EXHIBIT 4.1
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GEOKINETICS INC.,
THE GUARANTORS NAMED HEREIN
and
THE PURCHASERS NAMED HEREIN
SECURITIES PURCHASE AGREEMENT
Senior Secured Notes
Warrants to Purchase Common Stock
Dated as of October 1, 1999
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TABLE OF CONTENTS
(Not Part of Agreement)
PAGE
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PARAGRAPH 1. AUTHORIZATION OF ISSUE OF SECURITIES.....................1
PARAGRAPH 2. ACQUISITION OF SECURITIES................................2
PARAGRAPH 3. CONDITIONS PRECEDENT.....................................3
PARAGRAPH 4. COVENANTS................................................6
PARAGRAPH 5. REPRESENTATIONS AND WARRANTIES..........................10
PARAGRAPH 6. REPRESENTATIONS AND AGREEMENT OF THE
PURCHASERS..............................................18
PARAGRAPH 7. DEFINITIONS.............................................19
PARAGRAPH 8. MISCELLANEOUS...........................................24
Schedule I - Subsidiaries
EXHIBITS
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Exhibit A-1 - Form of 2005 Note
Exhibit A-2 - Form of 2002 Note
Exhibit B - Form of Warrant Agreement
Exhibit C-1 - Certificate of Incorporation
Exhibit C-2 - Tag-Drag Agreement
Exhibit D-1 - Closing Documents
Exhibit D-2 - Forms of Opinion of Counsel
Exhibit E - Capitalization of the Company
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GEOKINETICS INC.
SECURITIES PURCHASE AGREEMENT
Ladies and Gentlemen:
Each of undersigned, Geokinetics Inc., a Delaware corporation (the
"Company"), and each of the Guarantors listed on the signature pages hereto,
hereby agrees with the parties named on the signature pages hereto
(collectively, the "Purchasers") as follows:
PARAGRAPH 1. AUTHORIZATION OF ISSUE OF SECURITIES.
1A. GENERAL. The 2005 Notes and 26,818,594 Warrants are being issued
in connection with a "plan of reorganization" under Section 368(a)(1)(E) of the
Internal Revenue Code of 1986, as amended, in exchange for all of the Senior
Subordinated Notes (including accrued and unpaid interest) and the 1998
Warrants. The 2002 Notes and 23,250,000 Warrants are being issued and sold in
connection with (i) the funding of the tax payment of Geophysical Development
Corporation, a Texas corporation ("GDC"), of approximately $800,000; (ii) the
funding of GDC's employee stay bonuses of approximately $1.1 million; and (iii)
the provision of funds for working capital and general corporate purposes.
Capitalized terms used herein and not otherwise defined have the meanings
specified in Paragraph 7.
1B. AUTHORIZATION OF NOTES. The Company has authorized the issuance
of (i) its 13 1/2% Senior Secured Notes due 2005 (the "2005 Notes") in tHe
aggregate principal amount of up to $45,358,000 originally issued, to be dated
the date of issuance thereof, to mature on September 15, 2005, and to be in the
form of EXHIBIT A-1 attached hereto, and (ii) its 13 1/2% Senior Secured Notes
duE 2002 (the "2002 Notes" and, together with the 2005 Notes, the "Notes") in
the aggregate principal amount of up to $6,000,000 originally issued, to be
dated the date of issuance thereof, to mature on September 15, 2002, and to be
in the form of EXHIBIT A-2 attached hereto. The term "Notes" as used in this
agreement (the "Agreement") shall include the promissory notes delivered
pursuant to this Agreement, addi-
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tional Notes which may be issued as interest in accordance with the terms
thereof, and each such promissory note delivered in substitution or exchange for
any other Note pursuant to any such provision hereof, of such Note or of the
Indenture governing such Note.
1C. AUTHORIZATION OF WARRANTS. In connection with the transactions
described in Paragraph 1A, the Company has authorized the issuance and delivery
to the Purchasers of the 2002 Notes an aggregate of 23,250,000 warrants (the
"2002 Warrants"), and to the Purchasers of the 2005 Notes an aggregate of
26,818,594 warrants (the "2005 Warrants" and, together with the 2002 Warrants,
the "Warrants"), each Warrant to purchase one share (collectively, the "Warrant
Shares") of its common stock, par value $.01 per share (the "Common Stock"), at
an exercise price of $.56 per share, such Warrants to be in the form contained
in the Warrant Agreement attached hereto as EXHIBIT B and such Common Stock
having the rights, restrictions, privileges and preferences set forth in the
Certificate of Incorporation of the Company in the form of EXHIBIT C-1 attached
hereto (the "Certificate of Incorporation") and being subject to the provisions
of the agreement among the Company, Blackhawk Investors, L.L.C., ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and the Holders (the "Tag/Drag Agreement") in the
form of EXHIBIT C-2 attached hereto. The Warrants will have the benefit of the
registration rights set forth in the Warrant Agreement.
1D. AUTHORIZATION OF GUARANTEES. In connection with the transactions
described in Paragraph 1A, each of the Guarantors has authorized the issuance of
its unconditional senior guarantee of the 2005 Notes and the 2002 Notes, and in
the form of Guarantee attached to EXHIBIT A-1 and EXHIBIT A-2 hereto,
respectively (collectively, the "Guarantees").
PARAGRAPH 2. ACQUISITION OF SECURITIES.
2A. ACQUISITION OF SECURITIES. Subject to and upon the terms and
conditions herein set forth, each Purchaser agrees, severally and not jointly,
to (i) exchange with the Company the Senior Subordinated Notes (including rights
to accrued but unpaid interest thereunder) and 1998 Warrants held by such
Purchaser, if any, for the principal amount of 2005 Notes and number of 2005
Warrants and (ii) purchase from the Company
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the principal amount of 2002 Notes and number of 2002 Warrants for an aggregate
purchase price equal to the principal amount of such 2002 Notes, in each case as
set forth on the signature page hereto of such Purchaser, on October 1, 1999
(the "Date of Closing").
2B. PURCHASE PRICE ALLOCATION. The Company and the Purchasers agree
that the issue prices of the 2002 Notes and the 2002 Warrants for U.S. federal
income tax purposes are $628.00 per $1,000 principal amount of 2002 Notes and
$.08 per Warrant.
2C. TAG/DRAG AGREEMENT. Each Purchaser by executing its signature
page hereto shall be deemed to have executed the Tag/Drag Agreement.
PARAGRAPH 3. CONDITIONS PRECEDENT.
3. CONDITIONS TO CLOSING. The obligation of each Purchaser to
purchase and pay for the Notes and Warrants to be purchased by it is subject to
the satisfaction of the following conditions:
3A. DOCUMENTS TO BE DELIVERED. On or before the Date of Closing, the
Purchasers shall have received all of the following, duly executed and
delivered:
(i) the Notes being exchanged and/or purchased by each Purchaser in
the name and denomination set forth on the signature page hereto of such
Purchaser;
(ii) the Warrants being exchanged and/or purchased by each Purchaser
in the name and denomination set forth on the signature page hereto of
such Purchaser;
(iii) certificates of the Secretary and of the Chairman of the Board
or President of the Company and each Guarantor dated the Date of Closing,
which shall contain the names and signatures of the officers of the
Company and each Guarantor authorized to execute this Agreement and which
shall certify to the truth, correctness and completeness of the following
exhibits attached hereto as EXHIBIT D-1: (a) a copy of resolutions duly
adopted by the Board of Directors of the Company and each Guarantor, in
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each case in full force and effect at the time this Agreement is entered
into, authorizing the execution of this Agreement and the other
Transaction Documents delivered or to be delivered in connection herewith
on the part of the Company and the Guarantors and the consummation of the
transactions contemplated herein and therein, (b) a copy of the charter
documents of the Company and each Guarantor and all amendments thereto,
certified by the appropriate official of the state of organization, and
(c) a copy of the bylaws of the Company and each Guarantor in effect on
the Date of Closing;
(iv) a certificate (or certificates) as to the valid existence and
good standing of the Company and each Guarantor in its respective state of
organization, issued by the appropriate authorities of such jurisdiction;
(v) a certificate of the President of the Company dated the Date of
Closing, in which such officer certifies to the satisfaction of the
conditions set out in subsections (i) and (ii) of Paragraph 3B;
(vi) favorable opinions of (x) Chamberlain, Hrdlicka, White, ▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇, counsel to the Company, (y) The Bayard Firm, special Delaware
counsel to the Company, and (z) local counsel to the Company each dated
the Date of Closing and substantially in the form set forth in EXHIBIT
D-2, subject only to such qualifications, limitations or exceptions as may
be acceptable to each of the Purchasers; and
(vii) certificates of the Company's and the Guarantors' good standing
and due qualification to do business, issued by appropriate officials in
any states where the Company's and the Guarantors' ownership or leasing of
their respective properties or the conduct of their respective business
requires such qualification.
On or before the Date of Closing, the Purchasers and ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, counsel for the Purchasers, shall have received such further documents,
opinions, certificates and schedules or instruments relating to the business,
corporate, legal and financial affairs of the Company and its Subsidiaries as
they shall reasonably request.
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3B. REPRESENTATIONS; NO DEFAULT.
(i) All representations and warranties made by the Company in this
Agreement shall be true and correct on and as of the Date of Closing as if such
representations and warranties had been made on and as of such date, unless such
representation and warranty expressly indicates that it is being made as of any
other specific date in which case on and as of such other date.
(ii) The Company shall have performed and complied with all
agreements and conditions required in this Agreement to be performed or complied
with by it on or prior to the Date of Closing.
3C. PURCHASE PERMITTED BY APPLICABLE LAWS. On the Date of Closing,
the offer by the Company of, and the purchase of and payment for, the Warrants
and the Notes, respectively, on the terms and conditions herein provided
(including the use of the proceeds of the sale of such Securities by the
Company) shall not violate any applicable law or governmental regulation
(including, without limitation, section 5 of the Securities Act or Regulation U,
T or X of the Board of Governors of the Federal Reserve System) and shall not
subject any Purchaser to any tax, penalty, liability or other onerous condition
under or pursuant to any applicable law or governmental regulation.
3D. PROCEEDINGS. On the Date of Closing, all corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incident thereto shall be reasonably
satisfactory in substance and form to the Purchasers, and the Purchasers shall
have received all such counterpart originals or certified or other copies of
such documents as they or their counsel may reasonably request.
3E. OBLIGATIONS. The Company shall have satisfied any other
obligations to the Purchasers required to be paid or complied with by it on or
prior to the Date of Closing.
3F. IO AGREEMENT. The Company shall have received from Input Output,
Inc. ("IO") an agreement on terms and in form and substance satisfactory to the
Purchasers to refinance the obligations of the Company to IO.
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3G. BOARD OF DIRECTORS. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall have been elected
Chairman of the Executive Committee of the Board of the Company and shall have
agreed to become Chairman of the Executive Committee the Board of the Company on
terms in form and substance satisfactory to the Purchasers.
3H. SECURITY DOCUMENTS. The Company and the Guarantors shall have
duly authorized, executed and delivered the General Security Agreement and all
other Security Documents and shall have delivered to the collateral agent
thereunder, all of the collateral referred to therein and all annotations and
all other documents necessary to grant such security interest in such collateral
pursuant to the terms of the Security Documents; the Holders shall have a
perfected security interest on the collateral pledged under the Security
Documents with such priority in interest on such collateral as required
thereunder.
PARAGRAPH 4. COVENANTS.
4. COVENANTS. To induce the Purchasers to enter into this Agreement
and acquire the Notes and the Warrants, the Company warrants, covenants and
agrees as follows:
4A. FINANCIAL INFORMATION, REPORTS, NOTICES, ETC. The Company will
furnish, or will cause to be furnished, to the Holders copies of the following
financial statements, reports, notices and information, at the Company's
expense:
(i) as soon as available and in any event within 45 days after the
end of each Fiscal Quarter of each Fiscal Year of the Company,
consolidated balance sheets of the Company as of the end of such Fiscal
Quarter and consolidated statements of operations and cash flow of the
Company for such Fiscal Quarter and for the period commencing at the end
of the previous Fiscal Year and ending with the end of such Fiscal Quarter
(which may be the Company's Form 10-QSB), certified by the chief financial
officer of the Company, in each case with prior period comparisons and a
management's discussion and analysis of financial condition and results of
operations;
(ii) as soon as available and in any event within 90 days after the
end of each Fiscal Year, a copy of the
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annual audit report for such Fiscal Year for the Company and its
Subsidiaries, including therein consolidated balance sheets of the Company
as of the end of such Fiscal Year and consolidated statements of
operations and cash flow of the Company for such Fiscal Year (which may be
the Company's Form 10-KSB), certified in a manner reasonably acceptable to
the Holders by ▇▇▇▇▇, ▇▇▇▇▇▇▇ & Co., Inc., P.C. or other independent
public accountants acceptable to the Holders, with a management's
discussion and analysis of financial condition and results of operations;
(iii) promptly after (a) the sending or filing thereof, copies of all
reports which the Company or any of its Subsidiaries send to any lenders
and (b) the sending or filing thereof, all reports and registration
statements which the Company or any of its Subsidiaries file with the
Securities and Exchange Commission or any national securities exchange;
and
(iv) upon request by any Holder, as soon as available and in any
event within 30 days after the end of each month, monthly financial
reports and such other information respecting the condition or operations,
financial or otherwise, of the Company and each of its Subsidiaries as
such Holder may reasonably request.
In the event that, pursuant to the terms of the Notes, an indenture is qualified
under the Trust Indenture Act of 1939, as amended, with respect to the Notes,
the information required to be furnished pursuant to this Paragraph 4A shall be
provided pursuant hereto only to Holders of Warrants.
4B. INFORMATION REQUIRED BY RULE 144A. The Company will, upon the
request of any Holder, provide such Holder, and any qualified institutional
buyer designated by such Holder, such financial and other information as such
Holder may reasonably determine to be necessary in order to permit compliance
with the information requirements of Rule l44A under the Securities Act in
connection with the resale of Notes or Warrants. For the purpose of this
Paragraph 4B, the term "qualified institutional buyer" shall have the meaning
specified in Rule l44A under the Securities Act. At the request of holders of
25% or more of the aggregate principal amount of the Notes, the Company will use
its best efforts to cause the Notes to be eligible for participation in the
book-entry system of The Depository Trust Company.
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4C. INDEMNITY. The Company agrees to indemnify each of the
Purchasers, as debtholders, shareholders, directors and officers of the Company,
as the case may be, upon demand, from and against any and all liabilities,
obligations, claims, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements (including reasonable fees of attorneys,
accountants, experts and advisors) of any kind or nature whatsoever (in this
section collectively called "liabilities and costs") which to any extent (in
whole or in part) may be imposed on, incurred by, or asserted against any of the
Purchasers arising out of, resulting from or in any other way associated with
the execution, delivery or performance of the Transaction Documents or such
Purchaser's being a debtholder, shareholder, director or officer of the Company.
The foregoing indemnification shall apply whether or not such liabilities and
costs are in any way or to any extent caused, in whole or in part, by any
negligent act or omission of any kind by such holder, provided only that no
Purchaser shall be entitled under this ▇▇▇▇▇▇▇▇▇ ▇▇ to receive indemnification
for that portion, if any, of any liabilities and costs which is proximately
caused by such Purchaser's willful misconduct. If any Person (including the
Company or any of its Affiliates) ever alleges such willful misconduct by a
Purchaser, the indemnification provided for in this Paragraph 4C shall
nonetheless be paid upon demand, subject to later adjustment or reimbursement,
until such time as a court of competent jurisdiction enters a final judgment as
to the extent and effect of the alleged willful misconduct. As used in this
section the term "Purchaser" shall refer also to each director, officer, agent,
attorney, employee, representative and Affiliate of such Purchaser.
4D. OBSERVER RIGHTS OF HOLDERS.
From and after the Date of Closing, the Company shall take all such
action as may be necessary so as to allow two designees selected by the majority
of the Noteholders (as determined by the principal amount of the Notes held by
such Noteholders) to serve as observers for the Noteholders to attend each
meeting of the Company's Board of Directors and its committees (except when in
executive session) as nonvoting observers.
4E. PREEMPTIVE RIGHTS OF HOLDERS.
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(a) If the Company proposes to issue or sell any equity securities
(including but not limited to securities convertible into or exchangeable for
Common Stock) at any time, the Company shall give the Holders written notice of
such proposal, describing the type of equity securities and the price and the
terms upon which the Company proposes to issue the same. For a period of twenty
(20) days following the delivery of such notice by the Company, the Company
shall be deemed to have irrevocably offered to sell a PRO RATA portion of such
equity securities to the Holders, as a group, for the price and upon the terms
specified in the notice. Each Holder may exercise its right to purchase such
equity securities by giving written notice to the Company within such twenty
(20) day period and stating the quantity of equity securities to be purchased by
such Holder. Each Holder's PRO RATA portion, for purposes of this Paragraph 4E,
is the ratio of the number of Warrants (and Warrant Shares) which such Holder
then owns to the total number of shares of Common Stock plus the number of
Warrants (and Warrant Shares) then outstanding. As used herein, "issue" includes
sales or transfers by the Company of treasury shares. This Paragraph 4E shall
not apply to: (i) equity securities issued in a Public Equity Offering, (ii) the
issuance of Common Stock pursuant to convertible securities (including warrants
and stock options) of the Company outstanding on the Date of Closing, (iii)
stock options (and Common Stock issuable upon exercise thereof) that may be
granted to the Company's employees under the Company's plans so long as the sum
of (x) the number of options outstanding on the Date of Closing, (y) such
additional number of options granted after the Date of Closing and (z) the
number of options referred to in clauses (x) and (y) above which expire
unexercised, shall not exceed 11,633,775 options outstanding at any time
(subject to adjustment for stock splits, stock dividends, recapitalization,
etc.) and (iv) Common Stock (or securities convertible into Common Stock) issued
by the Company to the securityholders of another Person in connection with the
acquisition of such Person (whether the acquisition is of stock or assets of
such Person or a Subsidiary of such Person).
(b) Each Holder will have the right to transfer its rights under the
immediately preceding paragraph so long as such Holder transfers at least
250,000 Warrants or Warrant Shares to a single Person in the transaction
pursuant to which such rights would be transferred.
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(c) The preemptive rights set forth in paragraph (a) of this
Paragraph 4E shall terminate at such time as (i) (x) the Company consummates a
Public Equity Offering with gross proceeds of at least $35,000,000 and (y) the
Common Stock is traded on the NASDAQ System or any nationally registered
securities exchange, (ii) the Warrants or Warrant Shares shall have been
disposed of in accordance with a registration statement that has become
effective under the Securities Act or (iii) the Warrants or Warrant Shares shall
have been distributed to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act.
▇▇. ▇▇▇▇▇▇▇▇▇▇ OF RETURNED WARRANTS. Upon the receipt by the Company
of Warrants returned to it pursuant to ▇▇▇▇▇▇▇▇▇ ▇▇ hereof, the Company will
reissue, execute and deliver replacement Warrants to the Purchasers in such
amounts as are required pursuant to Paragraph 6C.
4G. AMENDMENT TO CHARTER. The Company will use its best efforts to
propose at the next shareholders' meeting of the Company an amendment to the
charter of the Company to allow for the preemptive rights described in Paragraph
4E. The Company will use its best efforts to cause its Board of Directors to
recommend such amendment for approval. Each Holder agrees to vote any Common
Stock it owns in favor of such amendment.
PARAGRAPH 5. REPRESENTATIONS AND WARRANTIES.
5. REPRESENTATIONS AND WARRANTIES. To induce the Purchasers to enter
into this Agreement and to purchase the Securities, the Company represents and
warrants as follows:
5A. ORGANIZATION AND GOOD STANDING. Each of the Company and its
Subsidiaries is duly incorporated, validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, and each has the
corporate power and authority to carry on its business as it is currently being
conducted and to own, lease and operate its properties, and each is duly
qualified and is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified, individually or in the aggregate, could not
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reasonably be expected to result in a Material Adverse Effect. Each of the
Company's Subsidiaries that is a partnership has been duly formed and is
currently existing under the laws of its jurisdiction of formation and has the
partnership power and authority to carry on its business as it is currently
being conducted and to own, lease and operate its properties, and each is duly
qualified to do business in each jurisdiction in which the nature of its
business or its ownership or leasing of property requires such qualification,
except where the failure to be so qualified, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.
5B. AUTHORIZATION. The Company has taken all corporate action
necessary to authorize the execution and delivery by it of each of this
Agreement and the other Transaction Documents to which it is a party and to
authorize the consummation of the transactions contemplated hereby and thereby
and the performance of its obligations hereunder and thereunder.
5C. NO CONFLICTS OR CONSENTS. The execution, delivery and
performance of the Transaction Documents, compliance by the Company with all the
provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not require any consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental body (except as such may be required under the
securities or Blue Sky laws of the various states) and will not conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the charter or bylaws of the Company or any of its Subsidiaries or any
agreement, indenture or other instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries or
their respective property is bound, or violate or conflict with any laws,
administrative regulations or rulings or court decrees applicable to the Company
or any of its Subsidiaries or their respective property.
5D. ENFORCEABLE OBLIGATIONS. Each of the Transaction Documents
constitutes a valid and legally binding agreement of the Company, enforceable
against it in accordance with its terms (assuming due authorization, execution
and delivery of each Transaction Document by any other party thereto), except
that enforcement thereof may be subject to (a) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights gener-
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ally and (b) general principles of equity (regardless of whether enforceability
is considered in a proceeding at law or in equity) and the discretion of any
court before which any proceeding therefor may be brought.
5E. WARRANTS. The Warrants have been duly and validly authorized by
the Company and, when executed by the Company in accordance with the provisions
of the Warrant Agreement, and delivered to and paid for by the Purchasers in
accordance with the terms hereof, will be entitled to the benefits of the
Warrant Agreement and will constitute valid and binding obligations of the
Company enforceable in accordance with their terms, except that the enforcement
thereof may be subject to (a) bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors' rights
generally and (b) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity) and the
discretion of any court before which any proceeding therefor may be brought.
5F. WARRANT SHARES. When issued and paid for in accordance with the
terms and conditions contained in the Warrant Agreement, upon exercise of the
Warrants, the Warrant Shares will be duly authorized, validly issued, fully paid
and non-assessable and will not be subject to any preemptive or similar rights.
The Warrant Shares have been duly reserved for issuance in accordance with the
terms of the Warrants and the Warrant Agreement. The capitalization of the
Company on the Date of Closing is set forth on EXHIBIT E hereto.
5G. NOTES. The Notes have been duly and validly authorized by the
Company and, when executed by the Company in accordance with the provisions
thereof, and delivered to and paid for by the Purchasers in accordance with the
terms hereof (including Notes issued in lieu of cash interest as provided
therein), will be entitled to the benefits thereof and will constitute valid and
binding obligations of the Company enforceable in accordance with their terms,
except that the enforcement thereof may be subject to (a) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (b) general principles of
equity (regardless of whether enforceability is considered in a proceeding at
law or in equity) and the discretion of any court before which any proceeding
therefor may be brought.
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5H. GUARANTEES. The Guarantees have been duly and validly authorized
by each of the Guarantors and, when executed by each Guarantor and affixed to
the Notes (including Notes issued in lieu of cash interest as provided therein),
will be entitled to the benefits thereof and will constitute valid and binding
obligations of each such Guarantor enforceable in accordance with their terms,
except that the enforcement thereof may be subject to (a) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (b) general principles of
equity (regardless of whether enforceability is considered in a proceeding at
law or in equity) and the discretion of any court before which any proceeding
therefor may be brought.
5I. NO CONFLICT. Neither the Company nor any of its Subsidiaries is
in violation of its respective charter or bylaws or in default in the
performance of any obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any other agreement,
indenture or instrument material to the conduct of the business of the Company
and its Subsidiaries, taken as a whole, to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries or
property is bound except for such violations or defaults which, individually or
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.
5J. FINANCIAL STATEMENTS. The financial statements, together with
related schedules and notes contained in the Exchange Act Reports, present
fairly the consolidated financial position, results of operations and changes in
financial position of the Company on the basis stated in the Exchange Act
Reports at the respective dates or for the respective periods to which they
apply; such statements and related schedules and notes have been prepared in
accordance with GAAP consistently applied throughout the periods involved,
except as disclosed therein; and the other financial and statistical information
and data set forth in the Exchange Act Reports is, in all material respects,
accurately presented and prepared on a basis consistent with such financial
statements and the books and records of the Company.
5K. NO UNDISCLOSED LIABILITIES. Except as fully reflected or
reserved against in the financial statements and the notes thereto referred to
in Paragraph 5J, there are no li-
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abilities or obligations with respect to the Company or any of its Subsidiaries
of any nature whatsoever (whether absolute, accrued, contingent or otherwise and
whether or not due) which, either individually or in the aggregate, would be
material to the Company and its Subsidiaries, taken as a whole. The Company does
not know of any basis for the assertion against the Company or any of its
Subsidiaries of any liability or obligation of any nature whatsoever that is not
fully reflected in such financial statements which, either individually or in
the aggregate, could reasonably be expected to be material to the Company and
its Subsidiaries, taken as a whole.
5L. FULL DISCLOSURE. No certificate, statement or other information
delivered herewith or heretofore by the Company to the Purchasers in connection
with the negotiation of this Agreement or in connection with any transaction
contemplated hereby (including without limitation the Exchange Act Reports)
contains any untrue statement of a material fact or omits to state any material
fact necessary to make the statements contained herein or therein not misleading
as of the date made or deemed made. There is no fact known to the Company that
has not been disclosed to the Purchasers which, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
5M. LITIGATION. There are no legal or governmental proceedings
pending to which the Company or any of its Subsidiaries is a party or of which
any of their respective property is the subject which could reasonably be
expected to result in a Material Adverse Effect, and, to the best knowledge of
the Company, no such proceedings are threatened or contemplated.
5N. ENVIRONMENTAL AND OTHER LAWS. Neither the Company nor any of its
Subsidiaries has violated any foreign, federal, state or local law or regulation
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), nor any federal or state law relating to discrimination
in the hiring, promotion or pay of employees nor any applicable federal or state
wages and hours laws, nor any provisions of the Employee Retirement Income
Security Act or the rules and regulations promulgated thereunder, which in each
case could reasonably be expected to result in any Material Adverse Effect.
-15-
5O. PERMITS. Each of the Company and its Subsidiaries has such
permits, licenses, franchises, consents, approvals, orders, certificates and
authorizations of governmental or regulatory authorities ("permits"), including,
without limitation, under any applicable Environmental Laws, as are necessary to
own, lease and operate its respective properties and to conduct its business
except for those the absence of which, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect; each of the
Company and its Subsidiaries has fulfilled and performed all of its obligations
with respect to such permits and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination thereof or
results in any other impairment of the rights of the holder of any such permit,
in each case where the same, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect; each permit is in full force
and effect; each of the Company and its Subsidiaries is operating in compliance
with its permits, and there are no proceedings pending or, to the Company's
knowledge, threatened against the Company or any of its Subsidiaries that seek
to cause any permit of any of them to be revoked, withdrawn, canceled, suspended
or not renewed, except where the failure of a permit to be in full force or
effect or noncompliance with a permit could not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
5P. TITLE TO PROPERTIES. Except as otherwise set forth in the
Exchange Act Reports or such as are not material to the business, prospects,
financial condition or results of operations of the Company and its
Subsidiaries, taken as a whole, each of the Company and its Subsidiaries has
good and marketable title, free and clear of all Liens, claims, encumbrances and
restrictions, to all property and assets described in the Exchange Act Reports
as being owned by them. All leases to which the Company or any of its
Subsidiaries is a party are valid and binding and no default has occurred or is
continuing thereunder, which, individually or in the aggregate, could reasonably
be expected to result in any Material Adverse Effect; and the Company and its
Subsidiaries enjoy peaceful and undisturbed possession under all such leases to
which any of them is a party as lessee other than such exceptions that,
individually or in the aggregate, could not reasonably be expected to result in
any Material Adverse Effect.
-16-
5Q. INSURANCE. Each of the Company and its Subsidiaries maintains
reasonably adequate insurance.
5R. REPORTS. Except that the Company's Form 10-KSB for the fiscal
year ended December 31, 1998 did not contain the required financial statements
and management's discussion and analysis of financial condition and results of
operations, each of the Company and its Subsidiaries has timely filed all
material reports, data and other information required by any other regulatory
agency with authority to regulate the Company or its Subsidiaries, or the
business of any of them in any manner; and each of the Company and its
Subsidiaries is in compliance with all rules, regulations and requirements of
all regulatory agencies, except where such noncompliance, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
5S. INVESTMENT COMPANY. Neither the Company nor any of its
Subsidiaries is, or upon application of the proceeds from the sale of the
Securities will be, an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
5T. INTELLECTUAL PROPERTY. Each of the Company and its Subsidiaries
owns and possesses all material licenses, patents, patent rights, patent
applications, inventions, trade secrets, know-how, proprietary information and
techniques, including processes, trademarks, service marks, trade names,
computer software and copyrights described or referred to in the Exchange Act
Reports or owned or used by it or that are necessary for and/or used in the
conduct of its business as described in the Exchange Act Reports. Any
registrations covering such patents, trademarks, service marks, trade names or
copyrights owned by, or licensed to the Company or any of its Subsidiaries are
valid and subsisting, have not been cancelled, abandoned or otherwise terminated
and, if applicable, have been duly issued or filed. Neither the Company nor any
of its Subsidiaries is aware of or has received any notice of infringement of,
or conflict or claimed conflict with, asserted rights of others with respect to
any licenses, patents, patent rights, patent applications, inventions, trade
secrets, know-how, proprietary information or techniques, including processes,
trademarks, service marks, trade names, computer software or copyrights.
-17-
5U. OFFERING OF NOTES OR WARRANTS. Except for solicitations to
offerees reasonably believed by the Company to be "accredited investors" as such
term is defined in Regulation D of the Securities Act, neither the Company nor
any agent acting on its behalf has, directly or indirectly, offered the Notes or
Warrants or any similar security of the Company for sale to, or solicited any
offers to buy the Notes or Warrants or any similar security of the Company from,
or otherwise approached or negotiated with respect thereto with, any Person
other than the Purchasers, and neither the Company nor any agent acting on its
behalf has taken or will take any action which would subject the issuance or
sale of the Notes or Warrants to the provisions of section 5 of the Securities
Act or to the registration provisions of any securities or Blue Sky law of any
applicable jurisdiction in such a manner as to require that the Notes or
Warrants actually be registered.
5V. USE OF PROCEEDS. Neither the Company nor any of its Subsidiaries
owns or has any present intention of acquiring any "margin stock" as defined in
Regulation U of the Board of Governors of the Federal Reserve System ("margin
stock"). The proceeds of sale of the Notes and Warrants will be used as set
forth in ▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇ of such proceeds will be used, directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
purchasing or carrying any margin stock or for the purpose of maintaining,
reducing or retiring any indebtedness which was originally incurred to purchase
or carry any stock that is currently a margin stock or for any other purpose
which might constitute this transaction a "purpose credit" within the meaning of
such Regulation U. Neither the Company nor any agent acting on its behalf has
taken or will take any action which could reasonably be expected to cause this
Agreement or the Notes to violate Regulation U, Regulation T or any other
regulation of the Board of Governors of the Federal Reserve System or to violate
the Exchange Act, in each case as in effect now or as the same may hereafter be
in effect.
Any certificate signed by any officer of the Company and delivered
to any Purchaser or to counsel for the Purchasers shall be deemed a
representation and warranty by the Company to each Purchaser as to the matters
covered thereby.
-18-
PARAGRAPH 6. REPRESENTATIONS AND AGREEMENT
OF THE PURCHASERS.
6A. ACKNOWLEDGMENTS OF THE PURCHASERS. Each Purchaser understands
and acknowledges to the Company that:
(i) the offering and sale of the Notes and Warrants is intended to
be exempt from registration under the Securities Act by virtue of the
provisions of Section 4(2) of the Securities Act;
(ii) there is no existing public or other market for the Notes and
Warrants and there can be no assurance that such Purchaser will be able to
sell or dispose of such Purchaser's Notes and Warrants;
(iii) the Notes and Warrants have not been registered under the
Securities Act and must be held indefinitely unless they are subsequently
registered under the Securities Act or such sale is permitted pursuant to
an available exemption from such registration requirement;
(iv) if any transfer of the Notes and Warrants is to be made in
reliance on an exemption under the Securities Act, the Company may require
an opinion of counsel reasonably satisfactory to it that such transfer may
be made pursuant to an exemption under the Securities Act; and
(v) that the Securities will have the legends contained on the forms
thereof attached as exhibits hereto.
6B. REPRESENTATIONS OF THE PURCHASERS. Each Purchaser, severally and
not jointly, represents and warrants to the Company that:
(i) the Securities to be acquired by it pursuant to this Agreement
are being acquired for its own account, not as a nominee or agent for any
other Person, and without a view to the distribution of such Notes and
Warrants or any interest therein in violation of the Securities Act;
(ii) it is an "Accredited Investor" as such term is defined in
Regulation D under the Securities Act and has such knowledge and
experience in financial and business matters so as to be capable of
evaluating the merits and
-19-
risks of its investment in the Securities, and such Purchaser is capable
of bearing the economic risks of such investment and is able to bear a
complete loss of its investment in the Securities;
(iii) it has been provided, to its satisfaction, the opportunity to
ask questions concerning the terms and conditions of the offering and sale
of the Securities, has had all such questions answered to its satisfaction
and has been supplied all additional information as it has requested; and
(iv) the execution, delivery, and performance of this Agreement is
within such Purchaser's powers (corporate or otherwise) and has been duly
authorized by all requisite action (corporate or otherwise).
6C. RETURN AND REALLOCATION OF WARRANTS UPON ADDITIONAL Investment.
The Purchasers agree that if within 60 days after the Date of Closing Blackhawk
or its designees shall purchase additional 2002 Notes yielding gross cash
proceeds to the Company of up to $1,000,000, (i) the PRO RATA allocation of the
2002 Warrants issued to the Purchasers pursuant to this Agreement shall be
adjusted to reflect such additional investment and (ii) each Purchaser will
return the 2002 Warrants that it received on the Date of Closing to the Company
in order that the Company may issue, execute and deliver replacement Warrants in
such amounts as are required pursuant to clause (i) above.
6D. TERMINATION OF 2005 WARRANTS. The Purchasers of the 2005 Notes
agree that 4,800,000 of the 2005 Warrants shall be terminated, on a PRO RATA
basis for each Purchaser of 2005 Notes, on each Interest Payment Date (as
defined in the 2005 Notes) through and including September 15, 2000 on which the
Company pays all interest due on the 2005 Notes on such Interest Payment Date in
cash.
PARAGRAPH 7. DEFINITIONS.
7. DEFINITIONS. For the purpose of this Agreement, the terms defined
in the indenture attached as part of EXHIBIT A-1 hereto (the "Indenture") shall
have the respective meanings set forth in the Indenture, except that terms
defined
-20-
in this Agreement shall have the respective meanings specified herein, and the
following terms shall have the meanings specified with respect thereto below
(such meanings to be equally applicable to both the singular and plural forms of
the terms defined):
"1998 WARRANTS" means the warrants to purchase up to 7,618,594
shares of Common Stock of the Company issued to the Original Purchasers pursuant
to the Original Purchase Agreement.
"2002 NOTES" has the meaning set forth in Paragraph 1B.
"2002 WARRANTS" has the meaning set forth in Paragraph 1C.
"2005 NOTES" has the meaning set forth in Paragraph 1B.
"2005 WARRANTS" has the meaning set forth in Paragraph 1C.
"ALL OR SUBSTANTIALLY ALL" shall have the meaning given such phrase
in the Revised Model Business Corporation Act.
"BLACKHAWK" means Blackhawk Investors, L.L.C. or affiliates thereof.
"COMMON STOCK" has the meaning set forth in Paragraph 1C.
"DATE OF CLOSING" has the meaning set forth in Paragraph 2A.
"DLJ HOLDERS" means DLJ Investment Partners, L.P. and any Affiliate
thereof holding Notes or Warrants.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXCHANGE ACT REPORTS" means Form 10-QSB filed on August 16, 1999
for the fiscal quarter ended June 30, 1999, Form 8-K filed on August 12, 1999,
Form 10-QSB filed on May 17,
-21-
1999 for the fiscal quarter ended March 31, 1999, the Company's Annual Report on
Form 10-KSB (as supplemented by the Notification of Late Filing filed on Form NT
10-K) for the year ended December 31, 1998 and Form 8-K filed on March 4, 1999,
in each case as filed with the Securities and Exchange Commission, and any other
reports filed by the Company with the Commission and delivered to the Purchasers
prior to the Date of Closing.
"FISCAL QUARTER" shall mean a three-month period ending on March 31,
June 30, September 30 or December 31 of any year.
"FISCAL YEAR" means a twelve-month period ending on December 31 of
any year.
"GENERAL SECURITY AGREEMENT" means the Security Agreement executed
and delivered by the Company and each Guarantor substantially in the form of
EXHIBIT C to the Indenture, except for such changes as shall have been approved
by the trustee under the Indenture, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms and the terms
of the Indenture.
"GUARANTEES" has the meaning set forth in ▇▇▇▇▇▇▇▇▇ ▇▇.
"▇▇▇▇▇▇▇▇▇▇" means, collectively, each Person named as such on the
signature pages hereto and each Person executing a Guarantee under any
Transaction Document now or hereafter.
"HOLDER" means any holder of Notes, Warrants or Warrant Shares from
time to time.
"LIEN" means, with respect to any property or assets, any right or
interest therein of a creditor to secure Indebtedness owed to such Person or any
other arrangement with such creditor which provides for the payment of such
Indebtedness out of such property or assets or which allows such Person to have
such Indebtedness satisfied out of such property or assets prior to the general
creditors of any owner thereof, including without limitation any lien, mortgage,
security interest, pledge, deposit, production payment, rights of a vendor under
any title retention or conditional sale agreement or lease substantially
equivalent thereto, or any other charge or encumbrance for security purposes,
whether arising by law or agree-
-22-
ment or otherwise, but excluding any right of offset which arises without
agreement in the ordinary course of business.
"MATERIAL ADVERSE EFFECT" means a material adverse effect to the
business, condition (financial or otherwise), assets, liabilities or results of
operations or prospects of the Company and its Subsidiaries, taken as a whole,
or the ability or obligation of the Company to perform on a timely basis its
obligations under this Agreement or the other Transaction Documents.
"NOTES" has the meaning set forth in Paragraph 1B.
"ORIGINAL PURCHASE AGREEMENT" means the Securities Purchase
Agreement dated April 30, 1998 among the Company and the Original Purchasers
relating to the issuance of and sale by the Company to the Original Purchasers
of $40,000,000 aggregate principal amount of the 12% Senior Subordinated Notes
of the Company due 2005 and warrants to purchase up to 7,618,594 shares of
Common Stock of the Company.
"ORIGINAL PURCHASERS" means the parties purchasing the 1998 Warrants
and the Senior Subordinated Notes named on the signature pages of the Original
Purchase Agreement.
"SECURITIES" means the Notes and the Warrants.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITY AGREEMENTS" means and includes the General Security
Agreement and any other general security agreements delivered pursuant to
Section 4.25 or 4.26 of the Indenture.
"SECURITY DOCUMENTS" means each of the Security Agreements and any
other documents utilized to pledge as collateral for the obligations owing to
the trustee under the Indenture or any Holder pursuant to the terms of this
Indenture, the Notes, the Guarantees and each Security Document or secured by
any of the Security Documents, any property or assets of whatever kind or
nature.
"SENIOR SUBORDINATED NOTES" means the 12% Senior Subordinated Notes
due 2005 of the Company issued to the Original Purchasers pursuant to the
Original Purchase Agreement.
-23-
"SUBSIDIARIES" means, collectively, each direct and indirect
subsidiary of the Company, as set forth on SCHEDULE I attached hereto (each, a
"Subsidiary").
"TAG/DRAG AGREEMENT" has the meaning set forth in Paragraph 1C.
"TRANSACTION DOCUMENTS" means this Agreement, the Notes, the
Guarantees, the Warrants, the Warrant Agreement, the Security Documents, the
Tag/Drag Agreement, and all other agreements, certificates, documents,
instruments and writings at any time delivered in connection herewith or
therewith.
"TRANSFEREE" means any direct or indirect transferee of all or any
part of any Security purchased under this Agreement.
"WARRANT" has the meaning set forth in Paragraph 1C.
"WARRANT AGREEMENT" means the Amended and Restated Warrant Agreement
by and among, inter alia, the Company and the Purchasers dated the Date of
Closing, in the form of EXHIBIT B hereto, as amended or supplemented from time
to time.
"WARRANT SHARES" has the meaning set forth in ▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇. TERMS AND DETERMINATIONS. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all determinations with
respect to accounting matters hereunder shall be made, and all unaudited
financial statements and certificates and reports as to financial matters
required to be furnished hereunder shall be prepared in accordance with GAAP as
in effect from time to time, applied on a basis consistent with the most recent
financial statements contained in the Company's Exchange Act Reports, except as
set forth in such unaudited statements.
-24-
PARAGRAPH 8. MISCELLANEOUS.
8. MISCELLANEOUS.
8A. EXPENSES. The Company agrees, whether or not the transactions
contemplated hereby or the other Transaction Documents shall be consummated, to
pay, and save the Purchasers and any Transferee harmless against liability for
the payment of, all reasonable out-of-pocket expenses arising in connection with
such transactions promptly (and, in any event, within 30 days after any invoice
or other statement or notice), including (i) all reasonable fees and expenses of
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel to the Purchasers, in connection with
this Agreement, the other Transaction Documents and the transactions
contemplated hereby and thereby, (ii) all document production and duplication
charges and the reasonable fees and expenses of one counsel engaged by the
Purchasers or such Transferees in connection with any subsequent proposed
modification of, or proposed consent under, this Agreement or the other
Transaction Documents whether or not such proposed modification shall be
effected or proposed consent granted, and (iii) the costs and expenses,
including reasonable attorneys' fees, incurred by the Purchasers or such
Transferee in enforcing (or determining whether or how to enforce) any rights
under this Agreement or the other Transaction Documents or in responding to any
subpoena or other legal process or informal investigative demand issued in
connection with this Agreement, the other Transaction Documents or the
transactions contemplated hereby or thereby or by reason of the Purchasers' or
such Transferee's having acquired any Security, including without limitation
costs and expenses incurred in any bankruptcy case. The obligations of the
Company this Paragraph 8A shall survive the transfer of any Security or portion
thereof or interest therein by any Purchaser or any Transferee, and the payment
of any Security.
8B. CONSENT TO AMENDMENTS. Except as otherwise expressly provided
herein, the provisions of this Agreement may be amended and the Company may take
any action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of each of
the holders of Notes and/or Warrants, as the case may be, purchased hereunder.
-25-
8C. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein or made in writing by or on
behalf of the Company in connection herewith shall survive the execution and
delivery of this Agreement, the Notes, the transfer by any Purchaser of any Note
or Warrant or portion thereof or interest therein, the payment of any Note and
the exercise of any Warrant, and may be relied upon by any Transferee,
regardless of any investigation made at any time by or on behalf of any
Purchaser or any Transferee. Subject to the preceding sentence, this Agreement
and the other Transaction Documents embody the entire agreement and
understanding between each Purchaser and the Company and supersede all prior
agreements and understandings relating to the subject matter hereof, including,
without limitation, the provisions of Paragraph 4 (Covenants) of the Original
Purchase Agreement other than Paragraph 4C thereof.
8D. SUCCESSORS AND ASSIGNS. All covenants and other agreements in
this Agreement contained by or on behalf of any of the parties hereto shall bind
and inure to the benefit of the respective successors and assigns of the parties
hereto (including, without limitation, any Transferee) whether so expressed or
not.
8E. NOTICES. All notices or other communications provided for
hereunder shall be in writing and sent by telecopy or nationwide overnight
delivery service (with charges prepaid) and (i) if to any Purchaser, addressed
to it at the address specified for such communications on the signature pages
hereof, or at such other address as such Purchaser shall have specified to the
Company in writing, (ii) if to any other Holder, addressed to such other Holder
at such address as such other Holder shall have specified to Company in writing
or, if any such other Holder shall not have so specified an address to the
Company, then addressed to such other Holder in care of the last Holder which
shall have so specified an address to the Company and (iii) if to the Company or
the Guarantors, addressed to Geokinetics Inc. at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: Chairman of the Board, or at such other address
as the Company shall have specified to the holder of each Security in writing.
8F. SATISFACTION REQUIREMENT. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this Agreement
required to be satis-
-26-
factory to the Holders, the determination of such satisfaction shall be made by
the Holders in the sole and exclusive judgment (exercised in good faith) of the
Person or Persons making such determination.
8G. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF
THE STATE OF DELAWARE WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. Any
legal action or proceeding with respect to this Agreement or any other
Transaction Document may be brought in the courts of the State of New York, of
the State of Delaware, of the United States for the Southern District of New
York or of the United States for the District of Delaware, and, by execution and
delivery of this Agreement, each of the Company and the Guarantors hereby
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts. Each of
the Company and the Guarantors further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to it at its address for notices pursuant to Paragraph 8E, such service
to become effective 5 days after such mailing. Each of he Company and the
Guarantors hereby irrevocably appoints CT Corporation System and such other
persons as may hereafter be selected by CT Corporation System irrevocably
agreeing in writing to serve as its agent for service of process in respect of
any such action or proceeding. Nothing herein shall affect the right of any
Holder to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against the Company in any other
jurisdiction. The Company hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Transaction Document brought in the courts referred to above and hereby further
irrevocably waive and agree not to plead or claim in any such court that any
such action or proceeding brought in any such court has been brought in an
inconvenient forum.
8H. SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the re-
-27-
maining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
8I. DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
8J. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument.
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this letter and return the same to the
Company whereupon this letter shall become a binding agreement by and among the
Company, the Guarantors and each of you.
Very truly yours,
THE COMPANY:
GEOKINETICS INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
THE GUARANTORS:
GEOPHYSICAL DEVELOPMENT
CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
QUANTUM GEOPHYSICAL, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
GEOKINETICS PRODUCTION CO.,
INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Treasurer
GEOSCIENCE SOFTWARE SOLUTIONS,
INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
RELIABLE EXPLORATION,
INCORPORATED
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
SIGNATURE GEOPHYSICAL SERVICES,
INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Treasurer
SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT
Accepted and Agreed as of the
date first above written:
DLJ INVESTMENT PARTNERS, L.P. Principal Amount of 2005
Notes Exchanged:
$19,243,132
By: DLJ INVESTMENT PARTNERS, INC.,
Its General Partner Number of 2005 Warrants
Exchanged: 11,377,789
By: /s/ Principal Amount of 2002
Name: Notes Purchased: $1,697,000
Title:
Number of 2002 Warrants
Purchased: 7,891,050
Address of Purchaser:
Mr. ▇▇▇▇ ▇▇▇▇▇▇▇▇
DLJ Investment Funding, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Designated Bank: Citibank, N.A.
ABA Number: ▇▇▇-▇▇▇-▇▇▇
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Account No.: 4061-0209
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
(if registered in the name of a
nominee, the nominee Taxpayer
I.D. Number)
Nominee (name in which Notes are to be registered, if different than name of
Purchaser)
SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT
Accepted and Agreed as of the
date first above written:
DLJ INVESTMENT FUNDING, INC. Principal Amount of 2005
Notes Exchanged:
$2,741,891
By: /s/ Number of 2005 Warrants
Name: Exchanged: 1,621,184
Title:
Principal Amount of 2002
Notes Purchased: $242,000
Number of 2002 Warrants
Purchased: 1,125,300
Address of Purchaser:
Mr. ▇▇▇▇ ▇▇▇▇▇▇▇▇
DLJ Investment Funding, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
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Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Designated Bank: Citibank, N.A.
ABA Number: ▇▇▇-▇▇▇-▇▇▇
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
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Account No.: 4061-0209
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
(if registered in the name of a
nominee, the nominee Taxpayer
I.D. Number)
Nominee (name in which Notes are to be registered, if different than name of
Purchaser)
__________________________________
SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT
Accepted and Agreed as of the
date first above written:
DLJ ESC II L.P. Principal Amount of 2005
Notes Exchanged:
$1,827,927
By: DLJ LBO PLANS MANAGEMENT
CORPORATION, its Number of 2005 Warrants
General Partner Exchanged: 1,080,789
Principal Amount of 2002
By: /s/ Notes Purchased: $161,000
Name:
Title: Number of 2002 Warrants
Purchased: 748,650
Address of Purchaser:
Mr. ▇▇▇▇ ▇▇▇▇▇▇▇▇
DLJ ESC II L.P.
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Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Designated Bank: Citibank, N.A.
ABA Number: ▇▇▇-▇▇▇-▇▇▇
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
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Account No.: 4061-0209
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
(if registered in the name of a
nominee, the nominee Taxpayer
I.D. Number)
Nominee (name in which Notes are to be registered, if different than name of
Purchaser)
__________________________________
SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT
Accepted and Agreed as of the
date first above written:
SPINDRIFT PARTNERS, L.P. Principal Amount of 2005
Notes Exchanged:
$4,252,312.50
By: WELLINGTON MANAGEMENT
COMPANY, LLP, its Number of 2005 Warrants
Investment Advisor Exchanged: 2,514,243
Principal Amount of 2002
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Notes Purchased: $375,000
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President, General Counsel Number of 2002 Warrants
Purchased: 1,743,750
Address of Purchaser:
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Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Designated Bank: Citibank, New York
ABA Number: ▇▇▇▇▇▇▇▇▇
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Account No.:
Attention:
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
(if registered in the name of a
nominee, the nominee Taxpayer
I.D. Number)
Nominee (name in which Notes are to be registered, if different than name of
Purchaser)
__________________________________
SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT
Accepted and Agreed as of the
date first above written:
SPINDRIFT INVESTORS (BERMUDA) Principal Amount of 2005
L.P. Notes Exchanged:
$1,417,437.50
By: WELLINGTON MANAGEMENT Number of 2005 Warrants
COMPANY, LLP, its Exchanged: 838,081
Investment Advisor
Principal Amount of 2002
Notes Purchased: $125,000
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Number of 2002 Warrants
Title: Vice President, General Counsel Purchased: 581,250
Address of Purchaser:
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Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Designated Bank: Citibank, New York
ABA Number: ▇▇▇▇▇▇▇▇▇
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Account No.:
Attention:
Taxpayer I.D. Number:
(if registered in the name of a
nominee, the nominee Taxpayer
I.D. Number)
Nominee (name in which Notes are to be registered, if different than name of
Purchaser)
__________________________________
SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT
Accepted and Agreed as of the
date first above written:
CHASE EQUITY ASSOCIATES, L.P. Principal Amount of 2005
Notes Exchanged:
$11,339,500
By: CHASE CAPITAL PARTNERS, its
General Partner Number of 2005 Warrants
Exchanged: 6,704,649
By: /s/ Principal Amount of 2002
Name: Notes Purchased: $1,000,000
Title:
Number of 2002 Warrants
Purchased: 4,650,000
Address of Purchaser:
Chase Equity Associates Direct
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Telecopy No.:
Designated Bank: Chase Manhattan Bank
ABA Number: 021 000 021
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Account No.:
Attention:
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
(if registered in the name of a
nominee, the nominee Taxpayer
I.D. Number)
Nominee (name in which Notes are to be registered, if different than name of
Purchaser)
__________________________________
SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT
Accepted and Agreed as of the
date first above written:
MHR CAPITAL PARTNERS LP Principal Amount of 2005
Notes Exchanged: $3,401,850
By: MHR ADVISORS LLC
Number of 2005 Warrants
Exchanged: 2,011,395
By: /s/
Name: Principal Amount of 2002
Title: Manager Notes Purchased: $300,000
Number of 2002 Warrants
Purchased: 1,395,000
Address of Purchaser:
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Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Designated Bank: Chase Manhattan Bank
ABA Number: ▇▇▇-▇▇▇-▇▇▇
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Account No.:
Attention:
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
(if registered in the name of a
nominee, the nominee Taxpayer
I.D. Number)
Nominee (name in which Notes are to be registered, if different than name of
Purchaser)
__________________________________
SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT
Accepted and Agreed as of the
date first above written:
Principal Amount of 2005
Notes Exchanged: $566,975
Number of 2005 Warrants
/s/ ▇▇▇▇ ▇. ▇▇▇▇, ▇▇. Exchanged: 335,232
Name: ▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
Principal Amount of 2002
Notes Purchased: $50,000
Number of 2002 Warrants
Purchased: 232,500
Address of Purchaser:
Telecopy No.:
Designated Bank: Chase Manhattan Bank
ABA Number: 021 000 021
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Account No.:
Attention:
Taxpayer I.D. Number: ###-##-####
(if registered in the name of a
nominee, the nominee Taxpayer
I.D. Number)
Nominee (name in which Notes are to be registered, if different than name of
Purchaser)
__________________________________
SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT
Accepted and Agreed as of the
date first above written:
WHITTIER VENTURES LLC Principal Amount of 2005
Notes Exchanged: $566,975
Number of 2005 Warrants
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇ Exchanged: 335,232
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: President Principal Amount of 2002
Notes Purchased: $50,000
Number of 2002 Warrants
Purchased: 232,500
Address of Purchaser:
Whittier Ventures LLC
c/o Whittier Trust Co.
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Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Designated Bank: Union Bank of California
ABA Number: ▇▇▇-▇▇▇-▇▇▇
Address: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Account No.:
Attention:
Taxpayer I.D. Number:
(if registered in the name of a
nominee, the nominee Taxpayer
I.D. Number)
Nominee (name in which Notes are to be registered, if different than name of
Purchaser)
__________________________________
SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT
Accepted and Agreed as of the
date first above written:
SOMERSET CAPITAL PARTNERS Principal Amount of 2002
Notes Purchased: $700,000
Number of 2002 Warrants
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Purchased: 3,255,000
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: General Partner
Address of Purchaser:
Somerset Capital Partners
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Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Designated Bank:
ABA Number:
Address:
Account No.:
Attention:
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
(if registered in the name of a
nominee, the nominee Taxpayer
I.D. Number)
Nominee (name in which Notes are to be registered, if different than name of
Purchaser)
__________________________________
SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT
Accepted and Agreed as of the
date first above written:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Principal Amount of 2002
Notes Purchased: $150,000
Number of 2002 Warrants
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Purchased: 697,500
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Address of Purchaser:
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Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Designated Bank:
ABA Number:
Address:
Account No.:
Attention:
Taxpayer I.D. Number: ###-##-####
(if registered in the name of a
nominee, the nominee Taxpayer
I.D. Number)
Nominee (name in which Notes are to be registered, if different than name of
Purchaser)
__________________________________
SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT
Accepted and Agreed as of the
date first above written:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Principal Amount of 2002
Notes Purchased: $150,000
Number of 2002 Warrants
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Purchased: 697,500
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Individually
Address of Purchaser:
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Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Designated Bank:
ABA Number:
Address:
Account No.:
Attention:
Taxpayer I.D. Number: ###-##-####
(if registered in the name of a
nominee, the nominee Taxpayer
I.D. Number)
Nominee (name in which Notes are to be registered, if different than name of
Purchaser)
__________________________________