Document:

Exhibit 10.1

 

SECOND AMENDED AND RESTATED

REVOLVING CREDIT

AND

SECURITY AGREEMENT

 

PNC BANK, NATIONAL ASSOCIATION

(AS LENDER AND AS AGENT)

AND

PNC CAPITAL MARKETS LLC

(AS LEAD ARRANGER)

 

WITH

 

GEOKINETICS INC.,

GEOPHYSICAL DEVELOPMENT CORPORATION,

QUANTUM GEOPHYSICAL, INC.,

GEOKINETICS EXPLORATION INC.,

TRACE ENERGY SERVICES, INC.,

GEOKINETICS HOLDINGS, INC.,

GRANT GEOPHYSICAL, INC.,

GRANT GEOPHYSICAL (INT’L), INC.,

GRANT GEOPHYSICAL CORP.,

AND

ADVANCED SEISMIC TECHNOLOGY, INC.

(BORROWERS)

 

May      , 2007

 

 

 

 

 

 

TABLE
OF CONTENTS

	
  I.          DEFINITIONS.

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.1.

  	
   

  	
  Accounting Terms

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.2.

  	
   

  	
  General Terms

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.3.

  	
   

  	
  Uniform Commercial Code Terms

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.4.

  	
   

  	
  Certain Matters of Construction

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II.         ADVANCES,
  PAYMENTS.

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.1.

  	
   

  	
  Revolving Advances

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.2.

  	
   

  	
  Procedure for Revolving Advances Borrowing

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.3.

  	
   

  	
  Disbursement of Advance Proceeds

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.4.

  	
   

  	
  Reserved

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.5.

  	
   

  	
  Maximum Advances

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.6.

  	
   

  	
  Repayment of Advances

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.7.

  	
   

  	
  Repayment of Excess Advances

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.8.

  	
   

  	
  Statement of Account

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.9.

  	
   

  	
  Letters of Credit

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.10.

  	
   

  	
  Issuance of Letters of Credit

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.11.

  	
   

  	
  Requirements For Issuance of Letters of Credit

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.12.

  	
   

  	
  Disbursements, Reimbursement

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.13.

  	
   

  	
  Repayment of Participation Advances

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.14.

  	
   

  	
  Documentation

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.15.

  	
   

  	
  Determination to Honor Drawing Request

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.16.

  	
   

  	
  Nature of Participation and Reimbursement
  Obligations

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.17.

  	
   

  	
  Indemnity

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.18.

  	
   

  	
  Liability for Acts and Omissions

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 i
 

 

	
  2.19.

  	
   

  	
  Additional Payments

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.20.

  	
   

  	
  Manner of Borrowing and Payment

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.21.

  	
   

  	
  Mandatory Prepayments

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.22.

  	
   

  	
  Increase in Aggregate Commitment

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.23.

  	
   

  	
  Use of Proceeds

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.24.

  	
   

  	
  Defaulting Lender

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III.        INTEREST AND FEES.

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.1.

  	
   

  	
  Interest

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.2.

  	
   

  	
  Letter of Credit Fees

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.3.

  	
   

  	
  Closing Fee and Facility Fee

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.4.

  	
   

  	
  Reserved

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.5.

  	
   

  	
  Computation of Interest and Fees

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.6.

  	
   

  	
  Maximum Charges

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.7.

  	
   

  	
  Increased Costs

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.8.

  	
   

  	
  Basis For Determining Interest Rate Inadequate or
  Unfair

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.9.

  	
   

  	
  Capital Adequacy

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.10.

  	
   

  	
  Gross Up for Taxes

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.11.

  	
   

  	
  Withholding Tax Exemption

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV.         COLLATERAL: GENERAL TERMS

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.

  	
   

  	
  Security Interest in the Collateral

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.2.

  	
   

  	
  Perfection of Security Interest

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.3.

  	
   

  	
  Disposition of Collateral

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.4.

  	
   

  	
  Preservation of Collateral

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.5.

  	
   

  	
  Ownership of Collateral

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.6.

  	
   

  	
  Defense of Agent’s and Lenders’ Interests

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 ii
 

 

	
  4.7.

  	
   

  	
  Books and Records

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.8.

  	
   

  	
  Financial Disclosure

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.9.

  	
   

  	
  Compliance with Laws

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.10.

  	
   

  	
  Inspection of Premises

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.11.

  	
   

  	
  Insurance

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.12.

  	
   

  	
  Failure to Pay Insurance

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.13.

  	
   

  	
  Payment of Taxes

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.14.

  	
   

  	
  Payment of Leasehold Obligations

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.15.

  	
   

  	
  Receivables

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.16.

  	
   

  	
  Maintenance of Equipment

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.17.

  	
   

  	
  Exculpation of Liability

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.18.

  	
   

  	
  Environmental Matters

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.19.

  	
   

  	
  Financing Statements

  	
   

  	
  60

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.20.

  	
   

  	
  Location of Equipment

  	
   

  	
  60

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V.         REPRESENTATIONS AND
  WARRANTIES.

  	
   

  	
  60

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.

  	
   

  	
  Authority

  	
   

  	
  60

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.2.

  	
   

  	
  Formation and Qualification

  	
   

  	
  61

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.3.

  	
   

  	
  Survival of Representations and Warranties

  	
   

  	
  61

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.4.

  	
   

  	
  Tax Returns

  	
   

  	
  61

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.5.

  	
   

  	
  Financial Statements

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.6.

  	
   

  	
  Entity Names

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.7.

  	
   

  	
  O.S.H.A. and Environmental Compliance

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.8.

  	
   

  	
  Solvency; No Litigation, Violation, Indebtedness or
  Default

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.9.

  	
   

  	
  Patents, Trademarks, Copyrights and Licenses

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.10.

  	
   

  	
  Licenses and Permits

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 iii
 

 

	
  5.11.

  	
   

  	
  Default of Indebtedness

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.12.

  	
   

  	
  No Default

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.13.

  	
   

  	
  No Burdensome Restrictions

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.14.

  	
   

  	
  No Labor Disputes

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.15.

  	
   

  	
  Use of Proceeds; Margin Regulations

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.16.

  	
   

  	
  Investment Company Act

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.17.

  	
   

  	
  Disclosure

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.18.

  	
   

  	
  Swaps

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.19.

  	
   

  	
  Conflicting Agreements

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.20.

  	
   

  	
  Application of Certain Laws and Regulations

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.21.

  	
   

  	
  Business and Property of Borrowers

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.22.

  	
   

  	
  Section 20 Subsidiaries

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.23.

  	
   

  	
  Anti-Terrorism Laws

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.24.

  	
   

  	
  Trading with the Enemy

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.25.

  	
   

  	
  Mechanic’s Liens

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.26.

  	
   

  	
  Restricted Subsidiaries

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.27.

  	
   

  	
  Delivery of Acquisition Agreement

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.28.

  	
   

  	
  Internal Controls and Procedures

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VI.        AFFIRMATIVE COVENANTS.

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.1.

  	
   

  	
  Payment of Fees

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.2.

  	
   

  	
  Conduct of Business and Maintenance of Existence and
  Assets

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.3.

  	
   

  	
  Violations

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.4.

  	
   

  	
  Government Receivables

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.5.

  	
   

  	
  Financial Covenants

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.6.

  	
   

  	
  Execution of Supplemental Instruments

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 iv
 

 

	
  6.7.

  	
   

  	
  Payment of Indebtedness

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.8.

  	
   

  	
  Standards of Financial Statements

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.9.

  	
   

  	
  Federal Securities Laws

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.10.

  	
   

  	
  Mechanic’s Liens

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.11.

  	
   

  	
  Restricted Subsidiaries

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.12.

  	
   

  	
  Exercise of Rights

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.13.

  	
   

  	
  Maintenance of Material Contracts

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.14.

  	
   

  	
  Pay-off of Investor Notes

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VII.       NEGATIVE COVENANTS.

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.1.

  	
   

  	
  Merger, Consolidation, Acquisition and Sale of
  Assets

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.2.

  	
   

  	
  Creation of Liens

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.3.

  	
   

  	
  Guarantees

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.4.

  	
   

  	
  Investments

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.5.

  	
   

  	
  Loans

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.6.

  	
   

  	
  Capital Expenditures

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.7.

  	
   

  	
  Dividends

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.8.

  	
   

  	
  Indebtedness

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.9.

  	
   

  	
  Nature of Business

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.10.

  	
   

  	
  Transactions with Affiliates

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.11.

  	
   

  	
  [Reserved]

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.12.

  	
   

  	
  Subsidiaries

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.13.

  	
   

  	
  Fiscal Year and Accounting Changes

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.14.

  	
   

  	
  Pledge of Credit

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.15.

  	
   

  	
  Amendment of Articles of Incorporation or By-Laws

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.16.

  	
   

  	
  Compliance with ERISA

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 v
 

 

	
  7.17.

  	
   

  	
  Prepayment of Indebtedness

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.18.

  	
   

  	
  Anti-Terrorism Laws

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.19.

  	
   

  	
  Membership/Partnership Interests

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.20.

  	
   

  	
  Trading with the Enemy Act

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.21.

  	
   

  	
  Other Agreements

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.22.

  	
   

  	
  Change of Control

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.23.

  	
   

  	
  Note Documents

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VIII.      CONDITIONS PRECEDENT.

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.1.

  	
   

  	
  Conditions to Initial Advances

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.2.

  	
   

  	
  Conditions to Each Advance

  	
   

  	
  79

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IX.        INFORMATION AS TO
  BORROWERS.

  	
   

  	
  80

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.1.

  	
   

  	
  Disclosure of Material Matters

  	
   

  	
  80

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.2.

  	
   

  	
  Schedules

  	
   

  	
  80

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.3.

  	
   

  	
  Environmental Reports

  	
   

  	
  80

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.4.

  	
   

  	
  Litigation

  	
   

  	
  80

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.5.

  	
   

  	
  Material Occurrences

  	
   

  	
  80

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.6.

  	
   

  	
  Government Receivables

  	
   

  	
  81

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.7.

  	
   

  	
  Annual Financial Statements

  	
   

  	
  81

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.8.

  	
   

  	
  Quarterly Financial Statements

  	
   

  	
  81

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.9.

  	
   

  	
  Monthly Financial Statements

  	
   

  	
  82

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.10.

  	
   

  	
  Borrowing Base Certificate

  	
   

  	
  82

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.11.

  	
   

  	
  Other Reports

  	
   

  	
  82

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.12.

  	
   

  	
  Additional Information

  	
   

  	
  82

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.13.

  	
   

  	
  Projected Operating Budget

  	
   

  	
  83

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.14.

  	
   

  	
  Equipment Reports

  	
   

  	
  83

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 vi
 

 

	
  9.15.

  	
   

  	
  Notice of Suits, Adverse Events

  	
   

  	
  83

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.16.

  	
   

  	
  ERISA Notices and Requests

  	
   

  	
  83

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.17.

  	
   

  	
  Additional Documents

  	
   

  	
  84

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.18.

  	
   

  	
  SEC Information

  	
   

  	
  84

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.19.

  	
   

  	
  Appraisals

  	
   

  	
  84

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  X.         EVENTS OF DEFAULT.

  	
   

  	
  84

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.1.

  	
   

  	
  Nonpayment

  	
   

  	
  84

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.2.

  	
   

  	
  Breach of Representation

  	
   

  	
  85

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.3.

  	
   

  	
  Financial Information

  	
   

  	
  85

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.4.

  	
   

  	
  Judicial Actions

  	
   

  	
  85

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.5.

  	
   

  	
  Noncompliance

  	
   

  	
  85

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.6.

  	
   

  	
  Judgments

  	
   

  	
  85

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.7.

  	
   

  	
  Bankruptcy

  	
   

  	
  85

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.8.

  	
   

  	
  Inability to Pay

  	
   

  	
  85

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.9.

  	
   

  	
  Affiliate Bankruptcy

  	
   

  	
  86

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.10.

  	
   

  	
  Material Adverse Effect

  	
   

  	
  86

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.11.

  	
   

  	
  Lien Priority

  	
   

  	
  86

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.12.

  	
   

  	
  Permitted Capital Lease Facility Default

  	
   

  	
  86

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.13.

  	
   

  	
  Cross Default

  	
   

  	
  86

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.14.

  	
   

  	
  Breach of Guaranty

  	
   

  	
  86

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.15.

  	
   

  	
  Change of Ownership

  	
   

  	
  86

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.16.

  	
   

  	
  Invalidity

  	
   

  	
  86

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.17.

  	
   

  	
  Licenses

  	
   

  	
  86

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.18.

  	
   

  	
  Seizures

  	
   

  	
  87

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.19.

  	
   

  	
  Operations

  	
   

  	
  87

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 vii
 

 

	
  10.20.

  	
   

  	
  Pension Plans

  	
   

  	
  87

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.21.

  	
   

  	
  Permitted Investor Notes Facility Default

  	
   

  	
  87

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XI.        LENDERS’ RIGHTS AND
  REMEDIES AFTER DEFAULT.

  	
   

  	
  87

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.1.

  	
   

  	
  Rights and Remedies

  	
   

  	
  87

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.2.

  	
   

  	
  Agent’s Discretion

  	
   

  	
  90

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.3.

  	
   

  	
  Setoff

  	
   

  	
  90

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.4.

  	
   

  	
  Rights and Remedies not Exclusive

  	
   

  	
  90

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.5.

  	
   

  	
  Allocation of Payments After Event of Default

  	
   

  	
  90

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XII.       WAIVERS AND JUDICIAL
  PROCEEDINGS.

  	
   

  	
  91

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.1.

  	
   

  	
  Waiver of Notice

  	
   

  	
  91

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.2.

  	
   

  	
  Delay

  	
   

  	
  91

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.3.

  	
   

  	
  Jury Waiver

  	
   

  	
  91

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.4.

  	
   

  	
  Waiver of Rights Under Texas Deceptive Trade
  Practices Act

  	
   

  	
  91

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XIII.      EFFECTIVE DATE AND TERMINATION.

  	
   

  	
  92

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.1.

  	
   

  	
  Term

  	
   

  	
  92

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.2.

  	
   

  	
  Termination

  	
   

  	
  92

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XIV.      REGARDING AGENT.

  	
   

  	
  92

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.1.

  	
   

  	
  Appointment

  	
   

  	
  92

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.2.

  	
   

  	
  Nature of Duties

  	
   

  	
  93

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.3.

  	
   

  	
  Lack of Reliance on Agent and Resignation

  	
   

  	
  93

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.4.

  	
   

  	
  Certain Rights of Agent

  	
   

  	
  94

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.5.

  	
   

  	
  Reliance

  	
   

  	
  94

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.6.

  	
   

  	
  Notice of Default

  	
   

  	
  94

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.7.

  	
   

  	
  Indemnification

  	
   

  	
  94

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.8.

  	
   

  	
  Agent in its Individual Capacity

  	
   

  	
  95

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 viii
 

 

	
  14.9.

  	
   

  	
  Delivery of Documents

  	
   

  	
  95

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.10.

  	
   

  	
  Borrowers’ Undertaking to Agent

  	
   

  	
  95

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.11.

  	
   

  	
  No Reliance on Agent’s Customer Identification
  Program

  	
   

  	
  95

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.12.

  	
   

  	
  Other Agreements

  	
   

  	
  95

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XV.       BORROWING AGENCY.

  	
   

  	
  96

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.1.

  	
   

  	
  Borrowing Agency Provisions

  	
   

  	
  96

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.2.

  	
   

  	
  Waiver of Subrogation

  	
   

  	
  96

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XVI.      MISCELLANEOUS.

  	
   

  	
  97

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.1.

  	
   

  	
  Governing Law

  	
   

  	
  97

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.2.

  	
   

  	
  Entire Understanding

  	
   

  	
  97

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.3.

  	
   

  	
  Successors and Assigns; Participations; New Lenders

  	
   

  	
  99

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.4.

  	
   

  	
  Application of Payments

  	
   

  	
  101

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.5.

  	
   

  	
  Indemnity

  	
   

  	
  102

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.6.

  	
   

  	
  Notice

  	
   

  	
  102

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.7.

  	
   

  	
  Survival

  	
   

  	
  105

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.8.

  	
   

  	
  Severability

  	
   

  	
  105

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.9.

  	
   

  	
  Expenses

  	
   

  	
  105

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.10.

  	
   

  	
  Injunctive Relief

  	
   

  	
  105

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.11.

  	
   

  	
  Consequential Damages

  	
   

  	
  105

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.12.

  	
   

  	
  Captions

  	
   

  	
  105

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.13.

  	
   

  	
  Counterparts; Facsimile Signatures

  	
   

  	
  105

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.14.

  	
   

  	
  Construction

  	
   

  	
  106

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.15.

  	
   

  	
  Confidentiality; Sharing Information

  	
   

  	
  106

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.16.

  	
   

  	
  Publicity

  	
   

  	
  106

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.17.

  	
   

  	
  Non-Applicability of Chapter 346

  	
   

  	
  106

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 ix
 

 

	
  16.18.

  	
   

  	
  Certifications From Banks and Participants; US
  PATRIOT Act

  	
   

  	
  107

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.19.

  	
   

  	
  Amendment and Restatement

  	
   

  	
  107

  

 

 x

AMENDED
AND RESTATED REVOLVING CREDIT

AND

SECURITY AGREEMENT

Amended and Restated Revolving Credit and Security
Agreement dated as of May      , 2007, among
GEOKINETICS INC., a Delaware corporation (“Geokinetics”), GEOPHYSICAL
DEVELOPMENT CORPORATION, a Texas corporation (“GDC”), QUANTUM GEOPHYSICAL,
INC., a Texas corporation (“Quantum”), GEOKINETICS EXPLORATION INC., formerly
known as Trace Energy Services Ltd., an entity organized under the laws of
Canada (“Exploration”), and TRACE ENERGY SERVICES, INC., a Texas corporation (“Trace
Energy (U.S.)”), GEOKINETICS HOLDINGS, INC., a Delaware corporation (“Geokinetics
Holdings”), GRANT GEOPHYSICAL, INC., a Delaware corporation (“Grant Geophysical”),
GRANT GEOPHYSICAL (INT’L), INC., a Texas corporation (“Grant Geophysical
International”), GRANT GEOPHYSICAL CORP., a Texas corporation (“Grant Corp.”),
ADVANCED SEISMIC TECHNOLOGY, INC. (“Advanced Seismic”), a Texas corporation
(Geokinetics, GDC, Quantum, Exploration, Trace Energy (U.S.), Geokinetics
Holdings, Grant Geophysical, Grant Geophysical International, Grant Corp. and
Advanced Seismic, each a “Borrower,” and collectively, “Borrowers”), the
financial institutions which are now or which hereafter become a party hereto
(collectively, the “Lenders” and individually a “Lender”) and PNC BANK,
NATIONAL ASSOCIATION (“PNC”), as administrative and collateral agent for
Lenders (PNC, in such capacity, the “Agent”).

W I T N E S S E T H:

WHEREAS, the Borrowers, Agent and Lenders are party to
that certain Amended and Restated Revolving Credit, CapEx Loan and Security
Agreement dated as of December 15, 2006, (as amended, the “Original
Agreement”); and

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

WHEREAS, the current outstanding CapEx Loans are being
converted on the date hereof to Revolving Advances; and

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

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

I.              DEFINITIONS.

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

 1
 

purposes of determining
compliance with financial covenants in this Agreement, such accounting terms
shall be defined in accordance with GAAP as applied in preparation of the
audited financial statements of Borrowers for the fiscal year ended
December 31, 2006.

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

“2006 Equity Offering” shall have the meaning
set forth in Section 8.1(aa) hereof.

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

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

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

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

“Advances” shall mean and include the Revolving
Advances and Letters of Credit.

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

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

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

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

“Anti-Terrorism Laws” shall mean any Applicable
Laws relating to terrorism or money laundering, including Executive Order No.
13224, the USA PATRIOT Act, the Applicable Laws comprising or implementing the
Bank Secrecy Act, and the Applicable Laws administered by the 

 2
 

United States Treasury
Department’s Office of Foreign Asset Control (as any of the foregoing
Applicable Laws may from time to time be amended, renewed, extended, or
replaced).

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

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

“Applicable Revolving Domestic Rate Margin”
shall mean the per annum interest rate margin from time to time in effect
applicable to Revolving Advances, and payable in addition to the Alternate Base
Rate with respect to Domestic Rate Loans, which shall be zero percent (0.0%) as
of the Second Restated Closing Date, and otherwise determined by reference to
Section 3.1 of the Agreement; provided, however, that until the Initial
Adjustment Date, the Applicable Revolving Domestic Rate Margin shall be zero
percent (0.00%).

“Applicable Revolving Eurodollar Rate Margin”
shall mean the per annum interest rate margin from time to time in effect
applicable to Revolving Advances, and payable in addition to the Eurodollar
Rate with respect to Eurodollar Rate Loans, which shall be two percent (2.00%)
as of the Second Restated Closing Date, and otherwise determined by reference
to Section 3.1 of the Agreement; provided, however, that until the Initial
Adjustment Date, the Applicable Revolving Eurodollar Rate Margin shall be two
percent (2.00%).

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

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

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

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

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

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

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

 3
 

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

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

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

“Borrowing Agent” shall mean Geokinetics.

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

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

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

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

“Cash Balance” shall mean all cash in Blocked
Accounts or Depository Accounts derived from Advances and all proceeds of
Collateral maintained in the Blocked Accounts and Depository Accounts that have
been applied to reduce the Formula Amount less outstanding checks..

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

 4
 

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

“Change of Ownership” shall mean (a) any single
person or single group of persons (within the meaning of the Securities
Exchange Act of 1934) who are not Original Owners shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the SEC
under the Securities Exchange Act of 1934) of 20% or more of the Equity
Interests of any Borrower having the right to vote for the election of
directors (or individuals performing similar functions) of any Borrower under
ordinary circumstances (including, for purposes of the calculation of
percentage ownership, any Equity Interests into which  any Equity Interests of any Borrower are
convertible or for which any such Equity Interests of any Borrower or of any
other Person may be exchanged and any Equity Interests issuable to such
Original Owners upon exercise of any warrants, options or similar rights which
may at the time of calculation be held by such Original Owners) or (b) any
merger, consolidation or sale of substantially all of the property or assets of
any Borrower; provided, that the sale by any Borrower of any Equity Interests
of any other Borrower  shall be deemed a
sale of substantially all of such Borrower’s assets.

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

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

 5
 

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

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

“Collateral”
shall mean and include:

(a)           all
Receivables;

(b)           all
Equipment;

(c)           all
General Intangibles;

(d)           all
Inventory;

(e)           all
Investment Property;

(f)            all
Subsidiary Stock;

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

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

 6
 

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

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

“Commitment” means, with respect to each
Lender, the commitment, if any, of such Lender to make Advances and to acquire
participations in Letters of Credit hereunder, expressed as an amount
representing the maximum possible aggregate amount of such Lender’s Advances
hereunder.  The initial aggregate amount
of the Lenders’ Commitments is $60,000,000, which may be subsequently increased
pursuant to the terms and conditions set forth herein, by an amount up to
$10,000,000 as a result of the occurrence of a Commitment Adjustment Event.

“Commitment Adjustment Event” is defined in
Section 2.22.

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

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

“Compliance Certificate” shall mean a compliance
certificate to be signed by the Chief Financial Officer, Chief Accounting
Officer, Vice President-Finance, Treasurer or Controller of Borrowing Agent,
which shall state that, based on an examination sufficient to permit such
officer to make an informed statement, no Default or Event of Default exists,
or if such is not the case, specifying such Default or Event of Default, its
nature, when it occurred, whether it is continuing and the steps being taken by
Borrowers with respect to such default and, such certificate shall have
appended thereto calculations which set forth Borrowers’ compliance with the
requirements or restrictions imposed by Sections 6.5, 7.4, 7.5, 7.6, 7.7, 7.8
and 7.11 and set forth the calculation of Undrawn Availability as of the date
of the financial statements delivered with the Compliance Certificate.

“Consents” shall mean all filings and all
licenses, permits, consents, approvals, authorizations, qualifications and
orders of Governmental Bodies and other third parties, domestic or foreign,
necessary to carry on any Borrower’s business or necessary (including to avoid
a conflict or breach under any agreement, instrument, other document, license,
permit or 

 7
 

other authorization) for
the execution, delivery or performance of this Agreement, the Other Documents,
including any Consents required under all applicable federal, provincial, state
or other Applicable Law.

“Contract Rate” shall mean the Revolving
Interest Rate.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 8
 

charges against income of
Borrowers on a Consolidated Basis for such period for federal, state and local
taxes actually paid.

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

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

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

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

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

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

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

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

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

 9
 

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

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

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

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

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

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

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

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

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

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

“Eligible
Equipment” shall mean operating Equipment acquired and located in the
United States or Canada for use in a Borrower’s normal business operations that
is subject to a valid, fully perfected security interest in favor of the Agent,
for the benefit of the Lenders, such security interest being prior to all other
Liens on such Equipment and such Equipment has been delivered to the applicable
Borrower at the premises at which such Equipment is intended to be 

 10
 

located.  Notwithstanding the foregoing, Eligible
Equipment shall not include (a) Equipment that is damaged or generally not in
good working order and (b) Equipment that is otherwise not satisfactory to
Agent as determined in good faith by the Agent in the exercise of its
reasonable discretion.

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

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

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

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

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

“Equipment Cap
Reduction” shall have the meaning set forth in Section 2.1 hereof

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

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

 

 11

“Eurodollar Rate” shall mean, with respect to
the Eurodollar Rate Loans for any Interest Period, the interest rate per annum
determined by the Agent by dividing (the resulting quotient rounded upwards, if
necessary, to the nearest 1/100th of 1% per annum) (i) the rate which appears
on the Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that
displays rates at which US dollar deposits are offered by leading banks in the
London interbank deposit market), or the rate which is quoted by another source
selected by the Agent which has been approved by the British Bankers’
Association as an authorized information vendor for the purpose of displaying
rates at which US dollar deposits are offered by leading banks in the London
interbank deposit market (an “Alternate Source”), at approximately 11:00 a.m.,
London time, two (2) Business Days prior to the commencement of such Interest
Period as the London interbank offered rate for U.S. Dollars for an amount
comparable to such Eurodollar Rate Loan and having a borrowing date and a
maturity comparable to such Interest Period (or if there shall at any time, for
any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or
any Alternate Source, a comparable replacement rate determined by the Agent at
such time (which determination shall be conclusive absent manifest error)), by
(ii) a number equal to 1.00 minus the Reserve Percentage.  Eurodollar Rate may also be expressed by the
following formula:

Average of London
interbank offered rates quoted

by Bloomberg or appropriate successor as shown on

LIBOR = Bloomberg Page BBAM1

1.00 - Reserve Percentage

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

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

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

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

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

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

“Federal Funds Effective Rate” for any day
shall mean the rate per annum (based on a year of 360 days and actual days
elapsed and rounded upward to the nearest 1/100 of 1%) announced by the Federal
Reserve Bank of New York (or any successor) on such day as being the weighted
average of the rates on overnight federal funds transactions arranged by
federal funds brokers on the previous trading day, as computed and announced by
such Federal Reserve 

 12
 

Bank (or any successor)
in substantially the same manner as such Federal Reserve Bank computes and
announces the weighted average it refers to as the “Federal Funds Effective
Rate” as of the date of this Agreement; provided, if such Federal Reserve Bank
(or its successor) does not announce such rate on any day, the “Federal Funds
Effective Rate” for such day shall be the Federal Funds Effective Rate for the
last day on which such rate was announced.

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

“Fee Letter” means that certain fee letter
dated as of the date hereof by and among Agent and Borrowers.

“Fixed Charge Coverage Ratio” shall mean and
include, with respect to any Fixed Charge Measurement Period, the ratio of
(a) EBITDA minus the sum of (i) all unfinanced Capital Expenditures made
during such period, (ii) all cash taxes paid during such period and (iii) cash
dividends paid in connection with the Preferred Equity to (b) the sum of
all Senior Debt Payments during such period. 
For the purposes of this definition, “unfinanced Capital Expenditures”
shall (a) exclude Capital Expenditures made using proceeds of the issuance of
Equity Interests received after March 31, 2007 (including the remaining
proceeds of the 2006 Equity Offering after payment in full of the Investor
Notes) on terms and conditions satisfactory to Agent and (b) include, from and
after the occurrence of an Undrawn Availability Event, Capital Expenditures
funded through Advances.

“Fixed Charge Measurement Period” shall mean
the period of time measured as of (i) the last day of each fiscal quarter
ending on or before June 30, 2008 for the period from July 1, 2007 through each
such quarter end, and (ii) the last day of each fiscal quarter thereafter, for
the four-quarter period then ending; provided  however, that
following any Undrawn Availability Event, such measurement period shall be the
period beginning on the first day of the fiscal quarter following an Undrawn
Availability Event, through and including the applicable date of determination,
until such measurement period equals four quarters, and thereafter it shall be
for the four-quarter period then ending.

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

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

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

 13
 

“Funded Debt” shall mean, with respect to any
Person, without duplication, all Indebtedness for borrowed money evidenced by
notes, bonds, debentures, or similar evidences of Indebtedness that by its
terms matures more than one year from, or is directly or indirectly renewable
or extendible at such Person’s option under a revolving credit or similar
agreement obligating the lender or lenders to extend credit over a period of
more than one year from the date of creation thereof, and specifically
including Capitalized Lease Obligations, current maturities of long-term debt,
revolving credit and short-term debt extendible beyond one year at the
option of the debtor, and also including, in the case of Borrower, the
Obligations and, without duplication, Indebtedness consisting of guaranties of
Funded Debt of other Persons.

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

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

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

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

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

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

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

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

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

“Grant Acquisition Agreement” shall mean that
certain Stock Purchase Agreement including all exhibits and schedules thereto
dated as of September 8, 2006 by and among 

 14
 

Geokinetics Holdings, as
buyer, and Elliot Associates, L.P., a Delaware limited partnership and Elliot
International, L.P., a Cayman Islands limited partnership, as sellers.

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

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

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

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

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

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

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

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

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

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

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

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

 15
 

of any assets subject to
any Lien shall be deemed, for the purposes hereof, to be the equivalent of the
creation, assumption and incurring of the indebtedness secured thereby, whether
or not actually so created, assumed or incurred.

“Indenture” shall mean that certain Indenture
by and among Geokinetics, GDC, Quantum, Trace Energy (U.S.), Geokinetics
Holdings, Grant Geophysical, Grant Corp., Advanced Seismic and Indenture
Trustee dated as of December 15, 2006.

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

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

“Initial Adjustment Date” shall mean the later
of (i) March 1, 2008 or (ii) the first day of the month following the date of
delivery of the financial statements for the quarter ending December 31, 2007,
pursuant to Section 9.8 hereof.

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

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

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

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

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

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

 16
 

title or other documents
representing them. For the purposes of this Agreement, “Inventory” shall
include seismic data collected for sale to Customers.

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

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

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

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

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

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

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

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

“Letter of Credit Sublimit” shall mean
$10,000,000.00.

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

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

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

 17
 

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

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

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

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

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

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

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

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

“Maximum Revolving Advance Amount” shall mean
$60,000,000, which may be subsequently increased pursuant to the terms and
conditions set forth in Section 2.22 by an amount up to $10,000,000 as a result
of a Commitment Adjustment Event; provided, however, until such time as all of
the Investor Notes have been indefeasibly paid in full and the Indenture and
the other Note Documents have been terminated, the “Maximum Revolving Advance
Amount” shall be $30,000,000.

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

 18
 

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

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

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

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

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

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

“Net Orderly Liquidation Value” shall mean, at
any time, the aggregate value of the Borrowers’ Eligible Equipment at such time
in an orderly liquidation, taking into account all costs, fees and expenses
estimated to be incurred by the Agent and the Lenders in connection with such
liquidation, based upon the most recent appraisal of the Borrowers’ Eligible
Equipment delivered pursuant to Section 9.19.

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

“Note” shall mean the Revolving Credit Note.

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

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

 19
 

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

“October 2006 Appraisal” means that certain
appraisal of the Borrowers’ Equipment conducted by Mitcham Industries, Inc.
dated as of October 1, 2006.

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

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

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

“Other Documents” shall mean the Note, the
Negative Pledge, the Questionnaire, the Pledge Agreement, the Collateral
Assignment of Acquisition Agreement, the Senior Subordination Agreement, any
Guaranty, any Guarantor Security Agreement, the Intellectual 

 20
 

Property Security
Agreement, any Lender-Provided Interest Rate Hedge and any and all other
agreements, instruments and documents, including guaranties, pledges, powers of
attorney, consents, interest or currency swap agreements or other similar
agreements and all other writings heretofore, now or hereafter executed by any
Borrower or any Guarantor and/or delivered to Agent or any Lender in respect of
the transactions contemplated by this Agreement.

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

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

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

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

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

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

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

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

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

“Permitted Capital Lease Facility” shall mean
the $6,000,000 Texas Equipment Lease with Quantum as lessee and CIT as lessor
to be entered into after the Original Closing Date for the lease of certain
seismic equipment and which is guaranteed by Geokinetics, Trace Energy 

 21
 

Services Ltd. and GDC,
which shall be in form and substance satisfactory to Agent in its sole
discretion.

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

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

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

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

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

 

 22

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

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

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

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

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

“Post-Closing Appraisal” shall have the meaning
set forth in Section 9.19 hereof.

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

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

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

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

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

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

 23
 

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

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

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

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

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

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

“Required Lenders” shall mean Lenders holding
at least fifty-one percent (51%) of the Advances and, if no Advances are
outstanding, shall mean Lenders holding fifty-one percent (51%) of the
Commitment Percentages.

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

“Restated Closing Date” shall mean December 15,
2006.

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

“Revolving Advances” shall mean Advances made
other than Letters of Credit.

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

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

 24
 

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

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

“Second Restated Closing Date” shall mean
May     , 2007.

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

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

“Senior Debt Payments” shall mean and include
all cash actually expended by any Borrower to make (a) interest payments
on any Advances hereunder, plus (b) payments for all fees, commissions and
charges set forth herein and with respect to any Advances, plus
(c) capitalized lease payments, plus (d) payments with respect to any
other Indebtedness for borrowed money, plus (e) on and after the occurrence of
an Undrawn Availability Event, the amount of any Equipment Cap Reduction.

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

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

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

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

“Synthetic Lease Obligations” shall mean all
monetary obligations of a person under (a) a so-called synthetic,
off-balance sheet or tax retention lease or (b) an agreement for the use
or possession of any property (whether real, personal or mixed) creating
obligations which do not appear on the balance sheet of such person, but which,
upon the insolvency or bankruptcy of such person, would be characterized as
Indebtedness of such person (without regard to accounting treatment).

 25
 

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

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

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

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

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

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

“Transactions” shall mean all of the
transactions contemplated under this Agreement.

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

“Undrawn Availability” at a particular date
shall mean an amount equal to (a) the lesser of (i) the Formula
Amount plus the Cash Balance or (ii) $60,000,000 plus the amount of any
Commitment increase pursuant to Section 2.22 hereof minus (b) the sum of
(i) the outstanding amount of Advances plus (ii) all amounts due and
owing to any Borrower’s trade creditors which are 60 days or more past due,
plus (iii) fees and expenses for which Borrowers are liable but which have
not been paid or charged to Borrowers’ Account.

“Undrawn Availability Event” shall mean such
time as Undrawn Availability falls below $6,000,000 at any reporting period
under this Agreement.

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

 26
 

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

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

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

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

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

 27
 

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

II.            ADVANCES, PAYMENTS.

2.1.   Revolving Advances.

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

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

(ii)        up
to the lesser of:

(A)   85%,
subject to the provisions of Section 2.1(b) hereof, of Eligible Foreign
Receivables, or

(B)   $10,000,000
(the “Foreign Advance Rate”), plus

(iii)       up
to the amount equal to the lesser of:

(A) (I)   before
delivery of the Post-Closing Appraisal to Agent, 80% of Orderly Liquidation
Value of the Eligible Equipment set forth in the October 2006 Appraisal (less
any Eligible Equipment that has been sold) and (II) on or after delivery of the
Post-Closing Appraisal, 85% of the Net Orderly Liquidation Value of Eligible
Equipment that has been appraised pursuant to the most recent appraisal
(whether initiated by Agent or requested by Borrowers pursuant to Section 9.19)
acceptable to Agent (less any Eligible Equipment that has been sold), or

 28
 

(B) (I)   $35,000,000
(which may be subsequently increased by an amount equal to any Commitment
increase that occurs pursuant to the terms and conditions set forth in Section
2.22 as a result of a Commitment Adjustment Event) minus

(II)   the
amount equal to $583,334 (provided that upon the occurrence of a Commitment
Adjustment Event, such amount shall be equal to (x) $35,000,000 plus the amount
of any Commitment increase that occurs pursuant to the terms and conditions set
forth in Section 2.22 as a result of a Commitment Adjustment Event divided by
(y) sixty (60)) multiplied by the number of calendar months ended after the
first anniversary of the Second Restated Closing Date (the “Equipment Cap
Reduction”)(the remainder of (I) minus (II), the “Equipment Advance Rate” and
together with the Domestic Advance Rate and the Foreign Advance Rate, the “Advance
Rates”), minus

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

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

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

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

2.2.   Procedure for Revolving Advances
Borrowing.

(a)    Borrowing
Agent on behalf of any Borrower may notify Agent prior to 10:00 a.m. (Eastern
Standard Time) on a Business Day of a Borrower’s request to incur, on that day,
a Revolving Advance hereunder.  Should any
amount required to be paid as interest hereunder, or as fees or other charges
under this Agreement or any other agreement with Agent or Lenders, or with
respect to any other Obligation, become due, same shall be deemed a request for
a Revolving Advance as of the date such payment is due, in the amount required
to pay in full such interest, fee, charge or Obligation under this Agreement or
any other agreement with Agent or Lenders, and such request shall be
irrevocable.

(b)    Notwithstanding
the provisions of subsection (a) above, in the event any Borrower desires to
obtain a Eurodollar Rate Loan, Borrowing Agent shall give Agent written 

 29
 

notice by no later than 10:00 a.m. (Eastern
Standard Time) on the day which is three (3) Business Days prior to the date
such Eurodollar Rate Loan is to be borrowed, specifying (i) the date of
the proposed borrowing (which shall be a Business Day), (ii) the type of
borrowing and the amount on the date of such Advance to be borrowed, which
amount shall be for at least $500,000 and if greater, in an integral multiple
of $100,000 and (iii) the duration of the first Interest Period
therefor.  Interest Periods for
Eurodollar Rate Loans shall be for one, two or three months; provided, if an
Interest Period would end on a day that is not a Business Day, it shall end on
the next succeeding Business Day unless such day falls in the next succeeding
calendar month in which case the Interest Period shall end on the next
preceding Business Day.  No Eurodollar
Rate Loan shall be made available to any Borrower during the continuance of a
Default or an Event of Default.  After
giving effect to each requested Eurodollar Rate Loan, including those which are
converted from a Domestic Rate Loan under Section 2.2(d), there shall not be
outstanding more than six (6) Eurodollar Rate Loans, in the aggregate.

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

Borrowing Agent shall elect the initial Interest
Period applicable to a Eurodollar Rate Loan by its notice of borrowing given to
Agent pursuant to Section 2.2(b) or by its notice of conversion given to Agent
pursuant to Section 2.2(d), as the case may be. 
Borrowing Agent shall elect the duration of each succeeding Interest
Period by giving irrevocable written notice to Agent of such duration not later
than 10:00 a.m. (Dallas, Texas time) on the day which is three (3) Business
Days prior to the last day of the then current Interest Period applicable to
such Eurodollar Rate Loan.  If Agent does
not receive timely notice of the Interest Period elected by Borrowing Agent,
Borrowing Agent shall be deemed to have elected to convert to a Domestic Rate
Loan subject to Section 2.2(d) hereinbelow.

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

(e)    At
its option and upon written notice given prior to 10:00 a.m. (Dallas, Texas
time) at least three (3) Business Days’ prior to the date of such prepayment,
any Borrower 

 30
 

may prepay the Eurodollar Rate Loans in whole
at any time or in part from time to time, with accrued interest on the
principal being prepaid to the date of such repayment.  Such Borrower shall specify the date of
prepayment of Advances which are Eurodollar Rate Loans and the amount of such
prepayment.  In the event that any
prepayment of a Eurodollar Rate Loan is required or permitted on a date other
than the last Business Day of the then current Interest Period with respect
thereto, such Borrower shall indemnify Agent and Lenders therefor in accordance
with Section 2.2(f) hereof.

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

(g)    Notwithstanding
any other provision hereof, if any Applicable Law, treaty, regulation or
directive, or any change therein or in the interpretation or application
thereof, shall make it unlawful for any Lender (for purposes of this subsection
(g), the term “Lender” shall include any Lender and the office or branch where
any Lender or any corporation or bank controlling such Lender makes or
maintains any Eurodollar Rate Loans) to make or maintain its Eurodollar Rate
Loans, the obligation of Lenders to make Eurodollar Rate Loans hereunder shall
forthwith be cancelled and Borrowers shall, if any affected Eurodollar Rate
Loans are then outstanding, promptly upon request from Agent, either pay all
such affected Eurodollar Rate Loans or convert such affected Eurodollar Rate
Loans into loans of another type.  If any
such payment or conversion of any Eurodollar Rate Loan is made on a day that is
not the last day of the Interest Period applicable to such Eurodollar Rate
Loan, Borrowers shall pay Agent, upon Agent’s request, such amount or amounts
as may be necessary to compensate Lenders for any loss or expense sustained or
incurred by Lenders in respect of such Eurodollar Rate Loan as a result of such
payment or conversion, including (but not limited to) any interest or other
amounts payable by Lenders to lenders of funds obtained by Lenders in order to
make or maintain such Eurodollar Rate Loan. 
A certificate as to any additional amounts payable pursuant to the
foregoing sentence submitted by Lenders to Borrowing Agent shall be conclusive
absent manifest error.

2.3.   Disbursement of Advance Proceeds.

All Advances shall be disbursed from whichever office
or other place Agent may designate from time to time and, together with any and
all other Obligations of Borrowers to Agent or Lenders, shall be charged to
Borrowers’ Account on Agent’s books. 
During the Term, Borrowers may use the Revolving Advances by borrowing,
prepaying and reborrowing, all in accordance with the terms and conditions
hereof.  The proceeds of each Revolving
Advance requested by Borrowing Agent on behalf of any Borrower or deemed to
have been requested by any Borrower under Section 2.2 hereof shall, with
respect to requested Revolving Advances to 

 31
 

the extent Lenders make
such Revolving Advances, be made available to the applicable Borrower on the
day so requested by way of credit to such Borrower’s operating account at PNC,
or such other bank located in the United States as Borrowing Agent may
designate following notification to Agent, in immediately available federal
funds or other immediately available funds or, with respect to Revolving
Advances deemed to have been requested by any Borrower, be disbursed to Agent
to be applied to the outstanding Obligations giving rise to such deemed
request.

2.4.   Reserved.

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

2.6.   Repayment of Advances.

(a)    The
Advances shall be due and payable in full on the last day of the Term subject
to earlier prepayment as herein provided.

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

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

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

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

 

 32

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

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

2.10. Issuance of Letters of Credit.

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

(b)   Each Letter of Credit shall, among other things,
(i) provide for the payment of sight drafts, other written demands for
payment, or acceptances of usance drafts when presented for honor thereunder in
accordance with the terms thereof and when accompanied by the documents
described therein and (ii) have an expiry date not later than twelve (12)
months after such Letter of Credit’s date of issuance and in no event later
than the last day of the Term.  Each
standby Letter of Credit shall be subject either to the Uniform 

 33
 

Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500, and any amendments or
revision thereof adhered to by the Issuer (“UCP 500”) or the International
Standby Practices (ISP98-International Chamber of Commerce Publication Number
590) (the “ISP98 Rules”), as determined by Agent, and each trade Letter of
Credit shall be subject to UCP 500.

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

2.11. Requirements For Issuance of Letters of
Credit.

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

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

2.12. Disbursements, Reimbursement.

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

(b)    In the event of any request for a drawing
under a Letter of Credit by the beneficiary or transferee thereof, Agent will
promptly notify Borrowing Agent. 
Provided that Borrowing Agent shall have received such notice, the
Borrowers shall reimburse (such obligation to reimburse Agent shall sometimes
be referred to as a “Reimbursement Obligation”) Agent prior to 12:00 p.m.,
Dallas, Texas time on each date that an amount is paid by Agent under 

 34
 

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

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

(d)    With
respect to any unreimbursed drawing that is not converted into a Domestic Rate
Loan to Borrowers in whole or in part as contemplated by Section 2.12(b),
because of Borrowers’ failure to satisfy the conditions set forth in Section
8.2 (other than any notice requirements) or for any other reason, Borrowers
shall be deemed to have incurred from Agent a borrowing (each a “Letter of
Credit Borrowing”) in the amount of such drawing. Such Letter of Credit
Borrowing shall be due and payable on demand (together with interest) and shall
bear interest at the rate per annum applicable to a Domestic Rate Loan.  Each Lender’s payment to Agent pursuant to
Section 2.12(c) shall be deemed to be a payment in respect of its participation
in such Letter of Credit Borrowing and shall constitute a “Participation
Advance” from such Lender in satisfaction of its Participation Commitment under
this Section 2.12.

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

 35
 

2.13. Repayment of Participation Advances.

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

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

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

2.15. Determination to Honor Drawing Request.   In
determining whether to honor any request for drawing under any Letter of Credit
by the beneficiary thereof, Agent shall be responsible only to determine that
the documents and certificates required to be delivered under such Letter of
Credit have been delivered and that they comply on their face with the
requirements of such Letter of Credit and that any other drawing condition
appearing on the face of such Letter of Credit has been satisfied in the manner
so set forth.

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

 36
 

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

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

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

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

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

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

(vii)     the
solvency of, or any acts or omissions by, any beneficiary of any Letter of
Credit, or any other Person having a role in any transaction or obligation
relating to a Letter of Credit, or the existence, nature, quality, quantity,
condition, value or other characteristic of any property or services relating
to a Letter of Credit;

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

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

 37
 

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

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

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

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

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

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

2.18. Liability for Acts and Omissions.   As
between Borrowers and Agent and Lenders, each Borrower assumes all risks of the
acts and omissions of, or misuse of the Letters of Credit by, the respective
beneficiaries of such Letters of Credit (INCLUDING,
WITHOUT LIMITATION, ALL RISKS ATTRIBUTABLE TO ANY ACT OR OMISSION ARISING FROM
AGENT’S OR LENDER’S NEGLIGENCE OR STRICT LIABILITY).  In furtherance and not in limitation of the
respective foregoing, Agent shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for an issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged (even if Agent
shall have been notified thereof); (ii) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
such Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason; (iii) the failure of the beneficiary of any such Letter of Credit, or
any other party to which such Letter of Credit may be transferred, to comply
fully with any conditions required in order to draw upon such Letter of Credit
or any other claim of any Borrower against any beneficiary of such Letter of
Credit, or any such 

 38
 

transferee, or any
dispute between or among any Borrower and any beneficiary of any Letter of
Credit or any such transferee; (iv) errors, omissions, interruptions or delays
in transmission or delivery of any messages, by mail, cable, telegraph, telex
or otherwise, whether or not they be in cipher; (v) errors in interpretation of
technical terms; (vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any such Letter of Credit or
of the proceeds thereof; (vii) the misapplication by the beneficiary of any
such Letter of Credit of the proceeds of any drawing under such Letter of
Credit; or (viii) any consequences arising from causes beyond the control of
Agent, including any governmental acts, and none of the above shall affect or
impair, or prevent the vesting of, any of Agent’s rights or powers hereunder.
Nothing in the preceding sentence shall relieve Agent from liability for Agent’s
gross negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final non-appealable judgment) in connection with actions or
omissions described in such clauses (i) through (viii) of such sentence.  In no event shall Agent or Agent’s Affiliates
be liable to any Borrower for any indirect, consequential, incidental,
punitive, exemplary or special damages or expenses (including without
limitation attorneys’ fees), or for any damages resulting from any change in
the value of any property relating to a Letter of Credit.

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

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

 39
 

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

2.20. Manner of Borrowing and Payment.

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

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

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

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

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

(d)    If
any Lender or Participant (a “Benefited Lender”) shall at any time receive any
payment of all or part of its Advances, or interest thereon, or receive any
Collateral in respect thereof (whether voluntarily or involuntarily or by
set-off) in a greater proportion than 

 40
 

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

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

2.21. Mandatory Prepayments.

(a)    Subject
to Section 4.3 hereof and excluding the exceptions set forth therein,
when Borrower (i) sells or otherwise disposes of any Collateral other than
Inventory in the Ordinary Course of Business, (ii) issues or sells any equity
securities, capital stock or other ownership interests, or receives any capital
contributions (except to the extent the proceeds of such a sale or issuance are
applied to the repayment of the Investor Notes, together with related
prepayment premiums, interest and fees), (iii) incurs any Indebtedness (other
than as permitted by Section 7.8 hereof), or (iv) receives any
proceeds payable in connection with (A) any condemnation proceedings affecting
any of the foregoing or any rights thereto or any interest in or to any
Collateral or (B) any damage to or taking of any of the foregoing or any rights
in any Collateral or any interest therein arising from or otherwise relating to
any exercise of the power of eminent domain, or any conveyance in lieu of or
under threat of any such taking, then Borrower shall repay the Advances in an
amount equal to the net cash proceeds of the foregoing (i.e., gross proceeds
less the reasonable costs of such sales, issuances, contributions or other 

 41
 

dispositions), such repayments to be made
promptly but in no event more than one (1) Business Day following receipt of
such net proceeds, and until the date of payment, such proceeds shall be held
in trust for Agent.  The foregoing shall
not be deemed to be implied consent to any such sale or transaction otherwise
prohibited by the terms and conditions hereof. 
Such repayments shall be applied to the remaining Advances in such order
as Agent may determine, subject to Borrowers’ ability to reborrow Revolving
Advances in accordance with the terms hereof.

2.22. Increase in Aggregate Commitment.   In
the event that a Lender desires to increase its Commitment, or a bank or other
entity that is not a Lender desires to become a Lender and provide an
additional Commitment hereunder, and so long as no Default or Event of Default
shall have occurred and be continuing and with the prior written consent of
Administrative Agent (which shall not be unreasonably conditioned, withheld or
delayed), the Borrowers shall have the right from time to time prior to the end
of the Term upon not less than thirty (30) days’ prior written notice to Agent
to increase the Commitment by an aggregate amount of up to $10,000,000 (subject
to the terms and conditions set forth herein, “Commitment Adjustment Event”);
provided, that in no event shall
the aggregate Commitment of all Lenders be increased to an amount greater than
$70,000,000; provided, further, that:

(a)    if
the Borrowers elect to increase the Commitment of a Lender, the Borrowers and
such Lender shall execute and deliver to the Agent a certificate substantially
in the form of Exhibit 2.22(a) attached hereto (a “Commitment Increase
Certificate”);

(b)    any
such Commitment increase shall be in increments of no less than $5,000,000;

(c)    if
the Borrowers elect to increase the Commitment by causing a bank or financial
institution that at such time is not a Lender to become a Lender (an “Additional
Lender”), the Borrower and such Additional Lender shall execute and deliver
to the Administrative Agent, a certificate substantially in the form of
Exhibit 2.22(c) hereto) (an “Additional Lender Certificate”); provided
that, any such Additional Lender shall be approved by the Agent (which approval
shall not be unreasonably conditioned, withheld or delayed) prior to such bank
or financial institution becoming an Additional Lender hereunder;

(d)    subject
to acceptance and recording thereof pursuant to this Section 2.22 hereof, from
and after the effective date specified in the Commitment Increase Certificate
or the Additional Lender Certificate, as applicable (or if any Eurodollar Rate
Loan is outstanding, then on the last day of the Interest Period in respect of
such Eurodollar Rate Loan, unless the Borrowers have paid compensation required
with respect to such Eurodollar Rate Loan): 
(a) the amount of the aggregate Commitment shall be increased by
the amount set forth therein, and (b) in the case of an Additional Lender
Certificate, any Additional Lender party thereto shall be a party to this
Agreement and the other Loan Documents and have the rights and obligations of a
Lender under this Agreement and the Other Documents.  In addition, the Lender party to the
Commitment Increase Certificate or Additional Lender, as applicable, shall
purchase a pro rata portion of the outstanding Advances (and participation
interests in Letters of Credit) of each of the other Lenders (and such Lenders
hereby agree to sell and to take all such further action to effectuate such
sale) such that each Lender (including any Additional Lender, if applicable)
shall 

 42
 

hold its respective percentage of the
outstanding Advances (and participation interests) after giving effect to the
increase in the Commitment; and

(e)    upon
its receipt of a duly completed Commitment Increase Certificate or an
Additional Lender Certificate, as applicable, executed by the Borrowers and the
Lender or the Additional Lender party thereto, as applicable, the Agent shall
accept such Commitment Increase Certificate or Additional Lender Certificate
and shall record the information contained therein in the Register.  No increase in the Commitment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register.

2.23. Use of Proceeds.

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

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

2.24. Defaulting Lender.

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

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

 

 43

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

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

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

III.           INTEREST AND FEES.

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

Commencing on the Initial Adjustment Date, the
Applicable Margin with respect to the Revolving Advances will be adjusted (up
or down) prospectively as determined in accordance with the foregoing table
based on the Borrowers’ most recent Financials. 
For purposes of this Section 3.1, “Financials” shall mean the annual or
quarterly financial statements of the Borrowers delivered pursuant to Section
9.7 and Section 9.8 of this Agreement. 
Adjustments, if any, to the Applicable Margin shall be effective on the
date upon which the applicable Financials are required to be delivered to Agent
under this Agreement.  If the Borrowers
fail to deliver the Financials to the Agent at the time required pursuant to
this Agreement, then the Applicable Margin shall be the highest Applicable Margin
set forth in the foregoing table beginning on the date upon which such
Financials were required to be delivered to Agent under this Agreement and
continuing until five days after such Financials are so delivered.  During the period from the 

 44
 

Second Restated Closing
Date through the Initial Adjustment Date, the Applicable Margin shall be
determined in accordance with the foregoing table as if the Fixed Charge
Coverage Ratio were greater than or equal to 1.50 to 1.00 but less than 2.00 to
1.00.

	
  If the Fixed Charge Coverage Ratio is:

  	
   

  	
   

  	
   

  	
  Applicable Revolving

  Eurodollar Rate Margin:

  	
   

  	
  Applicable Revolving

  Domestic Rate Margin:

  	
   

  
	
  Less than
  1.10:1.00

  	
   

  	
  2.50

  	
  %

  	
  0.50

  	
  %

  
	
  Greater than or
  equal to 1.10:1.00

  and less than 1.50:1.00

  	
   

  	
  2.25

  	
  %

  	
  0.25

  	
  %

  
	
  Greater than or
  equal to 1.50:1.00

  and less than 2.00:1.00

  	
   

  	
  2.00

  	
  %

  	
  0.00

  	
  %

  
	
  Greater than or equal
  to 2.00:1.00

  	
   

  	
  1.75

  	
  %

  	
  0.00

  	
  %

  

 

3.2.   Letter of Credit Fees.

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

On demand, Borrowers will cause cash to be deposited
and maintained in an account with Agent, as cash collateral, in an amount equal
to one hundred and five percent (105%) of the Maximum Undrawn Amount of all
outstanding Letters of Credit, and each Borrower hereby irrevocably authorizes
Agent, in its discretion, on such Borrower’s behalf and in such 

 45
 

Borrower’s name, to open
such an account and to make and maintain deposits therein, or in an account
opened by such Borrower, in the amounts required to be made by such Borrower,
out of the proceeds of Receivables or other Collateral or out of any other
funds of such Borrower coming into any Lender’s possession at any time.  Agent will invest such cash collateral (less
applicable reserves) in such short-term money-market items as to which Agent
and such Borrower mutually agree and the net return on such investments shall
be credited to such account and constitute additional cash collateral.  No Borrower may withdraw amounts credited to
any such account except upon the occurrence of all of the following: (x) payment
and performance in full of all Obligations, (y) expiration of all Letters
of Credit and (z) termination of this Agreement.

3.3.   Closing Fee and Facility Fee.

(a)    Fees.   Borrowers
shall pay to Agent all of the fees set forth in the Fee Letter on the dates set
forth therein.

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

3.4.   Reserved.

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

3.6.   Maximum Charges.   It is the
intention of the parties to comply strictly with applicable usury laws.  Accordingly, notwithstanding any provision to
the contrary in this Agreement or the Other Documents, in no event shall any
Obligations require the payment or permit the payment, taking, reserving,
receiving, collection or charging of any sums constituting interest under
Applicable Laws that exceed the maximum amount permitted by such laws, as the
same may be amended or modified from time to time (the “Maximum Rate”).  If any such excess interest is called for,
contracted for, charged, taken, reserved or received in connection herewith or
therewith, or in any communication by Agent, any Lender or any other Person to
Borrower, any Guarantor or any other Person liable for the Obligations, or in the
event that all or part of the principal or interest hereof or thereof shall be
prepaid or accelerated, so that under any of such circumstances or under any
other circumstance whatsoever the amount of interest contracted for, charged,
taken, reserved or received on the amount of principal actually outstanding
from time to time under the Obligations shall exceed the Maximum Rate, then in
such event it is agreed that: (a) the provisions of this paragraph shall
govern and control; 

 46
 

(b) neither
Borrower, any Guarantor nor any other Person now or hereafter liable for the
payment of any of the Obligations shall be obligated to pay the amount of such
interest to the extent it is in excess of the Maximum Rate; (c) any such
excess interest which is or has been received by Agent or any Lender,
notwithstanding this paragraph, shall be credited against the then unpaid
principal balance of the Obligations (or, if the principal amount of the
Obligations shall have been paid in full, refunded by Lenders to the party primarily
liable on the Obligation, and each Lender shall refund its pro rat share of
such interest); and (d) the provisions of this Agreement and the
Obligations, and any other communication to Borrower or any Guarantor, shall
immediately be deemed reformed and such excess interest reduced, without the
necessity of executing any other document, to the Maximum Rate.  The right to accelerate the maturity of the
Obligations does not include the right to accelerate, collect or charge
unearned interest, but only such interest that has otherwise accrued as of the
date of acceleration.  Without limiting
the foregoing, all calculations of the rate of interest contracted for,
charged, taken, reserved or received in connection with any of the Obligations
which are made for the purpose of determining whether such rate exceeds the
Maximum Rate shall be made to the extent permitted by Applicable Laws by
amortizing, prorating, allocating and spreading during the period of the full
term of such Obligations, including all prior and subsequent renewals and
extensions hereof or thereof, all interest at any time contracted for, charged,
taken, reserved or received by Agent or any Lender.  To the extent that either Chapter 303 or 306,
or both, of the Texas Finance Code apply in determining the Maximum Rate, Agent
and Lenders hereby elect to determine the applicable rate ceiling by using the
weekly ceiling from time to time in effect, subject to Agent’s right
subsequently to change such method in accordance with Applicable Law, as the
same may be amended or modified from time to time.

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

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

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

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

 47
 

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

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

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

(b)    Dollar
deposits in the relevant amount and for the relevant maturity are not available
in the London interbank Eurodollar market, with respect to an outstanding
Eurodollar Rate Loan, a proposed Eurodollar Rate Loan, or a proposed conversion
of a Domestic Rate Loan into a Eurodollar Rate Loan, then Agent shall give
Borrowing Agent prompt written, telephonic or telegraphic notice of such
determination.  If such notice is given,
(i) any such requested Eurodollar Rate Loan shall be made as a Domestic
Rate Loan, unless Borrowing Agent shall notify Agent no later than 10:00 a.m. (Dallas,
Texas time) two (2) Business Days prior to the date of such proposed borrowing,
that its request for such borrowing shall be cancelled or made as an unaffected
type of Eurodollar Rate Loan, (ii) any Domestic Rate Loan or Eurodollar
Rate Loan which was to have been converted to an affected type of Eurodollar
Rate Loan shall be continued as or converted into a Domestic Rate Loan, or, if
Borrowing Agent shall notify Agent, no later than 10:00 a.m. (Dallas, Texas
time) two (2) Business Days prior to the proposed conversion, shall be
maintained as an unaffected type of Eurodollar Rate Loan, and (iii) any
outstanding affected Eurodollar Rate Loans shall be converted into a Domestic
Rate Loan, or, if Borrowing Agent shall notify Agent, no later than 10:00 a.m.
(Dallas, Texas time) two (2) Business Days prior to the last Business Day of
the then current Interest Period applicable to such affected Eurodollar Rate
Loan, shall be converted into an unaffected type of Eurodollar Rate Loan, on
the last Business Day of the then current Interest Period for such affected
Eurodollar Rate Loans.  Until such notice
has been withdrawn, Lenders shall have no obligation to make an affected type
of Eurodollar Rate Loan or maintain outstanding affected Eurodollar Rate Loans
and no Borrower shall have the right to convert a Domestic Rate Loan or an
unaffected type of Eurodollar Rate Loan into an affected type of Eurodollar
Rate Loan.

3.9.   Capital Adequacy.

(a)    In
the event that Agent or any Lender shall have determined that any Applicable
Law, rule, regulation or guideline regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any
Governmental Body, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by Agent or any Lender
(for purposes of this Section 3.9, the term “Lender” shall 

 48
 

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

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

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

3.11. Withholding Tax Exemption.

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

 49
 

Regulations that certify or establish the
status of a payee or beneficial owner as a U.S. or foreign person.

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

(c)    Notwithstanding
the submission of a Withholding Certificate claiming a reduced rate of or
exemption from U.S. withholding tax required under Section 3.11(b) hereof,
Agent shall be entitled to withhold United States federal income taxes at the
full 30% withholding rate if in its reasonable judgment it is required to do so
under the due diligence requirements imposed upon a withholding agent under
§1.1441-7(b) of the Regulations. 
Further, Agent is indemnified under §1.1461-1(e) of the Regulations
against any claims and demands of any Payee for the amount of any tax it
deducts and withholds in accordance with regulations under §1441 of the Code.

IV.           COLLATERAL:  GENERAL TERMS

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

4.2.   Perfection of Security Interest.   Each
Borrower shall take all action that may be necessary or desirable, or that
Agent may request, so as at all times to maintain the validity, perfection,
enforceability and priority of Agent’s security interest in and Lien on the
Collateral or to enable Agent to protect, exercise or enforce its rights
hereunder and in the Collateral, including, but not limited to, (i) immediately
discharging all Liens other than Permitted 

 50
 

Encumbrances, (ii)
obtaining Lien Waiver Agreements, (iii) delivering to Agent, endorsed or
accompanied by such instruments of assignment as Agent may specify, and
stamping or marking, in such manner as Agent may specify, any and all chattel
paper, instruments, letters of credits and advices thereof and documents
evidencing or forming a part of the Collateral, (iv) entering into warehousing,
lockbox and other custodial arrangements satisfactory to Agent, and (v)
executing and delivering financing statements, control agreements, instruments
of pledge, mortgages, notices and assignments, in each case in form and
substance satisfactory to Agent, relating to the creation, validity,
perfection, maintenance or continuation of Agent’s security interest and Lien
under the Uniform Commercial Code or other Applicable Law.  By its signature hereto, each Borrower hereby
authorizes Agent to file against such Borrower, one or more financing,
continuation or amendment statements pursuant to the Uniform Commercial Code in
form and substance satisfactory to Agent (which statements may have a
description of collateral which is broader than that set forth herein).  All charges, expenses and fees Agent may
incur in doing any of the foregoing, and any local taxes relating thereto,
shall be charged to Borrowers’ Account as a Revolving Advance of a Domestic
Rate Loan and added to the Obligations, or, at Agent’s option, shall be paid to
Agent for its benefit and for the ratable benefit of Lenders immediately upon
demand.

4.3.   Disposition of Collateral.   Each
Borrower will safeguard and protect all Collateral for Agent’s general account
and make no disposition thereof whether by sale, lease or otherwise except (a)
the sale of Inventory in the Ordinary Course of Business and (b) the
disposition or transfer of obsolete and worn-out Equipment in the Ordinary
Course of Business during any fiscal year having an aggregate fair market value
of not more than $1,500,000 and only to the extent that (i) the proceeds of any
such disposition are used to acquire replacement Equipment which is subject to
Agent’s first priority security interest or (ii) the proceeds of which are
remitted to Agent to be applied pursuant to Section 2.21.

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

4.5.   Ownership of Collateral.

(a)    With
respect to the Collateral, at the time the Collateral becomes subject to Agent’s
security interest:  (i) each
Borrower shall be the sole owner of and fully authorized 

 51
 

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

(b)    (i) There
is no location at which any Borrower has any Inventory (except for Inventory in
transit and seismic data collected for sale to Customers) other than those
locations listed on Schedule 4.5; (ii) Schedule 4.5 hereto contains a
correct and complete list, as of the Second Restated Closing Date, of the legal
names and addresses of each warehouse at which Inventory of any Borrower is
stored; none of the receipts received by any Borrower from any warehouse states
that the goods covered thereby are to be delivered to bearer or to the order of
a named Person or to a named Person and such named Person’s assigns;
(iii) Schedule 4.5 hereto sets forth a correct and complete list as of the
Second Restated Closing Date of (A) each place of business of each
Borrower and (B) the chief executive office of each Borrower; and (iv) Schedule
4.5 hereto sets forth a correct and complete list as of the Second Restated
Closing Date of the location, by state and street address, of all Real Property
owned or leased by each Borrower, together with the names and addresses of any landlords.
With respect to any books and records in connection with any Collateral or in
any way relating thereto or evidencing the Collateral (collectively, the “Books
and Records”) which are located at a leased location, such Books and Records
shall only be located in and at such locations for which Agent has received an
executed landlord agreement in form and substance satisfactory to Agent.

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

 52
 

checks, Inventory,
documents or instruments in which Agent holds a security interest to deliver
same to Agent and/or subject to Agent’s order and if they shall come into any
Borrower’s possession, they, and each of them, shall be held by such Borrower
in trust as Agent’s trustee, and such Borrower will immediately deliver them to
Agent in their original form together with any necessary endorsement.

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

4.8.   Financial Disclosure.   Each
Borrower hereby irrevocably authorizes and directs all accountants and auditors
employed by such Borrower at any time during the Term to exhibit and deliver to
Agent and each Lender copies of any of such Borrower’s financial statements,
trial balances or other accounting records of any sort in the accountant’s or
auditor’s possession, and to disclose to Agent and each Lender any information
such accountants may have concerning such Borrower’s financial status and
business operations.  Each Borrower
hereby authorizes all Governmental Bodies to furnish to Agent and each Lender
copies of reports or examinations relating to such Borrower, whether made by
such Borrower or otherwise; however, Agent and each Lender will attempt to
obtain such information or materials directly from such Borrower prior to
obtaining such information or materials from such accountants or Governmental
Bodies.

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

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

 53
 

inspecting and appraising
the Collateral and any and all records pertaining thereto and the operation of
such Borrower’s business.

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

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

4.13. Payment of Taxes.   Each
Borrower will pay, when due, all taxes, assessments and other Charges lawfully
levied or assessed upon such Borrower or any of the Collateral including real
and personal property taxes, assessments and charges and all franchise, income,
employment, social security benefits, withholding, and sales taxes unless such Borrower is contesting such
taxes in good faith, by appropriate proceedings, and is maintaining adequate
reserves for such taxes in accordance with GAAP.  Notwithstanding the foregoing,
if a Lien 

 54
 

securing any such taxes
is filed in any public office and such Lien is not a Permitted Lien, then the
Borrowers shall pay all taxes secured by such Lien immediately and remove such
Lien of record promptly.  If any tax by
any Governmental Body is or may be imposed on or as a result of any transaction
between any Borrower and Agent or any Lender which Agent or any Lender may be
required to withhold or pay or if any taxes, assessments, or other Charges
remain unpaid after the date fixed for their payment, or if any claim shall be
made which, in Agent’s or any Lender’s opinion, may possibly create a valid
Lien on the Collateral, Agent may without notice to Borrowers pay the taxes,
assessments or other Charges and each Borrower hereby agrees to indemnify,
defend and hold Agent and each Lender harmless in respect thereof.  The amount of any payment by Agent under this
Section 4.13 shall be charged to Borrowers’ Account as a Revolving Advance and
added to the Obligations and, until Borrowers shall furnish Agent with an
indemnity therefor (or supply Agent with evidence satisfactory to Agent that
due provision for the payment thereof has been made), Agent may hold without
interest any balance standing to Borrowers’ credit and Agent shall retain its
security interest in and Lien on any and all Collateral held by Agent.

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

4.15. Receivables.

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

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

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

(d)    Collection
of Receivables.   Until any Borrower’s authority to do so is terminated
by Agent (which notice Agent may give at any time following the occurrence of
an Event of Default or a Default or when Agent in its sole discretion deems it
to be in Lenders’ best 

 55
 

interest to do so), each Borrower will, at
such Borrower’s sole cost and expense, but on Agent’s behalf and for Agent’s
account, collect as Agent’s property and in trust for Agent all amounts
received on Receivables, and shall not commingle such collections with any
Borrower’s funds or use the same except to pay Obligations.  Each Borrower shall deposit in the Blocked
Account or, upon request by Agent, deliver to Agent, in original form and on
the date of receipt thereof, all checks, drafts, notes, money orders,
acceptances, cash and other evidences of Indebtedness.

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

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

 56

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

(h)    Establishment
of a Lockbox Account, Dominion Account.   All proceeds of Collateral
shall be deposited by Borrowers into either (i) a lockbox account, full
dominion account or such other “blocked account” in which no Borrower has
access to the funds contained therein (“Blocked Accounts”) established at a
bank or banks (each such bank, a “Blocked Account Bank”) pursuant to an
arrangement with such Blocked Account Bank as may be selected by Borrowing
Agent and be acceptable to Agent or (ii) depository accounts (“Depository
Accounts”) established at the Agent for the deposit of such proceeds.  Each applicable Borrower (other than
Exploration), Agent and each Blocked Account Bank shall enter into a deposit
account control agreement in form and substance satisfactory to Agent directing
such Blocked Account Bank to transfer such funds so deposited to Agent, either
to any account maintained by Agent at said Blocked Account Bank or by wire
transfer to appropriate account(s) of Agent. 
Exploration shall enter into a deposit account control agreement with
Agent and each Blocked Account Bank in form and substance satisfactory to Agent
directing such Blocked Account Bank, upon notice from Agent (“Notice”), to
transfer such funds so deposited to Agent, either to any account maintained by
Agent at said Blocked Account Bank or by wire transfer to appropriate
account(s) of Agent.  Agent may deliver
such Notice at anytime (i) upon the occurrence and during the continuation of a
Default or Event of Default or (ii) Undrawn Availability is less than
$6,000,000.  All funds deposited in such
Blocked Accounts shall immediately become the property of Agent and Borrowing
Agent shall obtain the agreement by such Blocked Account Bank to waive any
offset rights against the funds so deposited. 
Neither Agent nor any Lender assumes any responsibility for such blocked
account arrangement, including any claim of accord and satisfaction or release
with respect to deposits accepted by any Blocked Account Bank thereunder.  All deposit accounts and investment accounts
of each Borrower and its Subsidiaries are set forth on Schedule 4.15(h).

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

 57
 

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

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

4.18. Environmental Matters.

(a)    Borrowers shall ensure that the Real
Property and all operations and businesses conducted thereon remain in
compliance with all Environmental Laws and they shall not place or permit to be
placed any Hazardous Substances on any Real Property except as permitted by
Applicable Law or appropriate governmental authorities.

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

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

(d)    In the event any Borrower obtains, gives or
receives notice of any Release or threat of Release of a reportable quantity of
any Hazardous Substances at the Real Property (any such event being hereinafter
referred to as a “Hazardous Discharge”) or receives any notice of violation,
request for information or notification that it is potentially responsible for
investigation or cleanup of environmental conditions at the Real Property,
demand letter or complaint, order, citation, or other written notice with
regard to any Hazardous Discharge or violation of Environmental Laws affecting
the Real Property or any Borrower’s interest therein (any of the foregoing is
referred to herein as an “Environmental Complaint”) from any Person, 

 58
 

including any state agency responsible in
whole or in part for environmental matters in the state in which the Real
Property is located or the United States Environmental Protection Agency (any
such person or entity hereinafter the “Authority”), then Borrowing Agent shall,
within five (5) Business Days, give written notice of same to Agent detailing
facts and circumstances of which any Borrower is aware giving rise to the
Hazardous Discharge or Environmental Complaint. 
Such information is to be provided to allow Agent to protect its security
interest in and Lien on the Real Property and the Collateral and is not
intended to create nor shall it create any obligation upon Agent or any Lender
with respect thereto.

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

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

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

 59
 

right to require Borrowers to post a bond,
letter of credit or other security reasonably satisfactory to Agent to secure
payment of these costs and expenses.

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

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

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

4.20. Location of Equipment.   Borrowers
shall maintain Equipment within the United States or Canada having a net book
value (as determined in accordance with GAAP) of no less than (i) twenty
percent (20%) of the total net book value of all Equipment owned by Borrowers
irrespective of its location and (ii) $30,000,000.

V.            REPRESENTATIONS AND WARRANTIES.

Each Borrower represents and warrants as follows:

5.1.   Authority.   Each Borrower has
full power, authority and legal right to enter into this Agreement, the CIT
Intercreditor Agreement, the RBC Intercreditor Agreement and the Other
Documents and to perform all its respective Obligations hereunder and thereunder.  This Agreement and the Other Documents have
been duly executed and delivered by each Borrower, and this Agreement and the
Other Documents constitute the legal, valid and binding obligation of such
Borrower enforceable in accordance with their terms, except as such
enforceability may be limited by any applicable bankruptcy, insolvency,
moratorium or similar laws affecting creditors’ rights generally.  The execution, delivery and performance of
this Agreement and of the Other Documents (a) are within such Borrower’s
corporate powers, have been duly 

 60
 

authorized by all
necessary corporate action, are not in contravention of law or the terms of
such Borrower’s by-laws, certificate of incorporation or other applicable
documents relating to such Borrower’s formation or to the conduct of such
Borrower’s business or of any material agreement or undertaking to which such
Borrower is a party or by which such Borrower is bound, (b) will not
conflict with or violate any law or regulation, or any judgment, order or decree
of any Governmental Body, (c) will not require the Consent of any
Governmental Body or any other Person, except those Consents set forth on
Schedule 5.1 hereto, all of which will have been duly obtained, made or
compiled prior to the Second Restated Closing Date and which are in full force
and effect and (d) will not conflict with, nor result in any breach in any
of the provisions of or constitute a default under or result in the creation of
any Lien except Permitted Encumbrances upon any asset of such Borrower under
the provisions of any agreement, charter document, instrument, by-law or other
instrument to which such Borrower is a party or by which it or its property is
a party or by which it may be bound, including under the provisions of the
Acquisition Agreement.

5.2.   Formation and Qualification.

(a)    Each
Borrower is duly organized and in good standing under the laws of the state or
province listed on Schedule 5.2(a) and is qualified to do business and is in
good standing in the states listed on Schedule 5.2(a) which constitute all
states in which qualification and good standing are necessary for such Borrower
to conduct its business and own its property and where the failure to so
qualify could reasonably be expected to have a Material Adverse Effect on such
Borrower.  Each Borrower has delivered to
Agent true and complete copies of its certificate of incorporation and by-laws
or analogous documents and will promptly notify Agent of any amendment or
changes thereto.

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

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

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

 61
 

5.5.   Financial Statements.

(a)    The
cash flow projections for fiscal years 2007 and 2008 of Borrowers on a
Consolidated Basis and their projected balance sheets as of the Second Restated
Closing Date, copies of which are annexed hereto as Exhibit 5.5(a) (the “Projections”)
were prepared by the Chief Financial Officer of Borrowing Agent, are based on
underlying assumptions which provide a reasonable basis for the projections
contained therein and reflect Borrowers’ judgment based on present
circumstances of the most likely set of conditions and course of action for the
projected period.

(b)    The
consolidated and consolidating balance sheets of Borrowers, their Subsidiaries
and such other Persons described therein (including the accounts of all
Subsidiaries for the respective periods during which a subsidiary relationship
existed) as of December 31,  2006,
and the related statements of income, changes in stockholder’s equity, and
changes in cash flow for the period ended on such date, all accompanied by
reports thereon containing opinions without qualification by independent
certified public accountants, copies of which have been delivered to Agent,
have been prepared in accordance with GAAP, consistently applied (except for
changes in application in which such accountants concur and present fairly the
financial position of Borrowers and their Subsidiaries at such date and the
results of their operations for such period. 
Since March 31, 2007, there has been no change in the condition,
financial or otherwise, of Borrowers or their Subsidiaries as shown on the
consolidated balance sheet as of such date and no change in the aggregate value
of machinery, equipment and Real Property owned by Borrowers and their
respective Subsidiaries, except changes in the Ordinary Course of Business, none
of which individually or in the aggregate has been materially adverse.

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

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

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

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

(c)    (i) There
are no visible signs of releases, spills, discharges, leaks or disposal
(collectively referred to as “Releases”) of Hazardous Substances at, upon,
under or within any Real Property or any premises leased by any Borrower; (ii) there
are no underground 

 62
 

storage tanks or polychlorinated biphenyls on
the Real Property or any premises leased by any Borrower; (iii) neither
the Real Property nor any premises leased by any Borrower has ever been used as
a treatment, storage or disposal facility of Hazardous Waste; and (iv) no
Hazardous Substances are present on the Real Property or any premises leased by
any Borrower, excepting such quantities as are handled in accordance with all
applicable manufacturer’s instructions and governmental regulations and in
proper storage containers and as are necessary for the operation of the
commercial business of any Borrower or of its tenants.

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

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

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

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

(d)    No
Borrower nor any member of the Controlled Group maintains or contributes to any
Plan other than those listed on Schedule 5.8(d) hereto.  (i) No Plan has incurred any “accumulated
funding deficiency,” as defined in Section 302(a)(2) of ERISA and Section
412(a) of the Code, whether or not waived, and each Borrower and each member of
the Controlled Group has met all applicable minimum funding requirements under
Section 302 of ERISA in respect of each Plan; (ii) each Plan which is
intended to be a qualified plan under Section 401(a) of the Code as currently
in effect has been determined by the Internal Revenue Service to be qualified
under Section 401(a) of the Code and the trust related thereto is exempt from
federal income tax under Section 501(a) of the Code; (iii) neither any
Borrower nor any member of the Controlled Group has incurred any liability to
the PBGC other than for the payment of premiums, and there are no premium
payments which have become due which are unpaid; (iv) no Plan has been
terminated by the plan administrator thereof nor by the PBGC, and there is no
occurrence which would cause the PBGC to institute proceedings under Title IV
of ERISA to terminate any Plan; (v) at this time, the current value of the
assets of each Plan exceeds the present value of the accrued benefits and other
liabilities of such Plan and neither any Borrower nor any member of the
Controlled Group knows of any facts or circumstances which would materially
change the value of such assets and accrued benefits and other liabilities;
(vi) neither any Borrower nor any member of the Controlled Group has
breached any of the 

 63
 

responsibilities, obligations or duties
imposed on it by ERISA with respect to any Plan; (vii) neither any
Borrower nor any member of a Controlled Group has incurred any liability for
any excise tax arising under Section 4972 or 4980B of the Code, and no fact
exists which could give rise to any such liability; (viii) neither any
Borrower nor any member of the Controlled Group nor any fiduciary of, nor any
trustee to, any Plan, has engaged in a “prohibited transaction” described in
Section 406 of the ERISA or Section 4975 of the Code nor taken any action which
would constitute or result in a Termination Event with respect to any such Plan
which is subject to ERISA; (ix) each Borrower and each member of the
Controlled Group has made all contributions due and payable with respect to
each Plan; (x) there exists no event described in Section 4043(b) of
ERISA, for which the thirty (30) day notice period has not been waived;
(xi) neither any Borrower nor any member of the Controlled Group has any
fiduciary responsibility for investments with respect to any plan existing for
the benefit of persons other than employees or former employees of any Borrower
and any member of the Controlled Group; (xii) neither any Borrower nor any
member of the Controlled Group maintains or contributes to any Plan which
provides health, accident or life insurance benefits to former employees, their
spouses or dependents, other than in accordance with Section 4980B of the Code;
(xiii) neither any Borrower nor any member of the Controlled Group has
withdrawn, completely or partially, from any Multiemployer Plan so as to incur
liability under the Multiemployer Pension Plan Amendments Act of 1980 and there
exists no fact which would reasonably be expected to result in any such
liability; (xiv) no Plan fiduciary (as defined in Section 3(21) of ERISA)
has any liability for breach of fiduciary duty or for any failure in connection
with the administration or investment of the assets of a Plan and (xv) with
respect to any Canadian Plans: (A) all contributions (including employee
contributions made by authorized payroll deductions or other withholdings)
required to be made to the appropriate funding agency in accordance with all
Applicable Law and the terms of each Plan have been made in accordance with all
Applicable Law and the terms of each Plan; (B) all liabilities under each Plan
are funded, on a going concern and solvency basis, in accordance with the terms
of the respective Plans and the most recent actuarial report filed with respect
to the Plan; and  (C) to the extent
required by  applicable pension benefit
laws and applicable regulatory authorities, no event has occurred and no
conditions exist with respect to any Plan that has resulted or could reasonably
be expected to result in any Plan having its registration revoked or refused
for the purposes of any administration of any relevant pension benefits
regulatory authority or being required to pay any taxes or penalties under any
applicable pension benefits or tax laws and 
there are no pending, threatened or anticipated claims involving or
relating to any of the Plans or welfare Plans (other than routine claims for
benefits).

5.9.   Patents, Trademarks, Copyrights and
Licenses.   All patents, patent applications, trademarks, trademark
applications, service marks, service mark applications, copyrights, copyright
applications, design rights, tradenames, assumed names, trade secrets and licenses
owned or utilized by any Borrower are set forth on Schedule 5.9, are valid and
have been duly registered or filed with all appropriate Governmental Bodies and
constitute all of the intellectual property rights which are necessary for the
operation of its business; there is no objection to or pending challenge to the
validity of any such patent, trademark, copyright, design rights, tradename,
trade secret or license and no Borrower is aware of any grounds for any
challenge, except as set forth in Schedule 5.9 hereto.  Each patent, patent application, patent
license, trademark, trademark application, trademark license, service mark,
service mark application, service mark license, design rights, copyright,
copyright application and copyright license 

 64
 

owned or held by any
Borrower and all trade secrets used by any Borrower consist of original
material or property developed by such Borrower or was lawfully acquired by
such Borrower from the proper and lawful owner thereof.  Each of such items has been maintained so as
to preserve the value thereof from the date of creation or acquisition
thereof.  With respect to all software
used by any Borrower, such Borrower is in possession of all source and object
codes related to each piece of software or is the beneficiary of a source code
escrow agreement, each such source code escrow agreement being listed on
Schedule 5.9 hereto.

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

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

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

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

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

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

 65
 

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

5.17. Disclosure.   No representation
or warranty made by any Borrower in this Agreement, the Acquisition Agreement,
or in any financial statement, report, certificate or any other document
furnished in connection herewith contains any untrue statement of fact or omits
to state any fact necessary to make the statements herein or therein not
misleading.  There is no fact known to
any Borrower or which reasonably should be known to such Borrower which such
Borrower has not disclosed to Agent in writing with respect to the transactions
contemplated by this Agreement  or the
Acquisition Agreement which could reasonably be expected to have a Material
Adverse Effect.

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

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

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

5.21. Business and Property of Borrowers.

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

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

5.23. Anti-Terrorism Laws.

(a)    General.   Neither
any Borrower nor any Affiliate of any Borrower is in violation of any
Anti-Terrorism Law or engages in or conspires to engage in any transaction that

 66
 

evades or avoids, or has the purpose of
evading or avoiding, or attempts to violate, any of the prohibitions set forth
in any Anti-Terrorism Law.

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

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

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

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

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

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

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

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

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

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

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

 

 67

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

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

VI.           AFFIRMATIVE COVENANTS.

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

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

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

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

 68
 

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

6.4.   Government Receivables.

(a)    Take
all steps necessary to protect Agent’s interest in the Collateral under the
Federal Assignment of Claims Act, the Uniform Commercial Code and the Financial
Administration Act (Canada); and all other applicable state or local statutes
or ordinances and deliver to Agent appropriately endorsed, any instrument or
chattel paper connected with any Receivable arising out of contracts between
any Borrower and the United States, any state or any department, agency or
instrumentality of any of them.

6.5.   Financial
Covenants.

(a)        Net Worth.   Maintain at all
times a Net Worth in an amount not less than $175,000,000.

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

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

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

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

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

 69
 

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

6.11.   Restricted Subsidiaries.   Take
all steps reasonably necessary to cause all of the Restricted Subsidiaries to
dissolve or otherwise terminate their existence in accordance with the laws of
their respective jurisdictions promptly following the Restated Closing Date
and, at all times prior thereto, cause such Restricted Subsidiaries to conduct
no material business activities, to incur no obligations and to acquire no
assets at any time after the Restated Closing Date.

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

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

6.14.   Pay-off of Investor Notes.   Borrowers
shall, on or before June 15, 2007, (a) use the proceeds of the 2006 Equity
Offering to pay the Investor Notes in full, (b) shall deliver a payoff letter
with respect to the Investor Notes from the Indenture Trustee, in form and
substance acceptable to Agent, and (c) shall deliver evidence that such
Investor Notes have been paid in full and all Liens associated therewith have
been terminated.

VII.          NEGATIVE COVENANTS.

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

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

(a)    Except
for (i) any merger of any Subsidiary or Borrower with a Borrower, in each case,
so long as a Borrower is the surviving entity or (ii) any merger of a Borrower
or Subsidiary with a third party so long as such Borrower or Subsidiary is the
surviving entity and the Agent and Required Lenders have given their prior
written consent, enter into any merger, consolidation or other reorganization
with or into any other Person or acquire all or a substantial portion of the
assets or Equity Interests of any Person or permit any other Person to
consolidate with or merge with it.

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

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

 70
 

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

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

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

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

 71
 

 

	
  Fiscal Year

  	
   

  	
   

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2007

  	
   

  	
  $

  	
  110,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2008 and each fiscal
  year thereafter

  	
   

  	
  $

  	
  50,000,000

  	
   

  

 

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

7.8.     Indebtedness.   Create, incur,
assume or suffer to exist any Indebtedness (exclusive of trade debt, accruals,
and other tax and operating liabilities not classified as debt according to
GAAP) except (i) Indebtedness to
Lenders; (ii) Indebtedness
incurred for the Permitted Capital Lease Facility and Capital Expenditures
permitted under Section 7.6 hereof; (iii) Indebtedness
listed on Schedule 7.8 hereto; (iv) Indebtedness secured by any Permitted
Encumbrance set forth in subclause (h) of the definition thereof; (v)
Indebtedness that is subordinated to the Obligations pursuant to a
subordination agreement that is on terms satisfactory to the Agent and Required
Lenders; (vi) Indebtedness under any Intercompany Notes; and (vii) the Investor
Notes (the foregoing being referred to herein as “Permitted Indebtedness”).

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

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

7.11.   [Reserved].

 72
 

7.12.   Subsidiaries.

(a)    Form
any Subsidiary (other than a Foreign Subsidiary, provided that with respect to
any Foreign Subsidiary that is formed, (i) Borrowers shall give Agent not less
than 30 days prior written notice of the intention to form such Foreign
Subsidiary, (ii) no Borrower shall advance monies to such Foreign Subsidiary
except to the extent permitted by Section 7.4(e) and (iii) such Foreign
Subsidiary is in the same line of business as the Borrowers as of the Second
Restated Closing Date) unless (i) such Subsidiary expressly joins in this
Agreement as a borrower and becomes jointly and severally liable for the obligations
of Borrowers hereunder, under the Notes, and under any other agreement between
any Borrower and Lenders and (ii) Agent shall have received all documents,
including legal opinions, it may reasonably require to establish compliance
with each of the foregoing conditions.

(b)    Enter
into any partnership, joint venture or similar arrangement, except in the
ordinary course of business for specific project requirements so long as (i)
Borrowers provide prior written notice to Agent, (ii) any liabilities of
Borrowers with respect to such arrangement are otherwise permitted under this
Agreement, (iii) any investments in such entities are no more than $5,000,000
individually or $10,000,000 in the aggregate, (iv) Undrawn Availability is not
less than $6,000,000 and no Event of Default has occurred and is continuing, in
each case, both before and after giving effect to such arrangement, and (v)
such partnership, joint venture or similar arrangement is in the same line of
business as the Borrowers as of the Second Restated Closing Date.

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

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

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

7.16.   Compliance with ERISA.   (i) (x) Maintain,
or permit any member of the Controlled Group to maintain, or (y) become
obligated to contribute, or permit any member of the Controlled Group to become
obligated to contribute, to any Plan, other than those Plans disclosed on
Schedule 5.8(d), (ii) engage, or permit any member of the Controlled Group
to engage, in any non-exempt “prohibited transaction”, as that term is defined
in section 406 of ERISA and Section 4975 of the Code, (iii) incur, or
permit any member of the Controlled Group to incur, any “accumulated funding
deficiency”, as that term is defined in Section 302 of ERISA or Section 412 of
the Code, (iv) terminate, or permit any member of the Controlled Group to
terminate, any Plan where such event could result in any liability of any
Borrower or any member of the Controlled Group or the imposition of a lien on
the property of any Borrower or any member of the Controlled Group pursuant to
Section 4068 of ERISA, (v) assume, or permit any member of the Controlled
Group to assume, any obligation to contribute to any 

 73
 

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

7.17.   Prepayment of Indebtedness.   At
any time, (i) directly or indirectly, prepay, repurchase, redeem, retire or
otherwise acquire any subordinated Indebtedness, (ii) use the proceeds of any
Indebtedness to prepay, repurchase, redeem, retire or otherwise acquire any
other Indebtedness (including subordinated Indebtedness), (iii) make or receive
any payments whatsoever with respect to any Intercompany Note without the prior
written consent of Agent, except,  that, a Borrower may make or
receive payments in satisfaction of such Intercompany Note in the form of the
Equity Interests of the debtor with respect to such Intercompany Note, (iv)
prepay, repurchase, redeem, retire or otherwise acquire any Indebtedness of any
Borrower, but (a) if (1) no Default or Event of Default has occurred and is
continuing and no Default or Event of Default would result from such payment or
transaction and (2) Undrawn Availability is at least $6,000,000 after giving
effect to such prepayment or transaction, then Borrowers may prepay,
repurchase, redeem, retire or otherwise acquire any Indebtedness (other than
the Investor Notes) of any Borrower, or (b) if (1) no Default or Event of
Default has occurred and is continuing and no Default or Event of Default would
result from such payment or transaction, (2) Undrawn Availability is at least
$6,000,000 after giving effect to such prepayment or transaction and (3) the
funds used to make such prepayment, repurchase, redemption retirement or
acquisition are the proceeds of new equity issued by Geokinetics, then
Borrowers may prepay, repurchase, redeem, retire or otherwise acquire the
Investor Notes or prepay the Permitted Capital Lease Facility, and (c) if (1)
no Default or Event of Default has occurred and is continuing and no Default or
Event of Default would result from such payment or transaction, (2) the funds
used to make such prepayment, repurchase, redemption retirement or acquisition
are the proceeds of new equity issued by Geokinetics and (3) the redemption of
the Investor Notes will be made within six months after the Restated Closing
Date pursuant to and in compliance with Section 3.07(a) of the Indenture,  then Borrowers may redeem the Investor Notes
pursuant to such Section 3.07(a).

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

 74
 

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

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

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

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

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

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

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

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

VIII.        CONDITIONS PRECEDENT.

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

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

(b)    Filings,
Registrations and Recordings.   Each document (including any Uniform
Commercial Code financing statement) required by this Agreement, any related 

 75
 

agreement or under law or reasonably
requested by the Agent to be filed, registered or recorded in order to create,
in favor of Agent, a perfected security interest in or lien upon the Collateral
shall have been properly filed, registered or recorded in each jurisdiction in
which the filing, registration or recordation thereof is so required  or requested, and Agent shall have received
an acknowledgment copy, or other evidence satisfactory to it, of each such
filing, registration or recordation and satisfactory evidence of the payment of
any necessary fee, tax or expense relating thereto;

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

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

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

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

(g)    Legal
Opinion.   Agent shall have received the executed legal opinion (upon
which the Lenders shall be permitted to rely) of Borrowers’ counsel in form and
substance satisfactory to Agent which shall cover such matters incident to the
transactions contemplated by this Agreement, the Notes, the Other Documents and
related agreements as Agent may reasonably require and each Borrower hereby
authorizes and directs such counsel to deliver such opinions to Agent and
Lenders;

 76

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

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

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

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

(l)     Projections.   Agent
shall have received a copy of the Projections, such Projections evidencing
Borrowers’ ability to repay all Advances and Obligations hereunder, which
Projections shall be satisfactory in all respects to Lenders;

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

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

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

(p)    Consents.   Agent
shall have received any and all Consents necessary to permit the effectuation
of the transactions contemplated by this Agreement and the Other Documents;
and, Agent shall have received such Consents and waivers of such third parties
as might assert claims with respect to the Collateral, as Agent and its counsel
shall deem necessary;

(q)    No
Adverse Material Change.   (i) since December 31, 2006, there
shall not have occurred any material change or any event, condition or state of
facts which could reasonably be expected to have a Material Adverse Effect and
(ii) no representations made or 

 77
 

information supplied to Agent or Lenders
shall have been proven to be inaccurate or misleading in any material respect;

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

(s)    Financial
Statements.   Agent shall have received the Borrowers’ financial
statements (i) described in Section 9.7 hereof for the Borrowers’ fiscal year
ending in 2006, (ii) described in Section 9.8 hereof for the Borrowers’
fiscal quarter ending March 31, 2007;

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

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

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

(w)   Undrawn
Availability.   After giving effect to the initial Advances hereunder,
Borrowers shall have Undrawn Availability of at least $35,000,000.00.  Cash Balance in Blocked Accounts or funds in
accounts with Agent shall be included for the purposes of testing Undrawn
Availability on the Second Restated Closing Date;

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

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

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

 78
 

(aa)  Equity
Offering.   Agent shall have received evidence that the Borrowers have
raised sufficient equity capital, on terms and conditions satisfactory to
Agent, to pay-off the Investor Notes in full (the “2006 Equity Offering”).

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

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

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

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

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

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

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

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

 79
 

IX.           INFORMATION AS TO BORROWERS.

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

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

9.2.     Schedules.   Deliver to Agent on
or before the last Business Day of each month as and for the prior month
(a) accounts receivable ageings and reconciliations to the general ledger,
(b) accounts payable schedules inclusive of reconciliations to the general
ledger, inclusive of all subcontractor balances and (c) Inventory
reports.  In addition, each Borrower will
deliver to Agent at such intervals as Agent may require:  (i) confirmatory assignment schedules,
(ii) copies of Customer’s invoices, (iii) evidence of shipment or
delivery, if applicable, and (iv) such further schedules, documents and/or
information regarding the Collateral as Agent may require including trial
balances and test verifications.  Agent
shall have the right to confirm and verify all Receivables by any manner and
through any medium it considers advisable and do whatever it may deem reason­ably
necessary to protect its interests hereunder. 
The items to be provided under this Section are to be in form
satisfactory to Agent and executed by each Borrower and delivered to Agent from
time to time solely for Agent’s convenience in main­taining records of the
Collateral, and any Borrower’s failure to deliver any of such items to Agent
shall not affect, terminate, modify or otherwise limit Agent’s Lien with
respect to the Collateral.

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

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

9.5.     Material Occurrences.   Promptly
notify Agent in writing upon the occurrence of (a) any Event of Default or
Default; (b) any event which with the giving of notice or lapse of time,
or both, would constitute an Event of Default; (c) any event, development
or circumstance whereby any financial statements or other reports furnished to
Agent fail in any material respect to present fairly, in accordance with GAAP
consistently applied, the financial condition or 

 80
 

operating results
of any Borrower as of the date of such statements; (d) any accumulated
retirement plan funding deficiency which, if such deficiency continued for two
plan years and was not corrected as provided in Section 4971 of the Code, could
subject any Borrower to a tax imposed by Section 4971 of the Code or any
accumulated retirement plan funding deficiency which could subject any Borrower
to a tax imposed by Applicable Law with respect to a Canadian Plan;
(e) each and every default by any Borrower which might result in the
acceleration of the maturity of any Indebtedness, including the names and
addresses of the holders of such Indebtedness with respect to which there is a
default existing or with respect to which the maturity has been or could be
accelerated, and the amount of such Indebtedness; and (f) any other
development in the business or affairs of any Borrower or any Guarantor which
could reasonably be expected to have a Material Adverse Effect; in each case
describing the nature thereof and the action Borrowers propose to take with
respect thereto.

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

9.7.     Annual Financial Statements.   Furnish
Agent within one hundred twenty (120) days after the end of each fiscal year of
Borrowers, financial statements of Borrowers on a consolidating and
consolidated basis including, but not limited to, audited statements of income
and stockholders’ equity, retained earnings and cash flow from the beginning of
the current fiscal year to the end of such fiscal year and the audited balance
sheet as at the end of such fiscal year, all prepared in accordance with GAAP
applied on a basis consistent with prior practices, and in reasonable detail
and reported upon without qualification by an independent certified public
accounting firm selected by Borrowers and satisfactory to Agent (the “Accountants”).  The report of the Accountants shall be accompanied
by a statement of the Accountants certifying that (i) they have caused
this Agreement to be reviewed, (ii) in making the examination upon which
such report was based either no information came to their attention which to
their knowledge constituted an Event of Default or a Default under this
Agreement or any related agreement or, if such information came to their
attention, specifying any such Default or Event of Default, its nature, when it
occurred and whether it is continuing, and such report shall contain or have
appended thereto calculations which set forth Borrowers’ compliance with the
requirements or restrictions imposed by Sections 6.5, 7.4, 7.5, 7.6, 7.7, 7.8
and 7.11 hereof.  In addition, the
reports shall be accompanied by (x) copies of any management letters of the
Accountants addressed to any Borrower and (y) a Compliance Certificate,
including calculations of all financial covenants required by this Agreement,
prepared and executed by the Borrowers’ auditor and the Chief Executive Officer,
President or Chief Financial Officer of the Borrowing Agent.

9.8.     Quarterly Financial Statements.   Furnish
Agent within forty-five (45) days after the end of each fiscal quarter (or
within fifty (50) days after the end of such fiscal quarter if, and only if,
Borrowers have been granted an extension by the SEC for Borrowers’ 10Q report
for such fiscal quarter), an unaudited balance sheet of Borrowers on a
consolidated and consolidating basis and unaudited statements of income and
stockholders’ equity and cash flow of Borrowers on a consolidated and
consolidating basis reflecting results of operations from the beginning of the
fiscal year to the end of such quarter and for such quarter, prepared on a
basis consistent with prior practices and complete and correct in all material
respects, subject to 

 81
 

normal and
recurring year end adjustments that individually and in the aggregate are not
material to Borrowers’ business.  The
reports shall be accompanied by a Compliance Certificate.

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

9.10.   Borrowing Base Certificate.   Deliver
to Agent on or before the last Business Day of (i) each month, calculated as of
the last day of the prior month, if Undrawn Availability is at least $6,000,000
at such time or (ii) each week, if Undrawn Availability is below $6,000,000 as
of the Friday of the prior week (unless the last day of the month falls during
such prior week, then such calculation shall be calculated as of the last day
of such month), as applicable, a Borrowing Base Certificate in form and
substance satisfactory to Agent (which shall not be binding upon Agent or
restrictive of Agent’s rights under this Agreement), including reporting of
sales, collection, credits, Equipment purchases (including invoices for such
Equipment) based on hard costs, Equipment sales (including a reference to the
appraised Net Orderly Liquidation Value and sales price) and information under
Section 9.2 requested by Agent.

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

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

 82
 

9.13.   Projected Operating Budget.   Furnish
Agent, within thirty (30) days after the end of each fiscal year of Borrowers,
commencing with fiscal year 2007, a month by month projected operating budget
and cash flow of Borrowers on a consolidated and consolidating basis, approved
by the board of directors of Borrowers, for the following fiscal year
(including (i) an income statement for each month, (ii) a balance
sheet as at the end of each month, (iii) cash flow statements for each
month and (iv) key assumptions, including capital spending plans), such
projections to be accompanied by a certificate signed by the President or Chief
Financial Officer of each Borrower to the effect that such projections have
been prepared on the basis of sound financial planning practice consistent with
past budgets and financial statements and that such officer has no reason to
question the reasonableness of any material assumptions on which such
projections were prepared.

9.14.   Equipment Reports.   Deliver to
Agent on each date upon which a Borrowing Base Certificate is required to be
delivered pursuant to Section 9.10, a report setting forth for each piece of
Borrowers’ Equipment (i) the appraisal value of such Equipment, (ii) the
location of such Equipment and (iii) the book value of such Equipment.

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

9.16.   ERISA Notices and Requests.   Furnish
Agent with immediate written notice in the event that (i) any Borrower or
any member of the Controlled Group knows or has reason to know that a
Termination Event has occurred, together with a written statement describing
such Termination Event and the action, if any, which such Borrower or any
member of the Controlled Group has taken, is taking, or proposes to take with
respect thereto and, when known, any action taken or threatened by the Internal
Revenue Service, Department of Labor or PBGC with respect thereto,
(ii) any  Borrower or any member of
the Controlled Group knows or has reason to know that a prohibited transaction
(as defined in Sections 406 of ERISA and 4975 of the Code) has occurred
together with a written statement describing such transaction and the action
which such Borrower or any member of the Controlled Group has taken, is taking
or proposes to take with respect thereto, (iii) a funding waiver request
has been filed with respect to any Plan together with all communications
received by any Borrower or any member of the Controlled Group with respect to
such request, (iv) any increase in the benefits of any existing Plan or
the establishment of any new Plan or the commence­ment of contributions to any
Plan to which any Borrower or any member of the Controlled Group was not
previously contributing shall occur, (v) any Borrower or any member of the
Controlled Group shall receive from the PBGC a notice of intention to terminate
a Plan or to have a trustee appointed to administer a Plan, together with
copies of each such notice, (vi) any Borrower or any member of the
Controlled Group shall receive any favorable or unfavorable determination
letter from the Internal Revenue Service regarding the qualification of a Plan
under Section 401(a) of the Code, 

 83
 

together with
copies of each such letter; (vii) any Borrower or any member of the
Controlled Group shall receive a notice regarding the imposition of withdrawal liability,
together with copies of each such notice; (viii) any Borrower or any
member of the Controlled Group shall fail to make a required installment or any
other required payment under Section 412 of the Code on or before the due date
for such install­ment or payment; (ix) any Borrower or any member of the
Controlled Group knows that (a) a Multiemployer Plan has been terminated,
(b) the administrator or plan sponsor of a Multiemployer Plan intends to
terminate a Multiemployer Plan, or (c) the PBGC has instituted or will
institute proceedings under Section 4042 of ERISA to terminate a Multiemployer
Plan.

9.17.   Additional Documents.   Execute
and deliver to Agent, upon request, such documents and agreements as Agent may,
from time to time, reasonably request to carry out the purposes, terms or
conditions of this Agreement.  In
furtherance of the foregoing, Agent may, in its reasonable discretion, request
any reports, documents or other information required to be delivered under
Sections 9.2, 9.4 and 9.10 be delivered to Agent more frequently than otherwise
required hereunder.

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

9.19.   Appraisals.   Permit Agent or
Agent’s representatives to perform appraisals as Agent deems appropriate in
Agent’s sole discretion; provided, however, that (a) only one physical
appraisal and one desktop appraisal per year shall be at Borrowers’ cost and
expense, so long as no Default has occurred and is continuing (all appraisals
during the continuance of a Default shall be at Borrowers’ sole cost and
expense) and (b) all such appraisals will not unreasonably interfere with the
Borrowers’ normal business operations, except (i) to the extent such
interference is unavoidable or otherwise necessary in the determination of the
Agent and (ii) during the continuance of an Event of Default.  Notwithstanding the foregoing, the Borrowers
may request the Agent to perform appraisals more frequently than set forth
above provided that any such requested appraisal shall be at Borrowers’ sole
cost and expense.  The Borrowers’ shall
deliver a current physical appraisal of the Equipment dated as of a date after
the Second Restated Closing Date to Agent on or before July      ,
2007 (the “Post-Closing Appraisal”).

X.            EVENTS OF DEFAULT.

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

10.1.   Nonpayment.   Failure by any
Borrower to pay any principal or interest on the Obligations when due, whether
at maturity or by reason of acceleration pursuant to the terms of this
Agreement or by notice of intention to prepay, or by required prepayment or
failure to pay 

 84
 

any other
liabilities or make any other payment, fee or charge provided for herein
(including the failure to make any Gross-Up Payment) when due or in any Other
Document;

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

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

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

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

10.6.   Judgments.   Any judgment or
judgments are rendered against any Borrower or any Guarantor for an aggregate
amount in excess of $500,000 or against all Borrowers or Guarantors for an
aggregate amount in excess of $1,000,000 and (i) enforcement proceedings
shall have been commenced by a creditor upon such judgment, (ii) there
shall be any period of thirty (30) consecutive days during which a stay of
enforcement of such judgment, by reason of a pending appeal or otherwise, shall
not be in effect, or (iii) any such judgment results in the creation of a
Lien upon any of the Collateral (other than a Permitted Encumbrance);

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

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

 

 85

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

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

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

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

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

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

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

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

10.17. Licenses.   (i) Any
Governmental Body shall (A) revoke, terminate, suspend or adversely modify
any license, permit, patent trademark or tradename of any Borrower or any
Guarantor, or (B) commence proceedings to suspend, revoke, terminate or
adversely modify any such license, permit, trademark, tradename or patent and
such proceedings shall not be dismissed or discharged within sixty (60) days,
or (C) schedule or conduct a hearing on the renewal of any license,
permit, trademark, tradename or patent necessary for the continuation of 

 86
 

any Borrower’s or
any Guarantor’s business and the staff of such Governmental Body issues a
report recommending the termination, revocation, suspension or material,
adverse modification of such license, permit, trademark, tradename or patent;
(ii) any agreement which is necessary or material to the operation of any
Borrower’s or any Guarantor’s business shall be revoked or terminated and not
replaced by a substitute acceptable to Agent within thirty (30) days after the
date of such revocation or termination, and such revocation or termination and
non-replacement would reasonably be expected to have a Material Adverse Effect;

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

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

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

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

XI.           LENDERS’ RIGHTS AND REMEDIES AFTER
DEFAULT.

11.1.   Rights and Remedies.

(a)    Upon
the occurrence of (i) an Event of Default pursuant to Section 10.7 all
Obligations shall be immediately due and payable and this Agreement and the
obligation of Lenders to make Advances shall be deemed terminated; and,
(ii) any of the other Events of Default and at any time thereafter (such
default not having previously been cured), at the option of Required Lenders
all Obligations shall be immediately due and payable and Lenders shall 

 87
 

have the right to terminate this Agreement
and to terminate the obligation of Lenders to make Advances and (iii) a
filing of a petition against any Borrower in any involuntary case under any
state or federal bankruptcy laws, all Obligations shall be immediately due and
payable and the obligation of Lenders to make Advances hereunder shall be
terminated other than as may be required by an appropriate order of the
bankruptcy court having jurisdiction over such Borrower.  Upon the occurrence of any Event of Default,
Agent shall have the right to exercise any and all rights and remedies provided
for herein, under the Other Documents, under the Uniform Commercial Code and at
law or equity generally, including the right to foreclose the security
interests granted herein and to realize upon any Collateral by any available
judicial procedure and/or to take possession of and sell any or all of the
Collateral with or without judicial process. 
Agent may enter any of any Borrower’s premises or other premises without
legal process and without incurring liability to any Borrower therefor, and
Agent may thereupon, or at any time thereafter, in its discretion without
notice or demand, take the Collateral and remove the same to such place as
Agent may deem advisable and Agent may require Borrowers to make the Collateral
available to Agent at a convenient place. 
With or without having the Collateral at the time or place of sale,
Agent may sell the Collateral, or any part thereof, at public or private sale,
at any time or place, in one or more sales, at such price or prices, and upon
such terms, either for cash, credit or future delivery, as Agent may
elect.  Except as to that part of the
Collateral which is perishable or threatens to decline speedily in value or is
of a type customarily sold on a recognized market, Agent shall give Borrowers
reasonable notification of such sale or sales, it being agreed that in all
events written notice mailed to Borrowing Agent at least ten (10) days prior to
such sale or sales is reasonable notification. 
At any public sale Agent or any Lender may bid for and become the
purchaser, and Agent, any Lender or any other purchaser at any such sale
thereafter shall hold the Collateral sold absolutely free from any claim or
right of whatsoever kind, including any equity of redemption and all such
claims, rights and equities are hereby expressly waived and released by each
Borrower.  In connection with the
exercise of the foregoing remedies, including the sale of Inventory, Agent is
granted a perpetual nonrevocable, royalty free, nonexclusive license and Agent
is granted permission to use all of each Borrower’s (a) trademarks, trade
styles, trade names, patents, patent applications, copyrights, service marks,
licenses, franchises and other proprietary rights which are used or useful in
connection with Inventory for the purpose of marketing, advertising for sale
and selling or otherwise disposing of such Inventory and (b) Equipment for
the purpose of completing any unfinished job, contract, project or assignment
as deemed necessary by Agent.  The cash
proceeds realized from the sale of any Collateral shall be applied to the
Obligations in the order set forth in Section 11.5 hereof.  Noncash proceeds will only be applied to the
Obligations as they are converted into cash. 
If any deficiency shall arise, Borrowers shall remain liable to Agent
and Lenders therefor.

(b)    To
the extent that Applicable Law imposes duties on the Agent to exercise remedies
in a commercially reasonable manner, each Borrower acknowledges and agrees that
it is not commercially unreasonable for the Agent (i) to fail to incur
expenses reasonably deemed significant by the Agent to prepare Collateral for
disposition or otherwise to complete raw material or work in process into
finished goods or other finished products for disposition, (ii) to fail to
obtain third party consents for access to Collateral to be disposed of, or to
obtain or, if not required by other law, to fail to obtain governmental or
third party consents for the collection or disposition of Collateral to be
collected or disposed of, (iii) to fail to exercise collection remedies
against Customers or other Persons obligated on Collateral or to remove Liens
on or any adverse claims against Collateral, (iv) to exercise collection
remedies against Customers and other 

 88
 

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

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

 89
 

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

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

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

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

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

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

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

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

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

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

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

 90
 

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

XII.         WAIVERS AND JUDICIAL PROCEEDINGS.

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

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

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

12.4.   Waiver of Rights Under Texas Deceptive
Trade Practices Act.   BORROWERS HEREBY WAIVE THEIR RIGHTS UNDER THE
DECEPTIVE TRADE PRACTICES—CONSUMER PROTECTION ACT, SECTION 17.41 ET SEQ., TEXAS
BUSINESS & COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND 

 91
 

PROTECTIONS.  AFTER CONSULTATION WITH AN ATTORNEY OF
BORROWERS’ OWN SELECTION, BORROWERS VOLUNTARILY CONSENT TO THIS WAIVER.  BORROWERS EXPRESSLY WARRANT AND REPRESENT
THAT BORROWERS (A) RE NOT IN A SIGNIFICANTLY DISPARATE BARGAINING POSITION
RELATIVE TO AGENT AND/OR ANY LENDER, AND (B) HAVE BEEN REPRESENTED BY
LEGAL COUNSEL IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.

XIII.        EFFECTIVE DATE AND TERMINATION.

13.1.   Term.   This Agreement, which
shall inure to the benefit of and shall be binding upon the respective
successors and permitted assigns of each Borrower, Agent and each Lender, shall
become effective on the date hereof and shall continue in full force and effect
until May      , 2012 (the “Term”) unless sooner
terminated as herein provided.  Borrowers
may terminate this Agreement at any time upon ninety (90) days’ prior written
notice upon payment in full of the Obligations.

13.2.   Termination.   The termination of
the Agreement shall not affect any Borrower’s, Agent’s or any Lender’s rights,
or any of the Obligations having their inception prior to the effective date of
such termination, and the provisions hereof shall continue to be fully
operative until all transactions entered into, rights or interests created or
Obligations have been fully and indefeasibly paid, disposed of, concluded or
liquidated.  The security interests,
Liens and rights granted to Agent and Lenders hereunder and the financing
statements filed hereunder shall continue in full force and effect,
notwithstanding the termination of this Agreement or the fact that Borrowers’
Account may from time to time be temporarily in a zero or credit position,
until all of the Obligations of each Borrower have been indefeasibly paid and
performed in full after the termination of this Agreement or each Borrower has
furnished Agent and Lenders with an indemnification satisfactory to Agent and
Lenders with respect thereto.  Accordingly,
each Borrower waives any rights which it may have under the Uniform Commercial
Code to demand the filing of termination statements with respect to the
Collateral, and Agent shall not be required to send such termination statements
to each Borrower, or to file them with any filing office, unless and until this
Agreement shall have been terminated in accordance with its terms and all
Obligations have been indefeasibly paid in full in immediately available
funds.  All representations, warranties,
covenants, waivers and agreements contained herein shall survive termination
hereof until all Obligations are indefeasibly paid and performed in full.

XIV.        REGARDING AGENT.

14.1.   Appointment.   Each Lender hereby
designates PNC to act as Agent for such Lender under this Agreement and the
Other Documents.  Each Lender hereby
irrevocably authorizes Agent to take such action on its behalf under the
provisions of this Agreement and the Other Documents and to exercise such
powers and to perform such duties hereunder and thereunder as are specifically
delegated to or required of Agent by the terms hereof and thereof and such
other powers as are reasonably incidental thereto and Agent shall hold all
Collateral, payments of principal and interest, fees (except the fees set forth
in Sections 3.3(a) and 3.4), charges and collections (without giving effect to
any collection days) received pursuant to this Agreement, for the ratable
benefit of Lenders.  Agent may perform
any of its duties hereunder 

 92
 

by or through its
agents or employees.  As to any matters
not expressly provided for by this Agreement (including collection of the Note)
Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the instructions of the
Required Lenders, and such instructions shall be binding; provided, however,
that Agent shall not be required to take any action which exposes Agent to
liability or which is contrary to this Agreement or the Other Documents or
Applicable Law unless Agent is furnished with an indemnification reasonably
satisfactory to Agent with respect thereto.

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

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

 93
 

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

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

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

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

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

14.7.   Indemnification.   To the extent
Agent is not reimbursed and indemnified by Borrowers, each Lender will
reimburse and indemnify Agent in proportion to its respective portion of the
Advances (or, if no Advances are outstanding, according to its Commitment
Percentage), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against Agent in performing its duties hereunder, or in any way
relating to or arising out of this Agreement or any Other Document (INCLUDING, WITHOUT LIMITATION, WITH RESPECT TO ANY
OTHERWISE 

 94
 

INDEMNIFIED
MATTER ARISING FROM AGENT’S NEGLIGENCE OR STRICT LIABILITY BUT NOT AGENT’S
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT); provided that,
Lenders shall not be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from Agent’s gross (not mere) negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final
non-appealable judgment).

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

14.9.   Delivery of Documents.   To the
extent Agent receives financial statements required under Sections 9.7, 9.8,
9.9, 9.10 and 9.13 from any Borrower pursuant to the terms of this Agreement
which any Borrower is not obligated to deliver to each Lender, Agent will
promptly furnish such documents and information to Lenders.

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

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

14.12. Other
Agreements.   Each of the Lenders agrees that it shall not, without the
express consent of Agent, and that it shall, to the extent it is lawfully
entitled to do so, upon the request of Agent, set off against the Obligations,
any amounts owing by such Lender to any Borrower or any deposit accounts of any
Borrower now or hereafter maintained with such Lender.  Anything in this Agreement to the contrary
notwithstanding, each of the Lenders further agrees that it shall not, unless
specifically requested to do so by Agent, take any action 

 95
 

to protect or
enforce its rights arising out of this Agreement or the Other Documents, it
being the intent of Lenders that any such action to protect or enforce rights
under this Agreement and the Other Documents shall be taken in concert and at
the direction or with the consent of Agent or Required Lenders.

XV.         BORROWING AGENCY.

15.1.   Borrowing Agency Provisions.

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

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

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

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

 

 96

XVI.        MISCELLANEOUS.

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

16.2.   Entire Understanding.

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

 97
 

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

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

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

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

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

(v)       change
the rights and duties of Agent.

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

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

(viii)    release
any Guarantor.

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

In the event that Agent requests the consent of a
Lender pursuant to this Section 16.2 and such consent is denied, then PNC may,
at its option, require such Lender to assign its interest in the Advances to
PNC or to another Lender or to any other Person designated by the Agent (the “Designated
Lender”), for a price equal to (i) the then outstanding principal amount
thereof plus (ii) accrued and unpaid interest and fees (but not including
any fees payable with respect to the 

 98
 

termination of this
Agreement before the expiration of the Term) then due such Lender, which
interest and fees shall be paid when collected from Borrowers.  In the event PNC elects to require any Lender
to assign its interest to PNC or to the Designated Lender, PNC will so notify
such Lender in writing within forty five (45) days following such Lender’s
denial, and such Lender will assign its interest to PNC or the Designated
Lender no later than five (5) days following receipt of such notice pursuant to
a Commitment Transfer Supplement executed by such Lender, PNC or the Designated
Lender, as appropriate, and Agent.

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

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

16.3.   Successors and Assigns; Participations;
New Lenders.

(a)    This
Agreement shall be binding upon and inure to the benefit of Borrowers, Agent,
each Lender, all future holders of the Obligations and their respective 

 99
 

successors and assigns, except that no
Borrower may assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of Agent and each Lender.

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

(c)    Any
Lender may, with the consent of Agent and the Borrowing Agent, on behalf of the
Borrowers, which consent shall not be unreasonably withheld or delayed, sell,
assign or transfer all or any part of its rights under this Agreement and the
Other Documents to one or more additional banks or financial institutions and
one or more additional banks or financial institutions may commit to make
Advances hereunder (each a “Purchasing Lender”), in minimum amounts of not less
than $5,000,000, pursuant to a Commitment Transfer Supplement, executed by a
Purchasing Lender, the transferor Lender, and Agent and delivered to Agent for
recording; provided, however, that if any Event of Default has occurred and is
continuing, no consent by Borrowing Agent or Borrowers shall be required for
such sale, assignment or transfer.  Upon
such execution, delivery, acceptance and recording, from and after the transfer
effective date determined pursuant to such Commitment Transfer Supplement, (i)
Purchasing Lender thereunder shall be a party hereto and, to the extent
provided in such Commitment Transfer Supplement, have the rights and
obligations of a Lender thereunder with a Commitment Percentage as set forth
therein, and (ii) the transferor Lender thereunder shall, to the extent
provided in such Commitment Transfer Supplement, be released from its
obligations under this Agreement, the Commitment Transfer Supplement creating a
novation for that purpose.  Such
Commitment Transfer Supplement shall be deemed to amend this Agreement to the
extent, and only to the extent, necessary to reflect the addition of such
Purchasing Lender and the resulting adjustment of the Commitment Percentages
arising from the purchase by such Purchasing Lender of all or a portion of the
rights and obligations of such transferor Lender under this Agreement and the
Other Documents.  Each Borrower hereby consents
to the addition of such Purchasing Lender and the resulting adjustment of the
Commitment Percentages arising from the purchase by such Purchasing Lender of
all or a portion of the rights and obligations of such transferor Lender under
this Agreement and the Other Documents. 
Borrowers shall execute and deliver such further documents and do such
further acts and things in order to effectuate the foregoing.

 100
 

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

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

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

16.4.   Application of Payments.   Agent
shall have the continuing and exclusive right to apply or reverse and re-apply
any payment and any and all proceeds of Collateral to any portion 

 101
 

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

16.5.   Indemnity.   Each Borrower shall
indemnify and defend Agent, each Lender and each of their respective officers,
directors, Affiliates, attorneys, employees and agents from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses and disbursements of any kind or nature whatsoever
(including fees and disbursements of counsel) which may be imposed on, incurred
by, or asserted against Agent or any Lender in any claim, litigation,
proceeding or investigation instituted or conducted by any Governmental Body or
instrumentality or any other Person with respect to any aspect of, or any
transaction contemplated by, or referred to in, or any matter related to, this
Agreement or the Other Documents, whether or not Agent or any Lender is a party
thereto, except to the extent that any of the foregoing arises out of the
willful misconduct of the party being indemnified (as determined by a court of
competent jurisdiction in a final and non-appealable judgment).  WITHOUT
LIMITING THE FOREGOING, (i) IT IS THE INTENTION OF BORROWERS, AND
BORROWERS AGREE, THAT THE INDEMNITY PROVISIONS AND EXCULPATORY PROVISIONS
CONTAINED IN THIS AGREEMENT SHALL APPLY WITH RESPECT TO LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SETTLEMENTS,
SUITS, COSTS, EXPENSES AND DISBURSEMENTS OF ANY KIND WHATSOEVER (INCLUDING,
WITHOUT LIMITATION, FEES AND DISBURSEMENTS OF COUNSEL), WHICH IN WHOLE OR IN
PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF ANY PARTY TO BE
INDEMNIFIED, AND (ii) this indemnity shall extend to any
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses and disbursements of any kind or nature whatsoever
(including fees and disbursements of counsel) asserted against or incurred by
any of the indemnitees described above in this Section 16.5 by any Person under
any Environmental Laws or similar laws by reason of any Borrower’s or any other
Person’s failure to comply with laws applicable to solid or hazardous waste
materials, including Hazardous Substances and Hazardous Waste, or other Toxic
Substances.  Additionally, if any taxes
(excluding taxes imposed upon or measured solely by the net income of Agent and
Lenders, but including any intangibles taxes, stamp tax, recording tax or
franchise tax) shall be payable by Agent, Lenders or Borrowers on account of
the execution or delivery of this Agreement, or the execution, delivery,
issuance or recording of any of the Other Documents, or the creation or
repayment of any of the Obligations hereunder, by reason of any Applicable Law
now or hereafter in effect, Borrowers will pay (or will promptly reimburse
Agent and Lenders for payment of) all such taxes, including interest and
penalties thereon, and will indemnify and hold the indemnitees described above
in this Section 16.5 harmless from and against all liability in connection
therewith.

16.6.   Notice.   Any notice or request
hereunder may be given to Borrowing Agent or any Borrower or to Agent or any
Lender at their respective addresses set forth below or at such other address
as may hereafter be specified in a notice designated as a notice of change of 

 102
 

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

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

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

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

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

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

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

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

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

(A)   If
to Agent or PNC at:

PNC Bank, National Association

2100 Ross Avenue, Suite 1850

Dallas, TX 75201

Attention:  Relationship Manager
(Geokinetics)

Telephone:  (214) 871-1218

Facsimile:  (214) 871-2015

 103
 

with a copy to:

PNC Bank, National Association

Two Tower Center Boulevard

East Brunswick, New Jersey 08816

Attention:  Josephine Griffin

Telephone:  (732) 220-4388

Facsimile:  (732) 220-4394

with an additional copy to:

PNC Bank, National Association

500 First Avenue

Pittsburgh, Pennsylvania 15219

Attention:  Lisa Pierce

Telephone:  (412) 762-6442

Facsimile:  (412) 762-8672

with an additional copy to:

Patton Boggs LLP

2001 Ross Avenue, Suite 3000

Dallas, Texas 75201

Attention:          Michelle W. Suarez

Telephone:        (214) 758-1500

Facsimile:           (214) 758-1550

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

(C)    If
to Borrowing Agent or any Borrower:

Geokinetics Inc.

14521 Old Katy Road, Suite 100

Houston, Texas 77079

Attention:          Scott McCurdy

Telephone:        (281) 848-6823

Facsimile:           (281) 398-9996

with a copy to:

Chamberlain, Hrdlicka, White, Williams & Martin

1200 Smith Street, 14th Floor

Houston, Texas 77002

Attention:          James J. Spring, III

Telephone:        (713) 658-1818

Facsimile:           (713) 658-2553

 104
 

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

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

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

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

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

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

16.13. Counterparts;
Facsimile Signatures.   This Agreement may be executed in any number of
and by different parties hereto on separate counterparts, all of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute one and the 

 105
 

same
agreement.  Any signature delivered by a
party by facsimile transmission shall be deemed to be an original signature
hereto.

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

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

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

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

 106
 

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

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

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

 

 107

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

	
  

  	
  GEOKINETICS INC.,

  as Borrowing Agent and as a Borrower

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: Scott A. McCurdy

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GEOPHYSICAL DEVELOPMENT CORPORATION,

  as a Borrower

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: Scott A. McCurdy

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  QUANTUM GEOPHYSICAL, INC.,

  as a Borrower

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: Scott A. McCurdy

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GEOKINETICS EXPLORATION INC.

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

  as a Borrower

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: Scott A. McCurdy

  
	
   

  	
  Title: Vice President

  

 

 

	
  

  	
  TRACE ENERGY SERVICES, INC.,

  as a Borrower

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: Scott A. McCurdy

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GEOKINETICS HOLDINGS, INC.,

  as a Borrower

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: Scott A. McCurdy

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GRANT GEOPHYSICAL, INC.,

  as a Borrower

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: Scott A. McCurdy

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GRANT GEOPHYSICAL (INT’L), INC.,

  as a Borrower

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: Scott A. McCurdy

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GRANT GEOPHYSICAL CORP.,

  as a Borrower

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: Scott A. McCurdy

  
	
   

  	
  Title: Vice President

  

 

 2
 

 

	
  

  	
  ADVANCED SEISMIC TECHNOLOGY, INC.,

  as a Borrower

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: Scott A. McCurdy

  
	
   

  	
  Title: Vice President

  

 

 3
 

 

	
  

  	
  PNC BANK, NATIONAL ASSOCIATION,

  as Lender and as Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Commitment Percentage:  100%

  

 

 4

LIST OF
EXHIBITS AND SCHEDULES

 

	
  Exhibits

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit 1.2

  	
   

  	
  Borrowing Base Certificate

  
	
  Exhibit 2.1(a)

  	
   

  	
  Revolving Credit Note

  
	
  Exhibit 2.22(a)

  	
   

  	
  Commitment Increase Certificate

  
	
  Exhibit 2.22(c)

  	
   

  	
  Additional Lender Certificate

  
	
  Exhibit 5.5(a)

  	
   

  	
  Financial Projections

  
	
  Exhibit 8.1(k)

  	
   

  	
  Financial Condition Certificate

  
	
  Exhibit 16.3

  	
   

  	
  Commitment Transfer Supplement

  
	
   

  	
   

  	
   

  
	
  Schedules

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1.2

  	
   

  	
  Permitted Encumbrances

  
	
  Schedule 4.5

  	
   

  	
  Equipment and Inventory Locations

  
	
  Schedule 4.15(c)

  	
   

  	
  Chief Executive Office Locations

  
	
  Schedule 4.15(h)

  	
   

  	
  Deposit and Investment Accounts

  
	
  Schedule 4.19

  	
   

  	
  Real Property

  
	
  Schedule 5.1

  	
   

  	
  Consents

  
	
  Schedule 5.2(a)

  	
   

  	
  States of Qualification and Good Standing

  
	
  Schedule 5.2(b)

  	
   

  	
  Subsidiaries

  
	
  Schedule 5.4

  	
   

  	
  Federal Tax Identification Number

  
	
  Schedule 5.6

  	
   

  	
  Prior Names

  
	
  Schedule 5.7

  	
   

  	
  Environmental

  
	
  Schedule 5.8(b)

  	
   

  	
  Litigation

  
	
  Schedule 5.8(d)

  	
   

  	
  Plans

  
	
  Schedule 5.9

  	
   

  	
  Intellectual Property, Source Code Escrow Agreements

  
	
  Schedule 5.10

  	
   

  	
  Licenses and Permits

  
	
  Schedule 5.14

  	
   

  	
  Labor Disputes

  
	
  Schedule 7.3

  	
   

  	
  Guarantees

  
	
  Schedule 7.8

  	
   

  	
  Permitted IndebtednessExhibit (10)A

 

Unlisted CUSIP Number:_____

 

FIVE-YEAR CREDIT AGREEMENT

 

 

dated as of

 

April 12, 2007

 

 

among

 

 

TARGET CORPORATION,

 

THE BANKS LISTED HEREIN,

 

THE CO-DOCUMENTATION AGENTS LISTED HEREIN,

 

BANK OF AMERICA, N.A.,

AS ADMINISTRATIVE AGENT

 

 

JPMORGAN CHASE BANK, N.A.,

AS SYNDICATION AGENT

 

 

BANC OF AMERICA SECURITIES LLC

and

JPMORGAN CHASE BANK, N.A.,

AS JOINT LEAD ARRANGERS AND JOINT BOOK
MANAGERS

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  1.

  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.01

  	
  Definitions

  	
   

  
	
  Section 1.02

  	
  Accounting Terms and
  Determinations

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  2.

  THE CREDITS

  	
   

  
	
   

  	
   

  
	
  Section 2.01

  	
  Commitments to Lend

  	
  13

  
	
  Section 2.02

  	
  Notice of Committed
  Borrowings

  	
  13

  
	
  Section 2.03

  	
  Money Market
  Borrowings

  	
  13

  
	
  Section 2.04

  	
  Notice to Banks;
  Funding of Loans

  	
  17

  
	
  Section 2.05

  	
  Reserved

  	
  18

  
	
  Section 2.06

  	
  Maturity of Loans

  	
  18

  
	
  Section 2.07

  	
  Interest Rates

  	
  18

  
	
  Section 2.08

  	
  Facility Fees

  	
  22

  
	
  Section 2.09

  	
  Optional Termination
  or Reduction of Commitments

  	
  22

  
	
  Section 2.10

  	
  Mandatory Termination
  of Commitments

  	
  22

  
	
  Section 2.11

  	
  Optional Prepayments

  	
  22

  
	
  Section 2.12

  	
  General Provisions as
  to Payments

  	
  23

  
	
  Section 2.13

  	
  Funding Losses

  	
  24

  
	
  Section 2.14

  	
  Computation of
  Interest and Fees

  	
  24

  
	
  Section 2.15

  	
  Withholding Tax
  Exemption

  	
  24

  
	
  Section 2.16

  	
  Change of Control

  	
  24

  
	
  Section 2.17

  	
  Increase in Combined
  Commitments

  	
  25

  
	
  Section 2.18

  	
  Extension of
  Termination Date

  	
  26

  
	
  Section 2.19

  	
  Evidence of Debt

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  3.

  CONDITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.01

  	
  Effectiveness

  	
  28

  
	
  Section 3.02

  	
  Borrowings

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  4.

  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.01

  	
  Corporate Existence
  and Power

  	
  30

  

 

i

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.02

  	
  Corporate and
  Governmental Authorization; No Contravention

  	
  30

  
	
  Section 4.03

  	
  Binding Effect

  	
  30

  
	
  Section 4.04

  	
  Financial Information

  	
  31

  
	
  Section 4.05

  	
  Litigation

  	
  31

  
	
  Section 4.06

  	
  Compliance with ERISA

  	
  31

  
	
  Section 4.07

  	
  Payment of Taxes

  	
  31

  
	
  Section 4.08

  	
  Full Disclosure

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  5.

  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.01

  	
  Information

  	
  32

  
	
  Section 5.02

  	
  Maintenance of
  Property

  	
  34

  
	
  Section 5.03

  	
  Conduct of Business
  and Maintenance of Existence

  	
  34

  
	
  Section 5.04

  	
  Compliance with Laws

  	
  34

  
	
  Section 5.05

  	
  Consolidations,
  Mergers and Sale of Assets

  	
  35

  
	
  Section 5.06

  	
  Dividends

  	
  35

  
	
  Section 5.07

  	
  Negative Pledge

  	
  35

  
	
  Section 5.08

  	
  Leverage Ratio

  	
  36

  
	
  Section 5.09

  	
  Use of Proceeds

  	
  36

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  6.

  DEFAULTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.01

  	
  Events of Default

  	
  36

  
	
  Section 6.02

  	
  Notice of Default

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  7.

  THE AGENT, THE SENIOR MANAGING AGENTS, THE MANAGING AGENTS, THE CO-

  AGENTS, THE CO-DOCUMENTATION AGENTS AND THE SYNDICATION AGENT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.01

  	
  Appointment and
  Authorization

  	
  38

  
	
  Section 7.02

  	
  Agent and Affiliates

  	
  38

  
	
  Section 7.03

  	
  Action by Agent

  	
  38

  
	
  Section 7.04

  	
  Consultation with
  Experts

  	
  38

  
	
  Section 7.05

  	
  Liability of Agent

  	
  38

  
	
  Section 7.06

  	
  Indemnification

  	
  39

  
	
  Section 7.07

  	
  Credit Decision

  	
  39

  

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.08

  	
  Successor Agent

  	
  39

  
	
  Section 7.09

  	
  Agent’s Fee

  	
  40

  
	
  Section 7.10

  	
  Senior Managing
  Agents, Managing Agents, Co-Agents, Co-Documentation Agents, and Syndication
  Agent

  	
  40

  
	
  Section 7.11

  	
  Defaults

  	
  40

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  8.

  CHANGE IN CIRCUMSTANCES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.01

  	
  Basis for Determining
  Interest Rate Inadequate or Unfair

  	
  40

  
	
  Section 8.02

  	
  Illegality

  	
  41

  
	
  Section 8.03

  	
  Increased Cost and
  Reduced Return

  	
  41

  
	
  Section 8.04

  	
  Base Rate Loans
  Substituted for Affected Fixed Rate Loans

  	
  43

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  9.

  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.01

  	
  Notices

  	
  43

  
	
  Section 9.02

  	
  No Waivers

  	
  44

  
	
  Section 9.03

  	
  Expenses; Documentary
  Taxes; Indemnification

  	
  44

  
	
  Section 9.04

  	
  Sharing of Set-Off

  	
  45

  
	
  Section 9.05

  	
  Amendments and Waivers

  	
  45

  
	
  Section 9.06

  	
  Successors and Assigns

  	
  45

  
	
  Section
  9.07

  	
  Collateral

  	
  48

  
	
  Section
  9.08

  	
  Replacement
  of Banks

  	
  48

  
	
  Section
  9.09

  	
  Governing
  Law; Submission to Jurisdiction

  	
  49

  
	
  Section
  9.10

  	
  Counterparts;
  Integration

  	
  50

  
	
  Section
  9.11

  	
  Confidentiality

  	
  50

  
	
  Section
  9.12

  	
  USA
  PATRIOT Act Notice

  	
  50

  

 

iii

 

	
  SCHEDULE
  I:

  	
  Senior
  Managing Agents and Managing Agents

  	
  S-I

  
	
  SCHEDULE
  II:

  	
  Co-Agents

  	
  S-II

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  A

  	
  Note

  	
  A-1

  
	
  EXHIBIT
  B

  	
  Form of
  Money Market Quote Request

  	
  B-1

  
	
  EXHIBIT
  C

  	
  Form of
  Invitation for Money Market Quotes

  	
  C-1

  
	
  EXHIBIT
  D

  	
  Form of
  Money Market Quote

  	
  D-1

  
	
  EXHIBIT
  E

  	
  Form of
  Commitment Increase Agreement

  	
  E-1

  
	
  EXHIBIT
  F

  	
  Form of
  Added Bank Agreement

  	
  F-1

  
	
  EXHIBIT
  G

  	
  Opinion
  of Counsel for the Borrower

  	
  G-1

  
	
  EXHIBIT
  H

  	
  Opinion
  of Helms Mulliss & Wicker, PLLC, Special Counsel for the Agent

  	
  H-1

  
	
  EXHIBIT
  I

  	
  Assignment
  and Assumption Agreement

  	
  I-1

  
	
  EXHIBIT
  J

  	
  Form of
  Borrowing Notice

  	
  J-1

  

 

iv

 

FIVE-YEAR CREDIT AGREEMENT

 

THIS FIVE-YEAR CREDIT AGREEMENT,
dated as of April 12, 2007, is among TARGET CORPORATION,
a Minnesota corporation, the BANKS listed on
the signature pages hereof, the SENIOR MANAGING AGENTS,
MANAGING AGENTS, CO-AGENTS, CO-DOCUMENTATION AGENTS and SYNDICATION AGENT
listed herein and BANK OF AMERICA, N.A.,
as Administrative Agent.

 

The Borrower has requested that the Banks
provide a revolving credit facility, and the Banks are willing to do so on the
terms and conditions set forth herein.

 

In consideration of the mutual covenants and
agreements herein contained, the parties hereto covenant and agree as follows:

 

ARTICLE 1.

DEFINITIONS

 

Section 1.01                                Definitions.
The following terms, as used herein, have the following meanings:

 

“Absolute Rate Auction”
means a solicitation of Money Market Quotes setting forth Money Market Absolute
Rates pursuant to Section 2.03.

 

“Accounts Receivable”
means those amounts due to a Person that would be categorized as “accounts
receivable” in accordance with generally accepted accounting principles.

 

“Added Bank”
has the meaning set forth in Section 2.17(a).

 

“Additional Commitment Bank”
has the meaning set forth in Section 2.18(d)

 

“Adjusted CD Rate”
has the meaning set forth in Section 2.07(b).

 

“Adjusted London Interbank
Offered Rate” has the meaning set forth in Section 2.07(c).

 

“Administrative
Questionnaire” means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Agent and submitted to
the Agent (with a copy to the Borrower) duly completed by such Bank.

 

“Agent”
means Bank of America, N.A. in its capacity as administrative agent for the
Banks hereunder, and its successors in such capacity.

 

“Agreement”
means this Five-Year Credit Agreement as the same may be amended or restated
from time to time in accordance with the terms hereof.

 

“Anniversary Date”
has the meaning set forth in Section 2.18(a).

 

“Applicable Lending Office”
means, with respect to any Bank, (i) in the case of its Domestic Loans, its
Domestic Lending Office, (ii) in the case of its Euro-

 

 

Dollar Loans,
its Euro-Dollar Lending Office and (iii) in the case of its Money Market Loans,
its Money Market Lending Office.

 

“Applicable Margin”
has the meaning set forth in Section 2.07(h).

 

“Approved Fund”
means any Person (other than a natural Person) that (i) 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 and (ii) is
administered or managed by (x) a Bank, (y) an affiliate of a Bank or (z) an entity
or an affiliate of an entity that administers or manages a Bank.

 

“Arrangers”
means Banc of America Securities LLC and J.P. Morgan Securities Inc., each in
its capacity as a joint lead arranger hereunder, and their successors in such
capacity.

 

“Assessment Rate”
has the meaning set forth in Section 2.07(b).

 

“Assignee”
has the meaning set forth in Section 9.06(c).

 

“Assignment and Assumption
Agreement” has the meaning set forth in Section 9.06(c).

 

“Bank” means
each bank or other financial institution listed on the signature pages hereof,
each Assignee which becomes a Bank pursuant to Section 9.06(c), and
their respective successors.

 

“Bank of America”
means Bank of America, N.A. and its successors.

 

“Base Rate”
means, for any day, a rate per annum equal to the higher of (i) the Prime Rate
for such day and (ii) the sum of 1⁄2 of 1% plus the Federal Funds Rate for such
day. Any change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Rate shall be effective on the effective date of such change in
the Prime Rate or Federal Funds Rate.

 

“Base Rate Loan”
means a Committed Loan to be made by a Bank as a Base Rate Loan in accordance
with the applicable Notice of Committed Borrowing or pursuant to Article 8.

 

“Benefited Bank”
has the meaning set forth in Section 9.04.

 

“Borrower”
means Target Corporation, a Minnesota corporation, and its successors.

 

“Borrower’s 2006 Form 10-K”
means the Borrower’s annual report on Form 10-K for the fiscal year ended
February 3, 2007, as filed with the Securities and Exchange Commission pursuant
to the Securities Exchange Act of 1934, as amended.

 

“Borrowing”
means the aggregation of Loans of one or more Banks to be made to the Borrower
pursuant to Article 2 on a single date and for a single Interest Period.
Borrowings are classified for purposes of this Agreement either by reference to
the pricing of Loans comprising such Borrowing (e.g., a “Base
Rate Borrowing” is a Borrowing comprised of Base Rate Loans, a “Euro-Dollar Borrowing” is a
Borrowing comprised of Euro-Dollar Loans, a “CD
Borrowing” is a Borrowing comprised of CD Loans, and a “Fixed Rate Borrowing” is a Borrowing

 

2

 

comprised of
Fixed Rate Loans) or by reference to the provisions of Article 2 under
which participation therein is determined (i.e., a “Committed
Borrowing” is a Borrowing under Section 2.01 in which all
Banks participate in proportion to their Commitments, while a “Money Market Borrowing” is a
Borrowing under Section 2.03 in which the Bank participants are
determined on the basis of their bids in accordance therewith).

 

“Capital Lease”
means a lease which gives rise to Capital Lease Obligations.

 

“Capital Lease Obligations”
means all obligations of a Person as lessee which are capitalized in accordance
with generally accepted accounting principles.

 

“CD Base Rate”
has the meaning set forth in Section 2.07(b).

 

“CD Loan”
means a Committed Loan to be made by a Bank as a CD Loan in accordance with the
applicable Notice of Committed Borrowing.

 

“Co-Agents”
means the banks listed on Schedule II hereto, in their capacity as
co-agents of the credit facility hereunder.

 

“Co-Documentation Agents”
means the banks listed on the signature pages hereto, in their capacity as
co-documentation agents of the credit facility hereunder.

 

“Commitment”
means, with respect to each Bank, the amount set forth opposite the name of
such Bank on the signature pages hereof or pursuant to any Assignment and
Assumption Agreement, as such amount may be reduced from time to time pursuant
to Section 2.09 or 2.18, or may be increased at any time pursuant
to Section 2.17, the aggregate amount of which at the Effective Date is
$2,000,000,000.

 

“Committed  Loan” means a loan made by a Bank
pursuant to Section 2.01.

 

“Consolidated
Rental  Expense”
means, for any period, the aggregate amount, determined on a consolidated
basis, of rental expense of the Borrower and its Consolidated Subsidiaries
accrued during such period, but excluding any unusual non-cash adjustments to
rental expenses of the Borrower related to prior periods.

 

“Consolidated
Subsidiary” means, at any date, any
Subsidiary or other entity the accounts of which would be consolidated with
those of the Borrower in its consolidated financial statements if such
statements were prepared as of such date.

 

“Consolidated
Tangible  Net
Worth” means, at any date, the
consolidated stockholders’ equity of the Borrower and its Consolidated
Subsidiaries less their consolidated Intangible Assets, all determined as of
such date. For purposes of this definition “Intangible Assets” means the amount
(to the extent reflected in determining such consolidated stockholders’ equity)
of (i) all write-ups (other than write-ups resulting from foreign currency
translations and write-ups of assets of a going concern business made within
twelve months after the acquisition of such business) subsequent to February 3,
2007 in the book value of any asset owned by the Borrower or a Consolidated
Subsidiary, (ii) all Investments in unconsolidated Subsidiaries and all equity
investments in Persons which are not Subsidiaries and (iii) all unamortized
debt discount and

 

3

 

expense,
unamortized deferred charges, goodwill, patents, trademarks, service marks,
trade names, anticipated future benefit of tax loss carry-forwards, copyrights,
organization or developmental expenses and other intangible assets.

 

“Convertible Preferred
Stock” means the Series B ESOP Convertible Preferred Stock, $.01
par value, of the Borrower.

 

“Debt” of
any Person means at any date, without duplication, (i) all obligations of such
Person for borrowed money, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) all obligations of
such Person to pay the deferred purchase price of property or services, except
trade accounts payable arising in the ordinary course of business, (iv) all
Capital Lease Obligations of such Person, (v) all debt secured by a Lien on any
asset of such Person, whether or not such debt is otherwise an obligation of
such Person, and (vi) all debt of others Guaranteed by such Person.

 

“Debt Rating”
means a rating of the Borrower’s long-term debt which is not secured or
supported by a guarantee, letter of credit or other form of credit enhancement.
If a Debt Rating by a Rating Agency is required to be at or above a specified
level and such Rating Agency shall have changed its system of classifications
after the date hereof, the requirement will be met if the Debt Rating by such
Rating Agency is at or above the new rating which most closely corresponds to
the specified level under the old rating system.

 

“Default”
means any condition or event which constitutes an Event of Default or which
with the giving of notice or lapse of time or both would, unless cured or
waived, become an Event of Default.

 

“Defaulting Bank”
means any Bank that (i) has failed to fund any portion of the Loans required to
be funded by it hereunder within one Domestic Business Day of the date required
to be funded by it hereunder, (ii) has otherwise failed to pay over to the
Agent or any other Bank any other amount required to be paid by it hereunder
within one Domestic Business Day of the date when due, unless the subject of a
good faith dispute, or (iii) has been deemed insolvent or become the subject of
a bankruptcy or insolvency proceeding.

 

“Dollar” and
“$” mean lawful money of the United
States.

 

“Domestic Business Day”
means any day except a Saturday, Sunday or other day on which commercial banks
in New York City are authorized by law to close.

 

“Domestic Lending Office”
means, as to each Bank, its office located at its address set forth in its
Administrative Questionnaire (or identified in its Administrative Questionnaire
as its Domestic Lending Office) or such other office as such Bank may hereafter
designate as its Domestic Lending Office by notice to the Borrower and the
Agent; provided that any Bank may so designate
separate Domestic Lending Offices for its Base Rate Loans, on the one hand, and
its CD Loans on the other hand, in which case all references herein to the
Domestic Lending Office of such Bank shall be deemed to refer to either or both
of such offices, as the context may require.

 

“Domestic Loans”
means CD Loans or Base Rate Loans or both.

 

4

 

“Domestic Reserve
Percentage” has the meaning set forth in Section 2.07(b).

 

“Effective Date”
means the date this Agreement becomes effective in accordance with Section
3.01.

 

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

 

“ERISA Affiliate”
means, with respect to the Borrower or any of its Subsidiaries, at any time,
each trade or business (whether or not incorporated) that would, at the time,
be treated together with the Borrower or any of its Subsidiaries as a single
employer under Section 4001 of ERISA or Section 414(b), (c), (f), (m) or (o) of
the Internal Revenue Code.

 

“Euro-Dollar Business Day”
means any Domestic Business Day on which commercial banks are open for
international business (including dealings in dollar deposits) in London.

 

“Euro-Dollar Lending Office”
means, as to each Bank, its office, branch or affiliate located at its address
set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Euro-Dollar Lending Office) or such other
office, branch or affiliate of such Bank as it may hereafter designate as its
Euro-Dollar Lending Office by notice to the Borrower and the Agent.

 

“Euro-Dollar Loan”
means a Committed Loan to be made by a Bank as a Euro-Dollar Loan in accordance
with the applicable Notice of Committed Borrowing.

 

“Euro-Dollar Reserve
Percentage” has the meaning set forth in Section 2.07(c).

 

“Event of Default”
has the meaning set forth in Section 6.01.

 

“Exchange Act”
means, at any time, the Securities Exchange Act of 1934, as amended from time
to time, and any successor statute, and the rules and regulations promulgated
thereunder.

 

“Existing Five-Year
Agreement” means the Five-Year Credit Agreement dated as of June
9, 2005, among the Borrower, the banks listed therein, the senior managing
agents, managing agents, co-agents, co-documentation agents and co-syndication
agents listed therein, and Bank of America, N.A., as administrative agent, as
the same may be amended or restated from time to time.

 

“Existing Termination Date”
has the meaning set forth in Section 2.18(a).

 

“Extending Bank”
has the meaning set forth in Section 2.18(e).

 

“Federal Funds Rate”
means, for any day, the rate per annum (rounded upward, if necessary, to the
nearest 1/100th 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 Domestic Business Day next succeeding such day, provided that (i) if such day is not a Domestic

 

5

 

Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Domestic Business Day as so published on the next succeeding
Domestic Business Day, and (ii) if no such rate is so published on such next
succeeding Domestic Business Day, the Federal Funds Rate for such day shall be
the average rate quoted to the Agent (in its individual capacity) on such day
on such transactions as determined by the Agent.

 

“Fixed Rate Loans”
means CD Loans or Euro-Dollar Loans or Money Market Loans (excluding Money
Market LIBOR Loans bearing interest at the Base Rate pursuant to Section
8.01(a)) or any combination of the foregoing.

 

“Group”
means the Borrower and its Subsidiaries, taken as a whole.

 

“Guarantee”
by any Person means any obligation, contingent or otherwise, of such Person
directly or indirectly guaranteeing any Debt or other obligation of any other
Person and, without limiting the generality of the foregoing, any obligation,
direct or indirect, contingent or otherwise, of such Person (i) to purchase or
pay (or advance or supply funds for the purchase or payment of such Debt or
other obligation (whether arising by virtue of partnership arrangements, by
agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or
(ii) entered into for the purpose of assuring in any other manner the obligee
of such Debt or other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part), provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business. The
term “Guarantee” used as a verb has a corresponding meaning.

 

“Income Taxes”
means, for any period, the consolidated provision for income taxes of the
Borrower and its Consolidated Subsidiaries accrued for such period.

 

“Increased Commitment Date”
has the meaning set forth in Section 2.17(b).

 

“Increasing Bank”
has the meaning set forth in Section 2.17(a).

 

“Interest Period”
means: (i) with respect to each Euro-Dollar Borrowing, the period commencing on
the date of such Borrowing and ending one, two, three or six months thereafter,
as the Borrower may elect in the applicable Notice of Borrowing; provided that:

 

(a)                                  any Interest Period
which would otherwise end on a day which is not a Euro-Dollar Business Day
shall be extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Dollar Business Day;

 

(b)                                 any Interest Period
which begins on the last Euro-Dollar Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall, subject to clause (c) below,
end on the last Euro-Dollar Business Day of a calendar month; and

 

6

 

(c)                                  any Interest Period
commencing prior to the Termination Date which would otherwise end after the
Termination Date shall end on the Termination Date;

 

(ii)                                  with respect to each
CD Borrowing, the period commencing on the date of such Borrowing and ending
30, 60, 90 or 180 days thereafter, as the Borrower may elect in the applicable
Notice of Borrowing; provided that:

 

(a)                                  any Interest Period
(other than an Interest Period determined pursuant to clause (b) below) which
would otherwise end on a day which is not a Domestic Business Day shall be
extended to the next succeeding Domestic Business Day; and

 

(b)                                 any Interest Period
commencing prior to the Termination Date which would otherwise end after the
Termination Date shall end on the Termination Date;

 

(iii)                               with respect to each
Base Rate Borrowing, the period commencing on the date of such Borrowing and
ending 30 days thereafter; provided that:

 

(a)                                  any Interest Period
(other than an Interest Period determined pursuant to clause (b) below) which
would otherwise end on a day which is not a Domestic Business Day shall be
extended to the next succeeding Domestic Business Day; and

 

(b)                                 any Interest Period
commencing prior to the Termination Date which would otherwise end after the
Termination Date shall end on the Termination Date;

 

(iv)                              with respect to each
Money Market LIBOR Borrowing, the period commencing on the date of such
Borrowing and ending such whole number of months thereafter as the Borrower may
elect in accordance with Section 2.03; provided
that:

 

(a)                                  any Interest Period
which would otherwise end on a day which is not a Euro-Dollar Business Day
shall be extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Dollar Business Day;

 

(b)                                 any Interest Period
which begins on the last Euro-Dollar Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall, subject to clause (c) below,
end on the last Euro-Dollar Business Day of a calendar month; and

 

(c)                                  any Interest Period
which would otherwise end after the Termination Date applicable to the Bank
holding a related Money Market LIBOR Loan shall end on the respective
Termination Date for such Bank; and

 

7

 

(v)                                 with respect to each
Money Market Absolute Rate Borrowing, the period commencing on the date of such
Borrowing and ending such number of days thereafter (but not less than 14 days)
as the Borrower may elect in accordance with Section 2.03; provided that:

 

(a)                                  any Interest Period
which would otherwise end on a day which is not a Domestic Business Day shall
be extended to the next succeeding Domestic Business Day; and

 

(b)                                 any Interest Period
which would otherwise end after the Termination Date applicable to the Bank
holding a related Money Market Absolute Rate Loan shall end on the respective
Termination Date for such Bank.

 

“Internal Control Event”
means a determination by management of the Borrower, or by the Borrower’s
Registered Public Accounting Firm in connection with the Borrower’s annual
evaluation of the effectiveness of internal control over financial reporting,
that a material weakness in internal controls over financial reporting, as
described in PCAOB Auditing Standard No. 2, exists in the Borrower’s internal
control over financial reporting.

 

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

 

“Investment”
means any investment in any Person, whether by means of share purchase, capital
contribution, loan, time deposit or otherwise.

 

“Level I Status”
exists at any date if at such date, the Borrower is at Level I in the chart
appearing in the definition of Applicable Margin as a result of its Debt
Ratings as determined in accordance with such definition.

 

“Level II Status”
exists at any date if at such date the Borrower is at Level II in the chart
appearing in the definition of Applicable Margin as a result of its Debt
Ratings as determined in accordance with such definition.

 

“Level III Status”
exists at any date if at such date the Borrower is at Level III in the chart
appearing in the definition of Applicable Margin as a result of its Debt
Ratings as determined in accordance with such definition.

 

“Level IV Status”
exists at any date if at such date the Borrower is at Level IV in the chart
appearing in the definition of Applicable Margin as a result of its Debt
Ratings as determined in accordance with such definition.

 

“Level V Status”
exists at any date if, at such date the Borrower is at Level V in the chart
appearing in the definition of Applicable Margin as a result of its Debt
Ratings as determined in accordance with such definition.

 

“LIBOR Auction”
means a solicitation of Money Market Quotes setting forth Money Market Margins
based on the London Interbank Offered Rate pursuant to Section 2.03.

 

8

 

“Lien”
means, with respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind, or any other type of preferential
arrangement that has the practical effect of creating a security interest, in
respect of such asset. For the purposes of this Agreement, the Borrower or any
Subsidiary shall be deemed to own subject to a Lien any asset which it has
acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, Capital Lease or other title retention agreement
relating to such asset, but excluding any asset held under a bona fide
consignment arrangement.

 

“Loan” means
a Domestic Loan or a Euro-Dollar Loan or a Money Market Loan and “Loans” means
Domestic Loans or Euro-Dollar Loans or Money Market Loans or any combination of
the foregoing.

 

“London Interbank Offered
Rate” has the meaning set forth in Section 2.07(c).

 

“Managing Agents”
means the banks listed on Schedule I hereto, in their capacity as
managing agents of the credit facility hereunder.

 

“Material Debt”
means Debt (other than Debt incurred hereunder) of the Borrower and/or one or
more of its Subsidiaries, arising in one or more related or unrelated
transactions, in an aggregate principal amount exceeding $100,000,000.

 

“Money Market Absolute Rate”
has the meaning set forth in Section 2.03(d).

 

“Money Market Absolute Rate
Loan” means a loan to be made by a Bank pursuant to an Absolute
Rate Auction.

 

“Money Market Lending
Office” means, as to each Bank, its Domestic Lending Office or
such other office, branch or affiliate of such Bank as it may hereafter designate
as its Money Market Lending Office by notice to the Borrower and the Agent; provided that any Bank may from time to time by notice to
the Borrower and the Agent designate separate Money Market Lending Offices for
its Money Market LIBOR Loans, on the one hand, and its Money Market Absolute
Rate Loans, on the other hand, in which case all references herein to the Money
Market Lending Office of such Bank shall be deemed to refer to either or both
of such offices, as the context may require.

 

“Money Market LIBOR Loan”
means a loan to be made by a Bank pursuant to a LIBOR Auction (including such a
loan bearing interest at the Base Rate pursuant to Section 8.01(a)).

 

“Money Market Loan”
means a Money Market LIBOR Loan or a Money Market Absolute Rate Loan.

 

“Money Market Margin”
has the meaning set forth in Section 2.03(d).

 

“Money Market Quote”
means an offer by a Bank to make a Money Market Loan in accordance with Section
2.03.

 

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

 

9

 

“Multiemployer Plan”
means, at any time, a “multiemployer plan” as defined in Section 4001(a)(3) of
ERISA to which contributions are or have been made by the Borrower or any of
its Subsidiaries or any ERISA Affiliate of the Borrower or any of its
Subsidiaries.

 

“Non-Extending Bank”
has the meaning set forth in Section 2.18(b).

 

“Notes”
means promissory notes of the Borrower, substantially in the form of Exhibit
A hereto, evidencing the obligation of the Borrower to repay the Loans and “Note”
means any one of such promissory notes issued hereunder.

 

“Notice Date”
has the meaning set forth in Section 2.18(a).

 

“Notice of Borrowing”
means a Notice of Committed Borrowing (as defined in Section 2.02) or a
Notice of Money Market Borrowing (as defined in Section 2.03(f)).

 

“Parent”
means, with respect to any Bank, any Person controlling such Bank.

 

“Participant”
has the meaning set forth in Section 9.06(b).

 

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

 

“Person”
means an individual, a corporation, a partnership, an association, a trust or
any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.

 

“Plan” means
any employee benefit plan which (i) is or has been maintained by the Borrower
or any of its Subsidiaries or any ERISA Affiliate of any of them, or to which
contributions by any such Person are or have been required to be made, (ii) is
subject to the provisions of Title IV of ERISA and (iii) is not a Multiemployer
Plan.

 

“Plan Event”
means (i) the provision of a notice of intent to terminate any Plan under
Section 4041 of ERISA, (ii) the receipt of any notice by any Plan that the PBGC
intends to apply for the appointment of a trustee to administer any Plan, (iii)
the termination of any Plan, (iv) the withdrawal of the Borrower, any of its
Subsidiaries or any ERISA Affiliate of any of them from any Plan described in
Section 4063 of ERISA that may constitute grounds for the imposition of any
liability or lien on the assets of the Borrower or any of its Subsidiaries in
excess of $100,000,000, (v) the complete or partial withdrawal of the Borrower
or any of its Subsidiaries or any ERISA Affiliate of any of them from any
Multiemployer Plan that may constitute grounds for the imposition of any
liability or lien on the assets of the Borrower or any of its Subsidiaries in
excess of $100,000,000, (vi) any other event or condition that would constitute
grounds under Section 4042 of ERISA for the termination of or for the
appointment of a trustee to administer, any Plan and (vii) any other event or
condition which under ERISA or the Internal Revenue Code may constitute grounds
for the imposition of any liability or lien on the assets of the Borrower or
any of its Subsidiaries in excess of $100,000,000 in respect of any Plan or
Multiemployer Plan.

 

10

 

“Prime Rate”
means the rate of interest publicly announced from time to time by Bank of
America, N.A. as its prime rate.

 

“Rating Agency”
means S&P or Moody’s.

 

“Reference Banks”
means Bank of America, N.A., JPMorgan Chase Bank, N.A. and Citicorp USA, Inc.,
or the successors thereof, and “Reference Bank” means any one of such Reference
Banks.

 

“Refunding Borrowing”
means a Committed Borrowing which, after application of the proceeds thereof,
results in no net increase in the outstanding principal amount of Committed
Loans made by any Bank.

 

“Registered Public
Accounting Firm” has the meaning specified in the federal
securities laws.

 

“Regulation U”
means Regulation U of the Board of Governors of the Federal Reserve System, as
in effect from time to time.

 

“Request Period”
has the meaning set forth in Section 2.18(a).

 

“Required Banks”
means at any time Banks having more than 50% of the aggregate amount of the
Commitments or, if the Commitments shall have been terminated, Banks holding
more than 50% of the aggregate unpaid principal amount of the Loans (excluding
Money Market Loans).

 

“Response Deadline”
has the meaning set forth in Section 2.18(b).

 

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

 

“Senior Managing Agents”
means the banks listed on Schedule I hereto, in their capacity as senior
managing agents of the credit facility hereunder.

 

“Significant Subsidiary”
means a “Significant Subsidiary” of the Borrower, as such term is defined in
Regulation S-X promulgated by the Securities and Exchange Commission.

 

“Status”
means, at any date, whichever of Level I Status, Level II Status, Level III
Status, Level IV Status or Level V Status exists at such date.

 

“Subsidiary”
means any corporation or other entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at the time
directly or indirectly owned by the Borrower.

 

“Syndication Agent”
means JPMorgan Chase Bank, N.A. in its capacity as syndication agent of the
credit facility hereunder.

 

11

 

“Termination Date”
means the later of (a) April 12, 2012 or (b) if the term of this Agreement is
extended pursuant to Section 2.18, such extended termination date as
determined pursuant to such Section; provided, however, that, in each case, if such date is not a Domestic
Business Day, the next preceding Domestic Business Day; provided
further that with respect to any
Non-Extending Bank, the Termination Date of such Non-Extending Bank’s Commitment
shall be the Existing Termination Date notwithstanding the extension of
Commitments by any other Bank pursuant to Section 2.18.

 

“Total Capitalization”
means, at any date, the sum (without duplication) of (i) the consolidated
stockholders’ equity of the Borrower and its Consolidated Subsidiaries plus
(ii) the net amount of Convertible Preferred Stock as reflected in the
consolidated statements of financial position of the Borrower and its
Consolidated Subsidiaries plus (iii) Total Finance Liabilities, all determined
as of such date.

 

“Total Finance Liabilities”
means, at any date, the sum of (i) all Debt of the Borrower and its
Consolidated Subsidiaries, determined on a consolidated basis as of such date,
plus (ii) an amount equal to (a) the Consolidated Rental Expense for the period
of four consecutive fiscal quarters of the Borrower ending on such date times
(b) eight.

 

“Usage”
means, at any date prior to the Termination Date, the percentage equivalent of
a fraction (i) the numerator of which is the aggregate outstanding principal
amount of the Loans at such date, after giving effect to any borrowing or
payment on such date, and (ii) the denominator of which is the aggregate amount
of the Commitments at such date. If for any reason any Loans remain outstanding
after termination of the Commitments, the Usage for each date on or after the
date of such termination shall be deemed to be greater than 50%.

 

“Voting Stock”
means capital stock of any class or classes (however designated) having voting
power for the election of directors of the Borrower, other than stock having
such power only by reason of the happening of a contingency.

 

Section 1.02                                Accounting
Terms and Determinations.  Unless
otherwise specified herein, all accounting terms used herein shall be interpreted,
all accounting determinations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared in accordance
with generally accepted accounting principles as in effect from time to time,
applied on a basis consistent (except for changes concurred in by the Borrower’s
independent public accountants) with the most recent audited consolidated
financial statements of the Borrower and its Consolidated Subsidiaries
delivered to the Banks (provided that
for the purpose of calculating covenant compliance under Article 5, the
effect of SFAS No. 133 shall not be applied); provided
that, if the Borrower notifies the Agent that the Borrower wishes to amend any
covenant in Article 5 to eliminate the effect of any change in generally
accepted accounting principles on the operation of such covenant (or if the
Agent notifies the Borrower that the Required Banks wish to amend Article 5
for such purpose), then the Borrower’s compliance with such covenant shall be
determined on the basis of generally accepted accounting principles in effect
for purposes of this Agreement immediately before the relevant change in
generally accepted accounting principles became effective, until either such
notice is withdrawn or such covenant is amended in a manner satisfactory to the
Borrower and the Required Banks.

 

12

 

ARTICLE 2.

THE CREDITS

 

Section 2.01                                Commitments
to Lend. Each Bank severally agrees, on the terms and conditions set forth
in this Agreement, to make loans to the Borrower pursuant to this Section from
time to time prior to the Termination Date in amounts such that the aggregate
principal amount of Committed Loans by such Bank at any one time outstanding
shall not exceed the amount of its Commitment. Each Borrowing under this
Section shall be in an aggregate principal amount of $25,000,000 or any larger
multiple of $5,000,000 (except that any such Borrowing may be in the aggregate
amount available in accordance with Section 3.02(b)) and shall be made
from the several Banks ratably in proportion to their respective Commitments. Within
the foregoing limits, the Borrower may borrow under this Section, repay, or to
the extent permitted by Section 2.11, prepay Loans and reborrow at any
time prior to the Termination Date under this Section.

 

Section 2.02                                Notice
of Committed Borrowings. The Borrower shall give the Agent notice (a “Notice of Committed Borrowing”) not
later than 11:00 A.M. (New York City time) on (x) the date of each Base Rate
Borrowing, (y) the second Domestic Business Day before each CD Borrowing and
(z) the third Euro-Dollar Business Day before each Euro-Dollar Borrowing,
specifying:

 

(a)                                  the
date of such Borrowing, which shall be a Domestic Business Day in the case of a
Domestic Borrowing or a Euro-Dollar Business Day in the case of a Euro-Dollar
Borrowing;

 

(b)                                 the
aggregate amount of such Borrowing;

 

(c)                                  whether
the Loans comprising such Borrowing are to be CD Loans, Base Rate Loans or
Euro-Dollar Loans; and

 

(d)                                 in
the case of a Fixed Rate Borrowing, the duration of the Interest Period
applicable thereto, subject to the provisions of the definition of Interest
Period.

 

Section 2.03                                Money
Market Borrowings.

 

(a)                                  The
Money Market Option. In addition to Committed Borrowings pursuant to Section
2.01, the Borrower may, as set forth in this Section, request the Banks to
make offers to make, prior to the Termination Date only, Money Market Loans to
the Borrower. The Banks may, but shall have no obligation to, make such offers
and the Borrower may, but shall have no obligation to, accept any such offers
in the manner set forth in this Section. No Money Market Loan shall be deemed
to be a use or reduction of the Commitment of any Bank, including the Bank
making such Money Market Loan. Notwithstanding the foregoing, while any Money
Market Loan is outstanding, the availability of Committed Loans under this
Agreement shall be reduced dollar-for-dollar by an amount equal to the
outstanding principal amount of such Money Market Loan.

 

(b)                                 Money
Market Quote Request. When the Borrower wishes to request offers to make
Money Market Loans under this Section, it shall transmit to the Agent by

 

13

 

facsimile
transmission a Money Market Quote Request substantially in the form of Exhibit
B hereto so as to be received no later than 11:00 A.M. (New York City time)
on (x) the fifth Euro-Dollar Business Day prior to the date of Borrowing
proposed therein, in the case of a LIBOR Auction, or (y) the Domestic Business
Day next preceding the date of Borrowing proposed therein, in the case of an
Absolute Rate Auction (or, in either case, such other time or date as the
Borrower and the Agent shall have mutually agreed and shall have notified to
the Banks not later than the date of the Money Market Quote Request for the
first LIBOR Auction or Absolute Rate Auction for which such change is to be
effective) specifying:

 

(i)                                     the
proposed date of Borrowing, which shall be a Euro-Dollar Business Day in the
case of a LIBOR Auction or a Domestic Business Day in the case of an Absolute
Rate Auction;

 

(ii)                                  the
aggregate amount of such Borrowing, which shall be $25,000,000 or a larger
multiple of $5,000,000 and which shall not exceed the aggregate amount
available in accordance with Section 3.02(b);

 

(iii)                               the duration of the
Interest Period applicable thereto, subject to the provisions of the definition
of Interest Period; and

 

(iv)                              whether
the Money Market Quotes requested are to set forth a Money Market Margin or a
Money Market Absolute Rate.

 

The Borrower may request offers to make Money Market Loans for more
than one Interest Period in a single Money Market Quote Request. No Money
Market Quote Request shall be given within five Euro-Dollar Business Days (or
such other number of days as the Borrower and the Agent may agree) of any other
Money Market Quote Request.

 

(c)                                  Invitation
for Money Market Quotes. Promptly upon receipt of a Money Market Quote
Request, the Agent shall send to the Banks by facsimile transmission an Invitation
for Money Market Quotes substantially in the form of Exhibit C
hereto, which shall constitute an invitation by the Borrower to each Bank to
submit Money Market Quotes offering to make the Money Market Loans to which
such Money Market Quote Request relates in accordance with this Section.

 

(d)                                 Submission
and Contents of Money Market Quotes.

 

(i)                                     Each
Bank may submit a Money Market Quote containing an offer or offers to make
Money Market Loans in response to any Invitation for Money Market Quotes. Each Money
Market Quote must comply with the requirements of this subsection (d)
and must be submitted to the Agent by facsimile transmission at its offices
specified in or pursuant to Section 9.01 not later than (x) 2:00 P.M.
(New York City time) on the fourth Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) 9:15 A.M.
(New York City time) on the proposed date of Borrowing, in the case of an
Absolute Rate Auction (or, in either case, such other time or date as the
Borrower

 

14

 

and
the Agent shall have mutually agreed and shall have notified to the Banks not
later than the date of the Money Market Quote Request for the first LIBOR
Auction or Absolute Rate Auction for which such change is to be effective); provided that Money Market Quotes submitted by the Agent (or
any affiliate of the Agent) in the capacity of a Bank may be submitted, and may
only be submitted, if the Agent or such affiliate notifies the Borrower of the
terms of the offer or offers contained therein not later than (x) 1:00 P.M.
(New York City time) on the fourth Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) 10:00 A.M.
(New York City time) on the proposed date of Borrowing, in the case of an
Absolute Rate Auction. Subject to Articles 3 and 6, any Money
Market Quote so made shall be irrevocable except with the written consent of
the Agent given on the instructions of the Borrower.

 

(ii)                                  Each
Money Market Quote shall be in substantially the form of Exhibit D
hereto and shall in any case specify:

 

(A)                              the
proposed date of Borrowing;

 

(B)                                the
principal amount of the Money Market Loan for which each such offer is being
made, which principal amount (w) may be greater than or less than the
Commitment of the quoting Bank, (x) must be $5,000,000 or a larger multiple of
$l,000,000, (y) may not exceed the principal amount of Money Market Loans for
which offers were requested and (z) may be subject to an aggregate limitation
as to the principal amount of Money Market Loans for which offers being made by
such quoting Bank may be accepted;

 

(C)                                in
the case of a LIBOR Auction, the margin above or below the applicable London
Interbank Offered Rate (the “Money Market Margin”)
offered for each such Money Market Loan, expressed as a percentage (specified
to the nearest 1/10,000th of 1%) to be added to or subtracted from such base
rate;

 

(D)                               in
the case of an Absolute Rate Auction, the rate of interest per annum (specified
to the nearest 1/10,000th of 1%) (the “Money Market Absolute Rate”)
offered for each such Money Market Loan; and

 

(E)                                 the
identity of the quoting Bank.

 

A Money Market Quote may set forth up to five separate offers by the
quoting Bank with respect to each Interest Period specified in the related
Invitation for Money Market Quotes.

 

(iii)                               Any Money Market Quote
shall be disregarded if it:

 

(A)                              is
not substantially in conformity with Exhibit D hereto or does not
specify all of the information required by subsection (d)(ii);

 

15

 

(B)                                contains
qualifying, conditional or similar language;

 

(C)                                proposes
terms other than or in addition to those set forth in the applicable Invitation
for Money Market Quotes; or

 

(D)                               arrives
after the time set forth in subsection (d)(i).

 

(e)                                  Notice
to Borrower. The Agent shall promptly notify the Borrower of the terms (i)
of any Money Market Quote submitted by a Bank that is in accordance with
subsection (d) and (ii) of any Money Market Quote that amends, modifies or is
otherwise inconsistent with a previous Money Market Quote submitted by such
Bank with respect to the same Money Market Quote Request. Any such subsequent
Money Market Quote shall be disregarded by the Agent unless such subsequent
Money Market Quote is submitted solely to correct a manifest error in such
former Money Market Quote. The Agent’s notice to the Borrower shall specify (A)
the aggregate principal amount of Money Market Loans for which offers have been
received for each Interest Period specified in the related Money Market Quote
Request, (B) the respective principal amounts and Money Market Margins or Money
Market Absolute Rates, as the case may be, so offered and (C) if applicable,
limitations on the aggregate principal amount of Money Market Loans for which
offers in any single Money Market Quote may be accepted.

 

(f)                                    Acceptance
and Notice by Borrower. Not later than 11:00 A.M. (New York City time) on
(x) the third Euro-Dollar Business Day prior to the proposed date of Borrowing,
in the case of a LIBOR Auction, or (y) the proposed date of Borrowing, in the
case of an Absolute Rate Auction (or, in either case, such other time or date
as the Borrower and the Agent shall have mutually agreed and shall have notified
to the Banks not later than the date of the Money Market Quote Request for the
first LIBOR Auction or Absolute Rate Auction for which such change is to be
effective), the Borrower shall notify the Agent of its acceptance or
non-acceptance of the offers so notified to it pursuant to subsection (e).
In the case of acceptance, such notice (a “Notice of Money Market
Borrowing”) shall specify the aggregate principal amount of
offers for each Interest Period that are accepted. The Borrower may accept any
Money Market Quote in whole or in part; provided that:

 

(i)                                     the
aggregate principal amount of each Money Market Borrowing may not exceed the
applicable amount set forth in the related Money Market Quote Request;

 

(ii)                                  the
principal amount of each Money Market Borrowing must be $25,000,000 or a larger
multiple of $5,000,000;

 

(iii)                               acceptance of offers may
only be made on the basis of ascending Money Market Margins or Money Market
Absolute Rates, as the case may be; and

 

16

 

(iv)                              the
Borrower may not accept any offer that is described in subsection (d)(iii)
or that otherwise fails to comply with the requirements of this Agreement.

 

(g)                                 Allocation
by Agent. If offers are made by two or more Banks with the same Money Market
Margins or Money Market Absolute Rates, as the case may be, for a greater
aggregate principal amount than the amount in respect of which such offers are
accepted for the related Interest Period, the principal amount of Money Market
Loans in respect of which such offers are accepted shall be allocated by the
Agent among such Banks as nearly as possible (in multiples of $1,000,000, as
the Agent may deem appropriate) in proportion to the aggregate principal
amounts of such offers. Determinations by the Agent of the amounts of Money
Market Loans shall be conclusive in the absence of manifest error.

 

Section 2.04                                Notice
to Banks; Funding of Loans.

 

(a)                                  Upon
receipt of a Notice of Borrowing, the Agent shall promptly notify each Bank of
the contents thereof and of such Bank’s share (if any) of such Borrowing and
such Notice of Borrowing shall not thereafter be revocable by the Borrower.

 

(b)                                 Not
later than 1:00 P.M. (New York City time) on the date of each Borrowing, each
Bank participating therein shall (except as provided in subsection (c)
of this Section 2.04) make available its share of such Borrowing, in
Federal or other funds immediately available in San Francisco, California, to
the Agent at its address referred to in Section 9.01. Unless the Agent
determines that any applicable condition specified in Article 3 has not
been satisfied, the Agent will make the funds so received from the Banks
available to the Borrower at the Agent’s aforesaid address.

 

(c)                                  If
any Bank makes a new Loan hereunder on a day on which the Borrower is to repay
all or any part of an outstanding Loan from such Bank, such Bank shall apply
the proceeds of its new Loan to make such repayment and only an amount equal to
the difference (if any) between the amount being borrowed and the amount being
repaid shall be made available by such Bank to the Agent as provided in subsection
(b), or remitted by the Borrower to the Agent as provided in Section
2.12, as the case may be.

 

(d)                                 Unless
the Agent shall have received notice from a Bank prior to the date of any
Borrowing that such Bank will not make available to the Agent such Bank’s share
of such Borrowing, the Agent may assume that such Bank has made such share
available to the Agent on the date of such Borrowing in accordance with subsections
(b) and (c) of this Section 2.04 and the Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so
made such share available to the Agent, such Bank and the Borrower severally
agree to repay to the Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the Agent, at
(i) in the case of the Borrower, a rate per annum equal to the higher of the
Federal Funds Rate or the interest rate applicable thereto pursuant to Section
2.07 and (ii) in the case of such Bank, the

 

17

 

Federal
Funds Rate. If such Bank shall repay to the Agent such corresponding amount,
such amount so repaid shall constitute such Bank’s Loan included in such
Borrowing for purposes of this Agreement. The failure of any Bank to make
available its share of any Borrowing shall not relieve any other Bank of its
corresponding obligation to do so on the date when due, and no Bank shall be
responsible for the failure of any other Bank to so make its share available.

 

Section 2.05                                Reserved.

 

Section 2.06                                Maturity
of Loans. Each Loan included in any Borrowing shall mature, and the
principal amount thereof shall be due and payable, on the last day of the
Interest Period applicable to such Borrowing.

 

Section 2.07                                Interest
Rates.

 

(a)                                  Each
Base Rate Loan shall bear interest on the outstanding principal amount thereof,
for each day from the date such Loan is made until it becomes due, at a rate
per annum equal to the Base Rate for such day. Such interest shall be payable
for each Interest Period on the last day thereof. Any overdue principal of or
interest on any Base Rate Loan shall bear interest, payable on demand, for each
day until paid at a rate per annum equal to the sum of 2% plus the rate
otherwise applicable to Base Rate Loans for such day.

 

(b)                                 Each
CD Loan shall bear interest on the outstanding principal amount thereof, for
each day during the Interest Period applicable thereto, at a rate per annum
equal to the sum of the Applicable Margin for such day plus the Adjusted CD
Rate for such Interest Period; provided that
if any CD Loan shall, as a result of clause (ii)(b) of the definition of
Interest Period, have an Interest Period of less than 30 days, such Loan shall
bear interest during such Interest Period at the rate applicable to Base Rate
Loans during such period. Such interest shall be payable for each Interest
Period on the last day thereof and, if such Interest Period is longer than 90
days, at intervals of 90 days after the first day thereof. Any overdue
principal of or interest on any CD Loan shall bear interest, payable on demand,
for each day until paid at a rate per annum equal to the sum of 2% plus the
higher of (i) the sum of the Applicable Margin for such day plus the Adjusted
CD Rate applicable to such Loan and (ii) the rate applicable to Base Rate Loans
for such day.

 

The “Adjusted CD Rate” applicable to any
Interest Period means a rate per annum determined pursuant to the following
formula:

 

	
  ACDR1 =

  	
  [CDBR]

  	
  + AR

  
	
   

  	
  [1.00-DRP]

  
	
  ACDR =

  	
  Adjusted CD Rate

  
	
  CDBR =

  	
  CD Base Rate

  
	
  DRP =

  	
  Domestic Reserve Percentage

  
	
  AR =

  	
  Assessment Rate

  

 

1
Rounded upward, if necessary, to the next higher 1/100 of 1%.

 

18

 

The “CD Base Rate”
applicable to any Interest Period is the rate of interest determined by the
Agent to be the average (rounded upward, if necessary, to the next higher 1/100
of 1%) of the prevailing rates per annum bid at 11:00 A.M. (New York City time)
(or as soon thereafter as practicable) on the first day of such Interest Period
by two or more New York certificate of deposit dealers of recognized standing
for the purchase at face value from each Reference Bank of its certificates of
deposit in an amount comparable to the principal amount of the CD Loan of such
Reference Bank to which such Interest Period applies and having a maturity
comparable to such Interest Period.

 

“Domestic Reserve
Percentage” means for any day that percentage (expressed as a
decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including without limitation any basic,
supplemental or emergency reserves) for a member bank of the Federal Reserve
System in New York City with deposits exceeding five billion dollars in respect
of new non-personal time deposits in dollars in New York City having a maturity
comparable to the related Interest Period and in an amount of $100,000 or more.
The Adjusted CD Rate shall be adjusted automatically on and as of the effective
date of any change in the Domestic Reserve Percentage.

 

“Assessment Rate”
means for any day the annual assessment rate in effect on such day which is
payable by a member of the Bank Insurance Fund classified as adequately
capitalized and within supervisory subgroup “A” (or a comparable successor
assessment risk classification) within the meaning of 12 C.F.R. § 327.4(a) (or
any successor provision) to the Federal Deposit Insurance Corporation (or any
successor) for such Corporation’s (or such successor’s) insuring time deposits,
at offices of such institution in the United States. The Adjusted CD Rate shall
be adjusted automatically on and as of the effective date of any change in the
Assessment Rate.

 

(c)                                  Each
Euro-Dollar Loan shall bear interest on the outstanding principal amount
thereof, for each day during the Interest Period applicable thereto, at a rate
per annum equal to the sum of the Applicable Margin for such day plus the Adjusted London Interbank Offered Rate for such
Interest Period. Such interest shall be payable for each Interest Period on the
last day thereof and, if such Interest Period is longer than three months, at
intervals of three months after the first day thereof.

 

The “Adjusted London Interbank
Offered Rate” applicable to any Interest Period means a rate per
annum equal to the quotient obtained (rounded upward, if necessary, to the next
higher 1/100 of 1%) by dividing (i) the applicable London Interbank Offered
Rate by (ii) 1.00 minus the Euro-Dollar Reserve Percentage.

 

The “London Interbank Offered
Rate” means, for such Interest Period, the rate per annum equal
to the British Bankers Association LIBOR Rate (“BBA

 

19

 

LIBOR”), as
published by Reuters (or other commercially available source providing
quotations of BBA LIBOR as designated by the Agent from time to time) at
approximately 11:00 A.M. (London time) two Euro-Dollar Business Days prior to
the commencement of such Interest Period, for Dollar deposits (for delivery on
the first day of such Interest Period) with a term equivalent to such Interest
Period. If such rate is not available at such time for any reason, then the “London
Interbank Offered Rate” for such Interest Period shall be the rate per annum
determined by the Agent to be the rate at which deposits in Dollars for
delivery on the first day of such Interest Period in same day funds in the
approximate amount of the Euro-Dollar Loan being made, continued or converted
by Bank of America and with a term equivalent to such Interest Period would be
offered by Bank of America’s London Branch to major banks in the London
interbank eurodollar market at their request at approximately 11:00 A.M.
(London time) two Euro-Dollar Business Days prior to the commencement of such
Interest Period.

 

“Euro-Dollar Reserve
Percentage” means, for any day during any Interest Period, the
reserve percentage (expressed as a decimal, carried out to five decimal places)
in effect on such day, whether or not applicable to any Bank, under regulations
issued from time to time by the Board of Governors of the Federal Reserve
System for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with respect to
Eurocurrency funding (currently referred to as “Eurocurrency liabilities”). The
applicable interest rate for each outstanding Euro-Dollar Loan shall be
adjusted automatically as of the effective date of any change in the
Euro-Dollar Reserve Percentage.

 

(d)                                 Any
overdue principal of or interest on any Euro-Dollar Loan shall bear interest,
payable on demand, for each day from and including the date payment thereof was
due to but excluding the date of actual payment, at a rate per annum equal to
the sum of 2% plus the higher of (i) the sum of
the Applicable Margin for such day plus the Adjusted London Interbank Offered
Rate applicable to such Loan and (ii) the sum of the Applicable Margin for such
day plus the Adjusted London Interbank Offered Rate as of such day applicable
to such Loan amount for a presumed one-month Interest Period (or if such amount
due remains unpaid more than three Euro-Dollar Business Days, then for a
presumed six-month Interest Period), or, if the circumstances described in clause
(a) or (b) of Section 8.01 shall exist, at a rate per annum
equal to the sum of 2% plus the rate
applicable to Base Rate Loans for such day.

 

(e)                                  Subject
to Section 8.01(a), each Money Market LIBOR Loan shall bear interest on
the outstanding principal amount thereof, for the Interest Period applicable
thereto, at a rate per annum equal to the sum of the London Interbank Offered
Rate for such Interest Period (determined in accordance with Section 2.07(c)
as if the related Money Market LIBOR Borrowing were a Committed Euro-Dollar
Borrowing) plus (or minus) the Money Market Margin
quoted by the Bank making such Loan in accordance with Section 2.03. Each
Money Market Absolute Rate Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a rate

 

20

 

per
annum equal to the Money Market Absolute Rate quoted by the Bank making such
Loan in accordance with Section 2.03. Such interest shall be payable for
each Interest Period on the last day thereof and, if such Interest Period is
longer than three months, at intervals of three months after the first day
thereof. Any overdue principal of or interest on any Money Market Loan shall
bear interest, payable on demand, for each day until paid at a rate per annum
equal to the sum of 2% plus the Base
Rate for such day.

 

(f)                                    The
Agent shall determine each interest rate applicable to the Loans hereunder. The
Agent shall give prompt notice to the Borrower and the participating Banks of
each rate of interest so determined, and its determination thereof shall be
conclusive in the absence of manifest error.

 

(g)                                 Each
Reference Bank agrees to use its best efforts to furnish quotations to the
Agent as contemplated by this Section. If any Reference Bank does not furnish a
timely quotation, the Agent shall determined the relevant interest rate on the
basis of the quotation or quotations furnished by the remaining Reference Bank
or Banks or, if none of such quotations is available on a timely basis, the
provisions of Section 8.01 shall apply.

 

(h)                                 The
“Applicable Margin” with respect to
any Euro-Dollar Loan or CD Loan at any date is the applicable percentage amount
set forth below in the applicable column, which shall be (i) determined based
upon the Debt Rating as specified below and (ii) applicable to all Euro-Dollar
Loans and CD Loans existing on and after the first date a specific Debt Rating
is effective (the “Debt Rating Date”) and
continuing until, but not including, the immediate next Debt Rating Date:

 

	
  Level

  	
  Debt Rating

  	
  Applicable

  Margin if

  Usage <50%

  	
  Applicable

  Margin if

  Usage > 50%

  
	
  I

  	
  Greater than or equal to AA- by S&P or
  Aa3 by Moody’s

  	
  0.115%

  	
  0.140%

  
	
  II

  	
  A+ by S&P or A1 by Moody’s

  	
  0.135%

  	
  0.160%

  
	
  III

  	
  A by S&P or A2 by Moody’s

  	
  0.150%

  	
  0.175%

  
	
  IV

  	
  A- by S&P or A3 by Moody’s

  	
  0.190%

  	
  0.240%

  
	
  V

  	
  Equal to or less than BBB+ by S&P or
  Baa1 by Moody’s

  	
  0.270%

  	
  0.320%

  

 

In the event that the Debt Ratings assigned
by S&P and Moody’s differ, the Applicable Margin and the Facility Fee Rate
referred to in Section 2.08 shall be determined by reference to the
rating level having the higher Debt Rating unless such

 

21

 

ratings are more than one level apart, in which case the rating level
that is one tier below the higher of the two ratings shall determine the Applicable
Margin and the Facility Fee Rate. The final Debt Rating level by which the
Applicable Margin and the Facility Fee Rate are determined is referred to
herein as a “Level”.

 

In the event that either S&P or Moody’s
(but not both) shall not make a Debt Rating, the above calculations of the
Applicable Margin and the Facility Fee Rate shall be made based on (i) the
rating provided by S&P or Moody’s, whichever shall then maintain a current
Debt Rating, and (ii) the Debt Rating provided by a nationally recognized
securities rating agency selected by the Borrower and approved by the Agent,
which shall be substituted for either S&P or Moody’s, as the case may be
(the “Alternative Rating Agency”),
and the Alternative Rating Agency’s equivalent rating levels shall be
substituted for the Debt Rating levels of either S&P or Moody’s, whichever
shall no longer then make the applicable Debt Rating.

 

Section 2.08                                Facility
Fees.

 

(a)                                  The
Borrower shall pay to the Agent for the account of the Banks ratably in
proportion to their respective Commitments a facility fee at the Facility Fee
Rate (as defined below). Such facility fee shall accrue from and including the
date hereof to but excluding the Termination Date, on the daily aggregate
amount of the Commitments (whether used or unused).

 

(b)                                 “Facility Fee Rate” means, at any
date, a rate per annum equal to (i) 0.035%, if Level I Status exists at such
date, (ii) 0.040%, if Level II Status exists at such date, (iii) 0.050%, if
Level III Status exists at such date, (iv) 0.060%, if Level IV Status exists at
such date, and (v) 0.080% if Level V Status exists at such date.

 

(c)                                  Accrued
fees under this Section shall be payable quarterly in arrears on each September
1, December 1, March 1 and June 1 and upon the respective Termination Date for
each Bank (and, if later, the date the Loans shall be repaid in their
entirety).

 

Section 2.09                                Optional
Termination or Reduction of Commitments. The Borrower may, upon at least
three Domestic Business Days’ notice to the Agent, (a) terminate the
Commitments at any time, if no Loans are outstanding at such time, or (b)
ratably reduce from time to time by an aggregate amount of $25,000,000 or any
larger multiple of $5,000,000, the aggregate amount of the Commitments in
excess of the aggregate outstanding principal amount of the Loans.

 

Section 2.10                                Mandatory
Termination of Commitments. The Commitments of each Bank shall terminate on
its respective Termination Date, and any Loans then outstanding (together with
accrued interest thereon) shall be due and payable on such date.

 

Section 2.11                                Optional
Prepayments.

 

(a)                                  The
Borrower may, upon at least one Domestic Business Day’s notice to the Agent,
prepay any Base Rate Borrowing (or any Money Market Borrowing bearing interest
at the Base Rate pursuant to Section 8.01(a)) in whole at any time, or
from time to time in part in amounts aggregating $25,000,000 or any larger
multiple of $5,000,000,

 

22

 

by
paying the principal amount to be prepaid together with accrued interest
thereon to the date of prepayment. Each such optional prepayment shall be
applied to prepay ratably the Loans of the several Banks included in such
Borrowing.

 

(b)                                 Except
as provided in Sections 2.18 and 8.02, and subject to Section 2.13,
the Borrower may not prepay all or any portion of the principal amount of any
Fixed Rate Loan prior to the maturity thereof.

 

(c)                                  Upon
receipt of a notice of prepayment pursuant to this Section, the Agent shall
promptly notify each Bank of the contents thereof and of such Bank’s ratable
share (if any) of such prepayment and such notice shall not thereafter be
revocable by the Borrower.

 

Section 2.12                                General
Provisions as to Payments.

 

(a)                                  The
Borrower shall make each payment of principal of and interest on, the Loans and
of fees hereunder, not later than 12:00 Noon (New York City time) on the date
when due, in Federal or other funds immediately available in San Francisco,
California, without set-off, deduction, recoupment or counterclaim, to the
Agent at its address referred to in Section 9.01. The Agent will
promptly distribute to each Bank its ratable share of each such payment
received by the Agent for the account of the Banks. Whenever any payment of
principal of, or interest on, the Domestic Loans or of fees shall be due on a
day which is not a Domestic Business Day, the date for payment thereof shall be
extended to the next succeeding Domestic Business Day unless such Domestic
Business Day occurs after the Termination Date, in which case the date for payment
thereof shall be the next preceding Domestic Business Day. Whenever any payment
of principal of, or interest on, the Euro-Dollar Loans shall be due on a day
which is not a Euro-Dollar Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month or occurs after the
Termination Date, in which case the date for payment thereof shall be the next
preceding Euro-Dollar Business Day. Whenever any payment of principal of, or
interest on, the Money Market Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month or occurs after the Termination Date, in which
case the date for payment thereof shall be the next preceding Euro-Dollar
Business Day. If the date for any payment of principal is extended by operation
of law or otherwise, interest thereon shall be payable for such extended time.

 

(b)                                 Unless
the Agent shall have received notice from the Borrower prior to the date on
which any payment is due to the Banks hereunder or that the Borrower will not
make such payment in full, the Agent may assume that the Borrower has made such
payment in full to the Agent on such date and the Agent may, in reliance upon
such assumption, cause to be distributed to each Bank on such due date an
amount equal to the amount then due such Bank. If and to the extent that the
Borrower shall not have so made such payment, each Bank shall repay to the
Agent forthwith on demand such amount distributed to such Bank together with
interest thereon, for each day from the

 

23

 

date
such amount is distributed to such Bank until the date such Bank repays such
amount to the Agent, at the Federal Funds Rate.

 

Section 2.13                                Funding
Losses. If the Borrower makes any payment of principal with respect to any
Fixed Rate Loan (pursuant to Section 2.16, Article 6 or 8
or otherwise) on any day other than the last day of the Interest Period
applicable thereto, or the last day of an applicable period fixed pursuant to Section
2.07(d), or if the Borrower fails to borrow any Fixed Rate Loans after
notice has been given to any Bank in accordance with Section 2.04(a), or
if any Bank shall be required to assign to any other Bank any portion of a
Committed Loan pursuant to Section 2.17(b), the Borrower shall reimburse
each Bank within 15 days after demand for any resulting loss or expense
incurred by it (or by an existing or prospective Participant in the related
Loan), including (without limitation) any loss incurred in obtaining,
liquidating or employing deposits from third parties, but excluding loss of
margin for the period after any such payment or failure to borrow, provided that such Bank shall have delivered to the Borrower
a certificate as to the amount of such loss or expense, which certificate shall
be conclusive in the absence of manifest error.

 

Section 2.14                                Computation
of Interest and Fees. Interest based on the Prime Rate hereunder shall be
computed on the basis of a year of 365 days (or 366 days in a leap year) and
paid for the actual number of days elapsed (including the first day but
excluding the last day). All other interest and fees shall be computed on the
basis of a year of 360 days and paid for the actual number of days elapsed
(including the first day but excluding the last day).

 

Section 2.15                                Withholding
Tax Exemption.

 

At least five Domestic Business Days prior to
the first date on which interest or fees are payable hereunder for the account
of any Bank, each Bank that is not incorporated under the laws of the United
States of America or a state thereof agrees that it will deliver to each of the
Borrower and the Agent two duly completed copies of United States Internal
Revenue Service Form W-8 (including Form W-8BEN or W-8EC1), certifying in
either case that such Bank is entitled to receive payments under this Agreement
and its Note, if applicable, without deduction or withholding of any United
States federal income taxes. Each Bank which so delivers a Form W-8BEN or
W-8EC1 further undertakes to deliver to the Agent on behalf of the Borrower two
additional copies of such form (or a successor form) on or before the date that
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 Borrower or the Agent, in each case certifying that such Bank
is entitled to receive payments under this Agreement and its Notes, if
applicable, 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 otherwise be required which renders all such forms inapplicable
or which would prevent such Bank from duly completing and delivering any such
form with respect to it and such Bank advises the Borrower and the Agent that
it is not capable of receiving payments without any deduction or withholding of
United States federal income tax.

 

Section 2.16                                Change
of Control. If a Change of Control shall occur (a) the Borrower will,
within ten days after the occurrence thereof, give each Bank notice thereof and
shall

 

24

 

describe in reasonable detail the facts and circumstances
giving rise thereto and (b) each Bank may, by three Domestic Business Days’
notice to the Borrower and the Agent given not later than 60 days after receipt
of such notice of Change of Control, terminate its Commitment, which shall
thereupon be terminated, and declare its pro rata share of the Committed Loans
and the Money Market Loans made by it (together with accrued interest thereon)
and any other amounts payable hereunder for its account to be, and such Loans
and such other amounts (including, without limitation, amounts payable under Section
2.13) shall thereupon become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower. For the purpose of this Section, a “Change of Control” shall occur if
(i) a majority of the directors of the Borrower shall be Persons other than
Persons (x) for whose election proxies shall have been solicited by the Board
of Directors of the Borrower or (y) who are then serving as directors appointed
by the Board of Directors to fill vacancies on the Board of Directors caused by
death or resignation (but not by removal) or to fill newly-created
directorships or (ii) any person or group of persons (within the meaning of Section
13 or 14 of the Exchange Act) shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated by the Securities and
Exchange Commission under the Exchange Act) of 50% or more in voting power of
the outstanding Voting Stock.

 

Section 2.17                                Increase
in Combined Commitments.

 

(a)                                  The
Borrower shall have the right, without the consent of the Banks, subject to the
terms of this Section 2.17, to effectuate from time to time, at any
time prior to the then effective Termination Date, an increase in the combined
Commitments under this Agreement by adding to this Agreement one or more other
banks or other financial institutions reasonably acceptable to the Agent and
the Borrower and qualifying as an Assignee hereunder, who shall, upon
completion of the requirements of this Section 2.17 constitute “Banks”
hereunder (an “Added Bank”), or by allowing
one or more Banks in their sole discretion to increase their respective
Commitments hereunder (each an “Increasing Bank”),
so that such added and increased Commitments shall equal the increase in
Commitments effectuated pursuant to this Section 2.17; provided that (i) there shall not be any increased
Commitment or any added Commitment, unless the aggregate increase or addition
to be effected is at least $25,000,000, (ii) no increase in or added
Commitments pursuant to this Section 2.17 shall result in combined
Commitments exceeding $2,250,000,000, (iii) no Bank’s Commitment shall be
increased under this Section 2.17 without the consent of such Bank, and
(iv) there shall not exist any Default or Event of Default immediately prior to
and immediately after giving effect to such increased or added Commitment. The
Borrower shall deliver or pay, as applicable, to the Agent not later than ten
Domestic Business Days prior to any such increase in Commitments each of the
following items with respect to each Added Bank and Increasing Bank:

 

(i)                                     a
written notice of Borrower’s intention to increase the combined Commitments
pursuant to this Section 2.17, which shall specify each Added Bank and
Increasing Bank, if any, the changes in amounts of Commitments that will
result, and such other information as is reasonably requested by the Agent;

 

25

 

(ii)                                  documents
in the form of Exhibit E or Exhibit F, as may be required by the
Agent, executed and delivered by each Added Bank and each Increasing Bank,
pursuant to which it becomes a party hereto or increases its Commitment, as the
case may be;

 

(iii)                               if requested by the
applicable Bank, Notes or replacement Notes, as the case may be, executed and
delivered by Borrower; and

 

(iv)                              a
non-refundable processing fee of $3,500 with respect to each Added Bank or
Increasing Bank for the sole account of the Agent.

 

(b)                                 Upon
receipt of any notice referred to in clause (a)(i) above, the Agent
shall promptly notify each Bank thereof. Upon execution and delivery of such
documents and the payment of such fee (the “Increased
Commitment Date”), each such Added Bank shall constitute a “Bank”
for all purposes under this Agreement and related documents without any
acknowledgment by or the consent of the other Banks, with a Commitment as
specified in such documents, or such Bank’s Commitment shall increase as
specified in such documents, as the case may be. Immediately upon the
effectiveness of the addition of such Added Bank or the increase in the
Commitment of such Increasing Bank under this Section 2.17, (i) the
respective pro rata shares of the Banks shall be deemed modified as appropriate
to correspond to such changed combined Commitments, and (ii) if there are at
such time outstanding any Committed Loans, each Bank whose pro rata share has
been decreased as a result of the increase in the combined Commitments shall be
deemed to have assigned, without recourse, to each Added Bank and Increasing
Bank such portion of such Bank’s Committed Loans as shall be necessary to
effectuate such adjustment in pro rata shares. Each Increasing Bank and Added
Bank (x) shall be deemed to have assumed such portion of such Committed Loans
and (y) shall fund to each other Bank on the Increased Commitment Date the
amount of Committed Loans assigned by it to such Bank. The Borrower agrees to
pay to the Banks on demand any and all amounts to the extent payable pursuant
to Section 2.13 as a result of any such prepayment of Committed Loans
occasioned by the foregoing increase in Commitments and the reallocation of the
pro rata shares.

 

(c)                                  This
section shall supercede any provisions in Section 9.06(b) to the
contrary.

 

Section 2.18                                Extension
of Termination Date.

 

(a)                                  Requests
for Extension. The Borrower may, by notice to the Agent, given not earlier
than 60 days prior to each of the first and second anniversaries of the
Effective Date hereof (each such anniversary being referred to herein as an “Anniversary Date” and each such 60
day period prior to an Anniversary Date being referred to herein as a “Request Period”), request that each
Bank extend its Commitment beyond such Bank’s Termination Date then in effect
(the “Existing Termination Date”)
for an additional one-year period from the Existing Termination Date; provided
that no more than one such request may be made during each Request Period. The
Agent shall promptly notify each

 

26

 

Bank
of the Borrower’s request for such extension (the date such notice is given
being referred to herein as the “Notice Date”).

 

(b)                                 Bank
Elections to Extend. Each Bank, acting in its sole discretion, shall, by
notice to the Agent given not later than 30 days following the Notice Date,
advise the Agent whether or not such Bank agrees to such extension (each such
Bank that determines not to so extend its Commitment being referred to as a “Non-Extending Bank”)). Any Bank that
does not so advise the Agent on or before the 30th day following the
Notice Date (the “Response Deadline”) shall be
deemed to be a Non-Extending Bank. The election of any Bank to agree to such
extension of the Termination Date shall not obligate any other Bank to so
agree.

 

(c)                                  Notification
by Agent. The Agent shall notify the Borrower of each Bank’s determination
under this Section 2.18 no later than the 5th Domestic
Business Day after the Response Deadline.

 

(d)                                 Additional
Commitment Banks. The Borrower shall have the right on or before the
related Anniversary Date to replace each Non-Extending Bank with, and add as “Banks”
under this Agreement in place thereof, one or more Assignees (each, an “Additional Commitment Bank”) as
provided in Section 9.06, provided that
each of such Additional Commitment Banks shall enter into an Assignment and
Assumption Agreement pursuant to which such Additional Commitment Bank shall
undertake a Commitment (and, if any such Additional Commitment Bank is already
a Bank, its Commitment shall be in addition to such Bank’s Commitment hereunder
on such date).

 

(e)                                  Minimum
Extension Requirement. If (and only if) the total of the Commitments of the
Banks that have agreed to so extend the Termination Date (each, an “Extending Bank”) and the additional
Commitments of the Additional Commitment Banks shall be more than 51% of the
aggregate amount of the Commitments in effect immediately prior to the related
Anniversary Date, then, effective as of the related Anniversary Date (but
subject to the prior satisfaction of the conditions set forth in clause (f)
below), the Termination Date of this Agreement and the Termination Date with
respect to the Commitments of each Extending Bank and of each Additional
Commitment Bank shall be extended to the date falling one year after the
Existing Termination Date (except that, if such date is not a Domestic Business
Day, such Termination Date as so extended shall be the next preceding Domestic
Business Day) and each Additional Commitment Bank shall thereupon become a “Bank”
for all purposes of this Agreement. Notwithstanding anything herein to the
contrary, the Commitment of each Non-Extending Bank shall remain in full force
and effect until and shall terminate on the Existing Termination Date for such
Non-Extending Bank, unless such Non-Extending Bank is replaced prior to the
related Anniversary Date by an Additional Commitment Bank as provided in clause
(d) above.

 

(f)                                    Conditions
to Effectiveness of Extensions. Notwithstanding the foregoing, the
extension of the Termination Date pursuant to this Section shall not be
effective with respect to any Bank unless:

 

27

 

(i)                                     no
Default shall have occurred and be continuing on the date of such extension and
after giving effect thereto;

 

(ii)                                  the
representations and warranties of the Borrower contained in this Agreement that
are qualified by materiality are true and correct and the representations and
warranties of the Borrower contained in the Agreement that are not qualified by
materiality are true and correct in all material respects, in each case on and
as of the date of such extension and after giving effect thereto, as though
made on and as of such date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such specific
date);

 

(iii)                               at the time of such
extension no material adverse change has occurred since February 3, 2007 in the
business, financial position or results of operations of the Borrower and its
Consolidated Subsidiaries considered as a whole; and

 

(iv)                              the
chief financial officer, treasurer or assistant treasurer of the Borrower shall
have delivered to the Agent a certificate, dated the Anniversary Date with
respect to such extension, as to the matters referred to in clauses (i) through
(iii) above.

 

(g)                                 Payment
of Non-Extending Banks. On the effective date of any extension of the
Termination Date hereunder, the Borrower shall prepay any Committed Loans
outstanding on such date (and pay any additional amounts required pursuant to Section
2.08 or 2.13) to the extent necessary to keep outstanding Committed
Loans ratable with any revised pro rata allocation of the Commitments of the
respective Banks effective as of such date.

 

(h)                                 Conflicting
Provisions. This Section shall supersede any provisions in Section 9.06
to the contrary.

 

Section 2.19                                Evidence
of Debt. The Loans made by each Bank shall be evidenced by one or more
accounts or records maintained by such Bank and by the Agent in the ordinary
course of business. Any failure to so record or any error in doing so shall
not, however, limit or otherwise affect the obligation of the Borrower
hereunder to pay any amount owing with respect to its obligations hereunder. In
the event of any conflict between the accounts and records maintained by any
Bank and the accounts and records of the Agent in respect of such matters, the
accounts and records of the Agent shall control in the absence of manifest
error.

 

ARTICLE 3.

CONDITIONS

 

Section 3.01                                Effectiveness.
This Agreement shall become effective on the date that each of the following
conditions shall have been satisfied (or waived in accordance with Section 9.05):

 

28

 

(a)                                  receipt
by the Agent of counterparts hereof signed by each of the parties hereto (or,
in the case of any party as to which an executed counterpart shall not have
been received, receipt by the Agent in form satisfactory to it of telegraphic,
telex or other written confirmation from such party of execution of a
counterpart hereof by such party);

 

(b)                                 receipt
by the Agent for the account of each Bank requesting such, of a duly executed
Note dated on or before the Effective Date;

 

(c)                                  receipt
by the Agent of an opinion of Timothy R. Baer, Esq., General Counsel for the
Borrower, substantially in the form of Exhibit G hereto and covering
such additional matters relating to the transactions contemplated hereby as the
Required Banks may reasonably request;

 

(d)                                 receipt
by the Agent of an opinion of Helms Mulliss & Wicker, PLLC, special counsel
for the Agent, substantially in the form of Exhibit H hereto and
covering such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;

 

(e)                                  receipt
by the Agent of evidence satisfactory to it of (i) the payment of all principal
of and interest on any loans outstanding under, and of all accrued fees under
the Existing Five-Year Agreement, and (ii) the satisfaction of all obligations,
termination of all commitments under, and cancellation or expiration of, the Existing
Five-Year Agreement;

 

(f)                                    receipt
by the Agent of all documents it may reasonably request relating to the
existence of the Borrower, the corporate authority for and the validity of this
Agreement and the Notes, if any, and any other matters relevant hereto, all in
form and substance satisfactory to the Agent;

 

(g)                                 receipt
by the Agent of a certificate signed by the assistant treasurer of the Borrower
certifying that since February 3, 2007 there shall not have occurred any
material adverse change in the business, financial position or results of
operations of the Borrower and its Consolidated Subsidiaries, considered as a
whole.

 

Promptly after the Effective Date the Agent
shall deliver to the Borrower for cancellation the promissory note of each lender
under the Existing Five-Year Agreement, or, in lieu thereof, a lost note
affidavit from any such lender which does not return its promissory note to the
Agent. The Agent shall promptly notify the Borrower and each Bank of the
effectiveness of this Agreement, and such notice shall be conclusive and
binding on all parties hereto.

 

Section 3.02                                Borrowings.
The obligation of any Bank to make a Loan on the occasion of any Borrowing is
subject to the satisfaction of the following conditions:

 

(a)                                  receipt
by the Agent of a Notice of Borrowing as required by Section 2.02 or 2.03,
as the case may be;

 

29

 

(b)                                 the
fact that, immediately after such Borrowing, the aggregate outstanding
principal amount of the Loans will not exceed the aggregate amount of the
Commitments;

 

(c)                                  the
fact that, immediately before and after such Borrowing, no Default shall have
occurred and be continuing; and

 

(d)                                 the
fact that (i) the representations and warranties of the Borrower contained in
this Agreement that are qualified by materiality are true and correct, and (ii)
the representations and warranties of the Borrower contained in this Agreement
that are not qualified by materiality are true and correct in all material
respects, in each case on and as of the date of such Borrowing (except, in the
case of a Refunding Borrowing, the representations and warranties set forth in Section
4.05 as to any matter which has theretofore been disclosed in writing by
the Borrower to the Banks).

 

Each Borrowing hereunder shall be deemed to
be a representation and warranty by the Borrower on the date of such Borrowing
as to the facts specified in clauses (b), (c) and, to the extent
applicable, (d) of this Section.

 

ARTICLE 4.

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants that:

 

Section 4.01                                Corporate
Existence and Power. Each of the Borrower and each of its Consolidated
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where, in light of the nature of the business transacted or
the property owned by it, such qualification is necessary and the failure so to
qualify might permanently impair title to property material to its operations
or its right to enforce a material contract against others, or expose it to
substantial liability in such jurisdiction.

 

Section 4.02                                Corporate
and Governmental Authorization; No Contravention. The execution, delivery
and performance by the Borrower of this Agreement and the Notes, if any, are
within the Borrower’s corporate powers, have been duly authorized by all
necessary corporate action, require no action by or in respect of, or filing
with, any governmental body, agency or official and do not contravene, or
constitute a default under, any provision of applicable law or regulation or of
the articles of incorporation or by-laws of the Borrower or of any agreement or
instrument evidencing or governing Debt of the Borrower or any other material
agreement, judgment, injunction, order, decree or other instrument binding upon
the Borrower or result in the creation or imposition of any Lien on any asset
of the Borrower or any of its Subsidiaries.

 

Section 4.03                                Binding
Effect. This Agreement constitutes a valid and binding agreement of the
Borrower and the Notes, if any, when executed and delivered in accordance with
this Agreement, will constitute valid and binding obligations of the Borrower
in each case enforceable in accordance with their respective terms, except as
(i) the enforceability thereof

 

30

 

may be limited by bankruptcy, insolvency or similar
laws affecting creditors’ rights generally and (ii) rights of acceleration and
the availability of equitable remedies may be limited by equitable principles
of general applicability.

 

Section 4.04                                Financial
Information. The consolidated statements of financial position of the Borrower
and its Consolidated Subsidiaries as of February 3, 2007 and the related
consolidated statements of results of operations, cash flows and shareholders’
investment for the fiscal year then ended, reported on by Ernst & Young,
LLP and set forth in the Borrower’s Form 10-K for the fiscal year then ended, a
copy of which has been delivered to each of the Banks, fairly present, in
conformity with generally accepted accounting principles, the consolidated
financial position of the Borrower and its Consolidated Subsidiaries as of such
date and their consolidated results of operations and cash flows for such
fiscal year.

 

Section 4.05                                Litigation.
There is no action, suit or proceeding pending against, or to the knowledge of
the Borrower threatened against or affecting, the Borrower or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency or
official which might reasonably be expected to materially adversely affect the
business, consolidated financial position or consolidated results of operations
of the Borrower and its Consolidated Subsidiaries or which in any manner draws
into question the validity of this Agreement or any Note.

 

Section 4.06                                Compliance
with ERISA. No Plan has incurred any “accumulated funding deficiency” (within
the meaning of Section 302 of ERISA or Section 412 of the Internal Revenue
Code), whether or not waived. Neither the Borrower nor any of its Subsidiaries
nor any Plan has engaged in any “prohibited transaction”, as such term is
defined in Section 4975 of the Internal Revenue Code or Section 406 or 407 of
ERISA, which might reasonably be expected to result, directly or indirectly, in
any material liability of the Group. No Plan Event has occurred or is expected
to occur which might reasonably be expected to result, directly or indirectly,
in any liability of the Group. The accumulated benefit obligation of any Plan
(as determined by the Plan’s actuaries) does not exceed the fair market value
of such Plan’s assets as of the end of the most recent year-end of such Plan by
more than $100,000,000. No “reportable event” (as defined in Section 4043 of
ERISA) has occurred with respect to any Plan or any Multiemployer Plan which
might reasonably be expected to result, directly or indirectly, in any
liability of the Group. If the Borrower or any of its Subsidiaries or any ERISA
Affiliate of any of them were to withdraw from any Plan described in Section
4063 of ERISA, or were to withdraw completely or partially from any
Multiemployer Plan, neither the Borrower nor any of its Subsidiaries would
incur, directly or indirectly, any liability under Title IV of ERISA in excess
of $100,000,000.

 

Section 4.07                                Payment
of Taxes. United States Federal income tax returns of the Borrower and its
Subsidiaries have been examined and closed through the fiscal year ended
January 31, 1998. The Borrower and its Subsidiaries have filed all United
States Federal income tax returns and all other material tax returns which, to
the best of the Borrower’s knowledge, are required to be filed by them and have
paid all taxes due pursuant to such returns or pursuant to any assessment
received by the Borrower or any Subsidiary, except for any such taxes which are
being contested in good faith by appropriate proceedings and against which the
Borrower in its judgment has set aside adequate reserves in accordance with
generally accepted accounting principles.

 

31

 

Section 4.08                                Full
Disclosure. All information heretofore furnished by the Borrower to the Agent
or any Bank for purposes of or in connection with this Agreement or any
transaction contemplated hereby is, and all such information hereafter
furnished by the Borrower to the Agent or any Bank will be, true and accurate
in all material respects on the date as of which such information is stated or
certified.

 

ARTICLE 5.

COVENANTS

 

The Borrower agrees that, so long as any Bank
has any Commitment hereunder or any Loan or other fees hereunder shall remain
unpaid:

 

Section 5.01                                Information.
The Borrower will deliver to each of the Banks:

 

(a)                                  as
soon as available and in any event within 90 days after the end of each fiscal
year of the Borrower, a consolidated statement of financial position of the
Borrower and its Consolidated Subsidiaries as of the end of such fiscal year
and the related consolidated statements of results of operations, cash flows
and shareholders’ investment for such fiscal year, setting forth in each case
in comparative form the figures for the previous fiscal year, all reported on
in a manner acceptable to the Securities and Exchange Commission by Ernst &
Young, LLP or other Registered Public Accounting Firm of recognized national
standing selected by the Borrower (the “Auditor”)
or other independent public accountants of nationally recognized standing, and
accompanied by a report of management on the Borrower’s internal control over
financial reporting pursuant to Item 308(a) of Regulation S-K promulgated under
the Exchange Act, and any report of the Auditor with respect the Borrower’s internal
controls so long as such reports continue to be required to be publicly filed
with the Securities and Exchange Commission or any successor or analogous
governmental authority pursuant to applicable federal securities laws;

 

(b)                                 as
soon as available and in any event within 60 days after the end of each of the
first three quarters of each fiscal year of the Borrower, a consolidated
statement of financial position of the Borrower and its Consolidated
Subsidiaries as of the end of such quarter and the related consolidated
statements of results of operations and cash flows for such quarter and for the
portion of the Borrower’s fiscal year ended at the end of such quarter, setting
forth in each case in comparative form the figures for the corresponding quarter
and the corresponding portion of the Borrower’s previous fiscal year, all
certified (subject to normal year-end adjustments) as to fairness of
presentation, generally accepted accounting principles and consistency by the
chief financial officer or the chief accounting officer of the Borrower;

 

(c)                                  within
15 days after the delivery of each set of financial statements referred to in clauses
(a) and (b)) above, a certificate of the chief financial officer or
the chief accounting officer of the Borrower (i) setting forth in reasonable
detail the calculations required to establish whether the Borrower was in
compliance with the requirements of Sections 5.07 to 5.08,
inclusive, on the date of such financial statements and (ii) stating whether
any Default exists on the date of such certificate and, if any

 

32

 

Default
then exists, setting forth the details thereof and the action which the
Borrower is taking or proposes to take with respect thereto;

 

(d)                                 within
15 days after the delivery of each set of financial statements referred to in clause
(a) above, a statement of the Auditor which reported on such statements
whether anything has come to their attention to cause them to believe that any
Default existed on the date of such statements;

 

(e)                                  within
15 days after any officer of the Borrower obtains knowledge of any Default, if
such Default is then continuing, a certificate of the chief financial officer
or the chief accounting officer of the Borrower setting forth the details
thereof and the action which the Borrower is taking or proposes to take with
respect thereto;

 

(f)                                    within
15 days after the mailing thereof to the shareholders of the Borrower
generally, copies of all financial statements, reports and proxy statements so
mailed;

 

(g)                                 within
15 days after the filing thereof copies of all reports on Forms 10-K, 10-Q and
8-K (or their equivalents) which the Borrower shall have filed with the
Securities and Exchange Commission or any governmental authority succeeding to
any of its functions (and if any such filing discloses an Internal Control
Event which the Borrower has determined requires remediation, copies of all
documents, reports or correspondence related thereto which have been publicly
filed with the Securities and Exchange Commission or any governmental authority
succeeding to any of its functions);

 

(h)                                 if
and when any ERISA Affiliate (i) gives or is required to give notice to the
PBGC of any “reportable event” (as defined in Section 4043 of ERISA) with respect
to any Plan which might constitute grounds for a termination of such Plan under
Title IV of ERISA, or knows that the plan administrator of any Plan has given
or is required to give notice of any such reportable event, a copy of the
notice of such reportable event given or required to be given to the PBGC; (ii)
receives notice of complete or partial withdrawal liability under Title IV of
ERISA or notice that any Multiemployer Plan is in reorganization, is insolvent
or has been terminated, a copy of such notice; (iii) receives notice from the
PBGC under Title IV of ERISA of an intent to terminate, impose liability (other
than for premiums under Section 4007 of ERISA) in respect of or appoint a
trustee to administer any Plan, a copy of such notice; (iv) applies for a
waiver of the minimum funding standard under Section 412 of the Internal
Revenue Code, a copy of such application; (v) gives notice of intent to
terminate any Plan under Section 4041(c) of ERISA, a copy of such notice and
other information filed with the PBGC; (vi) gives notice of withdrawal from any
Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails
to make any payment or contribution to any Plan or Multiemployer Plan or makes
any amendment to any Plan which has resulted or could result in the imposition
of a Lien or the posting of a bond or other security, a certificate of the
chief financial officer or the chief accounting officer of the Borrower setting
forth details as to such occurrence and action, if any, which the Borrower or
applicable ERISA Affiliate is required or proposes to take;

 

33

 

(i)                                     promptly
following, and in any event within ten days of any change in a Debt Rating by
any Rating Agency, notice thereof; and

 

(j)                                     from
time to time such additional information regarding the financial position or
business of the Borrower and its Subsidiaries as the Agent, at the request of
any Bank, may reasonably request.

 

As to any information contained in materials furnished pursuant to Section
5.01(g), the Borrower shall not be separately required to furnish such
information under clause (a) or (b) above. Notwithstanding the foregoing, the
Borrower shall remain obligated to furnish the information and materials
described in clauses (a) and (b) above at the times specified therein.

 

The Borrower hereby acknowledges that (a) the Agent and/or the
Arrangers will make available to the Banks materials and/or information
provided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting the
Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and (b) none of the Banks
will be “public-side” Banks (i.e., Banks that do not wish to receive material
non-public information with respect to the Borrower or its securities) (each, a
“Public Lender”). The Borrower hereby
agrees that (w) no Borrower Materials are to be made available to Public
Lenders, (x) all Borrower Materials shall be treated as private and may contain
material non-public information with respect to the Borrower or its securities
for purposes of United States federal and state securities laws; and (y) the
Agent and the Arrangers shall treat all Borrower Materials as being suitable
only for posting on a portion of the Platform not designated “Public Investor”.
Notwithstanding the foregoing, the Borrower shall be under no obligation to
mark any Borrower Materials “PUBLIC”.

 

Section 5.02                                Maintenance
of Property. The Borrower will keep, and will cause each Subsidiary to
keep, all material property useful and necessary in its business in good
working order and condition, ordinary wear and tear excepted, except where the
failure to do so would not reasonably be expected to have a material adverse
effect on the business, financial position or results of operations of the
Borrower and its Subsidiaries taken as a whole.

 

Section 5.03                                Conduct
of Business and Maintenance of Existence. Except as permitted by Section
5.05, the Borrower will continue, and will cause each Significant
Subsidiary to continue, to engage in business of the same general type as now
conducted by the Borrower and its Significant Subsidiaries, and will preserve,
renew and keep in full force and effect, and will cause each Significant
Subsidiary to preserve, renew and keep in full force and effect its respective
corporate existence and its respective rights, privileges and franchises
necessary or desirable in the normal conduct of business; provided
that, neither the Borrower nor any Significant Subsidiary shall be required to
preserve any such right, privilege or franchise if the Borrower shall determine
in good faith (a) that the preservation thereof is no longer desirable in the
conduct of the business of the Borrower or any Significant Subsidiary or (b) the
loss thereof will not be disadvantageous in any material respect to the
Borrower.

 

Section 5.04                                Compliance
with Laws. Except where the failure to do so would not reasonably be
expected to have a material adverse effect on the business, financial position
or results of operations of the Borrower and its Subsidiaries taken as a whole,
the Borrower will

 

34

 

comply, and cause each of its Subsidiaries to comply,
in all material respects with all applicable laws, rules, regulations and
orders where material to the assets or operations of the Borrower or any such
Subsidiary, such compliance to include, without limitation, paying before the
same become delinquent all taxes, fees, assessments and other governmental charges
imposed upon it or upon its property except to the extent any such taxes, fees,
assessments or other governmental charges are being contested in good faith by
appropriate proceedings and adequate reserves in the judgment of the Borrower
therefor have been established on the books of such Person in accordance with
generally accepted accounting principles.

 

Section 5.05                                Consolidations,
Mergers and Sale of Assets. The Borrower will not (a) dissolve or
liquidate, (b) merge with or into, or consolidate with, any other Person, (c)
dissolve or liquidate any Subsidiary or permit the merger or consolidation of
any Subsidiary into or with any other Person unless the Borrower shall
determine in good faith (i) that any such transaction is in the best interests
of the Borrower or (ii) such transaction will not be disadvantageous in any
material respect to the Borrower, or (d) sell, convey or transfer all or
substantially all of its property and assets to any other Person; provided, however, that
(x) any Person may be merged with or into, or consolidated with, the Borrower
if the Borrower is the surviving corporation, and (y) the Borrower may merge
with or into, or consolidate with, another corporation or sell, convey or
transfer its properties and assets substantially as an entity to any Person if
the corporation formed by such consolidation or into which the Borrower is
merged, or the Person which acquires by sale, conveyance or transfer the
properties and assets of the Borrower substantially as an entity, shall be a
corporation organized and existing under the laws of the United States of
America, any state thereof or the District of Columbia, and shall expressly
assume by a supplemental agreement hereto, executed and delivered to the Agent
in form satisfactory to the Agent, the full and timely performance and
observance of every covenant and agreement contained herein, including but not
limited to the payment of the principal and interest provided herein, on the
part of the Borrower to be performed or observed, in each case if immediately
after giving effect to such merger, consolidation, sale, conveyance or
transfer, no Default would occur and be continuing.

 

Section 5.06                                Dividends.
The Borrower will not, and will not permit any Subsidiary to, declare or pay
any dividends, purchase or otherwise acquire for value any of its capital stock
now or hereafter outstanding, or make any distribution of assets to its
stockholders as such, or permit any of its Subsidiaries to purchase or
otherwise acquire for value any of the capital stock of the Borrower, if any
such action would result in a breach of a covenant or agreement contained in,
or default under, or constitute an event of default under, any other agreement
then in effect between the Borrower and any Person relating to indebtedness for
money borrowed.

 

Section 5.07                                Negative
Pledge. The Borrower will not permit, at the end of any fiscal quarter, the
aggregate amount of Debt of the Borrower and its Consolidated Subsidiaries
secured by Liens (other than (a) Capital Lease Obligations, (b) Liens on
Accounts Receivable and (c) any Lien on any asset securing Debt incurred or
assumed for the purpose of financing all or any part of the cost of acquiring
or constructing such asset, provided that
such Lien attaches to such asset concurrently or within 120 days after the
acquisition or completion of construction thereof) to exceed 20% of
Consolidated Tangible Net Worth.

 

35

 

Section 5.08                                Leverage
Ratio. The Borrower will not, at the end of any fiscal quarter of the
Borrower, permit the ratio of (a) Total Finance Liabilities to (b) Total Capitalization to be greater than or equal to
3.0:4.0.

 

Section 5.09                                Use
of Proceeds. The proceeds of the Loans made under this Agreement will be
used, directly or indirectly, by the Borrower as a commercial paper backup
facility and for its general corporate purposes. None of such proceeds will be
used, directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of buying or carrying any “margin stock” within the meaning of
Regulation U.

 

ARTICLE 6.

DEFAULTS

 

Section 6.01                                Events
of Default. If one or more of the following events (“Events
of Default”) shall have occurred and be continuing:

 

(a)                                  the
Borrower shall fail to pay when due any principal of any Loan, or shall fail to
pay within five Domestic Business Days of the due date thereof any interest on
any Loan, any fees or any other amount payable hereunder;

 

(b)                                 the
Borrower shall fail to observe or perform any covenant contained in Sections
5.05 through 5.09, inclusive;

 

(c)                                  the
Borrower shall fail to observe or perform any covenant or agreement contained
in this Agreement (other than those covered by clause (a) or (b) above) for 30
days after written notice thereof has been given to the Borrower by the Agent
at the request of any Bank;

 

(d)                                 any
representation, warranty, certification or statement made by the Borrower in
this Agreement or in any certificate, financial statement or other document
delivered pursuant to this Agreement shall prove to have been incorrect in any
material respect when made (or deemed made);

 

(e)                                  the
Borrower or any of its Subsidiaries shall fail to make any payment in respect
of any Material Debt when due or within any applicable grace period;

 

(f)                                    any
event or condition shall occur which results in the acceleration of the
maturity of any Material Debt or enables the holder of such Material Debt or
any Person acting on such holder’s behalf to accelerate the maturity thereof;

 

(g)                                 the
Borrower or any of its Significant Subsidiaries shall commence a voluntary case
or other proceeding seeking liquidation, reorganization or other relief with
respect to itself 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 of it or any
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

 

36

 

assignment
for the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing;

 

(h)                                 an
involuntary case or other proceeding shall be commenced against the Borrower or
any of its Significant Subsidiaries 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 of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Borrower or any Significant Subsidiary
under the federal bankruptcy laws as now or hereafter in effect;

 

(i)                                     any
Plan Event that is likely to result in a liability of the Borrower or any
Subsidiary to the PBGC or any Multiemployer Plan in excess of $100,000,000
occurs, or the Borrower or any Subsidiary shall fail to meet its minimum
funding requirements under ERISA with respect to any Plan (or other class of
benefit which the PBGC has elected to insure), or any Plan shall be the subject
of termination proceedings and there shall result from such termination
proceedings a liability of the Borrower to the PBGC in excess of $100,000,000;
or

 

(j)                                     a
judgment or order for the payment of money in excess of $100,000,000 shall be
rendered against the Borrower or any of its Subsidiaries and such judgment or
order shall continue unsatisfied and unstayed for a period of 10 days;

 

then, and in every such event, the Agent shall (i) if requested by
Banks having more than 50% in aggregate amount of the Commitments, by notice to
the Borrower terminate the Commitments and they shall thereupon terminate, and
(ii) if requested by Banks holding more than 50% in aggregate principal amount
of the Loans, by notice to the Borrower declare the unpaid principal amount of
all outstanding Loans (together with accrued interest thereon and all other
fees pursuant to Section 2.08 or 2.13 owing or payable hereunder)
to be, and the unpaid principal amount of all outstanding Loans shall thereupon
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower; provided that in the case of any of the Events of Default
specified in clause (g) or (h) above with respect to the
Borrower, without any notice to the Borrower or any other act by the Agent or
the Banks, the Commitments shall thereupon terminate and the unpaid principal
amount of all outstanding Loans (together with accrued interest thereon and all
other fees pursuant to Section 2.08 or 2.13 owing or payable
hereunder) shall become immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower.

 

Section 6.02                                Notice
of Default. The Agent shall give notice to the Borrower under Section
6.01(c) promptly upon being requested to do so by any Bank and shall
thereupon notify all the Banks thereof.

 

37

 

ARTICLE 7.

THE AGENT, THE SENIOR MANAGING AGENTS, THE MANAGING AGENTS,

THE CO-AGENTS, THE CO-DOCUMENTATION AGENTS

AND THE SYNDICATION AGENT

 

Section 7.01                                Appointment
and Authorization. Each Bank irrevocably appoints and authorizes the Agent
to take such action as agent on its behalf and to exercise such powers under
this Agreement and the Notes, if any, as are delegated to the Agent by the
terms hereof or thereof, together with all such powers as are reasonably
incidental thereto.

 

Section 7.02                                Agent
and Affiliates. Except as provided in Section 2.03(d), Bank of
America shall have the same rights and powers under this Agreement as any other
Bank and may exercise or refrain from exercising the same as though it were not
the Agent, and Bank of America and its affiliates may accept deposits from,
lend money to, and generally engage in any kind of business with the Borrower
or any Subsidiary or affiliate of the Borrower as if it were not the Agent
hereunder. The Banks acknowledge that, pursuant to such activities, Bank of
America or its affiliates may receive information regarding the Borrower or its
affiliates (including information that may be subject to confidentiality
obligations in favor of the Borrower or such affiliate) and acknowledge that
the Agent shall be under no obligation to provide such information to them. With
respect to its Loans, Bank of America shall have the same rights and powers
under this Agreement as any other Bank and may exercise such rights and powers
as though it were not the Agent, and the terms “Bank” and “Banks” include Bank
of America in its individual capacity.

 

Section 7.03                                Action
by Agent. The obligations of the Agent hereunder are only those expressly
set forth herein, and the Agent shall not be a trustee or fiduciary for any
Bank; the term “Agent” is used solely as a matter of market custom to connote
an administrative relationship among independent contracting parties. Without
limiting the generality of the foregoing, the Agent shall not be required to
take any action with respect to any Default, except as expressly provided in Article
6.

 

Section 7.04                                Consultation
with Experts. The Agent may consult with legal counsel (who may be counsel
for the Borrower), independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or
experts.

 

Section 7.05                                Liability
of Agent. Neither the Agent nor any of its affiliates nor any of their
respective directors, officers, agents or employees shall be liable for any
action taken or not taken by it in connection herewith (a) with the consent or
at the request of the Required Banks or 
all Banks, as the case may be, or (b) in the absence of its own gross
negligence or willful misconduct and in no event shall any such Person be
liable for special, consequential, punitive or indirect damages. Neither the
Agent nor any of its affiliates nor any of their respective directors, officers,
agents or employees shall be responsible for or have any duty to ascertain,
inquire into or verify (i) any statement, warranty or representation made in
connection with this Agreement or any borrowing hereunder; (ii) the performance
or observance of any of the covenants or agreements of the Borrower; (iii) the
satisfaction of any condition specified in Article 3, except receipt of
items required to be delivered to the Agent; or (iv) the validity,
enforceability,

 

38

 

effectiveness, genuineness or sufficiency of this
Agreement, the Notes, if any, or any other instrument or writing furnished in
connection herewith. Neither the Agent nor any of its affiliates nor any of
their respective directors, officers, agents or employees shall be required to
initiate or conduct any litigation or collection proceedings under this
Agreement or the Notes, if any. The Agent shall not incur any liability by
acting in reliance upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex or similar writing) believed by it to
be genuine or to be signed by the proper party or parties.

 

Section 7.06                                Indemnification.
Each Bank shall, ratably in accordance with its Commitment (determined at the
time such indemnification is sought), indemnify the Agent, its affiliates and
their respective directors, officers, agent and employees (to the extent not
reimbursed by the Borrower) from and against all Indemnified Liabilities, as
defined in Section 9.03(b) (except such as result from such
indemnitees’ gross negligence or willful misconduct; provided,
however, that no action taken in
accordance with directions of the Required Banks or, in the case of an action
expressly requiring the consent of all of the Banks, with the directions of all
of the Banks, shall be deemed to constitute gross negligence or willful
misconduct for purposes of this Section), that such indemnitees may suffer or
incur in connection with this Agreement or as a result of any action taken or
omitted by such indemnitees hereunder. Without limitation of the foregoing,
each Bank shall reimburse the Agent upon demand for its ratable share
(determined at the time such reimbursement is sought) of any costs or
out-of-pocket expenses (including fees and expenses of counsel, including the
allocated costs of internal legal services) incurred by the Agent 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,
this Agreement or any document contemplated by or referred to herein, to the
extent that the Agent is not reimbursed for such expenses by or on behalf of
the Borrower. The undertaking in this Section shall survive termination of the
Commitments, the repayment of all Loans and the resignation of the Agent.

 

Section 7.07                                Credit
Decision. Each Bank acknowledges that it has, independently and without
reliance upon the Agent, any Senior Managing Agent, any Managing Agent, any
Co-Agent, any Co-Documentation Agent, the Syndication Agent or any other Bank,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each
Bank  also acknowledges that it will,
independently and without reliance upon the Agent, any Senior Managing Agent,
any Managing Agent, any Co-Agent, any Co-Documentation Agent, the Syndication
Agent or any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking any action under this Agreement.

 

Section 7.08                                Successor
Agent. The Agent may resign at any time by giving notice thereof to the
Banks and the Borrower. Upon any such resignation, the Required Banks shall
have the right to appoint a successor Agent. If no successor Agent shall have
been so appointed by the Required Banks, and shall have accepted such
appointment, within 30 days after the retiring Agent gives notice of
resignation, then the retiring Agent may, on behalf of the Banks, appoint a
successor Agent, which shall be a commercial bank organized or licensed under
the laws of the United States of America or of any State thereof and having a
combined capital and surplus of at least $50,000,000. Upon the acceptance of
its appointment as Agent hereunder by a

 

39

 

successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights and duties of the retiring
Agent, and the retiring Agent shall thereafter be discharged from its duties
and obligations hereunder. After any retiring Agent’s resignation hereunder as
Agent, the provisions of this Article shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent.

 

Section 7.09                                Agent’s
Fee. The Borrower shall pay to the Agent for its own account fees in the
amounts and at the times previously agreed upon between the Borrower and the
Agent.

 

Section 7.10                                Senior
Managing Agents, Managing Agents, Co-Agents, Co-Documentation Agents, and
Syndication Agent. Nothing in this Agreement shall impose on any Co-Agent,
Senior Managing Agent, Managing Agent, Co-Documentation Agent, or Syndication
Agent, in its capacity as such, any duties or obligations whatsoever, nor shall
any Co-Agent, Senior Managing Agent, Managing Agent, Co-Documentation Agent, or
Syndication Agent, in its capacity as such be deemed to have any fiduciary
relationship with any Bank.

 

Section 7.11                                Defaults.
The Agent shall not be deemed to have knowledge or notice of the occurrence of
a Default or Event of Default unless the Agent has received written notice from
a Bank or the Borrower specifying such Default or Event of Default and stating
that such notice is a “Notice of Default”. In the event that the Agent receives
such a notice of the occurrence of a Default or Event of Default, the Agent
shall give prompt notice thereof to the Banks. The Agent shall (subject to Section
7.05 hereof) take such action with respect to such Default or Event of
Default as shall reasonably be directed by the Required Banks, provided that,
unless and until the Agent shall have received such directions, the Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interest of the Banks.

 

ARTICLE 8.

CHANGE IN CIRCUMSTANCES

 

Section 8.01                                Basis
for Determining Interest Rate Inadequate or Unfair. If on or prior to the
first day of any Interest Period for any Fixed Rate Borrowing:

 

(a)                                  the
Agent is advised by the Reference Banks that deposits in dollars (in the
applicable amounts) are not being offered to the Reference Banks in the
relevant market for such Interest Period, or

 

(b)                                 the
Agent determines (which determination shall be conclusive) that by reason of
circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the interest rate for Euro-Dollar Loans for such
Interest Period; or

 

(c)                                  in
the case of a Committed Borrowing, Banks having 50% or more of the aggregate
amount of the Commitments advise the Agent that the Adjusted CD Rate or the
Adjusted London Interbank Offered Rate, as the case may be, as determined by
the Agent will not adequately and fairly reflect the cost to such Banks of
funding their CD Loans or Euro-Dollar Loans, as the case may be, for such
Interest Period;

 

40

 

the Agent shall forthwith give notice thereof to the Borrower and the
Banks, whereupon until the Agent notifies the Borrower that the circumstances
giving rise to such suspension no longer exist, the obligations of the Banks to
make CD Loans or Euro-Dollar Loans, as the case may be, shall be suspended. Unless
the Borrower notifies the Agent at least one Domestic Business Day before the
date of any Fixed Rate Borrowing for which a Notice of Borrowing has previously
been given that it elects not to borrow on such date, (i) if such Fixed Rate
Borrowing is a Committed Borrowing, such Borrowing shall instead be made as a
Base Rate Borrowing and (ii) if such Fixed Rate Borrowing is a Money Market
LIBOR Borrowing, the Money Market LIBOR Loans comprising such Borrowing shall
bear interest for each day from and including the first day to but excluding
the last day of the Interest Period applicable thereto at the Base Rate for
such day.

 

Section 8.02                                Illegality.
If, on or after the date of this Agreement, the adoption of any applicable law,
rule or regulation, or any change in any applicable law, rule or regulation, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof or compliance by any Bank (or its Euro-Dollar Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall make it unlawful
or impossible for any Bank (or its Euro-Dollar Lending Office) to make,
maintain or fund its Euro-Dollar Loans and such Bank shall so notify the Agent,
the Agent shall forthwith give notice thereof to the other Banks and the
Borrower, whereupon until such Bank notifies the Borrower and the Agent that
the circumstances giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans shall be suspended. Before
giving any notice to the Agent pursuant to this Section, such Bank shall
designate a different Euro-Dollar Lending Office if such designation will avoid
the need for giving such notice and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. If such Bank shall determine that it may
not lawfully continue to maintain and fund any of its outstanding Euro-Dollar
Loans to maturity and shall so specify in such notice, the Borrower shall
immediately prepay in full the then outstanding principal amount of each such
Euro-Dollar Loan, together with accrued interest thereon. Concurrently with
prepaying each such Euro-Dollar Loan, the Borrower shall, subject to Section
2.01, borrow a Base Rate Loan in an equal principal amount from such Bank
(on which interest and principal shall be payable contemporaneously with the
related Euro-Dollar Loans of the other Banks), and such Bank shall make such a
Base Rate Loan.

 

Section 8.03                                Increased
Cost and Reduced Return.

 

(a)                                  If
on or after (x) the date hereof in the case of any Committed Loan or any
obligation to make Committed Loans or (y) the date of the related Money Market
Quote, in the case of any Money Market Loan, the adoption of any applicable
law, rule or regulation, or any change in any applicable law, rule or
regulation, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof or compliance by any Bank (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency:

 

41

 

(i)                                     shall
subject any Bank (or its Applicable Lending Office) to any tax, duty or other
charge with respect to its Fixed Rate Loans, its Note, if any, or its
obligation to make Fixed Rate Loans, or shall change the basis of taxation of
payments to any Bank (or its Applicable Lending Office) of the principal of or
interest on its Fixed Rate Loans or any other amounts due under this Agreement
in respect of its Fixed Rate Loans or its obligation to make Fixed Rate Loans
(except for changes in the rate of tax on the overall net income of such Bank
or its Applicable Lending Office imposed by the jurisdiction in which such Bank’s
principal executive office or Applicable Lending Office is located); or

 

(ii)                                  shall
impose, modify or deem applicable any reserve (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding (A) with respect to any CD Loan any such requirement
included in an applicable Domestic Reserve Percentage  and (B) with respect to any Euro-Dollar Loan
any such requirement included in an applicable Euro-Dollar Reserve Percentage),
special deposit, insurance assessment (excluding, with respect to any CD Loan,
any such requirement reflected in an applicable Assessment Rate) or similar
requirement against assets of deposits with or for the account of or credit
extended by, any Bank (or its Applicable Lending Office) or shall impose on any
Bank (or its Applicable Lending Office) or on the United States market for
certificates of deposit or the London interbank market any other condition
affecting its Fixed Rate Loans, its Note, if any, or its obligation to make
Fixed Rate Loans;

 

and the result of any of the foregoing is to increase the cost to such
Bank (or its Applicable Lending Office) of making or maintaining any Fixed Rate
Loan, or to reduce the amount of any sum received or receivable by such Bank
(or its Applicable Lending Office) under this Agreement or under its Note, if
any, with respect thereto, by an amount deemed by such Bank to be material,
then, within 15 days after demand by such Bank (with a copy to the Agent), the
Borrower shall pay to such Bank such additional amount or amounts as will
compensate such Bank for such increased cost or reduction.

 

(b)                                 If
any Bank shall have determined that, after the date hereof the adoption of any
applicable law, rule or regulation regarding capital adequacy, or any change in
any such law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof or
any request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on capital of such Bank
(or its Parent) as a consequence of such Bank’s obligations hereunder to a
level below that which such Bank (or its Parent) could have achieved but for
such adoption, change, request or directive (taking into consideration its
policies with respect to capital adequacy) by an amount deemed by such Bank to
be material, then from time to time, within 15 days after demand by such Bank
(with a copy to the Agent), the Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank (or its Parent) for such reduction.

 

42

 

(c)                                  Each
Bank will promptly notify the Borrower and the Agent of any event of which it
has knowledge, occurring after the date hereof which will entitle such Bank to
compensation pursuant to this Section and will designate a different Applicable
Lending Office if such designation will avoid the need for, or reduce the
amount of such compensation and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. A certificate of any Bank claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods.

 

Section 8.04                                Base
Rate Loans Substituted for Affected Fixed Rate Loans. If (a) the obligation
of any Bank to make, maintain or convert to Euro-Dollar Loans has been
suspended pursuant to Section 8.02 or (b) any Bank has demanded compensation
under Section 8.03(a) and the Borrower shall, by at least five
Euro-Dollar Business Days’ prior notice to such Bank through the Agent, have
elected that the provisions of this Section shall apply to such Bank, then,
unless and until such Bank notifies the Borrower that the circumstances giving
rise to such suspension or demand for compensation no longer exist:

 

(a)                                  all
Loans which would otherwise be made, maintained or converted by such Bank as CD
Loans or Euro-Dollar Loans, as the case may be, shall be made, maintained or
converted instead as Base Rate Loans (on which interest and principal shall be
payable contemporaneously with the related Fixed Rate Loans of the other
Banks), and

 

(b)                                 after
each of its CD Loans or Euro-Dollar Loans, as the case may be, has been repaid
or converted, all payments of principal which would otherwise be applied to
repay such Fixed Rate Loans shall be applied to repay its Base Rate Loans
instead.

 

ARTICLE 9.

MISCELLANEOUS

 

Section 9.01                                Notices.
All notices, requests and other communications to any party hereunder shall be
in writing (including bank wire, telex, facsimile transmission or similar
writing) and shall be given to such party: (a) in the case of the Borrower or
the Agent, at its address, facsimile number set forth on the signature pages
hereof, (b) in the case of any Bank, at its address, facsimile number set forth
in its Administrative Questionnaire or (c) in the case of any party, such other
address, facsimile number as such party may hereafter specify for the purpose
by notice to the Agent and the Borrower. Each such notice, request or other
communication shall be effective (i) if given by mail, upon receipt, (ii) if
given by facsimile transmission, when such facsimile is transmitted to the
facsimile number specified in this Section and receipt of such facsimile is
confirmed, either orally or in writing by return facsimile to the transmitting
party at the facsimile number specified in this Section, by the party receiving
such transmission, or (iii) if given by any other means, when delivered at the
address specified in this Section; provided that
notices to the Agent under Article 2 or Article 8 shall not be
effective until received.

 

43

 

Notwithstanding any other provision of this Section
9.01, in the case of any communication required by Section 5.01, in
addition to the methods of delivery described above, any such communication may
be made by the posting of such financial statements, reports, officer’s
certificates or other information to an Internet website established by the
Agent with IntraLinks, Inc. or other similarly available electronic media (a “Posting Website”) or, in the case of
information required under Sections 5.01(a), (b), (f) and (g)
only, by the posting on the Posting Website of the universal resource locator
(URL) where such information may be obtained. Upon the initial establishment of
the Posting Website, the Agent shall give notice to each Bank of the URL for
the Posting Website in writing by mail or facsimile transmission as described
above. Each communication made by the Borrower pursuant to the second preceding
sentence shall be deemed to have been delivered when the information contained
therein is posted to the Posting Website.

 

Section 9.02                                No
Waivers. No failure or delay by the Agent or any Bank in exercising any
right, power or privilege hereunder or under any Note shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not exclusive
of any rights or remedies provided by law.

 

Section 9.03                                Expenses;
Documentary Taxes; Indemnification.

 

(a)                                  The
Borrower shall pay (i) all reasonable out-of-pocket expenses of the Agent,
including reasonable fees and disbursements of special counsel for the Agent,
in connection with the preparation of this Agreement, any waiver or consent
hereunder or any amendment hereof or any Default or alleged Default hereunder
and (ii) if an Event of Default occurs, all reasonable out-of-pocket expenses
incurred by the Agent and each Bank, including reasonable fees and
disbursements of counsel, in connection with such Event of Default and
collection, bankruptcy, insolvency, and other enforcement proceedings resulting
therefrom. The Borrower shall indemnify each Bank against any transfer taxes,
documentary taxes, assessments or charges made by any governmental authority by
reason of the execution and delivery of this Agreement or the Notes, if any.

 

(b)                                 The
Borrower agrees to indemnify the Agent and each Bank, their respective
affiliates and the respective directors, officers, agents, attorneys and
employees of the foregoing (each an “Indemnitee”)
and hold each Indemnitee harmless from and against any and all liabilities,
losses, damages, costs and expenses of any kind, including, without limitation,
the reasonable fees and disbursements of counsel, which may be incurred by such
Indemnitee in connection with any investigative, administrative or judicial
proceeding (whether or not such Indemnitee shall be designated a party thereto)
relating to or arising out of this Agreement or any actual or proposed use of
proceeds of Loans hereunder (the “Indemnified Liabilities”);
provided that no Indemnitee shall have
the right to be indemnified hereunder for such Indemnitee’s own gross
negligence or willful misconduct. No Indemnitee shall be liable for any damages
arising from the use by others of information or other materials obtained
through internet, Posting Website or other similarly available electronic media
in connection with the electronic posting of financial statements,
certificates, reports or other information to a

 

44

 

Posting
Website as provided for in Section 9.01 hereof unless such Indemnitee
has engaged in gross negligence or willful misconduct.

 

Section 9.04                                Sharing
of Set-Off. Each Bank agrees that if it shall, by exercising any right of
set-off, recoupment, counterclaim or otherwise, receive payment of a proportion
of the aggregate amount of principal and interest then due with respect to any
Loans held by it which is greater than the proportion received by any other
Bank in respect of the aggregate amount of principal and interest then due with
respect to any Loans held by such other Bank, the Bank receiving such
proportionately greater payment (the “Benefited Bank”)
shall purchase such participations in the Loans held by the other Banks, and
such other adjustments shall be made, as may be required so that all such
payments of principal and interest with respect to the Loans held by the Banks
shall be shared by the Banks pro rata; provided, however, that if all or any portion of such excess payment
is thereafter recovered from such Benefited Bank or is repaid in whole or in
part by such Benefited Bank in good faith settlement of a pending or threatened
avoidance claim, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery or settlement payment, but
without interest; further  provided
that nothing in this Section shall impair the right of any Bank to exercise any
right of set-off or counterclaim it may have and to apply the amount subject to
such exercise to the payment of indebtedness of the Borrower other than its
indebtedness under this Agreement. The Borrower agrees, to the fullest extent
it may effectively do so under applicable law, that any holder of a
participation in a Loan, whether or not acquired pursuant to the foregoing
arrangements, may exercise rights of set-off or counterclaim and other rights
with respect to such participation as fully as if such holder of a
participation were a direct creditor of the Borrower in the amount of such
participation.

 

Section 9.05                                Amendments
and Waivers. Any provision of this Agreement or the Notes, if any, may be
amended or waived if, but only if, such amendment or waiver is in writing and
is signed by the Borrower and the Required Banks (and, if the rights or duties
of the Agent are affected thereby, by the Agent); provided
that no such amendment or waiver shall, unless signed by all the Banks, (a)
increase or decrease the Commitment of any Bank (except for a ratable decrease
in the Commitments of all Banks and except for any increase in Commitments made
pursuant to, and in compliance with, Sections 2.17 and 2.18, as
applicable, hereof) or subject any Bank to any additional obligation, (b)
reduce the principal of or rate of interest on any Loan or any fees or margins
hereunder, (c) postpone the date fixed for any payment of principal of or
interest on any Loan or any fees hereunder or for the Termination Date (except
pursuant to, and in compliance with Section 2.18 hereof), (d) change the
percentage of the Commitments or of the aggregate unpaid principal amount of
the Loans, or the number of Banks, which shall be required for the Banks or any
of them to take any action under this Section or any other provision of this
Agreement, (e) consent to the assignment or transfer by the Borrower of any of
its rights or obligations under this Agreement or (f) amend, modify or waive Section
9.04 or this Section 9.05.

 

Section 9.06                                Successors
and Assigns.

 

(a)                                  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted
hereby, except that the Borrower may not assign or otherwise transfer any of
its rights or obligations hereunder without the prior written consent of the
Agent and each Bank, and no Bank may assign or otherwise transfer any of its
rights or

 

45

 

obligations
hereunder except (i) to an Assignee in accordance with the provisions of subsection
(c) of this Section, (ii) by way of participation in accordance with the
provisions of subsection (b) of this Section, or (iii) by way of pledge
or assignment of a security interest subject to the restrictions of subsection
(d) or (f) of this Section (and any other attempted assignment or
transfer by any party hereto shall be null and void). Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (b)
of this Section and, to the extent expressly contemplated hereby, the
Indemnitees) any legal or equitable right, remedy or claim under or by reason
of this Agreement.

 

(b)                                 Any
Bank may at any time grant to one or more banks or other institutions (each a “Participant”) participating
interests in its Commitment or any or all of its Loans. In the event of any
such grant by a Bank of a participating interest to a Participant, whether or
not upon notice to the Borrower and the Agent, such Bank shall remain
responsible for the performance of its obligations hereunder, and the Borrower
and the Agent shall continue to deal solely and directly with such Bank in
connection with such Bank’s rights and obligations under this Agreement. Any
agreement pursuant to which any Bank may grant such a participating interest
shall provide that such Bank shall retain the sole right and responsibility to
enforce the obligations of the Borrower hereunder including, without limitation,
the right to approve any amendment, modification or waiver of any provision of
this Agreement; provided that such participation
agreement may provide that such Bank will not agree to any modification,
amendment or waiver of this Agreement described in clause (a), (b)
or (c) of Section 9.05 without the consent of the Participant. The
Borrower agrees that each Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of Article 8 with
respect to its participating interest. An assignment or other transfer which is
not permitted by subsection (c) or (d) below shall be given
effect for purposes of this Agreement only to the extent of a participating
interest granted in accordance with this subsection (b).

 

(c)                                  Any
Bank may at any time assign to one or more banks, Approved Funds or other
institutions (each an “Assignee”)
all, or a proportionate part of all, of its rights and obligations under this
Agreement and its Notes, if any, and such Assignee shall assume such rights and
obligations, pursuant to an Assignment and Assumption Agreement in
substantially the form of Exhibit I hereto (an “Assignment
and Assumption Agreement”) executed by such Assignee and such
transferor Bank, with and subject to (so long as an Event of Default has not
occurred and is continuing) the subscribed consent of the Borrower, which
consent shall not be unreasonably withheld or delayed, and with the subscribed
acknowledgment of the Agent; provided that
(i) such assignment may, but need not, include rights of the transferor Bank in
respect of outstanding Money Market Loans and (ii) no interest may be assigned
by a Bank pursuant to this subsection (c) in an amount less than
$15,000,000 unless such lesser amount constitutes all of such assigning Bank’s
Commitment. Notwithstanding the foregoing, if an Assignee is an affiliate of
such transferor Bank or a Bank, (x) the subscribed consent of the Borrower
shall not be required and (y) the limitations set forth

 

46

 

in
clause (ii) above shall not be applicable. In all cases, any assignment
to any Approved Fund requires the consent of the Borrower. Upon execution and
delivery of such instrument and payment by such Assignee to such transferor
Bank of an amount equal to the purchase price agreed between such transferor
Bank and such Assignee, such Assignee shall be a Bank party to this Agreement
and shall have all the rights and obligations of a Bank with a Commitment as
set forth in such instrument of assumption, and the transferor Bank shall be
released from its obligations hereunder to a corresponding extent, and no
further consent or action by any party shall be required. Upon the consummation
of any assignment pursuant to this subsection (c), the transferor Bank,
the Agent and the Borrower shall make appropriate arrangements so that, if
required, a new Note is issued to the Assignee. Except as otherwise provided
herein, in connection with any such assignment, the transferor Bank shall pay
to the Agent an administrative fee for processing such assignment in the amount
of $3,500, unless waived by the Agent in its sole discretion. If the Assignee
is not incorporated under the laws of the United States of America or a state
thereof, it shall deliver to the Borrower and the Agent certification as to
exemption from deduction or withholding of any United States federal income
taxes in accordance with Section 2.15.

 

The Agent, acting solely for this purpose as
an Agent of the Borrower, shall maintain at the Agent’s principal office a copy
of each Assignment and Assumption Agreement delivered to it and a register for
the recordation of the names and addresses of the Banks, and the Commitments
of, and principal amounts of the Loans owing to, each Bank pursuant to the
terms hereof from time to time (the “Register”).
The entries in the Register as to the identity of the Banks and their
respective Commitments shall be conclusive absent manifest error, and the
Borrower, the Agent and the Banks may treat each Person whose name is recorded
in the Register pursuant to the terms hereof as a Bank hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower and any Bank, at any
reasonable time and from time to time upon reasonable prior notice. In
addition, at any time that a request for a consent for a material or
substantive change to this Agreement is pending, any Bank wishing to consult
with other Banks in connection therewith may request and receive from the Agent
a copy of the Register.

 

(d)                                 Any
Bank may at any time assign all or any portion of its rights under this
Agreement and its Note, if any, to a Federal Reserve Bank. No such assignment
shall release the transferor Bank from its obligations hereunder.

 

(e)                                  No
Assignee, Participant or other transferee of any Bank’s rights shall be
entitled to receive any greater payment under Section 8.03 than such
Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower’s prior written
consent or by reason of the provisions of Section 8.02 or 8.03
requiring such Bank to designate a different Applicable Lending Office under
certain circumstances or at a time when the circumstances giving rise to such
greater payment did not exist.

 

(f)                                    Notwithstanding
anything to the contrary contained herein, any Bank that is an Approved Fund
may create a security interest in all or any portion of the Loans owing to it
and the Note, if any, held by it to the trustee for the holders of obligations

 

47

 

owed,
or securities issued, by such Fund as security for such obligations or
securities, provided that unless and until such
trustee actually becomes a Bank in compliance with the other provisions of Section
9.06(c), (i) no such pledge shall release the pledging Bank from any of its
obligations under this Agreement and (ii) such trustee shall not be entitled to
exercise any of the rights of a Bank under this Agreement, including but not
limited to rights to approve amendments, waivers or other modifications of any
provision of this Agreement, even though such trustee may have acquired
ownership rights with respect to the pledged interest through foreclosure or
otherwise.

 

(g)                                 The
words “execution”, “signed”, “signature”, and words of like import in any
Assignment and Assumption Agreement shall be deemed to include electronic
signatures or the keeping of records in electronic form, each of which shall be
of the same legal effect, validity or enforceability as a manually executed
signature or the use of a paper-based recordkeeping system, as the case may be,
to the extent and as provided for in any applicable law, including the Federal
Electronic Signatures in Global and National Commerce Act, the New York State
Electronic Signatures and Records Act, or any other similar state laws based on
the Uniform Electronic Transactions Act.

 

Section 9.07                                Collateral.
Each of the Banks represents to the Agent and each of the other Banks that it
in good faith is not relying upon any “margin stock” (as defined in Regulation
U) as collateral in the extension or maintenance of the credit provided for in
this Agreement.

 

Section 9.08                                Replacement
of Banks. (a)  If any Bank requests
compensation under Section 8.03, or if the obligation of any Bank to
make Euro-Dollar Loans has been suspended pursuant to Section 8.02, or
if any Bank is a Defaulting Bank, or if any Bank is a Non-Extending Bank for
any extension of the Termination Date, then the Borrower may, at its sole
expense and effort, upon notice to such Bank and the Agent, require such Bank
to assign and delegate without unreasonable delay, without recourse (in
accordance with and subject to the restrictions contained in, and consents required
by, Section 9.06), all of its interests, rights and obligations under
this Agreement to an assignee that shall assume such obligations (which
assignee may be another Bank, if a Bank accepts such assignment), provided that:

 

(i)                                     the
Borrower shall have paid to the Agent the assignment fee specified in Section
9.06(c) (except as otherwise provided herein); provided
that any Defaulting Bank that has on more than one occasion failed to fund any
portion of the Loans required to be funded by it hereunder within one Domestic
Business Day of the date required to be funded by it hereunder shall pay to the
Agent the assignment fee specified in Section 9.06(c);

 

(ii)                                  such
Bank shall have received payment of an amount equal to the outstanding
principal of its Loans, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder (including any amounts under Section 2.13)
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts);

 

(iii)                               in the case of any such
assignment resulting from a claim for compensation by a Bank under Section
8.03, such assignment will result in a

 

48

 

reduction
in such compensation or payments that would otherwise result thereafter; and

 

(iv)                              such
assignment does not conflict with applicable laws.

 

A Bank shall not be required to make any such
assignment or delegation if, prior thereto, as a result of a waiver by such
Bank or otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply.

 

(b)                                 In
the event any Bank fails to approve any amendment, waiver or consent requested
by the Borrower pursuant to Section 9.05 that has received the written
approval of not less than the Required Banks but also requires the approval of
such Bank (any such Bank, a “Restricted Bank”),
so long as no Default or Event of Default shall have occurred and be continuing
and the Borrower has obtained a commitment (in an amount not less than the
entire amount of such Restricted Bank’s Commitment) from one or more Banks or
Assignees to become a Bank for all purposes hereunder (such Bank or Banks
referred to as the “Replacement Bank”), the
Borrower may cause such Restricted Bank to be replaced by, and to assign all
its rights and obligations under this Agreement (including its Commitment and
its outstanding Loans) pursuant to Section 9.06 to, such Replacement
Bank. Such Restricted Bank agrees to execute and to deliver to the Agent one or
more Assignment and Assumption Agreements with such Replacement Bank as
provided in Section 9.06 upon payment at par of all principal, accrued
interest, accrued fees and other amounts accrued or owing under this Agreement
to such Restricted Bank, and such Replacement Bank shall pay to the Agent the
assignment fee specified in Section 9.06(c) in connection with such
assignment. The Restricted Bank making such assignment will be entitled to
compensation for any expenses or other amounts which would be owing to such
Restricted Bank pursuant to any indemnification provision hereof (including, if
applicable, Section 2.13) as if the Borrower had prepaid the Loans of
such Bank (and terminated its Commitment, if applicable) rather than such
Restricted Bank having assigned its interest hereunder.

 

(c)                                  In
each case of clause (a) and (b) above, the Agent shall distribute
an amended schedule of Commitments, which shall be deemed incorporated into
this Agreement, to reflect changes in the identities of the Banks and
adjustments of their respective Commitments and/or shares thereof resulting
from any such replacement.

 

(d)                                 This
section shall supersede any provision in Section 9.05 to the contrary.

 

Section 9.09                                Governing
Law; Submission to Jurisdiction. This Agreement and each Note shall be
governed by and construed in accordance with the laws of the State of New York.
The Borrower hereby submits to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of any New York
State court sitting in New York City for purposes of all legal proceedings
arising out of or relating to this Agreement or the transactions contemplated
hereby. The Borrower irrevocably waives, to the fullest extent permitted by
law, any objection which it may now or hereafter have to the laying of the
venue of any such proceeding brought in such a court and any claim that any
such proceeding brought in such a court has been brought in an inconvenient
forum.

 

49

 

Section 9.10                                Counterparts;
Integration. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Agreement constitutes
the entire agreement and understanding among the parties hereto and supersedes
any and all prior agreements and understandings, oral or written, relating to
the subject matter hereof.

 

Section 9.11                                Confidentiality.
Each Bank agrees to exercise all reasonable efforts to keep any Information
delivered or made available by the Borrower to it which is clearly indicated to
be confidential information, confidential from anyone other than Persons
employed or retained by such Bank who are or are expected to become engaged in
evaluating, approving, structuring or administering the Loans; provided that nothing herein shall prevent any Bank from
disclosing such Information (a) to any of its affiliates or any other Bank or
affiliate thereof, (b) to its officers, directors, employees, agents, attorneys
and accountants who have a need to know such Information in accordance with
customary banking practices and who receive such Information having been made
aware of the restrictions set forth in this Section, (c) upon the order of any
court or administrative agency, (d) upon the request or demand of any
regulatory agency or authority having jurisdiction over such Bank or its
affiliates, (e) as required by any applicable law, rule or regulation, (f) to
any other Person if reasonably necessary to the administration of the credit
facility provided herein, (g) which has been publicly disclosed, (h) to the
extent reasonably required in connection with any litigation to which the
Agent, any Bank, the Borrower or their respective affiliates may be a party,
(i) to the extent reasonably required in connection with the exercise of any
remedy hereunder, (j) to such Bank’s legal counsel and independent auditors,
(k) with the prior written consent of the Borrower, and (l) to any actual or
proposed Participant or Assignee of all or part of its rights hereunder which
has agreed in writing to be bound by the provisions of this Section. For
purposes of this Section, “Information”
means all information received from the Borrower relating to the Borrower or
any of its business, other than any such information that is available to the
Agent or any Bank on a nonconfidential basis prior to disclosure by the
Borrower, provided that, in the case of information received from the Borrower
after the date hereof, such information is clearly identified at the time of
delivery as confidential.

 

Section 9.12                                USA
PATRIOT Act Notice. Each Bank that is subject to the Act (as hereinafter
defined) and the Agent (for itself and not on behalf of any Bank) hereby
notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain,
verify and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that will
allow such Bank or the Agent, as applicable, to identify the Borrower in
accordance with the Act.

 

[remainder of page intentionally left blank]

 

50

 

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

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
  WITNESS:

  	
  TARGET CORPORATION

  
	
   

  	
   

  	
   

  
	
  /s/ Jeff Vanmeter

  	
   

  	
  By:

  	
    /s/ Sara Ross

  	
   

  
	
   

  	
  Name:

  	
  Sara J. Ross

  
	
  /s/ Wendy Mahling

  	
   

  	
  Title:

  	
  Assistant Treasurer

  
	
   

  	
  1000 Nicollet Mall

  
	
   

  	
  Minneapolis, Minnesota 55403

  
	
   

  	
  Attention: Assistant Treasurer

  
	
   

  	
  Telecopy Number: (612) 761-5573

  
							

 

51

 

	
   

  	
  BANKS:

  
	
   

  	
   

  
	
  $_______________

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Ross Evans

  	
   

  
	
   

  	
  Name:

  	
  Ross Evans

  
	
   

  	
  Title:

  	
  Vice President

  

 

 

	
  $_______________

  	
  JPMORGAN CHASE BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Christine Herrick

  	
   

  
	
   

  	
  Name:

  	
  Christine Herrick

  
	
   

  	
  Title:

  	
  Vice President

  

 

 

	
  $_______________

  	
  CITICORP USA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Marc Merlino

  	
   

  
	
   

  	
  Name:

  	
  Marc Merlino

  
	
   

  	
  Title:

  	
  Vice President

  

 

 

	
  $_______________

  	
  U.S. BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Michael J. Staloch

  	
   

  
	
   

  	
  Name:

  	
  Michael J. Staloch

  
	
   

  	
  Title:

  	
  Senior Vice President

  

 

 

	
  $_______________

  	
  WACHOVIA BANK, NATIONAL

  
	
   

  	
  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Beth Rue

  	
   

  
	
   

  	
  Name:

  	
  Beth Rue

  
	
   

  	
  Title:

  	
  Vice President

  

 

 

	
  $_______________

  	
  BANK OF TOKYO-MITSUBISHI, LTD.,

  
	
   

  	
  CHICAGO BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Matthew A. Ross

  	
   

  
	
   

  	
  Name:

  	
  Matthew A. Ross

  
	
   

  	
  Title:

  	
  Vice President & Manager

  

 

 

	
  $_______________

  	
  LEHMAN BROTHERS BANKS, FSB

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Janine M. Shugan

  	
   

  
	
   

  	
  Name:

  	
  Janine M. Shugan

  
	
   

  	
  Title:

  	
  Authorized Signatory

  

 

 

	
  $_______________

  	
  MERRILL LYNCH BANK USA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Derek Befus

  	
   

  
	
   

  	
  Name:

  	
  Derek Befus

  
	
   

  	
  Title:

  	
  Vice President

  

 

 

	
  $_______________

  	
  WILLIAM STREET COMMITMENT

  CORPORATION (recourse only to the

  assets of William Street Commitment

  Corporation)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Mark Walton

  	
   

  
	
   

  	
  Name:

  	
  Mark Walton

  
	
   

  	
  Title:

  	
  Assistant Vice President

  

 

 

	
  $_______________

  	
  MIZUHO CORPORATE BANK, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Raymond Ventura

  	
   

  
	
   

  	
  Name:

  	
  Raymond Ventura

  
	
   

  	
  Title:

  	
  Deputy General Manager

  

 

 

	
  $_______________

  	
  WELLS FARGO BANK, NATIONAL

  
	
   

  	
  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Mark H. Halldorson

  	
   

  
	
   

  	
  Name:

  	
  Mark H. Halldorson

  
	
   

  	
  Title:

  	
  Vice President

  

 

 

	
  $_______________

  	
  HSBC BANK USA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Sam Opitz

  	
   

  
	
   

  	
  Name:

  	
  Sam Opitz

  
	
   

  	
  Title:

  	
  Vice President

  

 

 

	
  $_______________

  	
  BNP PARIBAS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Curtis Price

  	
   

  
	
   

  	
  Name:

  	
  Curtis Price

  
	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Christopher Grumboski

  	
   

  
	
   

  	
  Name:

  	
  Christopher Grumboski

  
	
   

  	
  Title:

  	
  Director

  

 

 

	
  $_______________

  	
  STATE STREET BANK AND TRUST

  
	
   

  	
  COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ 
  Fred Epstein

  	
   

  
	
   

  	
  Name:

  	
  Fred Epstein

  
	
   

  	
  Title:

  	
  Vice President

  

 

 

	
  $_______________

  	
  SUNTRUST BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Kelly Gunter

  	
   

  
	
   

  	
  Name:

  	
  Kelly Gunter

  
	
   

  	
  Title:

  	
  Vice President

  

 

 

	
  $_______________

  	
  FIFTH THIRD BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Christopher Motley

  	
   

  
	
   

  	
  Name:

  	
  Christopher Motley

  
	
   

  	
  Title:

  	
  Vice President

  

 

 

	
  $_______________

  	
  BARCLAYS BANK PLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Douglas Bernegger

  	
   

  
	
   

  	
  Name:

  	
  Douglas Bernegger

  
	
   

  	
  Title:

  	
  Director

  

 

 

	
  $_______________

  	
  FORTIS CAPITAL CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Egensmichael Van Iterson

  	
   

  
	
   

  	
  Scholten

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Egensmichael Van Iterson

  
	
   

  	
   

  	
  Scholten

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Timothy Streb

  	
   

  
	
   

  	
  Name:

  	
  Timothy Streb

  
	
   

  	
  Title:

  	
  Managing Director

  
							

 

 

	
  $_______________

  	
  PNC BANK, NA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Benjamin Kline

  	
   

  
	
   

  	
  Name:

  	
  Benjamin Kline

  
	
   

  	
  Title:

  	
  Credit Officer

  

 

 

	
  $_______________

  	
  MELLON BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Daniel J. Lenckos

  	
   

  
	
   

  	
  Name:

  	
  Daniel J. Lenckos

  
	
   

  	
  Title:

  	
  First Vice President

  

 

 

	
  $_______________

  	
  THE NORTHERN TRUST COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Alex Nikolov

  	
   

  
	
   

  	
  Name:

  	
  Alex Nikolov

  
	
   

  	
  Title:

  	
  Second-Vice President

  

 

 

	
   

  	
  AGENT:

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.,
  as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/     Don B.
  Pinzon

  	
   

  
	
   

  	
  Name:

  	
  Don B. Pinzon

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
  Agency Management Group

  
	
   

  	
  335 Madison Avenue, 4th Floor

  
	
   

  	
  Mail Code: NY1-503-04-03

  
	
   

  	
  New York, New York 10017

  
	
   

  	
  Attention: Vice President

  
	
   

  	
  Telecopy Number: (212) 901-7843

  

 

 

	
   

  	
  SYNDICATION AGENT:

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, N.A.,
  as

  Syndication Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Christine Herrick

  	
   

  
	
   

  	
  Name:

  	
  Christine Herrick

  
	
   

  	
  Title:

  	
  Vice President

  

 

 

	
   

  	
  CO-DOCUMENTATION AGENTS:

  
	
   

  	
   

  
	
   

  	
  CITICORP USA, INC.,   as

  Co-Documentation Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Marc Merlino

  	
   

  
	
   

  	
  Name:

  	
  Marc Merlino

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL

  ASSOCIATION, as Co-Documentation

  Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Michael J. Staloch

  	
   

  
	
   

  	
  Name:

  	
  Michael J. Staloch

  
	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WACHOVIA BANK, NATIONAL

  ASSOCIATION, as Co-Documentation

  Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Beth Rue

  	
   

  
	
   

  	
  Name:

  	
  Beth Rue

  
	
   

  	
  Title:

  	
  Vice President

  

 

 

SCHEDULE
I:  SENIOR
MANAGING AGENTS AND MANAGING AGENTS

 

SENIOR MANAGING AGENTS:

 

THE BANK OF TOKYO-MITSUBISHI, LTD., CHICAGO BRANCH

LEHMAN BROTHERS BANKS, FSB

MERRILL LYNCH BANK USA

WILLIAM STREET COMMITMENT CORPORATION

MIZUHO CORPORATE BANK, LTD.

WELLS FARGO BANK, NATIONAL ASSOCIATION

 

 

MANAGING AGENTS:

 

HSBC BANK USA

BNP PARIBAS

 

S-I

 

SCHEDULE
II: 
CO-AGENTS

 

FIFTH THIRD BANK

SUNTRUST BANK

STATE STREET BANK AND TRUST COMPANY

 

S-II

 

EXHIBIT A

 

NOTE

 

[__________, __________]

_______ __, 2007

 

For value received, Target Corporation, a
Minnesota corporation (the “Borrower”), promises to pay to
the order of ________________ (the “Bank”), for the account of its
Applicable Lending Office, the unpaid principal amount of each Loan made by the
Bank to the Borrower pursuant to the Credit Agreement referred to below on the
last day of the Interest Period relating to such Loan. The Borrower promises to
pay interest on the unpaid principal amount of each such Loan on the dates and
at the rate or rates provided for in the Credit Agreement. All such payments of
principal and interest shall be made in lawful money of the United States in
Federal or other immediately available funds at the office of Bank of America,
N.A., Mail Code: CA4-702-02-25 Building B, 2001 Clayton Road, Concord,
California  94520-2405.

 

All Loans made by the Bank, the respective
types and maturities thereof and all repayments of the principal thereof shall
be recorded by the Bank and, if the Bank so elects in connection with any
transfer or enforcement hereof, appropriate notations to evidence the foregoing
information with respect to each such Loan then outstanding may be endorsed by
the Bank on the schedule attached hereto, or on a continuation of such schedule
attached to and made a part hereof; provided that
the failure of the Bank to make any such recordation or endorsement shall not
affect the obligations of the Borrower hereunder or under the Credit Agreement.

 

This note is one of the Notes referred to in
the Five-Year Credit Agreement dated as of April 12, 2007 among the Borrower,
the Banks party thereto, the Senior Managing Agents, Managing Agents,
Co-Agents, Co-Documentation Agents and Syndication Agent listed therein and
Bank of America, N.A., as Agent (as the same may be amended, amended and
restated, supplemented or otherwise modified from time to time, the “Credit Agreement”).
Terms defined in the Credit Agreement are used herein with the same meanings. Reference
is made to the Credit Agreement for provisions for the prepayment hereof and
the acceleration of the maturity hereof.

 

[Signature page follows.]

 

A-1

 

	
   

  	
  TARGET CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

A-2

 

Note
(Cont’d)

 

LOANS AND
PAYMENTS OF PRINCIPAL

 

	
   

  	
   

  	
  Principal

  	
   

  	
   

  	
   

  	
  Amount of

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Amount
  of

  	
   

  	
  Type
  of

  	
   

  	
  Principal

  	
   

  	
  Maturity

  	
   

  	
  Notation

  	
   

  
	
  Date

  	
   

  	
  Loan

  	
   

  	
  Loan

  	
   

  	
  Repaid

  	
   

  	
  Date

  	
   

  	
  Made
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-3

 

EXHIBIT B

 

FORM OF
MONEY MARKET QUOTE REQUEST

 

[Date]

 

To:                              Bank
of America, N.A. (the “Agent”)

 

From:                  Target
Corporation

 

Re:                               Five-Year Credit Agreement
(the “Credit Agreement”)
dated as of April 12, 2007 among the Borrower, the Banks party thereto, the
Senior Managing Agents, Managing Agents, Co-Agents, Co-Documentation Agents and
Syndication Agent listed therein and the Agent

 

We hereby give notice pursuant to Section
2.03 of the Credit Agreement that we request Money Market Quotes for the
following proposed Money Market Borrowing(s):

 

Date of Borrowing:                                                                                                                                                                                                                                           

 

Principal Amount*                                                                                                                                                                                                                                                                                            Interest
Period**

 

$

 

Such Money Market Quotes should offer a Money
Market [Margin] [Absolute Rate]. [The
applicable base rate is the London Interbank Offered Rate.]

 

Terms used herein have the meanings assigned
to them in the Credit Agreement.

 

	
   

  	
  TARGET CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

* Amount must be $25,000,000 or a larger multiple of $5,000,000.

 

** Not less than one month (LIBOR Auction) or not less than 14 days
(Absolute Rate Auction), subject to the provisions of the definition of
Interest Period.

 

B-1

 

EXHIBIT C

 

FORM OF
INVITATION FOR MONEY MARKET QUOTES

 

[Date]

 

To:                              [Name
of Bank]

 

Re:                               Invitation
for Money Market Quotes

to Target Corporation (the “Borrower”)

 

Pursuant to Section 2.03 of the
Five-Year Credit Agreement dated as of April 12, 2007 among the Borrower, the
Banks party thereto, the Senior Managing Agents, Managing Agents, Co-Agents,
Co-Documentation Agents and Syndication Agent listed therein and the
undersigned, as Agent, we are pleased on behalf of the Borrower to invite you
to submit Money Market Quotes to the Borrower for the following proposed Money
Market Borrowing(s):

 

Date of Borrowing:                                                                                                                                                                                                                                           

 

Principal Amount                                                                                                                                                                                                                                                   Interest
Period

 

$

 

Such Money Market Quotes should offer a Money
Market [Margin] [Absolute Rate]. [The
applicable base rate is the London Interbank Offered Rate.]

 

Please respond to this invitation by no later
than [2:00 P.M.] [9.15 A.M.] (New York City time) on [date].

 

 

	
   

  	
  BANK OF AMERICA, N.A., as Agent

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Authorized
  Officer

  

 

C-1

 

EXHIBIT D

 

FORM OF
MONEY MARKET QUOTE

 

BANK OF AMERICA, N.A.

Agency Services

Mail Code:
CA4-702-02-25

Building B

2001 Clayton Road

Concord, California  94520-2405

 

Attention: ____________________

 

Re:                               Money
Market Quote to

Target Corporation (the “Borrower”)

 

In response to your invitation on behalf of
the Borrower dated ________, ____, we hereby make the following Money Market
Quote on the following terms:

 

1.                                       Quoting
Bank:                                                                                                                                                                                                                                                                   

 

2.                                       Person
to contact at Quoting Bank:                                                                                                                                                                                                                                                     

 

3.                                       Date
of Borrowing:                                                                                                                                                                                           *

 

4.                                       We hereby offer
to make Money Market Loan(s) in the following principal amounts, for the
following Interest Periods and at the following rates:

 

 

 

* As specified in the related Invitation.

 

D-1

 

	
  Principal

  	
   

  	
  Interest

  	
   

  	
  Money Market

  	
   

  	
  [Absolute

  
	
  Amount**

  	
   

  	
  Period***

  	
   

  	
  [Margin]****

  	
   

  	
  Rate]*****

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

[Provided, that the aggregate principal
amount of Money Market Loans for which the above offers may be accepted shall
not exceed $__________.]**

 

We understand and agree that the offer(s) set
forth above, subject to the satisfaction of the applicable conditions set forth
in the Five-Year Agreement dated as of April 12, 2007 among the Borrower, the
Banks party thereto, the Senior Managing Agents, Managing Agents, Co-Agents,
Co-Documentation Agents and Syndication Agent listed therein and yourselves, as
Agent, irrevocably obligates us to make the Money Market Loan(s) for which any
offer(s) are accepted, in whole or in part.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [NAME OF BANK]

  
	
   

  	
   

  
	
  Dated:

  	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized
  Officer

  

 

 

 

** Principal amount bid for each Interest Period may not exceed
principal amount requested. Specify aggregate limitation if the sum of the
individual offers exceeds the amount the Bank is willing to lend. Bids must be
made for $5,000,000 or a larger multiple of $1,000,000.

 

*** Not less than one month or not less than 14 days, as specified in
the related invitation. No more than five bids are permitted for each Interest
Period.

 

**** Margin over or under the London Interbank Offered Rate determined
for the applicable Interest Period. Specify percentage (to the nearest 1/10,000
of 1%) and specify whether “PLUS” or “MINUS”.

 

***** Specify rate of interest per annum (to the nearest 1/10,000th of
1%).

 

D-2

 

EXHIBIT E

 

FORM OF COMMITMENT INCREASE AGREEMENT

 

Date: ___________________

 

Bank of America, N.A.,

as Agent

Mail Code:
CA4-702-02-25

Building B

2001 Clayton Road

Concord, California  94520-2405

 

Target Corporation

1000 Nicollet Mall

Minneapolis, Minnesota 55403

 

Ladies and Gentlemen:

 

We refer to the Five-Year Agreement dated as
of April 12, 2007 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”) among Target
Corporation, a Minnesota corporation (the “Borrower”), the Banks referred
to therein, the Senior Managing Agents, Managing Agents, Co-Agents,
Co-Documentation Agents and Syndication Agent referred to therein and Bank of
America, N.A., as administrative agent (in such capacity, the “Agent”). Terms
defined in the Credit Agreement are used herein as therein defined.

 

This Commitment Increase Agreement is made
and delivered pursuant to Section 2.17 of the Credit Agreement.

 

Subject to the terms and conditions of Section
2.17 of the Credit Agreement, _______________________________ (“Increasing Bank”)
will increase its Commitment to an amount equal to $___________, on the
Increased Commitment Date applicable to it. The Increasing Bank hereby confirms
and agrees that with effect on and after such Increased Commitment Date, the
Commitment of the Increasing Bank shall be increased to the amount set forth
above, and the Increasing Bank shall have all of the rights and be obligated to
perform all of the obligations of a Bank under the Credit Agreement with a
Commitment in the amount set forth above.

 

Effective the on the Increased Commitment
Date applicable to it, the Increasing Bank (i) accepts and assumes from
the assigning Banks, without recourse, such assignment of Committed Loans as
shall be necessary to effectuate the adjustments in the pro rata shares of
Banks contemplated by Section 2.17 of the Credit Agreement, and (ii)
agrees to fund on such Increased Commitment Date such assumed amounts of
Committed Loans to Agent for the account of the assigning Banks in accordance
with the provisions of the Credit Agreement, in the amount notified to
Increasing Bank by Agent.

 

E-1

 

THIS COMMITMENT INCREASE AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK, NOTWITHSTANDING ITS EXECUTION OUTSIDE SUCH STATE.

 

IN WITNESS WHEREOF, Increasing Bank has
caused this Commitment Increase Agreement to be duly executed and delivered in
_____________, ______________, by its proper and duly authorized officer as of
the day and year first above written.

 

	
   

  	
  [INCREASING BANK]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
  CONSENTED TO as of

  	
   

  	
  :

  
	
   

  	
   

  
	
  TARGET CORPORATION

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  BANK OF AMERICA, N.A.,

  	
   

  
	
  as Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
								

 

E-2

 

EXHIBIT F

 

FORM OF ADDED BANK AGREEMENT

 

Date: ___________________

 

Bank of America, N.A.,

as Agent

Mail Code:
CA4-702-02-25

Building B

2001 Clayton Road

Concord, California  94520-2405

 

Target Corporation

1000 Nicollet Mall

Minneapolis, Minnesota 55403

 

Ladies and Gentlemen:

 

We refer to the Five-Year Credit Agreement
dated as of April 12, 2007 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”) among Target
Corporation, a Minnesota corporation (the “Borrower”), the Banks referred
to therein, the Senior Managing Agents, Managing Agents, Co-Agents,
Co-Documentation Agents and Syndication Agent referred to therein and Bank of
America, N.A., as administrative agent (in such capacity, the “Agent”). Terms
defined in the Credit Agreement are used herein as therein defined.

 

This Added Bank Agreement is made and
delivered pursuant to Section 2.17 of the Credit Agreement.

 

Subject to the terms and conditions of Section
2.17 of the Credit Agreement, _________________________ (the “Added Bank”)
will become a party to the Credit Agreement as a Bank, with a Commitment equal
to $___________, on the Increased Commitment Date applicable to it. The Added
Bank hereby confirms and agrees that with effect on and after such Increased
Commitment Date, the Added Bank shall be and become a party to the Credit
Agreement as a Bank and have all of the rights and be obligated to perform all
of the obligations of a Bank thereunder with a Commitment in the amount set
forth above.

 

Effective the on the Increased Commitment
Date applicable to it, the Added Bank (i) accepts and assumes from the
assigning Banks, without recourse, such assignment of Committed Loans as shall
be necessary to effectuate the adjustments in the pro rata shares of the Banks
contemplated by Section 2.17 of the Credit Agreement, and (ii) agrees to
fund on such Increased Commitment Date such assumed amounts of Committed Loans
to Agent for the account of the assigning Banks in accordance with the
provisions of the Credit Agreement, in the amount notified to the Added Bank by
the Agent.

 

F-1

 

The following administrative details apply to
the Added Bank:

 

(A)                              Lending
Office(s):

 

	
  Bank name:

  	
   

  
	
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attention:

  	
   

  
	
  Telephone:

  	
  (    )

  
	
  Facsimile:

  	
  (    )

  
	
   

  	
   

  
	
  Bank name:

  	
   

  
	
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attention:

  	
   

  
	
  Telephone:

  	
  (    )

  
	
  Facsimile:

  	
  (    )

  

 

(B)                                Notice
Address:

 

	
  Bank name:

  	
   

  
	
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attention:

  	
   

  
	
  Telephone:

  	
  (    )

  
	
  Facsimile:

  	
  (    )

  

 

(C)                                Payment
Instructions:

 

	
  Account No.:

  	
   

  
	
  At:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Reference:

  	
   

  
	
  Attention:

  	
   

  

 

THIS ADDED BANK AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, NOTWITHSTANDING ITS
EXECUTION OUTSIDE SUCH STATE.

 

F-2

 

IN WITNESS WHEREOF, the Added Bank has caused
this Added Bank Agreement to be duly executed and delivered in _____________,
______________, by its proper and duly authorized officer as of the day and
year first above written.

 

	
   

  	
  [ADDED BANK]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
  CONSENTED TO as of

  	
   

  	
  :

  
	
   

  	
   

  
	
  TARGET CORPORATION

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  BANK OF AMERICA, N.A.,

  	
   

  
	
  as Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
								

 

F-3

 

EXHIBIT G

 

OPINION
OF

COUNSEL
FOR THE BORROWER

 

__________, 2007

 

To the Banks and the Agent

Referred to Below

c/o Bank of America, N.A., as Agent

100 N. Tryon Street

Charlotte, North Carolina 28255-0001

 

Dear Ladies and Gentlemen:

 

I am Executive Vice President and General
Counsel of Target Corporation (the “Borrower”), and I have acted as
counsel to the Borrower in connection with the Five-Year Credit Agreement (the “Credit Agreement”)
dated as of April 12, 2007 among the Borrower, the banks listed on the
signature pages thereof (the “Banks”), the Senior Managing
Agents (the “Senior
Managing Agents”), Managing Agents (the “Managing Agents”),
Co-Agents (the “Co-Agents”), Co-Documentation
Agents (the “Co-Documentation Agents”) and
Syndication Agent (the “Syndication Agent”) listed
therein and Bank of America, N.A., as Agent (in such capacity, the “Agent”). As such
counsel, I, or the attorneys over whom I exercise supervision, have examined
(i) the Restated Articles of Incorporation of the Borrower, as amended to date;
(ii) the By-laws of the Borrower, as amended to date; and (iii) the corporate
proceedings of the Borrower relating to the Credit Agreement. I, or the
attorneys over whom I exercise supervision, have also examined certificates of
public officials and have made such other examinations as we have deemed
necessary to enable me to give the opinions herein expressed.

 

In our examination, I, and the attorneys over
whom I exercise supervision, have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals and the
conformity to, and authenticity of the originals of, all documents submitted to
us as certified, photostatic or conformed documents. In such examination we
have relied on certificates of public officials as to the incorporation, good
standing and valid existence of the Borrower, and, as to matters of fact, upon
inquiry of officers of the Borrower and the representations and warranties of
the Borrower contained in the Credit Agreement.

 

All terms used and not otherwise defined
herein shall have the meanings ascribed to them in the Credit Agreement.

 

Upon the basis of the foregoing, I am of the
opinion that:

 

1.                                       Each of the
Borrower and its Consolidated Subsidiaries is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and is duly qualified to do business as a foreign corporation and
is in good standing in each jurisdiction where, in light of the nature of the
business transacted or the property owned by it, such qualification is
necessary and the failure so to qualify might

 

G-1

 

permanently
impair title to property material to its operations or its right to enforce a
material contract against others, or expose it to substantial liability in such
jurisdiction.

 

2.                                       The Credit
Agreement and the Notes have been duly executed and delivered by Borrower to
the Agent. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes are within the Borrower’s corporate powers, have
been duly authorized by all necessary corporate action, require no action by or
in respect of, or filing with, any governmental body, agency or official and do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the articles of incorporation or by-laws of the Borrower or
of any agreement or instrument evidencing or governing Debt of the Borrower or
any other material agreement, judgment, injunction, order, decree or other
instrument binding upon the Borrower or result in the creation or imposition of
any Lien on any asset of the Borrower or any of its Subsidiaries.

 

3.                                       There is no
action, suit or proceeding pending against, or to the best of my knowledge
threatened against or affecting, the Borrower or any of its Subsidiaries before
any court or arbitrator or any governmental body, agency or official which
might reasonably be expected to materially adversely affect the business,
consolidated financial position or consolidated results of operations of the
Borrower and its Consolidated Subsidiaries or which in any manner draws into
question the validity of the Credit Agreement or the Notes.

 

This opinion letter is delivered solely to
the Banks, the Senior Managing Agents, the Managing Agents, the Co-Agents, the
Co-Documentation Agents, the Syndication Agent and the Agent, and may not be relied
upon by any other Person other than the addressees hereof, any successor or
assignee of any addressee (including successive assignees), Helms Mulliss &
Wicker, PLLC (who may rely upon this opinion as to matters of Minnesota law as
if this opinion were addressed to such firm) and any Person who shall acquire a
participation interest of any Bank (collectively, the “Reliance Parties”). This
opinion letter may be relied upon only in connection with matters related to
the Credit Agreement and then only as if it were delivered to the Reliance
Party on the date hereof. My opinions herein shall not be quoted or otherwise
included, summarized or referred to in any publication or document, in whole or
in part, for any purposes whatsoever, or furnished to any Person other than a
Reliance Party (or a Person considering whether to become a Reliance Party),
except as may be required of any Reliance Party, by applicable law, or
regulation or in accordance with any auditing or oversight function or request
of regulatory agencies to which a Reliance Party is subject.

 

Very truly yours,

 

G-2

 

EXHIBIT H

 

OPINION
OF

HELMS
MULLISS & WICKER, PLLC, SPECIAL COUNSEL

FOR THE
AGENT

 

__________, 2007

 

To the Banks and the Agent

Referred to Below

c/o Bank of America, N.A., as Agent

100 N. Tryon Street

Charlotte, North Carolina 28255-0001

 

Ladies and Gentlemen:

 

We have participated in the preparation of
the Five-Year Credit Agreement (the “Credit  Agreement”)
dated as of April 12, 2007 among Target Corporation, a Minnesota corporation
(the “Borrower”),
the banks listed on the signature pages thereof (the “Banks”), the Senior Managing
Agents, Managing Agents, Co-Agents, Co-Documentation Agents and Syndication
Agent listed therein and Bank of America, N.A., as the administrative agent (in
such capacity, the “Agent”), and have acted as
special counsel for the Agent for the purpose of rendering this opinion
pursuant to Section 3.01(d) of the Credit Agreement. Terms defined in
the Credit Agreement are used herein as therein defined.

 

We have examined originals or copies,
certified or otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and other instruments and
have conducted such other investigations of fact and law as we have deemed
necessary or advisable for purposes of this opinion.

 

Upon the basis of the foregoing, we are of
the opinion that the Credit Agreement constitutes a valid and binding agreement
of the Borrower and the Notes constitute valid and binding obligations of the
Borrower, except that, in each case, (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors’ rights
generally and (ii) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability.

 

Our opinion is subject to the following
qualifications:

 

(a)                                  enforcement of the
obligations under the Credit Agreement and the Notes may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors’ rights generally and by general principles of equity
(regardless of whether enforcement is sought in equity or at law);

 

(b)                                 we express no opinion
as to the effect on the opinion expressed herein of (i) the compliance or
non-compliance of any party to the Credit Agreement with any

 

H-1

 

state, federal or other laws or regulations applicable to it or (ii)
the legal or regulatory status or the nature of the business of any party;

 

(c)                                  we express no opinion
as to the enforceability of any rights to contribution, exculpation or
indemnification provided for in the Credit Agreement which purport to
indemnify, or provide exculpation to, a Person against the consequences of its
own negligence or willful misconduct or are violative of the public policy
underlying any law, rule or regulation (including any federal or state
securities law, rule or regulation);

 

(d)                                 we express no opinion
with respect to any provision of the Credit Agreement that purports to select a
governing law in conflict with mandatory choice of law rules set forth in
Section 5-116 of the Uniform Commercial Code as in effect in the State of New
York (the “UCC”);

 

(e)                                  we express no opinion
as to the enforceability of any provision of the Credit Agreement that purports
to affect venue or the subject matter jurisdiction of courts, to waive the
right to a jury trial or to waive any objection a Person may have that a suit,
action or proceeding has been brought in an inconvenient forum;

 

(f)                                    we express no
opinion with respect to the validity, perfection or priority of any security
interest;

 

(g)                                 we express no opinion
with respect to any provision of the Credit Agreement to the extent it
authorizes or permits any purchaser of a participation interest to set-off or
apply any deposit, property or indebtedness with respect to any participation
interest;

 

(h)                                 our opinion with
respect to the enforceability of the choice of New York law and choice of New
York forum provisions of the Credit Agreement 
is rendered in reliance upon the Act of July 19, 1984, ch. 421, 1984
McKinney’s Sess. Laws of N.Y. 1406 (codified at N.Y. Gen. Oblig. Law §§
5-1401, 5-1402 (McKinney 1989) and N.Y. CPLR 327(b) (McKinney 1990)) and is
subject to the qualifications that such enforceability may be limited by public
policy considerations of any jurisdiction, other than the courts of the State
of New York, in which enforcement of such provisions, or of a judgment upon an
agreement containing such provisions, is sought;

 

(i)                                     we express no
opinion as to any state or federal securities law;

 

(j)                                     the opinion
expressed herein only considers the application of those laws and regulations
that, in our experience, are customarily applicable to transactions of the type
embodied by the Credit Agreement; and

 

(k)                                  we express no opinion
as to the effect of any possible judicial, administrative or other action
giving effect to, or which constitute, the actions of governmental authorities
or laws of any country other than the United States of America.

 

Certain members of the firm are members of
the Bar of the State of New York and the foregoing opinion is limited to the
laws of the State of New York and the federal laws of the

 

H-2

 

United States
of America. In giving the foregoing opinion, (i) we express no opinion as to
the effect (if any) of any law of any jurisdiction (except the State of New
York) in which any Bank is located which limits the rate of interest that such
Bank may charge or collect and (ii) we have relied, without independent
investigation, as to all matters governed by the laws of Minnesota, upon the
opinion of Timothy R. Baer, Esq., General Counsel for the Borrower, dated the
date hereof, a copy of which has been delivered to you.

 

This opinion letter is delivered solely to
the Banks, the Senior Managing Agents, the Managing Agents, the Co-Agents, the
Co-Documentation Agents, the Syndication Agent and the Agent, and may not be
relied upon by any other Person other than the addressees hereof, any successor
or assignee of any addressee (including successive assignees) and any Person
who shall acquire a participation interest of any Bank (collectively, the “Reliance Parties”). This
opinion letter may be relied upon only in connection with matters related to
the Credit Agreement and then only as if it were delivered to the Reliance
Party on the date hereof. Our opinions herein shall not be quoted or otherwise
included, summarized or referred to in any publication or document, in whole or
in part, for any purposes whatsoever, or furnished to any Person other than a
Reliance Party (or a Person considering whether to become a Reliance Party),
except as may be required of any Reliance Party by applicable law or regulation
or in accordance with any auditing or oversight function or request of
regulatory agencies to which a Reliance Party is subject.

 

Very truly yours,

 

H-3

 

EXHIBIT I

 

ASSIGNMENT
AND ASSUMPTION AGREEMENT

 

AGREEMENT dated as of _________, ____ among [ASSIGNOR]
(the “Assignor”),
[and] [ASSIGNEE] (the
“Assignee”),
[and TARGET CORPORATION  (the “Borrower”)].

 

WITNESSETH

 

WHEREAS, this Assignment and Assumption Agreement
(the “Agreement”)
relates to the Five-Year Credit Agreement dated as of April 12, 2007 among the
Borrower, the Assignor and the other Banks party thereto, as Banks, the Senior
Managing Agents, Managing Agents, Co-Agents, Co-Documentation Agents and
Syndication Agent listed therein, and Bank of America, N.A., as Agent (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Credit
Agreement”);

 

WHEREAS, as provided under the Credit
Agreement, the Assignor has a Commitment to make Loans to the Borrower for an
aggregate principal amount at any time outstanding not to exceed $___________;

 

WHEREAS, Committed Loans made to the Borrower
by the Assignor under the Credit Agreement in the aggregate principal amount of
$__________ are outstanding at the date hereof;

 

WHEREAS, the Assignor proposes to assign to
the Assignee all of the rights of the Assignor under the Credit Agreement in
respect of a portion of its Commitment thereunder in an amount equal to
$__________ (the “Assigned
Amount”), together with a corresponding portion of its
outstanding Committed Loans, and the Assignee proposes to accept assignment of
such rights and assume the corresponding obligations from the Assignor on such
terms;

 

NOW, THEREFORE, in consideration of the
foregoing and the mutual agreements contained herein, the parties hereto agree
as follows:

 

SECTION 1. Definitions.
All capitalized terms not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement.

 

SECTION 2. Assignment.
The Assignor hereby assigns and sells to the Assignee without recourse,
representation or warranty of any kind except as expressly stated below all of
the rights of the Assignor under the Credit Agreement to the extent of the
Assigned Amount, and the Assignee hereby accepts such assignment from the
Assignor and assumes all of the obligations of the Assignor under the Credit
Agreement to the extent of the Assigned Amount, including the purchase from the
Assignor of the corresponding portion of the principal amount of the Committed
Loans made by the Assignor outstanding at the date hereof. Upon the execution
and delivery hereof by the Assignor[,
and] the Assignee[ and the Borrower], acknowledgment hereof by the Agent and
the payment of the amounts specified in Section 3 required to be paid on
the date hereof (a) the Assignee shall, as of the date hereof, succeed to the
rights and be obligated to perform the obligations of a Bank under the Credit
Agreement with a Commitment in an amount equal to the Assigned Amount, and (b)
the Commitment of the Assignor shall, as of the date hereof, be reduced by a
like amount and the Assignor released from its obligations under the

 

I-1

 

Credit
Agreement to the extent such obligations have been assumed by the Assignee. The
assignment provided for herein shall be without recourse to the Assignor.

 

SECTION 3. Payments.
As consideration for the assignment and sale contemplated in Section 2
hereof, the Assignee shall pay to the Assignor on the date hereof in Federal
funds the amount heretofore agreed between them.*  It is understood that facility fees accrued
to the date hereof with respect to the Assigned Amount are for the account of
the Assignor and such fees accruing from and including the date hereof are for
the account of the Assignee. Each of the Assignor and the Assignee hereby
agrees that if it receives any amount under the Credit Agreement which is for
the account of the other party hereto, it shall receive the same for the
account of such other party to the extent of such other party’s interest
therein and shall promptly pay the same to such other party.

 

[SECTION 4. Consent
of the Borrower. This Agreement is conditioned upon
the consent of the Borrower pursuant to Section 9.06(c) of the Credit
Agreement. The execution of this Agreement by the Borrower is evidence of this
consent. Pursuant to Section 9.06(c) the Borrower agrees to execute and
deliver a Note payable to the order of the Assignee to evidence the assignment
and assumption provided for herein.]

 

SECTION 5.
Non-Reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no responsibility
with respect to, the solvency, financial condition, or statements of the
Borrower, or the validity and enforceability of the obligations of the Borrower
in respect of the Credit Agreement or any Note. The Assignee acknowledges that
it has, independently and without reliance on the Assignor, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the business, affairs
and financial condition of the Borrower.

 

SECTION 6. Governing
Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.

 

SECTION 7.
Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.

 

 

*                                         Amount
should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any
upfront fee to be paid by the Assignor to the Assignee. It may be preferable in
an appropriate case to specify these amounts generically or by formula rather
than as a fixed sum.

 

I-2

 

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

 

	
   

  	
  [ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  [ASSIGNEE]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [TARGET CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Title:]

  
	
   

  	
   

  
	
  Acknowledged by:

  	
   

  
	
   

  	
   

  
	
  BANK OF AMERICA, N.A., as Agent

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
						

 

I-3

 

EXHIBIT J

FORM OF
BORROWING NOTICE

 

To:                              Bank of America, N.A., as
Agent

Mail Code:
CA4-702-02-25

Building B

2001 Clayton Road

Concord, California  94520-2405

Attention: Agency Services

 

Reference is hereby made to the Five-Year
Credit Agreement dated as of April 12, 2007 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”) among Target
Corporation, a Minnesota corporation (the “Borrower”), the Banks referred
to therein, the Senior Managing Agents, Managing Agents, Co-Agents,
Co-Documentation Agents and Syndication Agent referred to therein and Bank of
America, N.A., as administrative agent (in such capacity, the “Agent”). Terms
defined in the Credit Agreement are used herein as therein defined.

 

The Borrower through its authorized
representative hereby gives notice to the Agent that Loans of the type and
amount set forth below be made on the date indicated:

 

	
  Type of Loan

  (check one)

  	
   

  	
  Interest Period(1)

  	
   

  	
  Aggregate Amount(2)

  	
   

  	
  Date of Loan(3)

  
	
    Base Rate Loan

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
    Euro-Dollar Loan

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
    CD Loan

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

(1)                                  For any Euro-Dollar
Loan, one, two, three or six months, and for any CD Loan, 30, 60, 90 or 180
days.

(2)                                  Must be $25,000,000
or if greater an integral multiple of $5,000,000.

(3)                                  At least three (3)
Domestic Business Days later if a Euro-Dollar Loan, and at least two (2)
Domestic Business Days later if a CD Loan.

 

The Borrower hereby requests that the proceeds of Loans described in
this Borrowing Notice be made available to the Borrower as follows:    [insert transmittal instructions]  .

 

The undersigned hereby
certifies that all conditions contained in the Credit Agreement to the making
of any Loan requested hereby, including those conditions required under Section
3.02, have been met or satisfied in full.

 

	
   

  	
  TARGET CORPORATION

  
	
   

  	
   

  
	
   

  	
  BY:

  	
   

  	
   

  
	
   

  	
  TITLE:

  	
   

  	
   

  
	
   

  	
  DATE:

  	
   

  	
   

  
					

 

J-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00124-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00124-of-00352.parquet"}]]