or unconditional, latent or patent, accrued or unaccrued,
liquidated or unliquidated, or due or to become due (and there is no basis for any present
or future Action against Seller or any of its Affiliates giving rise to any such liability
or obligation) arising out of any injury to individuals or property as a result of the
ownership, possession, or use of any product designed, manufactured, sold, leased or
delivered by any of Seller or its Affiliates with respect to the Business, the Acquired
Entity or the Acquired Assets.

     (hh) Health and Safety Requirements. Except as set forth on Schedule 4.1(hh) and
except as would not reasonably be expected to have a Material Adverse Effect, (a) each of
Seller and its Affiliates is in compliance with all Health and Safety Requirements in
connection with owning, using, maintaining or operating the Business, the Acquired Assets
and the Acquired Entity; (b) each location at which each of Seller and its Affiliates
operates, or has operated, the Business, the Acquired Assets or the Acquired Entity is in
compliance with all Health and Safety Requirements; and (c) there are no pending, or to
Seller’s knowledge, threatened, allegations by any Person that any of the Acquired Assets
or the Acquired Entity is not, or that the Business has not been, conducted in compliance
with all Health and Safety Requirements.

     (ii) Inventory. Each of Seller’s and its Affiliates’ inventory with respect to the
Business, whether reflected on the financial statements provided pursuant to Section 4.1(b)
hereof or not, consists of raw materials and supplies, manufactured and processed parts,
goods-in-process and finished goods, all of which is merchantable and fit for the purpose
for which it was procured or manufactured and, except as has been written down on the face
of the Balance Sheet, none of which is slow-moving, obsolete, damaged or defective. Any
inventory that has been written down has either been written off or written down to its net
realizable value. There has been no change in

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inventory valuation standards or methods with respect to the inventory of the Business
in the prior three years. The quantities of inventory are not materially in excess of the
current needs of the Business in the current operating environment. With respect to third
party inventories on consignment at the Business’ locations, or inventory of the Business
on consignment at third party locations, the Business maintains reasonable and customary
records and follows reasonable and customary identification methods so that such inventory
can be properly identified and accounted for.

     (jj) Arm’s-Length Transactions. Except as set forth on Schedule 4.1(jj), neither
Seller nor any of its Affiliates is a party to any transaction, including the sale, lease
or change of property, the rendering of any service or the payment of any fee, in each
case, with respect to the Business, the Acquired Assets, or the Acquired Entity, other than
upon fair and reasonable terms no less favorable to Seller or its Affiliates, as the case
may be, than it would obtain in a comparable arm’s-length transaction with a Person that is
not an Affiliate.

     (kk) Master Technology License Agreement. Schedule 4.1(mm) identifies (i) the
connections that are currently licensed to Tenaris under the MTLA, (ii) trademarks
currently licensed to Tenaris and (iii) the connections that are currently marketed and
sold or under development by Seller or its Affiliates that are not required to be licensed
to Tenaris under the MTLA.

     (ll) Information True and Correct. No representation, statement or information
relating to Seller or the Business contained in this Agreement (including the Schedules
hereto) nor in any contract or document executed by Seller in connection herewith or
delivered pursuant hereto, contains any untrue statement of a material fact, or omits any
material fact, necessary to make the information contained therein not misleading. Seller
has made available to Buyer correct and complete copies of all documents listed or
described in the Schedules. Notwithstanding the foregoing or anything else in this
Agreement to the contrary, Seller makes no representations or warranties regarding any
forward-looking information provided by Seller or any of its Affiliates or advisors to
Buyer or any of its Affiliates or advisors. As used herein, “forward-looking information”
means prospective information relating to periods after the date hereof, and includes, but
is not limited to, financial and operational forecasts, projections, trends, budgets and
assumptions regarding any forward-looking information.

     4.2 Representations and Warranties of Buyer.

     Buyer on behalf of itself and each Affiliated Buyer represents and warrants to Seller as
follows:

     (a) Organization and Qualification. Vallourec S.A. is a corporation duly organized
and validly existing under the laws of France, Vallourec & Mannesmann Holdings, Inc. is a
corporation duly organized, validly existing, and in good standing under the laws of the
State of Delaware, and each has the requisite corporate power to carry on its business as
now being conducted.

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     (b) Authority. Buyer has all requisite corporate power and authority to execute and
deliver this Agreement and to perform its obligations under this Agreement. The execution,
delivery, and performance of this Agreement and the transactions contemplated hereby have
been duly and validly authorized by all requisite corporate action on the part of Buyer.
As of the Closing Date, the performance by each Affiliated Buyer of the transactions
contemplated by this Agreement will have been duly and validly authorized by all requisite
corporate or other action on the part of such Affiliated Buyer.

     (c) Enforceability. This Agreement has been duly and validly executed and delivered
by Buyer and constitutes a valid, legal and binding agreement of Buyer enforceable against
it in accordance with its terms, subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium, and other similar U.S. or non-U.S. laws of general application
from time to time in effect that affect creditors’ rights generally, (ii) general
principles of equity, and (iii) the power of a court to deny enforcement of remedies
generally based upon public policy.

     (d) No Violation or Breach. Neither the execution and delivery of this Agreement nor
the consummation of the transactions and performance of its terms and conditions hereof by
Buyer will (i) result in a violation or breach of any provision of the certificate of
incorporation, bylaws or other similar governing documents of Buyer or any material
agreement, indenture or other instrument under which Buyer is bound or (ii) violate any
material Law applicable to Buyer or the properties or assets of Buyer.

     (e) Consents. Except for Customary Post-Closing Consents and any applicable
requirements under the HSR Act, no consent, approval, authorization, or permit of, or
filing with or notification to, any Person is required for or in connection with the
execution and delivery of this Agreement by Buyer or for or in connection with the
consummation of the transactions and performance of Buyer’s obligations contemplated hereby
by Buyer.

     (f) Actions. There is no action pending or threatened in writing against Buyer that
could reasonably be expected to have a material adverse effect on Buyer’s ability to
consummate the transactions contemplated hereby.

     (g) Brokerage Fees and Commissions. Neither Buyer nor any Affiliate of Buyer has
incurred any obligation or entered into any agreement for any investment banking,
brokerage, or finder’s fee or commission in respect of the transactions contemplated by
this Agreement for which Seller or its Affiliates will incur any liability.

     (h) Funds. Buyer has, and at all times prior to Closing will have, sufficient funds
available to enable Buyer to consummate the transactions contemplated hereby and to pay the
Purchase Price and all related fees and expenses incurred by Buyer.

     (i) No Distribution. Buyer is an experienced and knowledgeable investor. Prior to
entering into this Agreement, Buyer was advised by its counsel and such other Persons it
has deemed appropriate concerning this Agreement and has relied solely on

20

 

an independent investigation and evaluation of, and appraisal and judgment with
respect to, the Business and the financial, price and expense assumptions applicable
thereto. Buyer is an “accredited investor,” as such term is defined in Regulation D of the
Securities Act of 1933, as amended, and will acquire the equity interests of the Acquired
Entity for its own account and not with a view to a sale or distribution thereof in
violation of the Securities Act of 1933, as amended, and the rules and regulations
thereunder, any applicable state blue sky laws or any other applicable securities laws.

     (j) Bankruptcy. There are no bankruptcy or reorganization proceedings pending, or to
the knowledge of Buyer threatened, against Buyer.

Article 5

Access and Confidentiality

     5.1 General Access. Promptly following the execution of this Agreement and until the
Closing Date (or earlier termination of this Agreement), Seller shall permit (and with respect to
the Acquired Entity, Seller shall cause the Acquired Entity to permit) Buyer and its
representatives:

     (a) to have reasonable access, at reasonable times in the offices of Seller, its
Affiliates and the Acquired Entity and in a manner so as not to interfere unduly with the
business operations of Seller, its Affiliates or the Acquired Entity, to the books,
records, contracts, and documents of Seller and its Affiliates, with respect to the
Business, and the Acquired Entity relating to its assets and operations insofar as the same
are in the possession of Seller, its Affiliates or the Acquired Entity and insofar as the
same may be disclosed without (i) violating any legal constraints or any legal obligation
or (ii) waiving any attorney/client, work product, or other privilege; and

     (b) subject to any required consent of any third Person, to conduct at reasonable
times and at Buyer’s sole risk, cost, and expense, in the presence of representatives of
Seller, reasonable inspections of the Acquired Assets and the Acquired Entity’s assets.

Buyer agrees to indemnify and hold harmless, release, and defend the Seller Indemnified Parties and
the Acquired Entity from and against any and all Losses arising, in whole or in part, from Buyer’s
inspection of the assets and records of Seller or the Acquired Entity, including claims for
personal injuries, property damage, and reasonable attorneys’ fees and expenses. Nothing in this
Agreement shall be construed to permit Buyer or its representatives to have access to any files,
records, contracts, or documents of Seller or its Affiliates relating to this transaction,
including any bids or offers received by Seller or its Affiliates for the sale of the Business, it
being agreed that all such bids or offers shall be the sole property of Seller.

     5.2 Confidential Information. Unless and until the Closing occurs, Buyer agrees to
maintain all information made available to it pursuant to this Agreement confidential and to cause
its officers, employees, representatives, consultants, and advisors to maintain all information
made available to them pursuant to this Agreement confidential, all as provided in that certain
confidentiality agreement dated August 17, 2007 (the “Confidentiality Agreement”),

21

 

by and between Seller and Buyer (the terms of which are incorporated herein by reference and made a
part of this Agreement). In addition, Buyer agrees that the term “Information” as used in the
Confidentiality Agreement includes the information described in the Confidentiality Agreement
provided or disclosed by Seller, the Acquired Entity, or any Affiliate of Seller.

Article 6

Taxes and Employee Benefits

     6.1 Tax Matters.

     (a) Allocation of Tax Liabilities with respect to the Acquired Entity.

     (i) Except to the extent accrued for on the Closing Balance Sheet, Seller shall
be responsible for all Taxes of the Acquired Entity regardless of when due and
payable:

     (A) with respect to all Tax periods ending on or before the Closing
Date; and

     (B) with respect to all Tax periods beginning before the Closing Date
and ending after the Closing Date, but only with respect to the portion of
such period up to the Closing Date.

     (ii) Buyer shall be responsible for all Taxes of the Acquired Entity,
regardless of when due and payable:

     (A) with respect to all Tax periods beginning after the Closing Date;
and

     (B) with respect to all Tax Periods beginning before the Closing Date
and ending after the Closing Date, but only with respect to the portion of
such period commencing after the Closing Date; and

     (C) accrued on the Closing Balance Sheet.

     (b) Allocation of Tax Liabilities with respect to Acquired Assets.

     (i) Except to the extent accrued for on the Closing Balance Sheet, all Taxes
levied or assessed against the Acquired Assets for the Tax period prior to the Tax
period in which the Closing Date falls and all previous Tax periods, regardless of
when due and payable, shall be paid by Seller.

     (ii) Except to the extent accrued for on the Closing Balance Sheet, all Taxes
levied or assessed against the Acquired Assets for the Tax period in which the
Closing Date falls, regardless of when due and payable, shall be prorated on a daily
basis between Buyer and Seller as of the Closing Date.

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     (iii) All Taxes levied or assessed against the Acquired Assets for the Tax
periods following the Tax period in which the Closing Date falls, shall be paid by
the Buyer.

     (iv) If the amount of such Taxes are not known at the Closing, the proration
shall be based on the Taxes of the Tax period prior to the Tax period in which the
Closing Date falls with an appropriate adjustment to be made between the parties
upon receipt of the Tax bill for the Tax period in which the Closing Date falls.

     (v) All Taxes accrued on the Closing Balance Sheet as a liability shall be paid
by Buyer.

     (c) Tax Returns.

     (i) To the extent the Acquired Entity is included in the Seller’s Consolidated
Tax Return for United States federal income tax purposes for the Tax period in which
the Closing Date falls, Seller shall include the income or loss for the Acquired
Entity for all Tax periods ending on or before the Closing Date on the timely filed
Seller’s Consolidated Tax Returns when due (including extensions).

     (ii) Seller shall cause to be prepared, and Buyer shall cause to be filed when
due (including any extensions), all other Tax Returns of the Acquired Entity for all
Tax periods ending on or before the Closing Date, for which Tax Returns have not
been filed as of such date. Tax Returns prepared by Seller shall be prepared and
filed in a manner consistent with past practice, including positions or elections on
deferring income or accelerating deductions consistent with Tax rules and the Tax
Law and in compliance with the Laws of each respective jurisdiction, except for
changes required by changes in Laws or facts.

     (iii) Buyer shall prepare and file when due (including any extensions) all Tax
Returns of the Acquired Entity for Tax periods ending after the Closing Date;
provided, however, Seller shall have the right to review prior to filing all Tax
Returns for any Tax period which includes the Closing Date or any period prior to
the Closing Date. Tax Returns prepared by Buyer and which include the Closing Date
or any period prior to the Closing Date shall be prepared and filed in a manner
consistent with past practice, including positions or elections on deferring income
or accelerating deductions consistent with Tax rules and the Tax Law and in
compliance with the Laws of each respective jurisdiction, except for changes
required by changes in Laws or facts.

     (d) Income And Loss Allocation. For purposes of this Section 6.1, the income or loss
of the Acquired Entity shall be apportioned to the period up to and including the Closing
Date and the period after the Closing Date by closing the books of the Acquired Entity as
of the end of the Closing Date.

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     (e) Cooperation.

     (i) After the Closing Date, Buyer and Seller shall make available to the other,
as reasonably requested, and to any Tax authority, all information, records or
documents (including state apportionment information) relating to Tax liabilities or
potential Tax liabilities of the Acquired Entity and Acquired Assets with respect
to:

     (A) Tax periods ending on or prior to the Closing Date; and

     (B) Tax periods beginning before the Closing Date and ending after the
Closing Date.

     (ii) Buyer and Seller shall preserve all such information, records and
documents until the expiration of any applicable statute of limitations thereof.

     (iii) Buyer and Seller shall prepare and provide to the other party any
information or documents requested by Buyer or Seller for the other party’s use in
preparation or review of the Tax Returns referred to in Section 6.1(c).

     (iv) Notwithstanding any other provision hereof, each party shall bear its own
expenses in complying with the foregoing provisions.

     (f) Audits.

     (i) Buyer shall promptly notify Seller in writing upon receipt by Buyer or any
Affiliates, or the Acquired Entity or any Affiliates, of notice of any pending or
threatened Tax liabilities of the Acquired Entity for any:

     (A) Tax period ending on or before the Closing Date; or

     (B) Tax period ending after the Closing Date but which includes the
Closing Date (to the extent it covers a Tax liability that Seller is
responsible for under Section 10.11).

     (ii) Seller and Buyer shall jointly have the right to represent the Acquired
Entity’s interests in any Tax audit or administrative or court proceeding for such
Tax periods and to employ counsel of their choosing at their own expense.

     (iii) Buyer agrees that it will cooperate fully with Seller and its counsel in
the defense against or compromise of any claim in any said proceeding.

     (iv) Seller shall not settle any claim for Taxes which could adversely affect
Buyer’s Tax liability for any period after the Closing Date (unless Sellers have
indemnified Buyer against such effects), without the prior written consent of Buyer,
which shall not be unreasonably withheld. Buyer shall not settle any claim for
Taxes which could adversely affect Seller’s Tax liability for any period prior

24

 

to the Closing Date (unless Buyer has indemnified Seller against such effects),
without the prior written consent of Seller, which shall not be unreasonably
withheld.

     (g) Tax Refunds.

     (i) All refunds of Taxes of the Acquired Entity shall be for the account of
Seller:

     (A) with respect to Tax periods ending on or before the Closing Date;
and

     (B) with respect to any Tax period beginning before the Closing Date
and ending after the Closing Date, but only with respect to the portion of
such period up to the Closing Date.

     (ii) Buyer shall take such action as reasonably requested by Seller to obtain
such refunds and shall cause the Acquired Entity to pay over to Seller any such
refunds immediately upon receipt thereof.

     (h) Tax Sharing Agreements. Except for the Tax sharing agreement included in the
definition of Excluded Liabilities, all Tax sharing agreements, if any, between Seller or
Affiliate of Seller and the Acquired Entity shall be terminated prior to the Closing Date
and no payments shall be made under such agreements on or after the Closing Date.

     (i) Transfer Taxes. All Transfer Taxes, owed as a result of the transactions
contemplated by this Agreement shall be paid half by Seller and half by Buyer.

     6.2 Employee Matters.

     (a) Employees. Prior to the Effective Time, Buyer or its Affiliate shall offer
employment to the Business Employees and such offers shall be communicated to such Business
Employees within a reasonable time prior to the Closing Date (the “Offered Employees”),
except for such Business Employees who will automatically transfer to Buyer as of the
Effective Time as employees of the Acquired Entity or under applicable Law (each an
“Automatically Transferred Employee”). Each offer of employment shall (i) be for an
employment position similar to the employment position the individual had immediately prior
to the Closing Date at a geographic location not further than 50 miles from the
individual’s principal place of employment immediately prior to the Closing Date, (ii) be
conditioned on Closing, (iii) be made in writing and (iv) shall remain open and unchanged
until the fifth Business Day prior to the Effective Time. Each Offered Employee who (i)
(A) accepts Buyer’s offer of employment and (B) commences employment with Buyer or its
Affiliates immediately after the Closing and (ii) each Automatically Transferred Employee,
shall be referred to herein as a “Transferred Employee.” The employment of each
Transferred Employee shall commence immediately upon the Effective Time and shall be
deemed, for all purposes, consistent with applicable Law and except as otherwise expressly
provided herein, to have

25

 

occurred with no interruption or break in service. Seller shall encourage all Offered
Employees to accept employment with Buyer, and Seller and its Affiliates shall not directly
or indirectly solicit the employment of or seek to retain the services of any such Offered
Employees. Each Business Employee who terminates employment with Seller or its Affiliates,
or who ceases to be assigned to work principally in the Business prior to the Effective
Time shall hereinafter be referred to as a “Terminated Employee.” Except as may otherwise
be provided in the Transition Services Agreement, if any, Seller or its Affiliates shall
terminate or shall cause to be terminated the employment of all Transferred Employees
effective as of the Effective Time.

     (b) Assumption of Employer Responsibilities. Buyer or Buyer’s Affiliate shall (i)
hire each Transferred Employee at the same initial level of base salary or wages that such
Transferred Employee was entitled to receive immediately prior to the Effective Time, and
(ii) to the extent such Transferred Employees remain employed with Buyer or Buyer’s
Affiliate, provide such Transferred Employees with tax qualified pension and welfare
benefits that are substantially comparable in the aggregate to those provided to such
Transferred Employees immediately prior to the Effective Time for a one-year period
commencing on the date on which the Closing Date occurs. Except as specifically required
by applicable Law, Buyer and its Affiliates shall not be obligated to continue any
employment relationship with or continue to provide any employee benefits to any
Transferred Employee for any specific period of time from and after the Effective Time.

     (c) Employee Benefit Plans. All Transferred Employees shall cease to participate in
any Benefit Plans maintained, sponsored by or contributed to by Seller or Seller’s
Affiliates as of the Effective Time. Effective on or prior to the Closing Date the
Acquired Entity shall have terminated its participation in any Benefit Plan maintained by
Seller or its Affiliate. Seller or its Affiliates shall cause each Transferred Employee
who was participating in Seller’s or its Affiliates’ Benefit Plans immediately prior to the
Effective Time to be fully vested in his or her benefits (other than severance benefits)
thereunder as at the Effective Time (including without limitation, the vesting of any
unvested stock options or other equity-based awards and the vesting of account balances
under Seller’s Executive Deferred Compensation Plan). Seller or its Affiliates shall take
necessary steps to effectuate the prior sentence, including without limitation amending or
causing to be amended Seller’s or its Affiliates’ Benefit Plans. As of the Effective Time,
Buyer shall allow all Transferred Employees and their eligible dependents to participate in
Buyer’s benefit plans (excluding any defined benefit and cash balance plans) as necessary
to comply with the terms of this Agreement and any applicable Law, without any gap or loss
of benefits or coverage. The Transferred Employees and their eligible dependents shall not
be subject to any pre-existing condition limitations, and Buyer shall recognize all service
credited to any Transferred Employee on the Seller’s books and records for purposes of
eligibility and vesting (but not benefit accrual) in the Buyer’s benefit plans. Buyer or
Buyer’s Affiliate shall adopt for the benefit of the Transferred Employees the severance
policy set forth on Schedule 6.2(c). Prior to the Closing Date, and to the extent
necessary to implement this sentence, Seller shall amend any Benefit Plan and take or cause
to be taken all other action as may be required to provide that severance or separation
payments shall not be payable to any Transferred

26

 

Employee on account of such employee’s termination of employment with Seller. Should
any severance or separation obligations or liabilities arise with respect to the
termination of employment of any Business Employees prior to or as of the Closing Date,
then such obligations and liabilities shall be borne by Seller. On or prior to the Closing
Date, Seller or its Affiliate shall cause the Transferred Employees to be paid annual
incentive compensation bonuses to the extent a liability has been accrued therefor on
Seller’s or its Affiliate’s balance sheet.

     (d) Retained and Assumed Liabilities. Except as otherwise provided in Section 6.2(e)
below, Seller shall retain responsibility for all benefits accrued or claims made or (with
respect to claims for workers’ compensation, group life, accidental death and
dismemberment, disability or health plan benefits) incurred prior to the Effective Time
under Seller’s Benefit Plans. Claims will be deemed to be incurred on the date that the
event or service giving rise to such claim occurs or is performed. Seller shall retain
responsibility for any continuation coverage obligations under COBRA to any Terminated
Employees and Offered Employees who do not become Transferred Employees, and their
respective covered dependents, who incur a COBRA qualifying event or loss of coverage under
any of Seller’s group health plans at any time on or prior to the Effective Time.
Following the Effective Time, Buyer shall or shall cause its Affiliate to provide COBRA
continuation coverage to all Transferred Employees and their qualified beneficiaries who
incur or incurred a qualifying event or loss at any time with respect to claims incurred on
or after the Effective Time. Except as specifically retained by Seller, Buyer or Buyer’s
Affiliate shall assume responsibility for all expenses and benefits for claims made or
incurred by any Transferred Employee or such Transferred Employee’s eligible dependents on
or after the Effective Time.

     From and after the Effective Time, Buyer shall assume responsibility for compliance
with, as well as any liability which may exist or arise out of WARN on account of any
Transferred Employee terminated after the Effective Time. No later than five business days
prior to the Closing Date, Seller shall provide Buyer with a list setting forth the number
of Business Employees terminated from each site of employment of the Business during the
90-day period ending on the Closing Date for reasons qualifying the termination as
“employment losses” under WARN and the date of each such termination with respect to each
termination; provided, that this sentence shall not apply with respect to any site of
employment at which sufficient employees have not been employed at any time in such 90-day
period for terminations of employment at such site to be subject to WARN.

     Seller or its Affiliates shall retain all responsibility for any transaction bonus,
retention, incentive or similar payments established by Seller in connection with the
transactions contemplated by this Agreement. Except as specifically provided in this
Section 6.2 or as is accrued as a current liability on the Closing Balance Sheet thereby
resulting in a reduction in Purchase Price, Buyer shall not assume any Benefit Plan or any
agreements that become effective following a change in control of Seller or its Affiliates
(“Change in Control Agreements”) maintained, sponsored or contributed to by Seller or
Seller’s Affiliates, and Buyer shall not be obligated to pay, perform or otherwise

27

 

discharge any liabilities of the Seller or any of Seller’s Affiliates relating to any
Benefit Plan or Change in Control Agreement.

     (e) Vacation. Buyer shall assume all liabilities for the Transferred Employees with
respect to accrued unused vacation and paid time off (“PTO”) immediately prior to the
Effective Time. Buyer shall allow each Transferred Employee either to (i) take in the
calendar year in which the Effective Time occurs, all PTO to which such Transferred
Employee is entitled in such year, less any PTO taken by such Transferred Employee as of
the Effective Time or (ii) receive vacation pay in lieu of any accrued unused PTO for such
calendar year as of the Effective Time.

     (f) Payroll Taxes. Seller and Buyer shall (i) treat Buyer and its Affiliate thereof
as applicable, as a “successor employer” and Seller as a “predecessor” within the meaning
of Sections 3121(a)(1) and 3306(b)(1) of the Code, with respect to Transferred Employees
who are employed by Buyer or such Affiliate for purposes of Taxes imposed in the United
States Federal Unemployment Tax Act (“FUTA”) or the United States Federal Insurance
Contributions Act (“FICA”) and (ii) cooperate with each other to avoid, to the extent
possible, the filing of more than one United States Internal Revenue Service Form W-2 with
respect to each such Transferred Employee for the calendar year in which the Effective time
occurs.

     (g) Laboratory Technicians. The current laboratory personnel are listed on Schedule
6.2(g). Prior to Closing, Buyer and Seller shall work together to determine in good faith
those laboratory technicians that will be transferred with the Business to Buyer and those
laboratory technicians that will remain with Seller and will not be transferred. Such
division will permit Buyer to take the laboratory manager, all test engineers and up to
nine laboratory technicians, and will permit Seller to retain the remaining laboratory
technicians (it being understood that the test engineers for the Business are already
included in the definition of Business Employees). The laboratory technicians that are
allocated to Buyer shall be considered Business Employees. The laboratory technicians who
are allocated to Seller shall not be considered Business Employees.

Article 7

Covenants of Seller and Buyer

     7.1 Conduct of Business Pending Closing. Subject to Section 7.2 and the constraints of
existing agreements from the date hereof through the Closing Date, except as disclosed in Schedule
7.1 or as otherwise consented to or approved by Buyer (which consent or approval shall not be
unreasonably withheld or delayed), Seller covenants and agrees that:

     (a) Changes in Business. Seller shall, and shall cause its Affiliates (including the
Acquired Entity) to, comply with the following:

     (i) neither Seller nor any of its Affiliates shall make any material change in
the operation of the Business;

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     (ii) except in the ordinary course of business and consistent with past
practices or in connection with obtaining any consent in accordance with Section
7.13(b), neither Seller nor any of its Affiliates shall enter into, assign,
terminate, or amend, in any material respect, any Significant Contract;

     (iii) not reduce its insurance coverage limits or make any material adverse
changes to the insurance programs currently in effect with respect to the Business;

     (iv) not hire, fire, reassign, promote or demote any Business Employee (so long
as such Business Employee is reasonably performing his or her job function and is
complying with Seller’s employment policies), except in the ordinary course of
business and consistent with past practices, nor increase the compensation or
benefits of any Business Employee, except in the ordinary course of the Business and
at an overall percentage that is not greater than increases granted to the employees
of the Retained Businesses;

     (v) Seller will promptly notify Buyer if (A) any Tier I Employee gives notice
to Seller or any of its Affiliates of such employee’s resignation from Seller or any
of its Affiliates, (B) Seller intends to terminate the employment of any Tier I
Employee or (C) Seller grants across-the-board pay increases to the Business
Employees, which, if so granted, shall be at an overall percentage that is not
greater than increases granted to the employees of the Retained Businesses;

     (vi) the Acquired Entity shall not:

     (A) declare or pay any dividends or make any distributions in respect
of, or issue any of, its equity interests or securities convertible into its
equity interests, or repurchase, redeem, or otherwise acquire any such
equity interests or securities or make or propose to make any other change
in its capitalization; provided, however, that on or before the Closing
Date, Seller shall have the right to cause the Acquired Entity to dividend
to Seller or its Affiliates any or all of the cash held by the Acquired
Entity;

     (B) merge into or with or consolidate with any other corporation or
acquire all or substantially all of the business or assets of any
corporation or other Person, except as contemplated by Section 2.1(b); or

     (C) make any change in its Charter Documents;

     (vii) other than pursuant to the requirements of existing contracts or
commitments or contracts and commitments entered into in accordance with (ii) above,
(A) Seller shall not sell, lease, or otherwise dispose of any Acquired Assets and
(B) the Acquired Entity shall not sell, lease, or otherwise dispose of any of its
assets, except, in each case, for (a) assets sold, leased, or otherwise disposed of
in the ordinary course of business, (b) the sale or disposition of any item of
personal property or equipment (other than Intellectual Property) having a value of
less

29

 

than $100,000 individually or $250,000 in the aggregate, (c) the sale,
disposition or transfer of any Excluded Assets and (d) the transfer or other
disposition of the accounts receivable or advances due or owing to the Acquired
Entity from any Affiliate of Seller as of the Effective Time;

     (viii) neither Seller nor any of its Affiliates shall take any action or enter
into any commitment with respect to or in contemplation of any liquidation,
dissolution, recapitalization, reorganization, or other winding up of its business
or operations;

     (ix) neither Seller nor any of its Affiliates shall change any material
accounting policies or practices (including, without limitation, any change in
depreciation or amortization policies) of the Business, except as required under
GAAP;

     (x) neither Seller nor any of its Affiliates shall create any benefit plans
(within the meaning of Section 3(3) of ERISA) or any other Benefit Plan relating to
any Business Employee, except as required by Law and except for pay increases made
in the ordinary course of business and consistent with past practice;

     (xi) except as will not result in any increase in liability to Buyer or that
does not relate to the Acquired Entity or the Business, neither Seller nor any of
its Affiliates shall make or change any material election in respect of Taxes, file
any Tax Return (other than a Tax Return that is due and cannot be extended) or any
amendment to a Tax Return, enter into any closing agreement, settle any claim or
assessment in respect of Taxes, consent to any extension or waiver of the limitation
period applicable to any claim or assessment in respect of Taxes or file for any
ruling request;

     (xii) use reasonable efforts to preserve intact its current business
organization as related to the Business;

     (xiii) use reasonable efforts to maintain Seller’s present relationships with
customers, service providers, landlords, suppliers, creditors, agents and others
having business relationships related to the Business;

     (xiv) notify Buyer promptly, and in any event prior to Closing, of (i) any
written notice of a material violation or written threatened notice of a material
violation received from any Governmental Authority after the date of this Agreement
relating to the Business or (ii) any other matter that could reasonably be expected
to have a Material Adverse Effect.

     (xv) not cancel, compromise, waive or release any material claim or right as
against any third party which Buyer would otherwise have as owner of the Acquired
Entity or any of the Acquired Assets for or in respect of any period after the
Closing Date; provided, however, that, without limiting the foregoing, Seller shall
not amend in any material respect the MTLA prior to the Closing Date and

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shall not waive any of Seller’s material rights under the MTLA with respect to
breaches occurring after the date hereof;

     (xvi) comply in all material respects with all Laws and contractual obligations
applicable to the operation of the Business;

     (xvii) cooperate with Buyer and assist Buyer in identifying the Governmental
Permits required by Buyer to operate the Business from and after the Closing Date
and either transferring existing Governmental Permits to Buyer, where permissible,
or working with Buyer to obtain new Governmental Permits for Buyer; and

     (xviii) maintain all books and Records relating to the Business in the ordinary
course of business.

     (b) Liens. Seller and its Affiliates shall not, and will cause the Acquired Entity
not to, grant any Lien on any Acquired Assets or assets of the Acquired Entity, except to
the extent (i) required or permitted incident to the operation of the Acquired Assets or
assets of the Acquired Entity and the Business, (ii) required by Law or any Significant
Contract, in each case to the extent such Liens are not material to the Business as a
whole.

     (c) Operation of Assets. Seller shall cause the Acquired Assets and assets of the
Acquired Entity to be maintained and operated in the ordinary course of business in
accordance with past practices, maintain insurance now in force with respect to such
assets, and pay or cause to be paid all costs and expenses in connection with such
insurance when due.

     7.2 Qualifications on Conduct. Seller and the Acquired Entity may take (or not take, as
the case may be) any of the actions described in Section 7.1 above if reasonably necessary under
emergency circumstances (or if required or prohibited pursuant to Law) and provided Buyer is
notified as soon thereafter as practicable. In addition, notwithstanding anything contained in
Section 7.1, no such limitations shall restrict Seller or any of its Affiliates or otherwise affect
in any way (i) the conduct and operations of the Retained Businesses or any other business or
operation not directly related to the Business; (ii) the ability of Seller and its Affiliates to
settle, dispose of or defend the Known Litigation or any Excluded Liability; or (iii) the
operation, utilization, sale or disposition of any Excluded Asset, so long as, in each case, it
has no adverse impact on the Acquired Assets, the Acquired Entity, the Business or Seller’s ability
to consummate the transactions contemplated hereby.

     7.3 Public Announcements. Prior to the Closing Date, without the prior written approval of
the other parties hereto (which approval shall not be unreasonably withheld), no party hereto will
issue, or permit any agent or Affiliate of it to issue, any press releases or otherwise make, or
cause any agent or Affiliate of it to make, any public statements with respect to this Agreement
and the transactions contemplated hereby, except where such release or statement is deemed in good
faith by the releasing party to be required by Law or under the rules and regulations of the New
York Stock Exchange or other applicable securities exchange or

31

 

market or the French and European Workers’ Councils. In each case to which such exception applies,
the releasing party will use its reasonable efforts to provide a copy of such release or statement
to the other party prior to releasing or making the statement. After the Closing Date, the parties
will confer with each other regarding their initial public announcement of the transactions
contemplated by this Agreement.

     7.4 Actions by Parties. Each party agrees to use commercially reasonable efforts to
satisfy the conditions to Closing described in Article 8 and to refrain from taking any action
within its control which would cause a breach of a representation or warranty described in Article
4. Neither Seller, nor any Affiliate of Seller, shall be required to expend any funds or incur any
costs to prevent or cure a breach of the representations and warranties described in Section 4.1.

     7.5 Notice of Developments; Schedules.

     (a) Seller will give prompt written notice to Buyer of any development occurring after
the date of this Agreement and prior to Closing that reasonably could be expected to result
in a Material Adverse Effect or would cause Seller not to be able to deliver the officer’s
certificate contemplated by Section 8.2(b).

     (b) Buyer and Seller agree that no disclosure by either party in any Schedule attached
hereto shall be deemed to indicate that such disclosure is material or required to be
disclosed on such Schedule.

     7.6 Further Assurances. Seller and Buyer each agree that from time to time after the
Closing Date, it will execute and deliver or cause its respective Affiliates (including the
Acquired Entity, the Affiliated Sellers and the Affiliated Buyers, as applicable) to execute and
deliver such further instruments, and take (or cause its respective Affiliates, including the
Acquired Entity, to take) such other action, as may be reasonably necessary to carry out the
purposes and intents of this Agreement.

     7.7 Records. On and after the date hereof and until the Closing Date or the date of
termination of this Agreement, Seller shall make the Records (including employment records relating
to the Transferred Employees) of the Business reasonably available to Buyer. On the Closing Date
or as soon as practicable thereafter, Seller shall deliver the Records to a location designated in
writing by Buyer. Buyer agrees to maintain, and cause the Acquired Entity and its Affiliates to
maintain, the Records until the seventh anniversary of the Closing Date (or for such longer period
of time as Seller shall advise Buyer is necessary to have Records available with respect to open
years for Tax audit purposes), or if any of the Records pertain to any claim or dispute pending on
the seventh anniversary of the Closing Date, Buyer shall maintain any of the Records designated by
Seller until such claim or dispute is finally resolved and the time for all appeals has been
exhausted. Buyer shall provide or cause the Acquired Entity and its Affiliates to provide Seller
and its representatives reasonable access to and the right to copy the Records for the purposes of:

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     (i) preparing and delivering any accounting provided for under this Agreement
and adjusting, prorating, and settling the charges and credits provided for in this
Agreement;

     (ii) complying with any Law affecting Seller’s interest in the Acquired Assets
or the Acquired Entity’s interest in its assets prior to the Closing Date;

     (iii) preparing any audit relating to Seller’s interest in the equity interests
of the Acquired Entity, Seller’s interest in each Acquired Assets or the Acquired
Entity’s interest in its assets prior to the Closing Date, or responding to any
audit prepared by a third party;

     (iv) preparing Tax Returns;

     (v) responding to or disputing any Tax audit; or

     (vi) asserting, defending, or otherwise dealing with any claim or dispute under
this Agreement or with respect to the Business, the Acquired Assets or the assets of
the Acquired Entity.

In no event shall Buyer, the Acquired Entity or any of their Affiliates destroy any Records without
giving Seller at least 10 days’ advance written notice thereof and the opportunity, at Seller’s
expense, for Seller to obtain such Records prior to their destruction. In addition, from and after
the Closing Date, upon the written request of Buyer, Seller shall provide Buyer reasonable access
to any Records retained by Seller.

     7.8 Obligations of the Acquired Entity. From and after Closing, Buyer agrees to cause the
Acquired Entity to perform and comply with each of the actions and obligations required or
stipulated in this Agreement to be performed or complied with by the Acquired Entity and not to
take any action which would prevent such performance and compliance by the Acquired Entity.

     7.9 Use of Names; Removal. Buyer acknowledges that following the Closing, it will not nor
will the Acquired Entity be entitled to use the names “Grant Prideco” or “Grant” or any variations
and derivations thereof, including any logo, trademark, or design containing such name (the
“Prohibited Names and Marks”). Accordingly, Buyer shall use all reasonable efforts to, within 90
days after the Closing, cause the destruction, disposal, or replacement of stationery, business
cards, and similar assets of the Acquired Entity or any Acquired Assets so to avoid the use of the
Prohibited Names and Marks.

     In addition, as soon as reasonably practicable, but not later than six months following the
Closing, Buyer shall cause to be removed the Prohibited Names and Marks from all of the Acquired
Assets and assets of the Acquired Entity (including signage at all real property locations), and
will not thereafter make any use whatsoever of the Prohibited Names and Marks. Buyer shall
indemnify Seller for any failure by Buyer to cause the removal of such names or marks after the
Closing or any other violation of this Section 7.9.

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     For purposes of marketing, advertising and customer relations, for a period of six months
following the Closing, Buyer shall have the right to refer to this acquisition of Seller’s
trademarks or other Intellectual Property in a manner not likely to cause confusion in the
marketplace, such as by reference to the effect that Buyer is the successor to certain trademarks
and tradenames of Seller, registered or unregistered.

     7.10 Governmental Filings. Seller and Buyer shall fully cooperate and coordinate with one
another and assist each other:

     (a) in determining whether any action by or in respect of, or filing with, any
Governmental Authority is required, or any actions, consents, approvals, or waivers are
required to be obtained from any Governmental Authority in connection with the consummation
of the transactions contemplated by this Agreement; and

     (b) in taking such actions or making any such filings, furnishing information required
in connection therewith and seeking timely to obtain any such actions, consents, approvals,
or waivers.

Seller and Buyer agree to file as soon as practicable, but in any event within ten Business Days
after the date of this Agreement, the Notification and Report Form and any information and
documents required to be filed under the HSR Act and to request early termination in connection
with such filings. Buyer agrees to make its best efforts to obtain approval of the proposed
transaction from any U.S. or state government authority pursuant to the HSR Act, or under any
similar foreign competition statutes or regulations, provided however that nothing herein shall
require Buyer to take or agree to take any actions that would result in a Material Adverse Effect
(as defined in Appendix A to this Agreement) on the Business or a material adverse effect on Buyer.

     7.11 Computer Hardware and Software.

     (a) Identification and Transfer. Schedule 7.11 sets forth a preliminary list of
computer hardware, third party software, and Inhouse Software that will be transferred to
Buyer. Buyer and Seller will cooperate with each other to:

     (i) identify at least 14 days prior to the anticipated Closing Date those
computer software systems currently being used by the Business that will be needed
by Buyer to continue the existing operations of the Business following the Closing;
and

     (ii) use their reasonable efforts to obtain all necessary third party consents,
additional licenses, and other documentation necessary for Buyer to obtain the right
to use the third party software identified on Schedule 7.11, through either a
transfer, assignment, or license by Seller or other Affiliates where legally
permissible in the judgment of Seller, or a direct purchase by Buyer.

If and to the extent that Seller or its Affiliates do not or are unable to transfer, assign, or
license any particular third party software to Buyer, Buyer shall purchase its own license and make
such modifications or enhancements as may be necessary to carry on the Business as currently

34

 

conducted. At or as soon as is commercially reasonable following the Closing, Seller shall or
shall cause its Subsidiaries to undertake to transfer, assign, or license (as appropriate) all
computer software systems necessary to operate the Business, if such transfer, assignment, or
license is, in the judgment of Seller, legally possible and commercially reasonable. Buyer
acknowledges that it may not be possible for Seller to transfer, assign, or license all such
software systems. In addition to the payment of the Purchase Price, Buyer shall promptly reimburse
Seller, upon receipt of a statement from Seller, for the amount of any fees, royalties, or charges
of third parties incurred by Seller or its Affiliates to take the action specified in clause (ii)
above to the extent approved by Buyer in advance.

     (b) Inhouse Software. “Inhouse Software” is software developed solely by employees of
Seller and owned in right, title and interest by Seller. For Inhouse Software, Buyer shall
obtain a perpetual, non-exclusive, paid-up license in and to the source code and
documentation (if any) to the programs and applications developed internally by Seller and
described in Section 2 of Schedule 7.11 (the “Inhouse Software”). Buyer shall be free to
disassemble, decompile, reverse engineer, or otherwise manipulate, develop, change,
enhance, expand, commercialize, sell, license, or abandon any of the Inhouse Software and
shall be under no obligation to account therefor to Seller. Inhouse Software is provided
“as is” without any warranty or representation whatsoever. Seller and its Affiliates
disclaim any and all warranties with respect to the Inhouse Software, including any implied
warranties of merchantability or fitness for a particular purpose, and shall not be liable
for any direct, indirect, consequential, third party, or any other damages relating to the
use, misuse, or reliance upon the Inhouse Software. Seller shall have no obligation
whatsoever with respect to Inhouse Software including any obligation to support, update,
upgrade, or maintain it. Seller shall retain all rights in and to the Inhouse Software
that are not explicitly granted to Buyer in this paragraph, including the right to
independently develop, change, enhance, expand, commercialize, sell, license or abandon the
Inhouse Software, and shall be under no obligation to account therefor or to provide copies
thereof to Buyer.

     (c) Regarding any software developed under contract by third parties for use by
Seller, Seller warrants that it has all right, title and interest to such software, and
that it will assign all such right, title and interest to such software to Buyer.

     7.12 Seller Obligations. Seller and its Affiliates have contingent liability under certain
agreements, instruments, obligations and guaranties in the respective amounts under the agreements
or instruments described in Schedule 7.12, as well as letters of credit, bonds, guarantees and
similar instruments entered into after signing of this Agreement and prior to Closing
(collectively, the “Seller Obligations”). On or before the Closing Date, Buyer shall provide or
cause to be provided substitute guaranties, letters of credit, bonds, or other assurances to the
beneficiaries of the Seller Obligations and will cause the Seller Obligations (and all liability of
the Seller or Seller’s Affiliates, as the case may be, in connection therewith) to be fully and
unconditionally released on the Closing Date, by documents in form and substance reasonably
satisfactory to Seller.

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     7.13 Cooperation.

     (a) Governmental Permits. Buyer and Seller shall cooperate in using their
commercially reasonable efforts to obtain any Governmental Permits required for Buyer to
operate the Business in any jurisdictions (i) where Seller or one of its Affiliates is
currently operating the Business through an entity that is not the Acquired Entity or (ii)
where a change of control of the Acquired Entity would require consent or a transfer of a
Governmental Permit to Buyer or an Affiliated Buyer.

     (b) Consents to Transfer. The Seller shall use all reasonable efforts to obtain any
consents to assignment of any Lease or Governmental Permit or Significant Contract (or a
sublease or sublicense reasonably satisfactory to Buyer that transfers to Buyer
substantially the same economic rights without an adverse effect on the Business). Except
with respect to any Significant Lease, Governmental Permit or Significant Contract, to the
extent that (i) any of the Acquired Assets (and any contracts, leases, property (real or
personal) or other assets of the Business to be assigned to Buyer) are not assignable by
the terms thereof, (ii) the assignment of any Acquired Assets (and any contracts, leases,
property (real or personal) or other assets of the Business to be assigned to a Buyer)
would constitute a violation of any law, judgment, decree, order, writ, injunction, rule or
regulation of any Governmental Authority or (iii) any Acquired Asset (and any contract,
lease, property (real or personal) or other asset of the Business to be assigned to Buyer)
is not assigned by Seller or its Affiliates at the Closing without a breach by such Person
of its obligations hereunder, such Acquired Assets (and any contracts, leases, property
(real or personal) or other assets of the Business to be assigned to the Buyer) shall be
held by Seller or an Affiliate of the Seller in accordance with a Nominee Agreement in form
and substance reasonably satisfactory to Buyer and Seller (the “Nominee Agreement”), or
shall otherwise be held under another arrangement that transfers to Buyer substantially the
same economic benefits as would be associated with an assignment of such Acquired Assets
(or any contracts, leases, property (real or personal) or other assets of the Business to
be assigned to a Buyer. Buyer shall cooperate with Seller and use its commercially
reasonable efforts to obtain such consents described herein or with Seller in creating an
arrangement or agreement that transfers the economic benefits of any Acquired Asset that is
not assigned.

     7.14 Noncompetition. Seller agrees that, for a period of three years following the
Closing, it will not and will cause its Affiliates not to, engage in any Prohibited Activity (it
being understood that any Person that becomes an Affiliate of Seller by virtue of a change of
control of Seller shall not be considered an Affiliate of Seller for purposes of this Section
7.14). A “Prohibited Activity” shall mean the engagement, directly or indirectly, in the
manufacture or sale of premium threaded connections for use on oil country tubular goods with
diameters of 16 inches or less, heat treatment and field services for oil country tubular goods
with diameters of 16 inches or less, accessory threading services relating to the same and testing
of such accessories relating to premium connections; provided, however, notwithstanding anything in
this Agreement to the contrary, nothing herein shall apply or prevent Seller or its Affiliates in
any way from competing in the businesses, and engaging in the activities, described on Schedule
7.14 (the “Permitted Activities”).

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     7.15 License Back of Intellectual Property.

     (a) Effective as of the Closing Date, Buyer hereby grants, and agrees to cause Buyer’s
Affiliates to grant, to Seller and its Affiliates, a worldwide, perpetual, royalty free
exclusive license (with right to sublicense) in the Grant Fields of Use, to make, have
made, sell, distribute, or utilize in any way the Buyer Licensed Intellectual Property
under the Intellectual Property included in the Acquired Assets (including any Intellectual
Property underlying licenses) in the Retained Businesses and Permitted Activities. Buyer
shall, and shall cause its Affiliates to, execute any documents reasonably requested by
Seller in this regard. Nothing in this Section 7.15 shall be interpreted as granting any
license to Seller and its Affiliates of any intellectual property owned by the Buyer, in
any field, before the Closing Date or developed after the Closing Date.

     (b) Effective as of the Closing Date, Seller hereby grants, and agrees to cause
Seller’s Affiliates to grant, to Buyer and its Affiliates, a worldwide, perpetual, royalty
free exclusive license (with right to sublicense) in the VAM Fields of Use, to make, have
made, sell, distribute, or utilize in any way the Seller Licensed Intellectual Property.
Seller shall, and shall cause its Affiliates to, execute any documents reasonably requested
by Buyer in this regard. Nothing in this Section 7.15 shall be interpreted as granting any
license to Buyer and its Affiliates of any intellectual property that relates to any of the
existing drill pipe or large-bore connections of the Retained Businesses, including without
limitation XT, HT, Turbo-Torque, GPDS, Viper, XLC, XLF, or XLW.

     (c) For purposes of the licenses granted pursuant to this Section 7.15, the following
definitions and principles shall apply:

     (1) “Buyer Licensed Intellectual Property” means that Intellectual Property
identified as such on Schedule 7.15 and any Buyer Non-Published Intellectual
Property.

     (2) “Seller Licensed Intellectual Property” means that Intellectual Property
identified as such on Schedule 7.15 and any Seller Non-Published Intellectual
Property.

     (3) “VAM Fields of Use” means the (i) manufacture or sale of threaded
connections for use on tubular goods with diameters of less than 20 inches (but
excluding drill pipe, drill collars, heavy weight drill pipe and related drill stem
products or other products utilizing a welded-on tool joint), (ii) heat treatment
and field services for tubular goods with diameters of less than 20 inches (but
excluding drill pipe, drill collars, heavy weight drill pipe and related drill
string products or other products utilizing a welded-on tool joint), (iii) casing
for drilling with a casing technique, (iv) tubing for drilling with a tubing
technique, (v) accessory threading products and services relating to (i) through
(iv) and testing of such accessories relating thereto (but excluding drill pipe,
drill collars, heavy weight drill pipe and related drill string products or other
products utilizing a

37

 

welded-on tool joint); but in all respects excluding any connections for any
size tubulars that are attached by welding.

     (4) “Grant Fields of Use” means the (i) manufacture or sale of drill pipe and
drill stem products (including drill collars, heavy weight drill pipe and related
drill string products or other products utilizing a welded-on tool joint) and
threaded connections related thereto, (ii) the manufacture or sale of threaded
connections for tubular goods with diameters of 20 inches or greater (18 5/8 inches
or greater with respect to welded-on connections) for use on tubular goods with
diameters of 20 inches or greater (18 5/8 inches or greater with respect to
welded-on connections), and field services relating to the same.

     (5) “Seller Non-Published Intellectual Property” means intellectual property of
the Seller not transferred to Buyer on the Closing Date that (i) exists on the
Closing Date, (ii) is not publicly available as of the date hereof (for example,
unpublished patent applications or invention disclosures (and any patents that are
issued as a result thereof) or patents or patent applications that have not been,
but are under obligation by law or contract to be transferred into the name of
Seller or its Affiliates prior to Closing Date), (iii) is not required to be
transferred to Buyer on the Closing Date pursuant to the terms of this Agreement and
(iv) reasonably could have some application in the VAM Field of Use. In the event
of any disagreement between Buyer and Seller regarding whether any such Intellectual
Property should be considered Seller Non-Published IP, the parties shall follow the
dispute resolution procedures set forth in this Agreement.

     (6) “Buyer Non-Published Intellectual Property” means Intellectual Property of
the Buyer that is not transferred to Seller at the Closing Date pursuant to this
Agreement that (i) is not listed on Annex A to this Agreement, and (ii) reasonably
could have some application in the Grant Fields of Use, but not including Buyer’s
intellectual property existing prior to the Closing Date or developed after the
Closing Date. In the event of any disagreement between Buyer and Seller regarding
whether any such Intellectual Property should be considered Buyer Non-Published IP,
the parties shall follow the dispute resolution procedures set forth in this
Agreement.

     (d) On the Closing Date, Buyer and Seller further agree to enter into the letter
agreement in substantially the form set forth in Exhibit 7.15(d) (the “MTLA Letter
Agreement”).

     7.16 Certain Insurance Matters. Seller agrees, at Buyer’s request, to provide access to
Seller’s occurrence-based insurance coverage and workers’ compensation coverage for pre-closing
occurrences and to fully cooperate with Buyer with respect to any such pre-Closing claims,
including making claims under such coverage and to provide Buyer with any insurance proceeds
received with respect to such claims.

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     7.17 Intercompany Accounts. At or prior to Closing, Seller shall cause all
intercompany account balances between the Business and Seller and its Affiliates to be
extinguished.

     7.18 Non-Solicitation of Transferred Employees. Seller agrees, on behalf of itself
and its Affiliates, that without the prior written consent of Buyer, it will not (i) solicit for
employment any Tier II or Tier III Transferred Employees (as such terms are used in the severance
policy attached as Schedule 6.2(c)) for a period of one year from the Closing Date or (ii) hire any
Tier I Transferred Employees for a period of two years from the Closing Date; provided that these
restrictions shall not apply to general advertisements or similar solicitations that are not
targeted to the Transferred Employees or to Transferred Employees who are no longer employed by
Buyer or its Affiliates.

     7.19 Fulfillment of Certain Contractual Commitments. In the ordinary course of business,
the Business provides threading services to XL Systems, a Retained Business. Schedule 4.1(jj)
(Arms-Length Transactions) summarizes outstanding contractual commitments of XL Systems pursuant to
which the Business will sell threads to XL Systems. Buyer agrees to cause the Business to complete
any such orders that are outstanding as of the Closing Date, as well as any such contracts that are
entered into in the ordinary course of business consistent with past practice between the date of
this Agreement and Closing. The prices for such threading services performed by the Business after
Closing shall be at fair market value prices, consistent with prices that the Business sells
premium threading services to other third parties. Except as specifically provided herein, Buyer
shall be under no obligation to enter into any agreements to provide threading services to Seller
after the Closing.

Article 8

Closing Conditions

     8.1 Seller’s Closing Conditions. The obligation of Seller to proceed with the Closing
contemplated hereby is subject, at the option of Seller, to the satisfaction on or prior to the
Closing Date of all of the following conditions:

     (a) Representations, Warranties and Covenants. The representations and warranties of
Buyer contained in Section 4.2 of this Agreement shall be true and correct in all material
respects on and as of the Closing Date (except for representations and warranties qualified
by materiality, which shall be true and correct in all respects on and as of the Closing
Date), and the covenants and agreements and other obligations of Buyer to be performed or
complied with on or before the Closing Date shall have been duly performed in all material
respects in accordance with this Agreement (except for covenants and agreements qualified
by materiality, which shall have been duly performed in all respects in accordance with
this Agreement).

     (b) Officer’s Certificate. Seller shall have received a certificate dated as of the
Closing Date, executed by a duly authorized officer of Buyer, to the effect that the
conditions described in Section 8.1(a) have been satisfied.

39

 

     (c) Closing Documents. On or prior to the Closing Date, Buyer shall have delivered,
or be standing ready to deliver at Closing, all agreements, instruments and other documents
required to be delivered by Buyer pursuant to Section 9.3, including applicable tax
documents and certificates.

     (d) No Action. On the Closing Date, (i) no Action shall be pending seeking to enjoin
or restrain the consummation of the Closing and (ii) no order of any court or
administrative agency shall be in effect that enjoins, restrains, conditions, makes illegal
or otherwise prohibits consummation of the Closing or the transactions contemplated hereby.

     (e) Waiting Period. The waiting period under the HSR Act shall have expired or been
terminated.

     (f) Seller’s Obligations. The actions required by Buyer under Section 7.12 with
respect to the Seller Obligations shall have occurred.

     (g) MTLA Letter Agreement. Seller and Buyer shall have entered into the MTLA Letter
Agreement.

     8.2 Buyer’s Closing Conditions. The obligation of Buyer to proceed with the Closing
contemplated hereby is subject, at the option of Buyer, to the satisfaction on or prior to the
Closing Date of all of the following conditions:

     (a) Representations, Warranties and Covenants. The representations and warranties of
Seller in Section 4.1 of this Agreement shall be true and correct in all material respects
on and as of the Closing Date (except for representations and warranties qualified by
materiality, which shall be true and correct in all respects on and as of the Closing
Date), and the covenants and agreements and other obligations of Seller to be performed or
complied with on or before the Closing Date shall have been duly performed in all material
respects in accordance with this Agreement (except for covenants and agreements qualified
by materiality, which shall have been duly performed in all respects in accordance with
this Agreement), except, in each case, for such inaccuracies of representations or
warranties or failures to perform covenants as would not have a Material Adverse Effect.

     (b) Officer’s Certificate. Buyer shall have received a certificate dated as of the
Closing Date, executed by a duly authorized officer of Seller, to the effect that to the
conditions described in Section 8.2(a) have been satisfied.

     (c) Closing Documents. On or prior to the Closing Date, Seller shall have delivered,
or be standing ready to deliver at the Closing, all agreements, instruments and documents
required to be delivered by Seller pursuant to Section 9.2, including applicable tax
documents and certificates.

     (d) No Action. On the Closing Date, (i) no Action shall be pending seeking to enjoin
or restrain the consummation of the Closing and (ii) no order of any court or
administrative agency shall be in effect that enjoins, restrains, conditions, makes illegal

40

 

or otherwise prohibits consummation of the Closing or the transactions contemplated
hereby.

     (e) Waiting Period. The waiting period under the HSR Act shall have expired or been
terminated.

     (f) Liens. Buyer shall have received evidence reasonably satisfactory to it that all
Liens listed on Schedule 4.1(o) with respect to personal property and Schedule 4.1(p) with
respect to real property shall have been discharged (unless Buyer provides written notice
to Seller that Buyer desires to assume the financial obligations related thereto).

     (g) Guarantees. All documents reasonably necessary to release the Acquired Entity
from (i) any guaranty of Seller’s outstanding high-yield notes shall have been executed and
delivered in accordance with the appropriate indenture and (ii) any guaranty or liability
(including as a party to) under any existing credit facility of Seller and its Affiliates
shall have been executed and delivered.

     (h) Required Consents. Seller shall have received and delivered to Buyer all Required
Consents (or a sublease or sublicense reasonably satisfactory to Buyer that transfers to
Buyer substantially the same economic benefits without an adverse effect on the Business),
in form and substance reasonably satisfactory to Buyer, each of which shall be in full
force and effect.

     (i) MTLA Letter Agreement. Seller and Buyer shall have entered into the MTLA Letter
Agreement.

Article 9

Closing

     9.1 Closing. The Closing shall be held on the Closing Date at 9:00 a.m., Houston time, at
the offices of Fulbright & Jaworski LLP, Houston, Texas, or at such other time or place as Seller
and Buyer may otherwise agree in writing.

     9.2 Seller’s Closing Obligations. At Closing, Seller shall execute and deliver, or cause
to be executed and delivered, to Buyer the following:

     (a) the stock certificates or comparable documentation representing the equity
interests in the Acquired Entity being transferred to Buyer, endorsed by Seller in blank or
accompanied by duly executed assignment documents;

     (b) the officer’s certificate referred to in Section 8.2(b);

     (c) resignations or terminations of the officers and directors of the Acquired Entity
from their status as officers or directors effective as of the Closing that are requested
by Buyer at least four days prior to the Closing Date;

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     (d) the Transition Services Agreement substantially in the form of Exhibit 9.2(d);

     (e) the Transition Services Heat Treat Supply Agreement substantially in the form of
Exhibit 9.2(e), unless the Closing occurs after March 31, 2008 or April 30 or May 30, 2008
(if Seller makes the election to extend the period thereof as provided for in Exhibit
9.2(e));

     (f) the Nominee Agreement, if applicable;

     (g) the MTLA Letter Agreement; and

     (h) bills of sale, deeds, Intellectual Property assignments by Seller to Buyer or
other transfer agreements or conveyance documents in proper form for the Acquired Assets in
each country or other jurisdiction of sale.

     9.3 Buyer’s Closing Obligations. At Closing, Buyer shall deliver, or cause to be
delivered, the Estimated Adjusted Purchase Price to Seller in immediately available funds to the
bank account as provided in Section 3.3, and Buyer shall execute and deliver, or cause to be
executed and delivered, to Seller the following:

     (a) the officer’s certificate of Buyer referred to in Section 8.1(b);

     (b) releases of the Seller Obligations as required by Section 7.12, together with
written evidence satisfactory to Seller that substitute guaranties have been provided as
required by Section 7.12;

     (c) the Transition Services Agreement substantially in the form of Exhibit 9.2(d);

     (d) the Transition Services Heat Treat Supply Agreement substantially in the form of
Exhibit 9.2(e), unless the Closing occurs after March 31, 2008 or April 30 or May 30, 2008
(if Seller makes the election to extend the period thereof as provided for in Exhibit
9.2(e));

     (e) the Nominee Agreement, if applicable;

     (f) the MTLA Letter Agreement; and

     (g) bills of sale, deeds, Intellectual Property assignments by Seller to Buyer or
other transfer agreements or conveyance documents in proper form for the Acquired Assets in
each country or other jurisdiction of sale.

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Article 10

Indemnification

     10.1 Indemnification By Seller.

     (a) Subject to the provisions of this Article 10, from and after the Closing Date,
Seller shall indemnify and hold harmless Buyer, the Affiliated Buyers and each of their
directors, officers, employees, successors, and assigns (collectively, the “Buyer
Indemnified Parties”) from and against any and all Losses (other than to the extent accrued
for on the Closing Balance Sheet) actually incurred, directly or indirectly, by any of the
Buyer Indemnified Parties (i) for any breach of Seller’s representations or warranties
made, as of the Closing Date, in this Agreement, (ii) for any breach of the covenants or
obligations of Seller and its Affiliates (other than any post-Closing covenants or
obligations of the Acquired Entity) under this Agreement, (iii) for any breach of the MTLA
caused by Seller or its Affiliates or by the consummation of the transactions contemplated
by this Agreement (except for such breaches that are the result of Buyer not timely
performing its obligations under the MTLA Letter Agreement) (collectively, “MTLA
Breaches”), (iv) in connection with any Known Litigation and (v) in connection with any
Excluded Liabilities.

     (b) Regarding the Watts et al v. XL Systems, L.P. and Grant Prideco patent
infringement litigation, CA 1:06-cv-00653-LY (“Watts Litigation”), Seller agrees to
indemnify and hold harmless Buyer and its Affiliates from any claims of damages (including
damages for willful infringement) or attorneys’ fees arising out of Buyer’s continued use
of TC II or other Seller’s products found to infringe, or features of such products found
to infringe in the Watts Litigation, after Closing. Additionally, should any injunction be
issued against continued manufacture, use or sale of TC II or other products found to
infringe in the Watts Litigation, Seller agrees to indemnify and hold harmless Buyer for
loss or impairment of its right to manufacture, use or sell TC II, including but not
limited to actual and consequential damages (including damages for willful infringement) to
Buyer, and attorneys’ fees. Buyer agrees to reasonably cooperate with Seller, at Seller’s
expense, in the defense of the Watts Litigation and the other Known Litigation, by making
the Transferred Employees and Records available to Seller to assist Seller in the defense
of such actions.

     10.2 Indemnification By Buyer. Subject to the provisions of this Article 10, from and
after the Closing Date, Buyer shall indemnify and hold harmless the Seller, its Affiliates (other
than the Acquired Entity), each of their past, present and future directors, officers, employees,
successors, and assigns, the Acquired Entity’s past and present (and, from the date hereof through
the Closing, future) directors, officers, employees, successors and assigns), and each of the
directors, officers, heirs, executors, successors and assigns of any of the foregoing
(collectively, the “Seller Indemnified Parties”) from and against any and all Losses actually
incurred, directly or indirectly, by any of the Seller Indemnified Parties (i) for any breach of
Buyer’s representations or warranties made, as of the Closing Date, in this Agreement, (ii) for any
breach of the covenants or obligations of Buyer and its Affiliates under this Agreement and (iii)
in connection with any Assumed Liabilities or operation of the Business following the Closing.

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     10.3 Third Party Claims. Except as set forth in Section 10.2, if a claim by a third party
is made against a Seller Indemnified Party or a Buyer Indemnified Party (an “Indemnified Party”)
after Closing, and if such party intends to seek indemnity with respect thereto under Section 5.1,
7.11, 10.1 or 10.2, such Indemnified Party shall promptly furnish written notice to the
indemnifying party (the “Indemnitor”) of such claims. Such notice shall specify in reasonable
detail, the facts and circumstances surrounding such claim and the basis under this Agreement for
indemnification (it being understood that the 30 day period pursuant to which an indemnifying party
may elect to assume defense is not triggered until and unless sufficient facts and circumstances
and details are alleged or provided, to the extent known by the Indemnified Party, to form a basis
for indemnification), but failure to give such notice shall not relieve the Indemnitor of any
liability hereunder unless and only to the extent the Indemnitor has suffered prejudice by such
failure. The Indemnitor, at its sole option, shall be entitled to participate in the defense and
to the extent that it wishes, shall have 30 days after receipt of such notice to so notify the
Indemnified Party and to undertake, conduct and control (at its sole expense and through counsel of
its own choosing that is reasonably acceptable to the Indemnified Party) the settlement or defense
thereof, and the Indemnified Party, if so requested, shall reasonably cooperate with it in
connection therewith; provided that the Indemnitor shall permit the Indemnified Party to
participate in, be continuously informed and monitor (but not control or conduct) such settlement
or defense through counsel chosen by such Indemnified Party (however, the fees and expenses of such
counsel shall be borne by such Indemnified Party). After notice from the Indemnitor to the
Indemnified Party of its election to assume the defense of such claim or action, the Indemnitor
shall not be liable to the Indemnified Party under this Article 10 for any legal or other expenses
subsequently incurred by the Indemnified Party in connection with the defense thereof other than
reasonable out-of-pocket costs of investigation and shall be entitled to settle any such claim
provided the Indemnitor pays all monetary costs of such settlement and such settlement (i) does not
in any material way restrict the ability of Buyer and its Affiliates to operate the Business in
substantially the same manner as conducted by Seller and its Affiliates, (ii) does not commit the
Indemnified Party to take, or forbear to take, any action or admit to any wrongdoing of any kind
and (iii) provides for a full and complete release by the third party of the Indemnified Party. In
addition, the Indemnitor shall not consent to the entry of any judgment that does not relate solely
to monetary damages without the prior written consent of the Indemnified Party, which consent may
not be unreasonably withheld. So long as the Indemnitor, at Indemnitor’s cost and expense, (i) has
undertaken the defense of such claim, (ii) is diligently contesting such claim in good faith, by
appropriate proceedings, and (iii) has taken such action as may be necessary to prevent any action
to foreclose a lien against or attachment of the property of the Indemnified Party for payment of
such claim, the Indemnified Party shall not pay or settle any such claim. Notwithstanding
compliance by the Indemnitor with the preceding sentence, the Indemnified Party shall have the
right to pay or settle any such claim after advance notice to the Indemnitor, provided that in such
event it shall waive any right to indemnity therefor by the Indemnitor for such claim and
unconditionally releases the Indemnitor from all liability arising out of such claim. If within 30
days after the receipt of the Indemnified Party’s notice of a claim of indemnity hereunder, the
Indemnitor does not notify the Indemnified Party in writing that it elects (at Indemnitor’s cost
and expense) to undertake the defense thereof, or gives such notice and thereafter fails to contest
diligently such claim in good faith or to prevent action to foreclose a lien against or attachment
of the Indemnified Party’s property as contemplated above, the Indemnitor shall be deemed a waiver
of its right to control and

44

 

participate in such matter and the Indemnified Party shall have the right to contest, settle and/or
compromise the claim without thereby waiving any right to indemnity therefor pursuant to this
Agreement. Notwithstanding anything contained in this Agreement to the contrary, the Indemnitor
shall not be liable for the fees and expenses of more than one separate firm (in addition to any
local counsel required in any other jurisdiction) for all the Indemnified Parties.

     10.4 Limitation of Seller’s Liability.

     (a) Individual Threshold. Seller and its Affiliates shall have no liability to Buyer
or any other Buyer Indemnified Party pursuant to Section 10.1 with respect to a particular
breach or nonfulfillment of a representation, warranty, covenant, or agreement on the part
of Seller or Affiliated Seller under this Agreement if the Losses resulting from such
breach or nonfulfillment do not exceed a per item threshold of $25,000. For the avoidance
of doubt, the individual threshold shall not apply to Losses associated with Known
Litigation, Excluded Liabilities, MTLA Breaches or the Watts Litigation. Additionally,
this Section 10.4(a) shall not apply to Section 4.1(m)(iv), any Losses under Section 10.11
(taxes) or breaches of representations or warranties that constitute fraud.

     (b) Aggregate Threshold. Seller shall have no liability to Buyer or any other Buyer
Indemnified Party with respect to Losses described in Section 10.1, unless and until the
aggregate of such Losses (each exceeding the per item threshold described in Section
10.4(a) above) exceeds an aggregate threshold equal to $16,000,000, and then from the first
dollar of such Losses. For the avoidance of doubt, the aggregate threshold shall not apply
to Losses associated with Known Litigation, Excluded Liabilities, MTLA Breaches or the
Watts Litigation. Additionally, this Section 10.4(b) shall not apply to Section
4.1(m)(iv), any Losses under Section 10.11 (taxes) or breaches of representations or
warranties that constitute fraud.

     (c) Aggregate Limit on Liability. Seller shall have no liability to Buyer or any
other Buyer Indemnified Party with respect to Losses described in Section 10.1, or to pay
any other amount in connection with or with respect to the Business, this Agreement or any
of the transactions contemplated by this Agreement, in any amount exceeding, in the
aggregate, 30 percent of the Adjusted Purchase Price. For the avoidance of doubt, the
aggregate limit on liability shall not apply to Losses associated with Known Litigation,
Excluded Liabilities, MTLA Breaches or the Watts Litigation. Additionally, this Section
10.4(c) shall not apply to Section 4.1(m)(iv), any Losses under Section 10.11 (taxes) or
breaches of representations or warranties that constitute fraud.

     10.5 Mitigation. Buyer shall have a duty to mitigate any Loss as to which an indemnity
applies under this Article 10.

     10.6 Survival and Time Limitation. The representations, warranties, covenants, and
agreements made herein shall survive the Closing, but (a) the representations and warranties of the
parties in Article 4 of this Agreement (other than Sections 4.1(c), 4.1(e), 4.1(f), 4.1(g), 4.1(h),
4.1(j), 4.1(k), 4.1(m)(iv), 4.1(n), 4.1(w), 4.2(a), 4.2(b), 4.2(c), 4.2(i) and 4.2(j)) shall
terminate

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on the 18-month anniversary of the Closing Date, (b) the representations and warranties described
in Section 4.1(n) (environmental), Section 4.1(w) (employee benefit plans) and Section 4.1(y)
(labor agreements) shall terminate on the date that is three years after the Closing Date, (c) the
representations, warranties, covenants and agreements described in Sections 4.1(k) (tax) and 6.1
(tax) shall terminate on the date that is 60 days after the expiration of all applicable statutes
of limitations (including extensions) with respect to the matters covered thereby and (d) the
representations and warranties described in Sections 4.1(c) (organization), 4.1(e) (authority),
4.1(f) (enforceability), 4.1(g) (Sellers’ Ownership), 4.1(h) (capitalization), 4.1(j) (bankruptcy),
4.1(m)(iv), 4.2(a) (organization), 4.2(b) (authority), 4.2(c) (enforceability), 4.2(i) (no
distribution) and 4.2(j) (bankruptcy), shall survive indefinitely. After Closing, any assertion by
a party that another party is liable for indemnification under the terms of this Agreement or
otherwise in connection with the Business or the transactions contemplated in this Agreement must
be made in writing and must be given to the other party on or prior to the 18-month anniversary of
the Closing Date (or not at all), except for (i) any assertions for breach of any representation or
warranty described in Section 4.1(n), Section 4.1(w) or Section 4.1(y), which must be given on or
prior to the date that is three years after the Closing Date (or not at all), (ii) any assertions
for breach of any representation, warranty, covenant or agreement described in Sections 4.1(k) or
6.1, which must be given to the other party on or prior to the date that is 60 days after the
expiration of all applicable statutes of limitations with respect to the matters covered thereby
(or not at all) and (iii) any assertions for breach of any representation or warranty described in
Sections 4.1(c), 4.1(e), 4.1(f), 4.1(g), 4.1(h), 4.1(j), 4.1(m)(iv), 4.2(a), 4.2(b), 4.2(c), 4.2(i)
and 4.2(j), which shall survive indefinitely.

     10.7 Sole and Exclusive Remedy. From and after the Closing Date, the indemnification
provisions of Section 5.1, Section 7.9 and this Article 10 shall be the sole and exclusive remedy
of each party (including the Seller Indemnified Parties and the Buyer Indemnified Parties) (i) for
any breach of the other party’s representations, warranties, covenants, or agreements contained in
this Agreement or (ii) otherwise with respect to the Business, this Agreement, or any of the
transactions contemplated by this Agreement.

     10.8 Releases, Disclaimers, and Limitations on Liability. ALL RELEASES, DISCLAIMERS,
LIMITATIONS ON LIABILITY, AND INDEMNITIES IN SECTIONS 10.1, 10.2 AND IN SECTION 5.1 SHALL APPLY
EVEN IN THE EVENT OF THE SOLE, JOINT, AND/OR CONCURRENT NEGLIGENCE, STRICT LIABILITY, OR OTHER
FAULT OF SELLER, THE SELLER INDEMNIFIED PARTIES, BUYER OR THE BUYER INDEMNIFIED PARTIES.

     10.9 Disclaimer of Warranties. NOTWITHSTANDING ANYTHING CONTAINED TO THE CONTRARY IN ANY
OTHER PROVISION OF THIS AGREEMENT, IT IS THE EXPLICIT INTENT OF EACH PARTY HERETO THAT SELLER OR
ITS AFFILIATES ARE NOT MAKING ANY REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS, IMPLIED,
STATUTORY OR OTHERWISE, BEYOND THOSE REPRESENTATIONS OR WARRANTIES GIVEN IN THIS AGREEMENT, AND IT
IS UNDERSTOOD THAT OTHER THAN SUCH EXPRESS REPRESENTATIONS AND WARRANTIES, BUYER TAKES THE ACQUIRED
ENTITY, AND ALL EQUITY INTERESTS IN THE ACQUIRED ENTITY AND THE ACQUIRED ASSETS AND ASSETS OF THE
ACQUIRED ENTITY “AS IS” AND “WHERE IS” AND IS NOT RELYING UPON ANY REPRESENTATION OR WARRANTY

46

 

OR UNDERSTANDING EXCEPT THOSE EXPRESSLY CONTAINED HEREIN. WITHOUT LIMITING THE GENERALITY OF THE
IMMEDIATELY PRECEDING SENTENCE AND EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, (I) SELLER
HEREBY EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT COMMON LAW, BY
STATUTE OR OTHERWISE, RELATING TO (A) THE CONDITION OR SUFFICIENCY OF THE ACQUIRED ASSETS OR ASSETS
OF THE ACQUIRED ENTITY (INCLUDING ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE, OR OF CONFORMITY TO MODELS OR SAMPLES OF MATERIALS, OR THE PRESENCE OR
ABSENCE OF ANY HAZARDOUS MATERIALS IN OR ON, OR DISPOSED OR DISCHARGED FROM, THE ACQUIRED ASSETS OR
ASSETS OF THE ACQUIRED ENTITY), (B) ANY INFRINGEMENT BY SELLER, THE ACQUIRED ENTITY OR ANY OF THEIR
AFFILIATES OF ANY INTELLECTUAL PROPERTY RIGHT OF ANY THIRD PARTY OR (C) THE ACCURACY OR
COMPLETENESS OF THE INFORMATION, RECORDS, AND DATA NOW, HERETOFORE, OR HEREAFTER MADE AVAILABLE TO
BUYER IN CONNECTION WITH THIS AGREEMENT (INCLUDING ANY DESCRIPTION OF THE BUSINESS, ACQUIRED
ASSETS, ACQUIRED ENTITY, ANY FINANCIAL OR PRICING ASSUMPTIONS, SALES FORECASTS, OR FINANCIAL OR
ENVIRONMENTAL INFORMATION, OR ANY OTHER MATERIAL FURNISHED TO BUYER BY SELLER OR ANY AFFILIATE OF
SELLER OR ANY DIRECTOR, OFFICER, EMPLOYEE, COUNSEL, AGENT, OR ADVISOR THEREOF), (II) BUYER HEREBY
WAIVES ANY RIGHTS UNDER STATUTES TO CLAIM DIMINUTION OF CONSIDERATION AND ANY CLAIMS BY BUYER FOR
DAMAGES BECAUSE OF REDHIBITORY VICES OR DEFECTS, WHETHER KNOWN OR UNKNOWN AND (III) SELLER AND
BUYER AGREE THAT THE ACQUIRED ASSETS AND ASSETS OF THE ACQUIRED ENTITY ARE TO BE ACCEPTED BY BUYER
IN THEIR PRESENT CONDITION AND STATE OF REPAIR.

     10.10 Waiver of Certain Damages. In no event shall either party be liable to the other for
any indirect, consequential, special, exemplary, or punitive damages (including any damages on
account of lost profits or opportunities or lost or delayed production) suffered or incurred by
such other party hereunder, except (i) to the extent that such other party is found liable for such
damages to a third party and (ii) for indemnification by Seller under Section 10.1(b) hereof.

     10.11 Tax Indemnity. Notwithstanding any of the above, Seller shall indemnify and
hold harmless the Buyer Indemnified Parties from and against all Losses attributable to all Taxes
(or the non-payment thereof) of the Acquired Entity and Acquired Assets for all taxable periods
that are the responsibility of the Seller under Section 6.1 (a)(i), (b)(i) and (b)(ii) (including
all Taxes of any member of an affiliated, consolidated, combined or unitary group of which the
Acquired Entity is or was a member on or prior to the Closing Date, including pursuant to Treasury
Regulation § 1.1502-6 or any analogous or similar state, local, or foreign law or regulation); and
Buyer shall indemnify and hold harmless the Seller Indemnified Parties from and against all Losses
attributable to all Taxes (or the non-payment thereof) of the Acquired Entity and Acquired Assets
for all taxable periods that are the responsibility of the Buyer under Section 6.1 (a)(ii), (b)(ii)
and (b)(iii).

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Article 11

Termination; Remedies; Limitations

     11.1 Termination. This Agreement and the transactions contemplated hereby may be
terminated at any time prior to the Closing:

     (a) by the mutual consent of Seller and Buyer; or

     (b) (i) if the Closing has not occurred before the close of business 365 days after the date
of this Agreement, then by Seller if any condition specified in Section 8.1 has not been satisfied
on or before such close of business, and shall not theretofore have been waived by Seller, or (ii)
if the Closing has not occurred before the close of business 365 days after the date of this
Agreement, then by Buyer if any condition specified in Section 8.2 has not been satisfied on or
before such close of business, and shall not theretofore have been waived by Buyer; provided, in
each case, that the failure to consummate the transactions contemplated hereby on or before such
date did not result from the failure by the party or parties seeking termination of this Agreement
to fulfill any undertaking or commitment provided for herein on the part of such party or parties
that is required to be fulfilled on or prior to Closing.

     11.2 Effect of Termination. In the event of termination of this Agreement by Seller or
Buyer pursuant to Section 11.1, written notice thereof shall forthwith be given by the terminating
party or parties to the other party or parties hereto, and this Agreement shall thereupon terminate
(except for the provisions of Section 12.4 and 12.10, which shall survive such termination);
provided, however, that following such termination Buyer will continue to be bound by its
obligations described in Sections 5.1 and 5.2. If this Agreement is terminated as provided herein,
all filings, applications and other submissions made to any Governmental Authority shall, to the
extent practicable, be withdrawn from the Governmental Authority to which they were made.
Notwithstanding anything to the contrary contained herein, termination of this Agreement for any
reason shall not release any party from any liability for any breach by such party of the terms and
provisions of this Agreement prior to such termination.

Article 12

Other Provisions

     12.1 Counterparts. This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to the other party.

     12.2 Governing Law; Jurisdiction; Process.

     (a) Governing Law. This Agreement and the rights and obligations of the parties
hereunder and the transactions contemplated hereby shall be governed by, enforced, and
interpreted in accordance with the laws of the State of New York applicable to contracts
entered into and to be performed entirely within the State of New York, without regard to
conflict of law principles thereof.

     (b) Arbitration. In the event any dispute (“Dispute”) arises regarding or pertaining
to the validity, intention or interpretation, execution or compliance of this

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Agreement, the parties to this Agreement will, in good faith, use their reasonable
best efforts to settle such Dispute. If, within the 60 calendar days following the date in
which one of the parties gives notice to the other of the existence of a Dispute, such
Dispute has not been finally resolved in writing to the mutual satisfaction of the parties
to this Agreement, each of the parties hereto hereby irrevocably and unconditionally agrees
to submit such Dispute, for itself and its property, to be fully and finally resolved by
arbitration. Such arbitration shall be conducted in New York, New York, in English,
pursuant to the Arbitration Rules of the International Chamber of Commerce then in effect
(the “ICC Rules”) by a panel of three arbitrators, one designated by Seller, one designated
by Buyer, and the third, who shall act as chairman, designated by the other two arbitrators
so appointed and who shall have no relation to Buyer or Seller. In the event that the first
two arbitrators fail to appoint the third arbitrator within 30 days after their selection,
such third arbitrator shall be appointed pursuant to the ICC Rules. The arbitration panel
shall, in respect of any Dispute submitted thereto, grant an award, strictly grounded in
law, not later than the end of the ninth calendar month after the month in which such
Dispute is submitted to arbitration. The award of the arbitration panel will be final and
binding on the parties to this Agreement and such award may be entered in any court having
jurisdiction for its enforcement, and the parties to this Agreement hereby expressly submit
to the jurisdiction of said court. The fees and expenses of the arbitration panel shall be
borne equally by the parties to this Agreement; provided, however, each such party shall be
solely responsible for all fees and expenses of counsel retained by such party in
connection with any such arbitration.

     12.3 Entire Agreement. This Agreement (including the Confidentiality Agreement) and the
Appendices, Schedules, Annexes and Exhibits hereto contain the entire agreement between the parties
with respect to the subject matter hereof and there are no agreements, understandings,
representations or warranties between the parties other than those described or expressly referred
to herein.

     12.4 Expenses. Buyer shall be responsible for all recording, filing or registration fees
for any assignment or conveyance delivered to Buyer under or pursuant to this Agreement. All other
costs and expenses incurred by each party hereto in connection with all things required to be done
by it hereunder, including attorneys’ fees, accountant fees and the expense of environmental and
title examination, shall be borne by the party incurring same.

     12.5 Notices. All notices hereunder shall be sufficiently given for all purposes hereunder
if in writing and delivered personally, sent by documented overnight delivery service or, to the
extent receipt is confirmed, by United States Mail, telecopy, or other electronic transmission
service to the appropriate address or number as described below. Notices to Seller shall be
addressed as follows:

Grant Prideco, Inc.

400 North Sam Houston Pkwy East, Suite 900

Houston, Texas 77050

Attention: General Counsel

Telecopy No.: (281) 878-5732

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with copies to:

Fulbright & Jaworski L.L.P.

Fulbright Tower

1301 McKinney, Suite 5100

Houston, Texas 77010

Attention: Charles L. Strauss

Telecopy No.: (713) 651-5246

or at such other address and to the attention of such other Person as Seller may designate by
written notice to Buyer.

Notices to Buyer shall be addressed to:

Vallourec S.A. and

Vallourec & Mannesmann Holdings, Inc.

1990 Post Oak Blvd., Suite 1400

Houston, Texas 77056-3813

Attention: Didier Hornet

Telecopy No.: (713) 479-3234

with copies to:

The Vallourec Group

27, avenue du General Leclerc

92660 Boulogne Billancourt Cedex

France

Attention: Philippe Dupeyré, Group General Counsel

Telecopy No.: 011-331-49 09 3785

and

Akin Gump Strauss Hauer & Feld LLP

1700 Pacific Avenue, Suite 4100

Dallas, Texas 75201

Attn: Richard C. Levin and Jennifer De la Rosa

Telecopy No.: (214) 969-4343

or at such other address and to the attention of such other Person as Buyer may designate by
written notice to Seller.

     12.6 Successors and Assigns. Any of the rights and obligations of the parties hereto shall
be assignable or delegable, in whole or in part, by either party hereto to one or more Affiliates
of such party upon written notice to the other party and without the express written consent of
such other party; provided, however, that any such assignment or delegation shall not cause the
assigning party to be released from its obligations hereunder. Subject to the preceding

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sentence, this Agreement shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns.

     12.7 Amendments and Waivers. This Agreement may not be modified or amended except by an
instrument or instruments in writing signed by the party against whom enforcement of any such
modification or amendment is sought. Any party hereto may, only by an instrument in writing, waive
compliance by another party hereto with any term or provision of this Agreement on the part of such
other party hereto to be performed or complied with. The waiver by any party hereto of a breach of
any term or provision of this Agreement shall not be construed as a waiver of any subsequent
breach.

     12.8 Appendices, Annexes, Schedules and Exhibits. All Appendices, Annexes, Schedules and
Exhibits hereto which are referred to herein are hereby made a part hereof and incorporated herein
by such reference.

     12.9 Interpretation and Rules of Construction. It is expressly agreed that this Agreement
shall not be construed against any party, and no consideration shall be given or presumption made,
on the basis of who drafted this Agreement or any particular provision hereof or who supplied the
form of Agreement. In construing this Agreement:

     (i) examples shall not be construed to limit, expressly or by implication, the
matter they illustrate;

     (ii) the word “includes” and its derivatives means “includes, but is not
limited to” and corresponding derivative expressions;

     (iii) a defined term has its defined meaning throughout this Agreement and each
Appendix, Annex, Exhibit and Schedule to this Agreement, regardless of whether it
appears before or after the place where it is defined;

     (iv) each Exhibit, Annex and Schedule to this Agreement is a part of this
Agreement, but if there is any conflict or inconsistency between the main body of
this Agreement (including Appendix A which shall be considered part of the main body
of this Agreement) and any Exhibit, Annex or Schedule, the provisions of the main
body of this Agreement shall prevail; and

     (v) the headings and titles herein are for convenience only and shall have no
significance in the interpretation hereof.

     12.10 Agreement for the Parties’ Benefit Only. Except as specified in Section 5.1 and
Article 10, which are also intended to benefit and to be enforceable by any of the indemnified
parties thereunder, this Agreement is not intended to confer upon any Person not a party hereto any
rights or remedies hereunder, and no Person, other than the parties hereto or the indemnified
parties, is entitled to rely on any representation, warranty, covenant or agreement contained
herein. In each case, such third party beneficiary may only bring suit against the defaulting
party or parties.

51

 

     12.11 Severability. If any term or other provision of this Agreement is invalid, illegal
or incapable of being enforced by any rule of Law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not affected in any adverse
manner to any party. Upon such determination that any term or other provision is invalid, illegal
or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent
possible.

     12.12 Time of Essence. Time is of the essence in this Agreement. If the date specified in
this Agreement for giving any notice or taking any action is not a Business Day (or if the period
during which any notice is required to be given or any action taken expires on a date which is not
a Business Day), then the date for giving such notice or taking such action (and the expiration
date of such period during which notice is required to be given or action taken) shall be the next
day that is a Business Day.

52

 

     IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of each of the parties as
of the day first above written.

	 	 	 	 	 
	 	Seller:

GRANT PRIDECO, INC.

 	 
	 	By:  	/s/ Michael McShane
 	 
	 	 	Michael McSHANE 	 
	 	 	Chairman, President and
Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	Buyer:

VALLOUREC S.A.

 	 
	 	By:  	/s/ Pierre Verluca
 	 
	 	 	Pierre VERLUCA 	 
	 	 	Chairman of the Management Board 	 
	 

	 	 	 	 	 
	 	VALLOUREC & MANNESMANN HOLDINGS, INC.

 	 
	 	By:  	/s/ Jean-Pierre Michel
 	 
	 	 	Jean-Pierre MICHEL 	 
	 	 	Director 	 

1

 

	 	 	 	 	 

APPENDIX A

TO

PURCHASE AND SALE AGREEMENT

Definitions

     “338(h)(10) Election” has the meaning given in Section 2.4(b).

     “Acquired Assets” has the meaning given in Section 2.1(a).

     “Acquired Entity” has the meaning given in the recitals.

     “Acquired Personal Property” means the assets described on Item 3 of Annex A.

     “Action” means any action, suit, claim, investigation, inquiry or proceeding by or before any
court or other Governmental Authority or any arbitration proceeding.

     “Adjusted Purchase Price” has the meaning given in Section 3.1(b).

     “Adjustment Amount” has the meaning given in Section 3.1(b).

     “Affiliate” means, as to the Person specified, any Person controlling, controlled by or under
common control with such specified Person. The concept of control, controlling or controlled as
used in the aforesaid context means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of another, whether through the ownership of
voting securities, by contract or otherwise. No Person shall be deemed an Affiliate of any Person
by reason of the exercise or existence of rights, interests, or remedies under this Agreement.
Notwithstanding anything contained in the Agreement or this Appendix A to the contrary, Voest
Alpine Tubulars shall not be considered an Affiliate of Seller.

     “Affiliated Buyer” has the meaning given in the recitals.

     “Affiliated Seller” has the meaning given in the recitals.

     “Agreed Rate” means an annual rate of interest equal to the lesser of (i) the prime rate per
annum as reported from time to time by The Wall Street Journal and (ii) the maximum rate of
interest allowed by Law.

     “Agreement” has the meaning given in the preamble.

     “Appraiser” has the meaning given in Section 3.5.

     “Arbitrator’s Closing Statement” has the meaning given in Section 3.4(b).

     “Assumed Liabilities” means any of Seller’s or its Subsidiaries’ liabilities, debts and
obligations pertaining to the Business, whether known or unknown, now existing or hereafter
arising, absolute or contingent, liquidated or unliquidated, whether or not required to be accrued
under GAAP, that are not expressly included in the definition of Excluded Liabilities. Without

Appendix A - Page 1

 

limiting the generality of the foregoing, the Assumed Liabilities shall include: (a) the
liabilities specifically accrued for in the Closing Balance Sheet, as determined pursuant to the
terms of this Agreement, (b) the liabilities and obligations of the Seller and its Subsidiaries and
the Business under the contracts and other agreements constituting part of the Acquired Assets or
to which the Acquired Entity is a party but only to the extent such liabilities and obligations
relate to the Business and (c) the liabilities and obligations of the Seller and its Subsidiaries
and the Business under warranty claims relating to goods manufactured or sold or services provided
by the Business prior to the Closing Date.

     “Automatically Transferred Employee” has the meaning given in Section 6.2(a).

     “Balance Sheet” has the meaning given in Section 4.1(b).

     “Balance Sheet Date” has the meaning given in Section 4.1(b).

     “Benefit Plans” means (a) any employee welfare benefit plan or employee pension benefit plan
as defined in sections 3(1) and 3(2) of ERISA, including, but not limited to, a plan that provides
retirement income or results in deferrals of income by employees for periods extending to their
terminations of employment or beyond, and a plan that provides medical, surgical or hospital care
benefits or benefits in the event of sickness, accident, disability, death or unemployment
(including any such coverage after retirement) and (b) any other material employee benefit
agreement or arrangement that is not an ERISA plan, including but not limited to, any deferred
compensation plan, stock option plan, stock purchase plan, stock award plan, bonus program, golden
parachute agreement, severance pay plan, dependent care assistance plan, cafeteria plan, employee
assistance program, scholarship program, vacation policy, sick leave policy, retiree health care
benefit program, disability program or other similar plan or agreement or arrangements that is
sponsored or maintained for the benefit of directors, Business Employees or former Business
Employees (or their dependents or beneficiaries).

     “Business” has the meaning given in the recitals.

     “Business Day” means any day which is not a Saturday, Sunday, or legal holiday recognized by
the United States of America.

     “Business Employees” means (i) all employees of the Acquired Entity and (ii) all employees of
Seller and its affiliates who work primarily in connection with the Business, including employees
who are not actively at work by reason of layoff, sick leave, vacation, disability or other
approved leave of absence, except for any persons who are receiving long term disability benefits.
“Business Employees” shall also mean such lab technicians as Buyer and Seller shall mutually agree
in accordance with Section 6.2(g).

     “Buyer” has the meaning given in the preamble.

     “Buyer Indemnified Parties” has the meaning given in Section 10.1(a).

     “Change in Control Agreements” has the meaning given in Section 6.2(d).

     “Charter Documents” has the meaning given in Section 4.1(c).

Appendix A - Page 2

 

     “Closing” means the consummation of the transaction contemplated by Article 9.

     “Closing Balance Sheet” has the meaning given in Section 3.1(b).

     “Closing Date” means the fifth Business Day immediately following the day on which the last to
be fulfilled or waived of the conditions set forth in Article 8 (other than the conditions that by
their terms are capable of being satisfied only on the Closing Date) shall have been fulfilled or
waived, or such other date as may be mutually agreed to by Seller and Buyer.

     “Closing Statement” has the meaning given in Section 3.2.

     “Closing Statement Arbitrator” has the meaning given in Section 3.4(b).

     “COBRA” has the meaning given in Section 4.1(w)(iii).

     “Code” means the Internal Revenue Code of 1986, as amended and revised from time to time, and
any substitute or successor provisions thereto, and the rules and regulations promulgated
thereunder.

     “Confidentiality Agreement” has the meaning given in Section 5.2.

     “Contract” includes any agreement to which Seller is a party, including but not limited to
license agreements involving Intellectual Property.

     “Customary Post-Closing Consents” means consents and approvals from Governmental Authorities
or third parties that are customarily obtained after closing in connection with transactions
similar in nature to the transactions contemplated hereby.

     “Dispute” has the meaning given in Section 12.2(b).

     “Effective Time” means 11:59 p.m., Houston time, on the Closing Date.

     “Environmental Laws” means all Laws, as existing as of the Closing Date, relating to (a) the
control of or liability for any pollutant, or protection of the air, water or land or other
environmental media, (b) waste generation, handling, treatment, storage, disposal or
transportation, (c) exposure to hazardous or toxic substances, and (d) Environmental Liabilities.
“Environmental Laws” shall include without limitation the Clean Air Act, 42 U.S.C. § 7401 et seq.,
the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., the Federal Water Pollution
Control Act, 33 U.S.C. § 1251 et seq., the Safe Drinking Water Act, 42 U.S.C. § 300f et seq., and
the Comprehensive Environmental Response, Compensation, and Liability Act, as amended by the
Superfund Amendments and Reauthorization Act, 42 U.S.C. § 9601 et seq. or comparable state, federal
or non-United States Law and regulations promulgated thereunder.

     “Environmental Liabilities” means any and all costs, damages, settlements, expenses,
penalties, fines, taxes, prejudgment and post-judgment interest, court costs and attorneys’ fees
(a) incurred or imposed (i) pursuant to any order, notice of responsibility, directive (including
requirements embodied in Environmental Laws), injunction, judgment or similar act (including
settlements) by any Governmental Authority to the extent arising out of or under Environmental

Appendix A - Page 3

 

Laws or (ii) pursuant to any claim or cause of action by a Governmental Authority or other
third Person for personal injury, property damage, damage to natural resources, remediation or
response costs to the extent arising out of or attributable to any violation of, or any remedial
obligation under, any Environmental Law, or (b) otherwise arising under or related to Environmental
Laws.

     “equity interests” means any capital stock, partnership interests, membership interests or
other units of equity ownership.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the
regulations promulgated and rulings issued thereunder.

     “Estimated Adjusted Purchase Price” has the meaning given in Section 3.2.

     “Excluded Assets” has the meaning given in Section 2.1(c).

     “Excluded Liabilities” means (a) any of Seller’s or its Subsidiaries’ liabilities, debts and
obligations, whether known or unknown, now existing or hereafter arising, absolute or contingent,
liquidated or unliquidated, whether or not required to be accrued under GAAP (collectively,
“Liabilities”), arising from the Excluded Assets or relating to the Retained Business, (b) Known
Litigation, (c) litigation attributable to a criminal activity of Seller or its Affiliates, (d)
liabilities listed on Schedule 2.2 or liabilities of Seller or its Affiliates arising under this
Agreement or the Seller Related Agreements, (e) liabilities for severance obligations to
Transferred Employees under the Change in Control Agreements or otherwise in excess of that set
forth in Schedule 6.2(c), (f) Liabilities relating to claims by Persons related to alleged exposure
to hazardous materials (including asbestos) prior to Closing, and (g) Liabilities arising from or
relating to sites or facilities formerly owned or operated by the Acquired Entity or in the
Business.

     “Final Closing Statement” has the meaning given in Section 3.4(b).

     “Final Purchase Price Allocation” has the meaning given in Section 3.5.

     “Final Settlement Date” has the meaning given in Section 3.4(a).

     “GAAP” means United States generally accepted accounting principles as in effect on the date
hereof.

     “Governmental Authority” means any United States or non-U.S. federal, state, provincial or
municipal entity, and any political subdivision or other governmental authority, department,
commission, court, board, bureau, agency or instrumentality, or other entity, U.S. domestic or
non-U.S., exercising executive, legislative, judicial, quasi-judicial, regulatory or administrative
functions of or pertaining to government.

     “Governmental Permits” has the meaning given in Section 4.1(l).

     “Health and Safety Requirements” means all orders, contracts, Laws, and programs (including
those promulgated or sponsored by industry associations, insurance companies, and

Appendix A - Page 4

 

risk management companies) concerning or relating to public health and safety and
worker/occupational health and safety, including those relating to the presence, use,
manufacturing, refining, production, generation, handling, transportation, treatment, recycling,
transfer, storage, disposal, distribution, importing, labeling, testing, processing, discharge,
release, threatened release, control, or other action or failure to act involving cleanup of any
hazardous materials, substances or wastes, chemical substances or mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or byproducts, asbestos, polychlorinated
biphenyls, noise, or radiation, each as amended and as now or hereafter in effect.

     “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules and
regulations adopted pursuant thereto.

     “HSR Act Approval” means any approval of a Governmental Authority required under the HSR Act.

     “ICC Rules” has the meaning given in Section 12.2(b).

     “income tax” means federal, state, local, or foreign income or franchise taxes or other taxes
measured in whole or in part by income and any interest and penalties or additions thereon.

     “Indemnified Party” has the meaning given in Section 10.3.

     “Indemnitor” has the meaning given in Section 10.3.

     “Inhouse Software” has the meaning given in Section 7.11(b).

     “Intellectual Property” means patents, trademarks, trade names, service marks, logos, trade
secrets, copyrights and all applications and registrations therefor that are used primarily in the
Business.

     “Knowledge” or “knowledge” means the actual knowledge of any fact, circumstance, event or
condition after due inquiry of the relevant persons by (a) an officer, with respect to Buyer and
(b) the Business officers and general managers or an officer, with respect to Seller.

     “Known Litigation” has the meaning given in Section 4.1(t).

     “Law” means any applicable statute, law (including common law), ordinance, regulation, rule,
ruling, order, writ, injunction, decree or other official act of or by or requirement of any
Governmental Authority as interpreted and in existence on the date of this Agreement.

     “Lien” means any lien, security interest, charge, claim, mortgage, deed of trust, option,
warrant, purchase right, lease or other encumbrance.

     “Losses” means any and all claims, liabilities (including further liability claims), losses,
causes of action, fines, penalties, litigation, lawsuits, administrative proceedings,
administrative investigations, costs, and expenses, including reasonable attorneys’ fees, court
costs, and other costs of suit. Losses will not include any amounts accrued or reflected on the
Closing Balance Sheet.

Appendix A - Page 5

 

     “Material Adverse Effect” means a material adverse effect on (i) the business, operations,
properties, assets or financial condition of the Business, taken as a whole, excluding any effect
directly or indirectly resulting from (a) any change in economic, industry, or market conditions,
unless such change materially disproportionately impacts the Business, (b) any change in Law or
regulatory policy, (c) any change in accounting rules or requirements, (d) taking any action
required by this Agreement or (e) this Agreement or the consummation of the transactions
contemplated by this Agreement, or (ii) Seller’s ability to consummate the transactions
contemplated hereby.

     “Material Licenses” has the meaning given in Section 4.1(r)(iv).

     “Material Suppliers” means the five suppliers that accounted for the largest dollar volume of
purchases for the Business during the last fiscal year (but excluding US Steel Corporation).

     “MTLA” means that certain Master Technology License Agreement dated June 19, 1998, between
Seller and DST Distributors of Steel Tubes Limited, including any amendments thereto.

     “MTLA Breaches” has the meaning given in Section 10.1(a).

     “MTLA Letter Agreement” has the meaning given in Section 7.15(d).

     “Net Debt” means the aggregate amount for the Business of any financial debt defined as the
aggregate amount (to the extent not included in Working Capital on the Closing Balance Sheet and to
the extent it is a liability of the Buyer or Acquired Entity on the Closing Date) of:

     (a) all long term and short term indebtedness for borrowed monies (including
loans, facilities, overdrafts, unpaid interest and intercompany debt);

     (b) all penalties or costs to be paid in connection with the early repayment,
reimbursement or refinancing of any of the above mentioned items, if any;

     (c) that portion of obligations with respect to capital leases that is properly
classified as a liability on a balance sheet in accordance with GAAP applied on a
basis consistent with the Balance Sheet.

     “Nominee Agreement” has the meaning given in Section 7.13(b).

     “Notice of Disagreement” has the meaning given in Section 3.4(a).

     “Offered Employees” has the meaning given in Section 6.2(a).

     “Permitted Activities” has the meaning given in Section 7.14.

     “Person” means any Governmental Authority or any individual, firm, partnership, corporation,
limited liability company, joint venture, trust, unincorporated organization or other entity or
organization.

Appendix A - Page 6

 

     “Prohibited Names and Marks” has the meaning given in Section 7.9.

     “PTO” has the meaning given in Section 6.2(e).

     “Prohibited Activity” has the meaning given in Section 7.14.

     “Purchase Price” has the meaning given in Section 3.1(a).

     “Real Estate” has the meaning given in Annex A.

     “Records” means any and all of the books, records, contracts, agreements and files of Seller
and its Affiliates related to the Business, as applicable, and existing on the Closing Date
(including, but not limited to, personnel files of the Business Employees) and all increases and
additions thereto after the Closing Date, including computer records and electronic copies of such
information whether maintained by the Seller or the Buyer or their respective Affiliates.

     “Required Consents” means (a) all of the consents and approvals set forth on Schedule 8.2(h)
hereto and (b) any other consent that, if not obtained, or such consent requirement cannot be
satisfied in accordance with Section 7.13(b), could reasonably be expected to have a Material
Adverse Effect.

     “Retained Business” means all business and operations of Seller and its Affiliates other than
the Business, including, without limitation, Seller’s drill stem operations, drill bit operations,
XL Systems operations and Intelliserv operations.

     “Seller” has the meaning given in the preamble.

     “Seller Indemnified Parties” has the meaning given in Section 10.2.

     “Seller Obligations” has the meaning given in Section 7.12.

     “Seller Related Agreements” means the Transition Services Agreement, the Transition Services
Heat Treat Supply Agreement (if applicable) and the MTLA Letter Agreement.

     “Seller’s Consolidated Tax Returns” mean the federal consolidated income tax returns filed
pursuant to Section 1502 of the Code, which includes the Acquired Entity as a member of the
affiliated group of companies as defined in Section 1504 of the Code, and any similar combined,
consolidated or unitary state, or local or foreign tax returns.

     “Severance Plan” means the Severance Plan of Seller with substantially the terms summarized in
Schedule 6.2(c).

     “Significant Contracts” means the following contracts, agreements or understandings to which
Seller and its Affiliates (including the Acquired Entity) are party and relating primarily to the
ownership and operation of the Business:

Appendix A - Page 7

 

     (i) indentures, mortgages, loan agreements, security agreements, guarantees or
other agreements or commitments for the borrowing of money, or the deferred purchase
price of assets;

     (ii) all employment agreements, real property leases and material technology
license agreements;

     (iii) royalty, distributorship, agency or similar agreements requiring the
expenditure or series of related expenditures of funds in excess of $100,000 per
annum;

     (iv) agreements, contracts or commitments, or orders, writs, injunctions,
decrees, judgments or awards by any court, arbitration panel or Governmental
Authority, that restrict in any manner the business activity of the Acquired Entity
or owner of the Acquired Assets and Assumed Liabilities or restrict any of them from
competing with any other Person or entity or from conducting any line of business in
any geographic area;

     (v) all master service agreements, distributor contracts, field service
representative agreements and repair and maintenance agreements, which cannot be
terminated without penalty with notice of 90 days or less;

     (vi) all contracts and agreements providing for receipt or payment, contingent
or otherwise, of $100,000 or more annually and which may not be terminated without
payment or penalty with notice of 90 days or less;

     (vii) any contract requiring a capital expenditure or known commitment after
the Closing in excess of $100,000 in any calendar year;

     (viii) any contract or agreement to buy, sell, lease (as lessor or as lessee)
or otherwise convey or obtain an interest in real or personal property having a
value in excess of $100,000;

     (ix) any contract or agreement establishing any joint venture, strategic
alliance or other collaboration relating to the Business; and

     (x) any other contract that is material to the Business or the Acquired Entity.

     “Significant Leases” has the meaning given in Section 4.1(q).

     “Subsidiary” means any corporation, limited liability company, limited partnership or other
entity, at least a majority of the voting equity interests (i.e. equity interests entitled to vote
for the election of directors, but excluding equity interests entitled so to vote only upon the
happening of some contingency unless such contingency will have occurred) of which are owned
directly or indirectly by the Seller or the Acquired Entity.

Appendix A - Page 8

 

     “Tax” or “Taxes” means all federal, national, state, local, municipal, foreign, net income,
gross income, gross receipts, windfall profit, severance, property, production, sales, use,
license, excise, franchise, employment, payroll, withholding, alternative or add-on minimum, ad
valorem, value-added, transfer, stamp or environmental tax (including taxes under Internal Revenue
Code Section 59A), escheat payments or any other tax, custom, duty, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest or penalty, addition to tax
or additional amount imposed by any governmental authority.

     “Tax Returns” means all returns, declarations, reports, estimates, statements and other
documents required to be filed with respect to Taxes and the term “Tax Return” means any one of the
foregoing Tax Returns.

     “Tenaris” means DST Distributors of Steel Tubes Limited, Siderca, S.A., Tubos de Acero Mexico,
Dalmine S.p.a. or any Affiliates thereof.

     “TCA” has the meaning given in the Recitals.

     “Terminated Employee” has the meaning given in Section 6.2(a).

     “Tier I Employee” has the meaning given in Schedule 4.1(w)(i).

     “Transfer Taxes” means all transfer Taxes, including without limitation sales, use, value
added, excise (including excise Taxes on petroleum, products of petroleum, petrochemicals and other
taxable substances), stock, stamp, documentary, filing, recording, permit, license, authorization
and similar Taxes, filing fees and similar charges.

     “Transferred Bank Accounts” has the meaning given in Annex A.

     “Transferred Employee” has the meaning given in Section 6.2(a).

     “Transition Services Agreement” means the Transition Services Agreement dated as of the
Closing Date between Seller and Buyer, or their designated Affiliates, substantially in the form of
Exhibit 9.2(d).

     “Tubular Business LP” has the meaning given in Section 2.3.

     “Watts Litigation” has the meaning given in Section 10.1(b).

     “WARN” has the meaning given in Section 4.1(y).

     “Working Capital” has the meaning given in Section 3.1(b).

     “XL Systems Business” means Seller’s XL Systems business but excluding any interest in any
Atlas Bradford product lines or Intellectual Property.

Appendix A - Page 9

 

Annex A

Acquired Assets and Assets Owned by Acquired Entity

	1.	 	Owned Real Property. All of Seller’s and its Affiliates’ right, title and interest
in the real property more specifically described as owned on Annex A-1 (collectively, the
“Real Estate”) and all buildings, improvements, other constructions, construction-in-progress
and fixtures now or hereafter located on the Real Estate, together with as they relate to the
Real Estate, all right, title and interest of Seller and its Affiliates in all options,
easements, servitudes, rights-of-way and other rights associated therewith.
	 
	2.	 	Leased Real Property. All of Seller’s and its Affiliates’ right, title and interest
to the leases of real property more specifically described as leased on Annex A-1.
	 
	3.	 	Personal Property. All tangible personal property of every kind and nature owned by
Seller or Affiliates of Seller as of the date of this Agreement that is used in the Business,
including all furniture, fixtures, machinery, equipment, vehicles, laboratory equipment and
assets (other than the R&D excluded assets set forth on Attachment 1 to Schedule 2.1(c)) and
personal computers, as such may be reduced through sale or consumption thereof or increased
through additions thereto through the Closing Date (collectively, the “Acquired Personal
Property”).
	 
	4.	 	Inventory. All inventory that is used in connection with the operation of the
Business and owned by Seller or its Affiliates as of the date of this Agreement, as such
inventory may be reduced through consumption thereof, or increased through addition thereto
through the Closing Date.
	 
	5.	 	Receivables. All accounts, notes, receivables and other rights to receive money
owned by Seller or Affiliates of Seller on the date of this Agreement arising out of or
relating to the operations of the Business, as such may be reduced by payments received or
increased through replacement thereof or additional thereto.
	 
	6.	 	Intellectual Property. All Intellectual Property owned by Seller and Affiliates of
Seller and used in the Business, including the patents, patent applications, trademarks,
tradenames and copyrights (registered or unregistered) listed on Annex A-2 as being owned by
Seller or an Affiliate of Seller and all contracts to which Seller or an Affiliate of Seller
is party pursuant to which Intellectual Property used primarily in the Business is licensed to
Seller or an Affiliate of Seller, including the licenses listed on Annex A-2. Also included
in this Intellectual Property that is part of the Acquired Assets, to the extent that it may
not be listed on Annex A-2, are all patent applications filed or patents obtained by or on
behalf of Seller or Affiliates of Seller relating primarily to the Business, including those
which, by law or by contract are to be assigned to Seller and Affiliates of Seller; all trade
secrets, including disclosures by employees or others not listed on Annex A-2 that by law or
by contract are owned or obligated to be owned by Seller or Affiliates of Seller. If any
Intellectual Property within the Acquired Assets also cover Seller’s Retained Business, Buyer
will license back to Seller the rights pursuant to Section 7.15 hereof. If Buyer needs, in
order to conduct the Business, any intellectual property of Seller that is not included in the
Intellectual Property of these Acquired

Annex A - Page 1

 

	 	 	Assets, but which Seller has rights to grant licenses, then Seller will grant a license to
Buyer under such intellectual property pursuant to Section 7.15 hereof.
	 
	7.	 	Contracts. The benefit and obligation to perform subsequent to the Closing Date of
all contracts and agreements and understandings to which the Seller or any of the Seller’s
Affiliates is a party (including leases) relating to the ownership, maintenance and operation
of the Business existing on the Closing Date, as listed on Annex A-3.
	 
	8.	 	Records, Insurance Proceeds and Permits. All the right, title and interest of the
Seller and its Affiliates in the following tangible and intangible assets used or held for use
primarily in connection with the ownership, maintenance and operation of the Business, to the
extent assignable by law and to the extent the Seller or its Affiliates have the right to
assign and transfer such assets:

     (i) all Records to be delivered to Buyer pursuant to Section 7.7;

     (ii) all insurance proceeds or rights to insurance proceeds relating to any
damage, destruction or other loss relating to the Business, other than proceeds
relating to the Known Litigation; and

     (iii) all certificates, licenses, permits, consents, operating authorities,
orders, exemptions, franchises, approvals, registration filings, accreditations and
other authorizations and applications therefore related to the operation of the
Business as presently being conducted.

     (iv) All deposits held by Seller or its Affiliates in connection with future
services to be rendered in connection with the Business.

     (v) All warranties, guarantees and covenants not to compete with respect to the
Business.

	9.	 	Cash and Bank Accounts. The cash and cash equivalents on deposit on the Closing Date
in the bank or savings and loan accounts listed on Annex A-4 (the “Transferred Bank
Accounts”).
	 
	10.	 	Other Property. All other or additional privileges, rights, interests, properties
and assets owned by the Seller and its Affiliates of every kind and description and wherever
located that are used or intended for use primarily in connection with, or that are necessary
to the continued conduct of, the operation of the Business as presently being conducted,
including (unless expressly excluded from sale herein or on a schedule attached hereto) all
such assets of Seller and its Subsidiaries as are included on the Balance Sheet (after giving
effect to changes resulting from the operation of the Business through the Closing Date).

Annex A - Page 2

 

Annex B

Guideline of the Content of the Working Capital Definition

     A guideline for the content of the Working Capital is set forth below:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	A/C Group	 	Name	 	Premium	 	TCA	 	Tube Alloy US	 	Saint Johns	 	Total
	 	111000	 	 	AR TRADE
	 	 	9,493	 	 	 	13,665	 	 	 	9,577	 	 	 	 	 	 	 	32,736	 
	 	111001	 	 	US GAAP ACCOUNT
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	111010	 	 	AR TRADE CONTRA
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	111050	 	 	US GAAP AR ACCR
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	111099	 	 	COLLECTS IN TRA
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	117000	 	 	AR — OTHER
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	0	 
	 	118000	 	 	AR AP OFFSET
	 	 	0	 	 	 	0	 	 	 	-38	 	 	 	 	 	 	 	(38	)
	 	119000	 	 	ALLOW DOUBTFUL
	 	 	-6	 	 	 	0	 	 	 	-36	 	 	 	 	 	 	 	(43	)
	 	 	 	 	A/R Trade, Net / DSO
	 	 	9,487	 	 	 	13,665	 	 	 	9,503	 	 	 	292	 	 	 	32,947	 
	 	121000	 	 	INV RM INTRAN
	 	 	44	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	44	 
	 	121020	 	 	USGP INV RAW MA
	 	 	370	 	 	 	24,808	 	 	 	2,108	 	 	 	 	 	 	 	27,286	 
	 	121040	 	 	INV FINISH PART
	 	 	41	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	41	 
	 	121990	 	 	INV RAW MAT OTH
	 	 	0	 	 	 	4,867	 	 	 	42	 	 	 	 	 	 	 	4,910	 
	 	122010	 	 	WIP LEGACY
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	122020	 	 	WORK IN PROCESS
	 	 	163	 	 	 	5,920	 	 	 	1,132	 	 	 	 	 	 	 	7,215	 
	 	122040	 	 	WIP-Finished Pa
	 	 	0	 	 	 	1,688	 	 	 	0	 	 	 	 	 	 	 	1,688	 
	 	122990	 	 	WIP OTHER
	 	 	-144	 	 	 	0	 	 	 	-142	 	 	 	 	 	 	 	(286	)
	 	123000	 	 	INV FG INTRAN
	 	 	0	 	 	 	0	 	 	 	44	 	 	 	 	 	 	 	44	 
	 	123020	 	 	INV FINISH GOOD
	 	 	0	 	 	 	3,751	 	 	 	2,606	 	 	 	 	 	 	 	6,357	 
	 	123090	 	 	INV CUST MATERL
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	123990	 	 	USGP INV F G-OT
	 	 	0	 	 	 	5	 	 	 	142	 	 	 	 	 	 	 	147	 
	 	127000	 	 	USGP INV MODEL
	 	 	0	 	 	 	-1,296	 	 	 	215	 	 	 	 	 	 	 	(1,081	)
	 	127092	 	 	STAND CST REVAL
	 	 	0	 	 	 	-121	 	 	 	22	 	 	 	 	 	 	 	(99	)
	 	128000	 	 	INV RESERVE
	 	 	-255	 	 	 	-848	 	 	 	-134	 	 	 	 	 	 	 	(1,237	)
	 	129020	 	 	US GAAP MFG SUP
	 	 	305	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	305	 
	 	 	 	 	Inventory &
Supplies / DOI
	 	 	523	 	 	 	38,774	 	 	 	6,035	 	 	 	7	 	 	 	45,340	 
	 	130000	 	 	Def Chrgs
	 	 	0	 	 	 	0	 	 	 	207	 	 	 	 	 	 	 	207	 
	 	 	 	 	Deferred Charges
	 	 	—	 	 	 	—	 	 	 	207	 	 	 	—	 	 	 	207	 
	 	131000	 	 	PREPAID INSURAN
	 	 	212	 	 	 	321	 	 	 	108	 	 	 	 	 	 	 	641	 
	 	131001	 	 	AMORT PPD INS
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	132000	 	 	PREPAID RENT
	 	 	0	 	 	 	0	 	 	 	1	 	 	 	 	 	 	 	1	 
	 	133000	 	 	PREPAID SOFTWAR
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	136000	 	 	PPD ROYALTY CUR
	 	 	0	 	 	 	0	 	 	 	4	 	 	 	 	 	 	 	4	 
	 	137500	 	 	ASSETS FOR RESL
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	139000	 	 	PREPAID OTHER
	 	 	0	 	 	 	0	 	 	 	13	 	 	 	 	 	 	 	13	 
	 	139500	 	 	OTHER ASSETS
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	116000	 	 	EMPLOYEE RECEIV
	 	 	0	 	 	 	8	 	 	 	0	 	 	 	 	 	 	 	8	 
	 	 	 	 	Other Current Assets
	 	 	212	 	 	 	329	 	 	 	126	 	 	 	14	 	 	 	681	 
	 	201000	 	 	AP TRADE
	 	 	-2,039	 	 	 	-3,312	 	 	 	-2,196	 	 	 	 	 	 	 	(7,547	)
	 	201001	 	 	AP TRADE HFA
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	201003	 	 	AP SUSPENSE
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	201004	 	 	AP INV NOT REC
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	0	 
	 	203000	 	 	AP ACCRUAL
	 	 	-48	 	 	 	-5,154	 	 	 	-128	 	 	 	 	 	 	 	(5,330	)
	 	204000	 	 	RNV HFA
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	204001	 	 	RECVD NVCH OOB
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	204100	 	 	RNV MOVEX
	 	 	-159	 	 	 	-256	 	 	 	-1,388	 	 	 	 	 	 	 	(1,804	)

Annex B - Page 1

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	A/C Group	 	Name	 	Premium	 	TCA	 	Tube Alloy US	 	Saint Johns	 	Total
	 	205000	 	 	BANK OVERDRAFTS
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	205001	 	 	BANK OVRDRFT PR
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	209000	 	 	AP OTHER
	 	 	0	 	 	 	0	 	 	 	9	 	 	 	 	 	 	 	9	 
	 	 	 	 	A/P Trade / DPO
	 	 	(2,246	)	 	 	(8,722	)	 	 	(3,704	)	 	 	(30	)	 	 	(14,702	)
	 	221001	 	 	ACC SAL & WAGES
	 	 	-432	 	 	 	-288	 	 	 	-423	 	 	 	 	 	 	 	(1,143	)
	 	221003	 	 	ACCRUED BONUSES
	 	 	-325	 	 	 	-40	 	 	 	-50	 	 	 	 	 	 	 	(415	)
	 	222001	 	 	GROUP HEALTH AC
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	222005	 	 	GROUP HLTH CHGS
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	222101	 	 	WRK COMP ACCRL
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	222105	 	 	WRK COMP CHRGES
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	222201	 	 	MED FLEX W/H
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	222206	 	 	CHILD FLEX W/H
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	223202	 	 	ACC VACATION PA
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	223501	 	 	ACC COURT W/H
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	223701	 	 	Accrued ESPP
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	223751	 	 	ACC 401K CONTRI
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	0	 
	 	223755	 	 	ACC 401K MATCH
	 	 	0	 	 	 	0	 	 	 	-10	 	 	 	 	 	 	 	(10	)
	 	223756	 	 	ACC 401K LN RPY
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	(0	)
	 	223800	 	 	Acc NonQual Def
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	223811	 	 	ACCRUED EDC
	 	 	-4	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	(5	)
	 	223871	 	 	ACC FICA TAX WH
	 	 	-23	 	 	 	-17	 	 	 	-25	 	 	 	 	 	 	 	(64	)
	 	223872	 	 	ACC MEDI TAX WH
	 	 	-6	 	 	 	-4	 	 	 	-6	 	 	 	 	 	 	 	(16	)
	 	223881	 	 	ACC FED INC TAX
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	223882	 	 	ACC ST W/H TAX
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	(0	)
	 	223890	 	 	EMPLOYEE W/H
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	223900	 	 	ACC UNEMPL TAX
	 	 	-4	 	 	 	-1	 	 	 	-4	 	 	 	 	 	 	 	(8	)
	 	224001	 	 	OTH BENEFIT PAY
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	231000	 	 	ACC PROPERTY TX
	 	 	-202	 	 	 	-110	 	 	 	-168	 	 	 	 	 	 	 	(480	)
	 	232000	 	 	SALES TAX PAYAB
	 	 	0	 	 	 	0	 	 	 	16	 	 	 	 	 	 	 	16	 
	 	232010	 	 	DIRECT PAY TAX
	 	 	0	 	 	 	0	 	 	 	-10	 	 	 	 	 	 	 	(10	)
	 	234000	 	 	ACC FRANCH TAX
	 	 	0	 	 	 	0	 	 	 	40	 	 	 	 	 	 	 	40	 
	 	251000	 	 	ACC WARRANTY
	 	 	-10	 	 	 	-65	 	 	 	-82	 	 	 	 	 	 	 	(157	)
	 	253000	 	 	ACCR ENVIRONMNT
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	254002	 	 	ACC ROYALTIES
	 	 	-15	 	 	 	0	 	 	 	-411	 	 	 	 	 	 	 	(426	)
	 	259000	 	 	ACC LIABIL OTH
	 	 	-2	 	 	 	-94	 	 	 	-46	 	 	 	 	 	 	 	(143	)
	 	 	 	 	Accrued Liabilities
	 	 	(1,022	)	 	 	(619	)	 	 	(1,180	)	 	 	(42	)	 	 	(2,864	)
	 	257100	 	 	DEFERRED REVENU
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	257200	 	 	Dfrd Rev. Rec
	 	 	0	 	 	 	0	 	 	 	-308	 	 	 	 	 	 	 	(308	)
	 	 	 	 	Deferred Revenue
	 	 	—	 	 	 	—	 	 	 	(308	)	 	 	—	 	 	 	(308	)
	Assets	 	 	10,222	 	 	 	52,768	 	 	 	15,871	 	 	 	313	 	 	 	79,174	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Liabilities	 	 	3,268	 	 	 	9,341	 	 	 	5,192	 	 	 	72	 	 	 	17,873	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	NET WORKING CAPITAL	 	 	6,954	 	 	 	43,427	 	 	 	10,679	 	 	 	241	 	 	 	61,301	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	A/C group	 	Name	 	Premium	 	TCA	 	Tube Alloy US	 	Saint Johns	 	Total
	 	111000	 	 	AR TRADE
	 	 	9,493	 	 	 	13,665	 	 	 	9,577	 	 	 	 	 	 	 	32,736	 
	 	111001	 	 	US GAAP ACCOUNT
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	111010	 	 	AR TRADE CONTRA
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	111050	 	 	US GAAP AR ACCR
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	111099	 	 	COLLECTS IN TRA
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	117000	 	 	AR — OTHER
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	0	 

Annex B - Page 2

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	A/C group	 	Name	 	Premium	 	TCA	 	Tube Alloy US	 	Saint Johns	 	Total
	 	118000	 	 	AR AP OFFSET
	 	 	0	 	 	 	0	 	 	 	-38	 	 	 	 	 	 	 	(38	)
	 	119000	 	 	ALLOW DOUBTFUL
	 	 	-6	 	 	 	0	 	 	 	-36	 	 	 	 	 	 	 	(43	)
	 	 	 	 	A/R Trade, Net / DSO
	 	 	9,487	 	 	 	13,665	 	 	 	9,503	 	 	 	292	 	 	 	32,947	 
	 	121000	 	 	INV RM INTRAN
	 	 	44	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	44	 
	 	121020	 	 	USGP INV RAW MA
	 	 	370	 	 	 	24,808	 	 	 	2,108	 	 	 	 	 	 	 	27,286	 
	 	121040	 	 	INV FINISH PART
	 	 	41	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	41	 
	 	121990	 	 	INV RAW MAT OTH
	 	 	0	 	 	 	4,867	 	 	 	42	 	 	 	 	 	 	 	4,910	 
	 	122010	 	 	WIP LEGACY
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	122020	 	 	WORK IN PROCESS
	 	 	163	 	 	 	5,920	 	 	 	1,132	 	 	 	 	 	 	 	7,215	 
	 	122040	 	 	WIP-Finished Pa
	 	 	0	 	 	 	1,688	 	 	 	0	 	 	 	 	 	 	 	1,688	 
	 	122990	 	 	WIP OTHER
	 	 	-144	 	 	 	0	 	 	 	-142	 	 	 	 	 	 	 	(286	)
	 	123000	 	 	INV FG INTRAN
	 	 	0	 	 	 	0	 	 	 	44	 	 	 	 	 	 	 	44	 
	 	123020	 	 	INV FINISH GOOD
	 	 	0	 	 	 	3,751	 	 	 	2,606	 	 	 	 	 	 	 	6,357	 
	 	123090	 	 	INV CUST MATERL
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	123990	 	 	USGP INV F G-OT
	 	 	0	 	 	 	5	 	 	 	142	 	 	 	 	 	 	 	147	 
	 	127000	 	 	USGP INV MODEL
	 	 	0	 	 	 	-1,296	 	 	 	215	 	 	 	 	 	 	 	(1,081	)
	 	127092	 	 	STAND CST REVAL
	 	 	0	 	 	 	-121	 	 	 	22	 	 	 	 	 	 	 	(99	)
	 	128000	 	 	INV RESERVE
	 	 	-255	 	 	 	-848	 	 	 	-134	 	 	 	 	 	 	 	(1,237	)
	 	129020	 	 	US GAAP MFG SUP
	 	 	305	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	305	 
	 	 	 	 	Inventory &
Supplies / DOI
	 	 	523	 	 	 	38,774	 	 	 	6,035	 	 	 	7	 	 	 	45,340	 
	 	130000	 	 	Def Chrgs
	 	 	0	 	 	 	0	 	 	 	207	 	 	 	 	 	 	 	207	 
	 	 	 	 	Deferred Charges
	 	 	—	 	 	 	—	 	 	 	207	 	 	 	—	 	 	 	207	 
	 	131000	 	 	PREPAID INSURAN
	 	 	212	 	 	 	321	 	 	 	108	 	 	 	 	 	 	 	641	 
	 	131001	 	 	AMORT PPD INS
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	132000	 	 	PREPAID RENT
	 	 	0	 	 	 	0	 	 	 	1	 	 	 	 	 	 	 	1	 
	 	133000	 	 	PREPAID SOFTWAR
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	136000	 	 	PPD ROYALTY CUR
	 	 	0	 	 	 	0	 	 	 	4	 	 	 	 	 	 	 	4	 
	 	137500	 	 	ASSETS FOR RESL
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	139000	 	 	PREPAID OTHER
	 	 	0	 	 	 	0	 	 	 	13	 	 	 	 	 	 	 	13	 
	 	139500	 	 	OTHER ASSETS
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	116000	 	 	EMPLOYEE RECEIV
	 	 	0	 	 	 	8	 	 	 	0	 	 	 	 	 	 	 	8	 
	 	 	 	 	Other Current Assets
	 	 	212	 	 	 	329	 	 	 	126	 	 	 	14	 	 	 	681	 
	 	201000	 	 	AP TRADE
	 	 	-2,039	 	 	 	-3,312	 	 	 	-2,196	 	 	 	 	 	 	 	(7,547	)
	 	201001	 	 	AP TRADE HFA
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	201003	 	 	AP SUSPENSE
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	201004	 	 	AP INV NOT REC
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	0	 
	 	203000	 	 	AP ACCRUAL
	 	 	-48	 	 	 	-5,154	 	 	 	-128	 	 	 	 	 	 	 	(5,330	)
	 	204000	 	 	RNV HFA
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	204001	 	 	RECVD NVCH OOB
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	204100	 	 	RNV MOVEX
	 	 	-159	 	 	 	-256	 	 	 	-1,388	 	 	 	 	 	 	 	(1,804	)
	 	205000	 	 	BANK OVERDRAFTS
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	205001	 	 	BANK OVRDRFT PR
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	209000	 	 	AP OTHER
	 	 	0	 	 	 	0	 	 	 	9	 	 	 	 	 	 	 	9	 
	 	 	 	 	A/P Trade / DPO
	 	 	(2,246	)	 	 	(8,722	)	 	 	(3,704	)	 	 	(30	)	 	 	(14,702	)
	 	221001	 	 	ACC SAL & WAGES
	 	 	-432	 	 	 	-288	 	 	 	-423	 	 	 	 	 	 	 	(1,143	)
	 	221003	 	 	ACCRUED BONUSES
	 	 	-325	 	 	 	-40	 	 	 	-50	 	 	 	 	 	 	 	(415	)
	 	222001	 	 	GROUP HEALTH AC
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	222005	 	 	GROUP HLTH CHGS
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	222101	 	 	WRK COMP ACCRL
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	222105	 	 	WRK COMP CHRGES
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	222201	 	 	MED FLEX W/H
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	222206	 	 	CHILD FLEX W/H
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 

Annex B - Page 3

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	A/C group	 	Name	 	Premium	 	TCA	 	Tube Alloy US	 	Saint Johns	 	Total
	 	223202	 	 	ACC VACATION PA
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	223501	 	 	ACC COURT W/H
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	223701	 	 	Accrued ESPP
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	223751	 	 	ACC 401K CONTRI
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	0	 
	 	223755	 	 	ACC 401K MATCH
	 	 	0	 	 	 	0	 	 	 	-10	 	 	 	 	 	 	 	(10	)
	 	223756	 	 	ACC 401K LN RPY
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	(0	)
	 	223800	 	 	Acc NonQual Def
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	223811	 	 	ACCRUED EDC
	 	 	-4	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	(5	)
	 	223871	 	 	ACC FICA TAX WH
	 	 	-23	 	 	 	-17	 	 	 	-25	 	 	 	 	 	 	 	(64	)
	 	223872	 	 	ACC MEDI TAX WH
	 	 	-6	 	 	 	-4	 	 	 	-6	 	 	 	 	 	 	 	(16	)
	 	223881	 	 	ACC FED INC TAX
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	223882	 	 	ACC ST W/H TAX
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	(0	)
	 	223890	 	 	EMPLOYEE W/H
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	223900	 	 	ACC UNEMPL TAX
	 	 	-4	 	 	 	-1	 	 	 	-4	 	 	 	 	 	 	 	(8	)
	 	224001	 	 	OTH BENEFIT PAY
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	231000	 	 	ACC PROPERTY TX
	 	 	-202	 	 	 	-110	 	 	 	-168	 	 	 	 	 	 	 	(480	)
	 	232000	 	 	SALES TAX PAYAB
	 	 	0	 	 	 	0	 	 	 	16	 	 	 	 	 	 	 	16	 
	 	232010	 	 	DIRECT PAY TAX
	 	 	0	 	 	 	0	 	 	 	-10	 	 	 	 	 	 	 	(10	)
	 	234000	 	 	ACC FRANCH TAX
	 	 	0	 	 	 	0	 	 	 	40	 	 	 	 	 	 	 	40	 
	 	251000	 	 	ACC WARRANTY
	 	 	-10	 	 	 	-65	 	 	 	-82	 	 	 	 	 	 	 	(157	)
	 	253000	 	 	ACCR ENVIRONMNT
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	254002	 	 	ACC ROYALTIES
	 	 	-15	 	 	 	0	 	 	 	-411	 	 	 	 	 	 	 	(426	)
	 	259000	 	 	ACC LIABIL OTH
	 	 	-2	 	 	 	-94	 	 	 	-46	 	 	 	 	 	 	 	(143	)
	 	 	 	 	Accrued Liabilities
	 	 	(1,022	)	 	 	(619	)	 	 	(1,180	)	 	 	(42	)	 	 	(2,864	)
	 	257100	 	 	DEFERRED REVENU
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	—	 
	 	257200	 	 	Dfrd Rev. Rec
	 	 	0	 	 	 	0	 	 	 	-308	 	 	 	 	 	 	 	(308	)
	 	 	 	 	Deferred Revenue
	 	 	—	 	 	 	—	 	 	 	(308	)	 	 	—	 	 	 	(308	)
	Assets	 	 	10,222	 	 	 	52,768	 	 	 	15,871	 	 	 	313	 	 	 	79,174	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Liabilities	 	 	3,268	 	 	 	9,341	 	 	 	5,192	 	 	 	72	 	 	 	17,873	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	NET WORKING CAPITAL	 	 	6,954	 	 	 	43,427	 	 	 	10,679	 	 	 	241	 	 	 	61,301	 

Annex B - Page 4

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