Document:

exv10w1

 

Exhibit 10.1

December 21, 2006

Mr. John R. Huff

Oceaneering International, Inc.

11911 FM 529

Houston, TX 77041

Re: Amended and Restated Service Agreement

Dear Mr. Huff:

Oceaneering International, Inc. values the contribution you have made to the Company over these
many years, as well as your current service as Chairman of the Board.

Reference is made to Annex I hereto for definitions of certain terms used in this Agreement, and
such definitions are incorporated herein by such reference with the same effect as if set forth
herein. Certain capitalized terms used in this Agreement in connection with the description of
various Plans are defined in the respective Plans, but if any conflicts with a definition herein
contained, this Agreement shall prevail.

The Company previously entered into the Original Agreement with you. You and the Company also
previously entered into the COC Agreement that provides certain other, and sometimes additional,
compensation and benefits to you under the circumstances set forth in the COC Agreement.

In response to the enactment of Section 409A of the Code, and in anticipation of the expiration of
Agreement Phase A under the Original Agreement, the Company and you hereby enter into this
Agreement, dated December 21, 2006, as set forth herein and effective at the Effective Date.
Except to the extent expressly provided to the contrary in the COC Agreement, you shall be entitled
to compensation and benefits under both this Agreement and the COC Agreement in the event of a
Change of Control; provided, however, Section 8(f) of this Agreement shall override and
control any contrary provision of the COC Agreement.

	1.	 	Term of this Agreement.
	 
	 	 	The Company hereby agrees that this Agreement shall continue through the Agreement Period
and you hereby agree to perform the obligations described herein. Three phases (Agreement
Phase A, Agreement Phase B and Agreement Phase C) shall collectively constitute the
Agreement Period. The date of the end of the Agreement Period, as determined in accordance
with this Agreement, is the “Expiration Date” and the period commencing August 15, 2001 and
ending on the Expiration Date is hereinafter referred to as the “Agreement Period”.
Agreement Phase A expires December 30, 2006 and is not further addressed in this Agreement.
Agreement Phase B commences December 31, 2006.

 

 

	2.	 	Duties.

	 	(a)	 	During Agreement Phase B, you shall not be an employee of the Company but shall
stand ready to perform, as an independent contractor, the duties, and hold the
position, of non-executive Chairman of the Board, as may be requested by the Board
acting in its sole discretion, subject to any required shareholder approval. In
addition, you shall provide Additional Services. During Agreement Phase B, in no event shall there be any
reduction in your Agreement Phase B Compensation (Section 7). During Agreement Phase
B, your duties as non-executive Chairman of the Board and any Additional Services
rendered on behalf of the Company (i) shall not be deemed to restrict you from
attending to matters or engaging in activities not directly related to the business of
the Company, and (ii) unless otherwise agreed to in writing by you and the Company,
shall not exceed a rate that equals or exceeds 40 hours in any calendar month.
	 
	 	(b)	 	During Agreement Phase C, you shall have no obligation to perform services for
the Company in any capacity.
	 
	 	(c)	 	During Agreement Phase C, you may be requested by the Board, acting in its sole
discretion, to serve as non-executive Chairman of the Board, subject to any required
shareholder approval. In such event, the parties shall negotiate the
terms and conditions of your service as non-executive Chairman of the
Board during Agreement Phase C.

	3.	 	Termination of Service.
	 
	 	 	Upon compliance by the initiating party with any applicable procedures set forth in Section
4 hereof, your service with the Company as non-executive Chairman of the Board may be
terminated by you or the Company (pursuant to action of the Board or of the stockholders of
the Company) for any reason.
	 
	4.	 	Procedures for Termination of Service.
	 
	 	 	If your service terminates during Phase B:

	 	(a)	 	You shall receive compensation and benefits pursuant to Section 5(a) if you are
not non-executive Chairman of the Board for any reason, including death or Disability,
other than your refusing to serve as non-executive Chairman of the Board; provided,
that (i) your refusal to serve as non-executive Chairman of the Board by reason that
the Company has failed to fulfill any of its obligations under this Agreement or (ii)
any failure by you to perform your duties under Section

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	 	 	 	2(a) at a particular level desired by the Company or the Board, shall not be
considered a refusal by you to serve as non-executive Chairman of the Board. Under
such circumstances (and subject to Section 4(c)), your Termination Date shall be (i)
for reason other than death or Disability, the date specified in a written notice
transmitted by either you or the Company on or before such date, (ii) in the case of
Disability, the date specified in a written notice by either you or the Company
delivered on or before such date and stating that a determination as to Disability
has been made by a physician of your choice, or (iii) in the case of death, the date
of your death.
	 
	 	(b)	 	You shall receive compensation and benefits pursuant to Section 5(b) if you are
not non-executive Chairman of the Board by reason of your refusing to serve as
non-executive Chairman of the Board; provided that (i) your refusal to serve as
non-executive Chairman of the Board by reason that the Company has failed to fulfill
any of its obligations under this Agreement or (ii) any failure by you to perform your
duties under Section 2(a) at a particular level desired by the Company or the Board,
shall not be considered a refusal by you to serve as non-executive Chairman of the
Board.
	 
	 	(c)	 	If you claim benefits under Section 4(a), you shall transmit to the Company, in
sufficient detail to permit a reasonable assessment of the bona fides thereof, that
your service has been terminated for any such reason. The Board shall issue a
resolution to you not more than 10 days following the date of such notice as to:

	 	(i)	 	Their Acceptance — In the event the Board accepts your notice
claiming benefits under Section 4(a), then the Termination Date is established.
	 
	 	(ii)	 	Their Rejection — In the event the Board rejects your notice,
then (A) the Company must escrow within 10 days following the rejection all
amounts which would have been due pursuant to Section 5(a) if your notice had
been accepted at a bank of your choice, (B) you must proceed to dispute
resolution pursuant to Section 9, and (C) all provisions of this Agreement,
including but not limited to Compensation (Section 7), shall be continued until
a termination is determined pursuant to such dispute resolution from which no
further appeal is possible. The Termination Date shall be the date on which no
further appeal is possible.

	5.	 	Effect of Termination of Service.
	 
	 	 	If your service is terminated during Phase B:

	 	(a)	 	Pursuant to Section 4(a) and prior to the Expiration Date, you shall receive:

	 	(i)	 	to the extent not theretofore paid, (A) payment when due of the
amount described in Section 7(a), (B) payment when due of the amount described
in Section 7(j), and (C) payment when due of the amount described in Section
7(b) if such payment described in this Section 5(a)(i)(C) is due on or prior to
the Termination Date;

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	 	(ii)	 	all benefits conferred upon you by the Termination Package, and
in addition, you shall be entitled to Medical Benefits previously earned under
Section 6 and payable to you, your Spouse and your Children for each of your
and their lives; and
	 
	 	(iii)	 	the provisions of Sections 8, 9, 10, 11(a), and 12 through 16
shall remain in full force and effect through the Expiration Date.

	 	(b)	 	Pursuant to Section 4(b) by your refusing to serve as non-executive Chairman of
the Board, you shall receive:

	 	(i)	 	to the extent not theretofore paid, (A) payment when due of the
amount described in Section 7(a), (B) payment when due of the amount described
in Section 7(j), and (C) payment when due of the amount described in Section
7(b) if such payment described in this Section 5(a)(i)(C) is due on or prior to the Termination Date;
	 
	 	(ii)	 	all benefits under the Plans and the Other Plans in which you
are at the time a participant, to the extent the same are vested under the
terms thereof at the Termination Date, and in addition, you shall be entitled
to Medical Benefits previously earned under Section 6 and payable to you, your
Spouse and your Children for each of your and their lives; and
	 
	 	(iii)	 	(except as otherwise provided herein) all other obligations of
the Company under this Agreement shall thereupon cease, except that the
provisions of Sections 8, 9, 10, 11(a), and 12 through 16 shall remain in full
force and effect through the Expiration Date.

	 	 	You shall not be required to mitigate the amount of any payment provided for in this
Agreement by seeking employment or other service, nor shall the amount of any payment
provided for in this Agreement be reduced by any compensation earned by you as the result of
employment with or service to another Person after any Termination Date.
	 
	6.	 	Medical Care Benefits.

	 	(a)	 	Notwithstanding anything in this Agreement to the contrary, and in all events,
until the last to die of you, your Spouse and your Children, the Company shall pay for
all Medical Care and reimbursement for tax consequences as specified in this Section 6
for you, your Spouse and your Children, without reduction. The Company may arrange for
a group or individual insurance policy to provide all or a portion of these Medical
Care costs, however, in all events, the Company is obligated to ensure that payment for
all Medical Care costs is made within 10 days of submittal to the Company for payment.
The Company shall either pay all amounts directly to the provider of the Medical Care
or reimburse you, your Spouse and your Children for such expenses incurred, whichever
may be requested by you, your Spouse or your Children. Should the Company elect to
provide insurance for any or all of the costs of Medical Care, the Company shall
nevertheless provide 100% reimbursement of any expenses incurred by you, your

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	 	 	 	Spouse and your Children that are not reimbursed by insurance or otherwise within 10
days after submittal of such expenses to the Company for payment.
	 
	 	(b)	 	Reimbursement for Tax Consequences — In the event that any payment,
distribution, transfer or benefit by the Company, the Company sponsored benefit plans
programs or practices, on account of Medical Care described in Section 6(a) herein, to
or for the benefit of you, your Spouse or your Children or the heirs or beneficiaries
thereof (each a “Payment” and collectively the “Payments”) is or was subject to any
income tax imposed by the Code any successor provision or any comparable provision of
state or local income tax law (collectively, “Income Tax”), or any interest, penalty or
addition to tax is or was incurred by you, or your Spouse or your Children with respect
to such Income Tax (such Income Tax, together with any such interest, penalty, addition
to tax, and costs [including professional fees] hereinafter collectively referred to as
the “Tax”), then, in accordance with the provisions of this Section 6(b), the Company
shall pay to you (or, as applicable, your Spouse or your Children) an additional cash
payment (hereinafter referred to as the “Gross-Up Payment”) in an amount such that
after payment by you (or your Spouse or your Children) of all taxes, interest,
penalties, additions to tax and costs imposed or incurred with respect to the Gross-Up
Payment (including without limitation, any income and excise taxes imposed upon the
Gross-Up Payment), you (or your Spouse or your Children) retains an amount of the
Gross-Up Payment equal to the Tax imposed upon such Payment or Payments. The Company’s
funding of any such Gross-Up Payment shall be triggered by a determination by you, your
Spouse or your Children that a Payment is subject to Tax. Following any such
determination, the Company shall, within 20 days, pay to you (or, as applicable, your
Spouse or your Children) the applicable Gross-Up Payment to be calculated assuming the
highest incremental individual income tax rate then in effect. Thereafter, if it is
determined by you, your Spouse, your Children or any agent thereof that:

	 	(i)	 	Medical Care expenses for which a Payment was made resulted in
an income tax deduction to the recipient of the Gross-Up Payment; or
	 
	 	(ii)	 	the Gross-Up Payment was calculated using a tax rate in excess
of the highest incremental tax rate actually paid by the recipient of the
Gross-Up Payment,

	 	 	 	then the recipient of the Gross-Up Payment shall reimburse the Company for the
amount by which the Gross-Up Payment exceeded the actual Tax paid. This Section
6(b) is intended to put you (or your Spouse or your Children) in the same position
as would have existed had no Tax been imposed upon or incurred as a result of any
Payment.

	7.	 	Compensation.

	 	(a)	 	On August 15, 2007, the Company shall pay you the lump sum amount of
$6,400,000.

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	 	(b)	 	During Agreement Phase B, the Company agrees to pay you the following lump sum
amounts at the following times:

	 	 	 	 	 
	August 15, 2007

	 	$	1,415,000	 
	 
	 	 	 	 
	August 15, 2008

	 	$	940,000	 
	 
	 	 	 	 
	August 15, 2009

	 	$	940,000	 
	 
	 	 	 	 
	August 15, 2010

	 	$	940,000	 

	 	(c)	 	Following the commencement of Agreement Phase C, the Company will be obligated
to pay you the Termination Package.
	 
	 	(d)	 	During Agreement Phase B, in addition to the compensation described in Section
7(b), you shall continue to vest as if you had remained employed by the Company in any
interests that you may hold under the Plans or Other Plans as of December 31, 2006,
including without limitation, continued participation of the then current Fiscal Year
Bonus Plan if the applicable fiscal year commenced during Agreement Phase A; provided,
however, (A) that you shall not be eligible to participate in any subsequent grants or
contributions made under the Plans and the Other Plans on or after January 1, 2007,
other than the Long Term Incentive Bonus Plan, and you shall receive Long Term
Incentive Bonus Plan awards for calendar years 2007 and 2008 equal to those awarded to
the Chief Executive Officer of the Company and subject to the same performance measures
and vesting schedules as are applicable to the Chief Executive Officer, and (B) you
shall receive a distribution of your interest in the SERP determined as of June 29,
2007, as soon as practicable after June 29, 2007, but not later than July 10, 2007.
	 
	 	(e)	 	During Agreement Phase C, you shall not be eligible to participate in any
subsequent grants or contributions made to the Plans and the Other Plans, unless you
serve as non-executive Chairman of the Board during Agreement Phase C pursuant to
Section 2(c), in which event you shall remain eligible to participate in the Long Term
Incentive Bonus Plan for such period on the same terms as if you were in Agreement
Phase B, subject to the limitation provided in Section 7(g) below.
	 
	 	(f)	 	While serving as non-executive Chairman of the Board, the Company shall
reimburse you for all expenses paid or incurred by you in the performance of your
duties under this Agreement in accordance with the Company’s normal expense
reimbursement policies applicable to non-employee members of the Board, and such
reimbursement shall be made with regard for your higher level of responsibility as
Chairman of the Board.

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	 	(g)	 	Additionally, while serving as non-executive Chairman of the Board, the Company
shall pay you such Board retainers, meeting fees, and any cash or equity awards as are
applicable to non-employee members of the Board; provided however, you shall not be
eligible for any such retainers, fees or awards for 2007 or 2008 as you are to receive
a Long Term Incentive Bonus Plan award equal to that of the Chief Executive Officer.
For any year after 2008 in which you receive a Long Term Incentive Bonus Plan award in
excess of awards applicable to non-employee members of the Board, you will not receive
an additional Long Term Incentive Bonus Plan award equal to the award granted to other
non-employee members of the Board for such year.
	 
	 	(h)	 	During such period as you are serving as non-executive Chairman of the Board,
the Company shall provide you appropriate office space and administrative assistance,
and you shall be entitled to use all Company facilities on the same terms as available
to other non-employee members of the Board. Further, the Company agrees that you shall
have a right of first refusal to purchase the Daybreak fishing barge for fair market
value at such time as the Company chooses to sell the Daybreak, and such fair market
value shall be deemed equal to the amount of a bona fide third-party offer made on or
about such time.
	 
	 	(i)	 	If, prior to the Expiration Date, the Company ceases to provide you with appropriate office space and
administrative assistance, then until the Expiration Date, you shall be entitled to obtain the professional
services of employees of the Company by your payment of fair market value for such
services, and such fair market value shall be as determined in good faith by agreement
between you and the Company.
	 
	 	(j)	 	Vacation pay accrued by you as an employee of the Company through December 30,
2006, will be paid to you on January 10, 2007.

	8.	 	Tax Protection.

	 	(a)	 	Any other provision of this Agreement to the contrary notwithstanding, if the
present value (as defined herein) of the total amount of payments and benefits to be
paid or provided to you under this Agreement which are considered to be “parachute
payments” within the meaning of Section 280G(b) of the Code, when added to any other
such “parachute payments” received by you from the Company upon or after a Change of
Control, whether or not under this Agreement, is in excess of the amount you can
receive without causing you to be subject to an excise tax with respect to such amount
on account of Code Section 4999, the Company shall pay to you an additional amount
(hereinafter referred to as the “Excise Tax Premium”). The Excise Tax Premium shall be
equal to the excise tax determined under Code Sections 280G and 4999 attributable to
the total amount of payments and benefits to be paid or provided to you under this
Agreement and any other “parachute payments” received by you upon or after a Change of
Control. The Excise Tax Premium shall also include any amount attributable to excise
tax on the Excise Tax Premium. The Company shall also

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	 	 	 	pay to you an additional amount (the “Additional Amount”) such that the net amount
received by you, after paying any applicable Excise Tax Premium and any federal or
state income, excise or other tax on such additional amount, shall be equal to the
amount that you would have received if such Excise Tax Premium were not applicable.
You shall be deemed to pay income taxes on the date of termination of your service
at the highest marginal rate of income taxation in effect in your taxing
jurisdiction. The Additional Amount shall include any amount attributable to
income, excise or other tax on the Additional Amount.
	 
	 	(b)	 	Not later than 30 days following your Termination Date as provided herein, the
independent public accountants acting as auditors for the Company on the date of the
Change of Control (or another accounting firm designated by you) shall determine
whether the sum of the present value of any “parachute payments” payable under this
Agreement and the present value of any other “parachute payments” received by you from
the Company upon or after a Change of Control is in excess of the amount you can
receive without causing you to be subject to an excise tax with respect to such amount
on account of Code Section 4999, and shall determine the amount of any Excise Tax
Premium and Additional Amount payable to you. The Excise Tax Premium and Additional
Amount shall be paid to you as soon as practicable but in no event later than 30 days
following your Termination Date, and shall be net of any amounts required to be
withheld for taxes.
	 
	 	(c)	 	For purposes of this Section 8, “present value” means the value determined in
accordance with the principles of Section 1274(b)(2) of the Code under the rules
provided in Treasury Regulations under Section 280G of the Code.
	 
	 	(d)	 	References to Code Section 280G herein are specific references to Section 280G
as added to the Code by the Tax Reform Act of 1984 and as amended by the Tax Reform Act
of 1986. To the extent Code Section 280G is amended prior to the termination of this
Agreement, or is replaced by a successor statute, the provisions of this Section 8
shall be deemed modified without further action of the parties in a manner consistent
with such amendments or successor statutes, as the case may be. In the event that Code
Section 280G or any successor statute is repealed, this Section 8 shall cease to be
effective on the effective date of such repeal. The parties recognize that Treasury
Regulations under Code Sections 280G and 4999 may affect the amount that may be paid
hereunder and agree that, upon the issuance of any such regulations, this Agreement may
be modified as in good faith may be deemed necessary in light of the provisions of such
regulations to achieve the purposes hereof, and that consent to such modifications
shall not be unreasonably withheld.
	 
	 	(e)	 	The foregoing notwithstanding, if you receive payment from the Company for
reimbursement of any excise taxes pursuant to any other agreement, to the extent any
Excise Tax Premium under this Agreement be duplicative, you shall not be entitled to
receive payment of such an Excise Tax Premium.

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	 	(f)	 	Within ten days after the date on which either you or the Company receives
notice of proposed examination findings (a/k/a 30-day letter) under which the Internal
Revenue Service has proposed that any federal tax, penalty, addition or interest
thereon (collectively, a “Tax Liability”) be assessed under Section 409A of the Code
with respect to any benefit provided under this Agreement and/or the COC Agreement, the
Company shall pay to you in the form of a cash lump sum such amount as is equal to such
Tax Liability, plus an additional amount (a “409A Additional Amount”) such that the net
amount received by you, after paying any applicable Tax Liability and any federal or
state income, excise or other tax on such 409A Additional Amount, shall be equal to the
amount that you would have received if such Tax Liability had not been assessed. For
purposes of determining a 409A Additional Amount, you shall be deemed to pay income
taxes at the highest marginal rate of income taxation in effect in your taxing
jurisdiction. A 409A Additional Amount shall include any amount attributable to
income, excise or other tax on such 409A Additional Amount. By execution of this
Agreement, you expressly covenant to amend this Agreement and/or the COC Agreement as
requested by the Company to ensure compliance with Section 409A and applicable Treasury
regulations, unless such amendment would cause more than insubstantial economic harm to
you.

	9.	 	Dispute Resolution.

	 	(a)	 	This Agreement shall be governed in all respects, including as to validity,
interpretation and effect, by the internal laws of the State of Texas without regard to
choice of law principles.
	 
	 	(b)	 	It is irrevocably agreed that if any dispute arises with respect to any action,
suit or other legal proceeding pertaining to this Agreement or to the interpretation of
or enforcement of any of your rights hereunder under this Agreement:

	 	(i)	 	the Company and you agree that exclusive jurisdiction for any
such suit, action or legal proceeding shall be in the state district courts of
Texas sitting in Harris County, Texas;
	 
	 	(ii)	 	we are each at the time present in Texas for the purpose of
conferring personal jurisdiction;
	 
	 	(iii)	 	the Company and you each consent to the jurisdiction of each
such court in any such suit, action or legal proceeding and will comply with
all requirements necessary to give such court jurisdiction;
	 
	 	(iv)	 	the Company and you each waive any objection it may have to the
laying of venue of any such suit, action or legal proceeding in any of such
court; and
	 
	 	(v)	 	the Company and you each waive any objection or right to
removal it that may otherwise have in any such suit, action or legal
proceeding.

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	 	(vi)	 	any such suit, action or legal proceeding may be brought in
such court, and any objection that the Company or you may now or hereafter have
to the venue of such action or proceeding in any such court or that such action
or proceeding was brought in an inconvenient court is waived, and we each agree
not to plead or claim the same;
	 
	 	(vii)	 	service of process in any such suit, action or legal
proceeding may be effected by mailing a copy thereof by registered or certified
mail, return receipt requested (or any substantially similar form of mail),
postage prepaid, to such party provided in Section 13 hereof, and
	 
	 	(viii)	 	prior to any trial on the merits, we will submit to court supervised,
non-binding mediation.

	 	(c)	 	Notwithstanding any contrary provision of Texas law, the Company shall have the
burden of proof with respect to any of the following: (i) that you refused to serve as
non-executive Chairman of the Board; (ii) that the Company is not in default of the
performance of its obligations under this Agreement; and (iii) that a Change of Control
has not occurred.

	10.	 	Indemnity.
	 
	 	 	You will receive, to the fullest extent possible and to such greater extent as applicable
law hereafter may permit, indemnity from the Company on terms at least as favorable as that
provided under (i) the Indemnity Agreement, or (ii) the Company’s Bylaws, as in effect on
the date hereof.
	 
	11.	 	Successors; Binding Agreement.

	 	(a)	 	In the event any Successor does not assume this Agreement by operation of law,
the Company will seek to have any Successor, by agreement in form and substance
satisfactory to you, expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it. If
there has been a Change of Control prior to, or a Change of Control will result from,
any such succession, then failure of the Company to obtain at your request such
agreement prior to or upon the effectiveness of any such succession (other than by
merger or consolidation) shall constitute a termination of your status as non-executive
Chairman of the Board for reasons other than your refusal to serve.
	 
	 	(b)	 	This Agreement shall inure to the benefit of and be enforceable by your
personal and legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.

	12.	 	Fees and Expenses.
	 
	 	 	The Company shall pay all legal and other costs (including but not limited to,
administrative, accounting, tax, human resource and expert witness fees and expenses) up

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	 	 	to a maximum of $1,000,000 incurred by you as a result of your seeking to obtain, assert or
enforce any right or benefit conferred upon you by this Agreement.
	 
	 	 	You shall prepare an estimate of any fees you expect to incur in the following 90 days and
claim reimbursement for under this Section 12 no later than 10 days after notice by you to
the Company that you intend to seek legal representation under this Agreement. The Company
shall pay such estimates to you within 10 days of your notice. At the end of the 90 days,
and each 90 days thereafter, you shall prepare a subsequent estimate and submit it to the
Company within 10 days and the Company agrees to pay all subsequent such estimates to you
within 10 days of each notice until the matter has been resolved. After the matter has been
resolved, you will submit an appropriate accounting of actual expenses and estimates; such
that:

	 	(i)	 	if estimates paid to you exceed actuals, you will promptly
submit a refund to the Company; or
	 
	 	(ii)	 	if actuals exceed estimates paid to you, you will submit a
final request for reimbursement from the Company, which the Company will
promptly pay.

	 	 	To the extent that your Spouse or Children are seeking to obtain, enforce or assert any
right or benefit conferred on them by this Agreement, they shall be entitled to fee and
expense reimbursement as if the right or benefit had been asserted by you.
	 
	13.	 	Notices.
	 
	 	 	Any and all notices required or permitted to be given hereunder shall be in writing and
shall be deemed to have been given when delivered in person to the Persons specified below
or deposited in the United States mail, certified or registered mail, postage prepaid and
addressed as follows:

			
	          If to the Company:	 	Oceaneering International, Inc.

11911 FM 529

Houston, Texas 77041

Attention: Chairman, Compensation Committee of the
Board of Directors
	 		
	          If to you:	 	John R. Huff

102 Broad Oaks Circle

Houston, Texas 77056

	 	 	Either party may change, by the giving of notice in accordance with this Section 13, the
address to which notices are thereafter to be sent.

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	14.	 	Validity.
	 
	 	 	The invalidity or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which shall remain in
full force and effect.
	 
	15.	 	Survival.
	 
	 	 	All obligations undertaken and benefits conferred pursuant to this Agreement, except those
set forth in Sections 1 and 2, shall survive the Agreement Period and any termination of
service and continue thereafter until performed in full.
	 
	16.	 	Miscellaneous.

	 	(a)	 	No provision of this Agreement may be modified, waived or discharged unless
such modification, waiver or discharge is agreed to in writing, signed by you and the
Chairman of the Compensation Committee of the Board. No waiver by either party hereto
at any time of any breach by the other party hereto of, or of compliance with, any
condition or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise, express
or implied, with respect to the subject matter hereof have been made by either party
which are not expressly set forth in this Agreement.
	 
	 	(b)	 	Failure to pay within 10 days of a payment due date or notice thereon (whether
payment is disputed or not) will result in a default of this Agreement. Past due
amounts will accrue interest and compound at the lesser of 2% per month or the highest
interest rate allowed by law.
	 
	 	(c)	 	Your Spouse and Children are third party beneficiaries of this Agreement with
respect to Medical Care benefits under Section 6, dispute resolution in Section 9, and
fees and expenses in Section 12.

If this letter correctly sets forth our understanding with respect to the subject matter hereof,
please sign and return one copy of this letter to the Company.

	 	 	 	 	 
	 	Sincerely,

Oceaneering International, Inc.

 	 
	 	BY:  	/s/
Harris J. Pappas 	 
	 	 	Harris J. Pappas, Chairman 	 
	 	 	Compensation Committee of the Board 	 
	 

Agreed to as of this the 21st day

of December, 2006:

 

/s/ John R. Huff

John R. Huff

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ANNEX I TO AMENDED AND RESTATED SERVICE AGREEMENT

DATED DECEMBER 21, 2006

BETWEEN

OCEANEERING INTERNATIONAL, INC. AND

JOHN R. HUFF

Definition of Certain Terms

“ADDITIONAL
SERVICES” means services provided by you in furtherance of the
Company’s business operations as may be mutually agreed to in
writing by you and the Company which shall initially involve
strategic planning and business expansion initiatives; provided,
however, that (i) any such Additional Services shall be
commensurate in all material respects with your duties as
non-executive Chairman of the Board and (ii) in furtherance of
any objective to be achieved in connection with performance of
Additional Services, you shall have access to all information and
materials from the Company as you deem necessary or advisable to
accomplish the objective.

“AGREEMENT” means this Amended and Restated Service Agreement between you and the Company dated as
of December 21, 2006, but effective as of the Effective Date.

“AGREEMENT PERIOD” means uninterrupted period beginning August 15, 2001, and ending upon the
expiration of Agreement Phase C.

“AGREEMENT PHASE A” means period beginning on August 15, 2001 and ending on December 30, 2006.

“AGREEMENT PHASE B” means the period beginning on December 31, 2006, and ending on the earlier to
occur of (i) the date on which you are no longer serving as Chairman of the Board; or (ii) August
15, 2011.

“AGREEMENT PHASE C” means the period beginning on the expiration of Agreement Phase B and ending 10
years thereafter.

“BOARD” means the Board of Directors of the Company.

“CHANGE OF CONTROL” means the earliest date at which:

	 	(a)	 	any Person is or becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company representing
20% or more of the combined voting power of the Company’s outstanding Voting
Securities, other than through the purchase of Voting Securities directly from the
Company through a private placement; or
	 
	 	(b)	 	individuals who constitute the Board on the date hereof (the “Incumbent Board”)
cease for any reason to constitute at least a majority thereof, provided that any
person becoming a director subsequent to the date hereof whose election, or nomination
for election by the Company’s shareholders, was approved by a vote of at least
two-thirds of the directors comprising the Incumbent Board shall from and after such
election be deemed to be a member of the Incumbent Board; or
	 
	 	(c)	 	the Company is merged or consolidated with another corporation or entity and as
a result of such merger or consolidation less than 60% of the outstanding Voting
Securities of the surviving or resulting corporation or entity shall then be owned by
the former stockholders of the Company; or

13

 

	 	(d)	 	a tender offer or exchange offer is made and consummated by a Person other than
the Company for the ownership of 20% or more of the Voting Securities of the Company
then outstanding; or
	 
	 	(e)	 	all or substantially all of the assets of the Company are sold or transferred
to a Person as to which (i) the Incumbent Board does not have authority (whether by law
or contract) to directly control the use or further disposition of such assets and (ii)
the financial results of the Company and such Person are not consolidated for financial
reporting purposes.

Anything else in this definition to the contrary notwithstanding, (i) no Change of Control shall be
deemed to have occurred by virtue of any transaction which results in you, or a group of Persons
which includes you, acquiring more than 20% of either the combined voting power of the Company’s
outstanding Voting Securities or the Voting Securities of any other corporation or entity which
acquires all or substantially all of the assets of the Company, whether by way of merger,
consolidation, sale of such assets or otherwise, and (ii) no Change of Control shall be deemed to
have occurred unless such event constitutes an event specified in Code Section 409A(2)(A)(v) and
the Treasury regulations promulgated thereunder.

“CHILDREN” means your natural children as of August 15, 2001, namely Christopher David Huff and
Jonathan Travis Huff.

“COC AGREEMENT” means the Change in Control Agreement between you and the Company dated August 15,
2001.

“CODE” means the Internal Revenue Code of 1986, as amended.

“COMPANY” means Oceaneering International, Inc., a Delaware corporation, headquartered in Houston,
Texas.

“DISABILITY” means you are unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to result in death or
can be expected to last for a continuous period of not less than 12 months. Your inability and its
anticipated duration shall be determined solely by a medical physician of your choice to be
approved by the Company, which approval shall not be unreasonably withheld.

“EFFECTIVE DATE” means the close of business on December 30, 2006.

“EXCHANGE ACT” means the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

“EXPIRATION DATE” means the end of the Agreement Period as described in Section 1.

“FISCAL YEAR BONUS PLAN” means for each year, the Company’s fiscal year bonus plan, or any other
plan adopted by the Board which provides for the payment of additional compensation or equity
consideration on an annual basis to senior executive officers contingent upon the Company’s
performance, including stock performance and results of operations for that specific

14

 

year, in either case as such plan shall be amended or modified prior to, but not on or after, any
Termination Date.

“INDEMNITY AGREEMENT” means that certain agreement between you and the Company dated as of November
16, 2001, and any successor thereto.

“LONG TERM INCENTIVE BONUS PLAN” means the Company’s long term incentive plans (including
agreements issued thereunder, e.g., restricted stock agreements and stock option agreements) or any
other plan or agreement approved by the Board, other than the Fiscal Year Bonus Plan, which
provides for the payment of additional compensation or equity consideration to senior executive
officers contingent on the Company’s performance, including stock performance and results of
operations for a specific time period, and in either case, as such plan may be amended or modified
prior to, but not on or after, any Termination Date.

“MARKET VALUE,” when used with respect to a Share, means the mean between the highest and lowest
sales price per Share on the New York Stock Exchange or if not listed thereon, on such other
exchange as shall at the time constitute the principal exchange for trading in Shares. If the
Shares are not publicly traded, the market value shall be as determined by an independent appraiser
appointed by you for such purpose.

“MEDICAL CARE” means any expense required, as determined in your, or the applicable of your Spouse
or Children receiving such benefits after your death, sole discretion, to provide assistance to the
well being of “you,” “your Spouse,” or “your Children” for their maintenance of physical and/or
mental health, as such expenses were generally defined in Section 213(d)(1) of the Code as in
effect as of August 15, 2001.

“ORIGINAL AGREEMENT” means, collectively, the Service Agreement between you and the Company, dated
as of August 15, 2001, the First Modification thereto dated May 11, 2006, and the Second
Modification thereto dated August 25, 2006.

“OTHER PLANS” means any thrift; bonus or incentive; stock option or stock accumulation; pension;
medical, disability, accident or life insurance plan, program, policy or arrangement of the Company
which is intended to benefit employees of the Company that are similarly situated to you (other
than the Plans or as otherwise provided to you in this Agreement).

“PERSON” means any individual, corporation, partnership, group, association or other “person,” as
such term is used in Sections 13(d) and 14(d) of the Exchange Act, other than the Company or any
Plans sponsored by the Company.

“PLANS” means any Fiscal Year Bonus Plan, Long Term Incentive Bonus Plan and the SERP.

“SERP” means the Supplemental Executive Retirement Plan (“SERP”), as the same shall be amended or
modified.

“SHARES” means shares of Common Stock, $.01 par value, of the Company at the date of this
Agreement, as the same shall be subsequently amended, modified or changed.

15

 

“SPOUSE” means the woman who was legally married to you as of August 15, 2001, namely Karen Keohane
Huff.

“SUCCESSOR” means any Person that succeeds to, or has the ability to control, the Company’s
business as a whole, directly by merger, consolidation or spin-off or indirectly by purchase of the
Company’s Voting Securities or acquisition of all or substantially all of the assets of the
Company.

“TERMINATION DATE” means that date which is the final date of your service pursuant to Section 4.

“TERMINATION NOTICE” is a notice that complies with the requirements of Section 4.

“TERMINATION PACKAGE” means your right to receive, and the Company’s obligation to pay and/or
perform on, the following:

	 	(a)	 	On or within five days following the Termination Date, the Company shall pay to
you a cash lump sum in an amount equal to $800,000. The Company shall also pay to you a
cash lump sum in an amount equal to $800,000 on each of the subsequent nine
anniversaries of the Termination Date. In the event of your subsequent Disability,
death or a Change of Control, all unpaid amounts shall be accelerated and paid to your
estate, or you, respectively, in a non-discounted lump-sum payment;
	 
	 	(b)	 	Any other amounts then owed to you by the Company, including interest per
Section 16(b);
	 
	 	(c)	 	All then outstanding contingent compensation issued or awarded to you under the
Plans and Other Plans shall become vested, exercisable, distributable and unrestricted
(any contrary provision in the Plans notwithstanding). You shall have the right
immediately to:

	 	(i)	 	for one year thereafter, exercise all or any portion of all
your options covered by the Plans and Other Plans and to have the underlying
Shares issued to you,
	 
	 	(ii)	 	for one year thereafter, in lieu of such exercise as provided
in Subsection (c)(i) above, as elected by you, to receive a cash amount within
five days following an applicable Termination Date equal to the spread between
the exercise price and the higher Market Value of the shares, multiplied by the
number of shares of outstanding stock options,
	 
	 	(iii)	 	all Shares of Restricted Stock issued under the Plans and
Other Plans shall be vested with all conditions to have been deemed to have
been satisfied with respect to all such shares of Restricted Stock provided
that such share had not theretofore been forfeited,

16

 

	 	(iv)	 	to receive a cash amount within five days following an
applicable Termination Date equal to all tax assistance payments associated
with the issuance of Shares covered by Restricted Stock held by you under the
Plans and Other Plans and vested pursuant to Subsection (c)(iii) above. Any
obligation to not sell Shares issued to you under Restricted Stock programs for
any period of time after vesting to keep associated tax assistance payments is
eliminated, and
	 
	 	(v)	 	obtain the full benefit of any other contingent compensation
rights to which you may be entitled under the Plans and Other Plans, including
without limitation the maximum award you would have been eligible to receive
under the then current Fiscal Year Bonus Plan if the applicable fiscal year
commenced during Agreement Phase A, and, in each case, as though all applicable
performance targets had been met or achieved at maximum levels for all
performance periods (including those extending beyond the Expiration Date) and
any and all Other Plans and SERP contingencies had been satisfied in full.

“VOTING SECURITIES” means, with respect to any corporation or business enterprise, those
securities, which under ordinary circumstances are entitled to vote for the election of directors
or others charged with comparable duties under applicable law.

17exv10w1

 

Exhibit
10.1

EXECUTION COPY

Geokinetics Inc.

and

The Guarantors listed on Schedule B hereto

$110,000,000

Second Priority Senior Secured Floating Rate Notes due 2012

PURCHASE AGREEMENT

dated December 11, 2006

RBC Capital Markets Corporation

 

 

PURCHASE AGREEMENT

December 11, 2006

RBC Capital Markets Corporation

1211 Avenue of the Americas, 32nd Floor

New York, NY 10036

  As Initial Purchaser

     Ladies and Gentlemen:

     Introductory. Geokinetics Inc., a Delaware corporation (the “Company”), on the terms and
subject to the condition set forth herein, proposes to issue and sell to RBC Capital Markets
Corporation (the “Initial Purchaser”) $110,000,000 aggregate principal amount of the Company’s
Second Priority Senior Secured Floating Rate Notes due 2012 (the “Notes”). RBC Capital Markets
Corporation has agreed to act as the Initial Purchaser in connection with the offering and sale of
the Notes.

     The Securities (as defined below) will be issued pursuant to an indenture, to be dated as of
December 15, 2006 (the “Indenture”), between the Company and Wells Fargo Bank, National
Association, as trustee (the “Trustee”). Notes issued in book-entry form will be issued in the
name of Cede & Co., as nominee of The Depository Trust Company (the “Depositary”).

     The Company’s payment of principal of, premium and interest and Additional Interest (as
defined in the Indenture), if any, under the Notes, the Exchange Notes (as defined below) and the
Indenture will be unconditionally guaranteed (the “Guarantees,” and together with the Notes, the
“Securities”), jointly and severally, on a senior secured basis, by (i) each of the Company’s
domestic subsidiaries as of the date hereof, which are listed on Schedule B hereto, and (ii) any
domestic subsidiary of the Company formed or acquired on or after the Closing Date (as defined
below) that executes a supplemental indenture setting forth an additional guarantee in accordance
with the terms of the Indenture, and their respective successors and assigns (collectively, the
“Guarantors”). The Exchange Notes (as defined below) and the Guarantees thereof are herein
collectively referred to as the “Exchange Securities.”

     The holders of the Securities will be entitled to the benefits of a registration rights
agreement, to be dated as of December 15, 2006 (the “Registration Rights Agreement”), among the
Company and the Initial Purchaser, pursuant to which the Company and each of the

 

 

Guarantors will agree to file with the Securities and Exchange Commission (the “Commission”) a
registration statement under the Securities Act of 1933 (as amended, the “Securities Act,” which
term, as used herein, includes the rules and regulations of the Commission promulgated thereunder),
relating to an offer (the “Exchange Offer”) to exchange another series of debt securities of the
Company with terms substantially identical to the Notes (the “Exchange Notes”) and to have it
declared effective by the Commission on or prior to 270 days after the Closing Date, and, to the
extent required by the Registration Rights Agreement, a shelf registration statement pursuant to
Rule 415 of the Securities Act relating to the resale by certain holders of the Notes.

     The Company understands that the Initial Purchaser proposes to make an offering of the
Securities on the terms and in the manner set forth herein and in the Pricing Disclosure Package
(as defined below) and the Final Offering Memorandum (as defined below) and agrees that the Initial
Purchaser may resell, subject to the conditions set forth herein, all or a portion of the
Securities to purchasers (the “Subsequent Purchasers”) at any time after the date of this
Agreement. The “Time of Execution” means 3:48 p.m. (New York City time) on December 11, 2006,
which is the time of the first sale of the Notes by the Initial Purchaser to the public. The
Securities are to be offered and sold to or through the Initial Purchaser without being registered
with the Commission under the Securities Act, in reliance upon exemptions therefrom. The terms of
the Securities and the Indenture will require that investors that acquire Securities expressly
agree that Securities may only be resold or otherwise transferred, after the date hereof, if such
Securities are registered for sale under the Securities Act or if an exemption from the
registration requirements of the Securities Act is available (including the exemptions afforded by
Rule 144A (“Rule 144A”) or Regulation S (“Regulation S”) thereunder).

     Pursuant to the Notes Security Documents (as defined in the Indenture) to be entered into
between the Company, the Guarantors and the Trustee, the obligations of the Company under the
Securities and of each Guarantor under its Guarantee will be secured by Second Priority Liens (as
defined in the Indenture) over substantially all assets of the Company and the Guarantors over
which any First Priority Lien (as defined in the Indenture) exists, subject to certain exceptions
(all assets subject to the Second Priority Liens, hereinafter collectively referred to as the
“Collateral”). The Second Priority Liens will be junior to the First Priority Liens and to any
other liens having priority or otherwise ranking senior to the Second Priority Liens. The
Collateral has been pledged to PNC Bank, National Association, as agent (the “Collateral Agent”),
for the benefit of the lenders under the Revolving Credit, Term Loan and Security Agreement, dated
as of June 12, 2006, between the Agent, the Company and certain of its subsidiaries as borrowers,
as amended by Joinder and Amendment No. 1, dated as of September 8, 2006 (the “PNC Credit
Facility”), as holders of the First Priority Liens, and will be granted to the Trustee for the
benefit of the holders of the Securities as holders of the Second Priority Liens. The Trustee will
enter into an intercreditor agreement (the “Intercreditor Agreement”) with the Agent with respect
to the Collateral, which will govern the relative ranking of the Second Priority Liens and the
First Priority Liens.

     As used herein, the term “Operative Documents” refers to this Agreement, the Registration
Rights Agreement, the Indenture, the Notes Security Documents (as defined below), the Securities,
the Exchange Securities and the Intercreditor Agreement.

2

 

     The Company has prepared and delivered to the Initial Purchaser copies of a preliminary
offering memorandum, dated December 1, 2006 (the “Preliminary Offering Memorandum”), and have
prepared and delivered to the Initial Purchaser copies of a pricing supplement, dated December 11,
2006 (in the form attached hereto as Exhibit A, the “Pricing Supplement”), describing the terms of
the Securities, each for use by the Initial Purchaser in connection with its solicitation of offers
to purchase the Securities. The Preliminary Offering Memorandum and the Pricing Supplement are
herein referred to as the “Pricing Disclosure Package.” Promptly after the Time of Execution, the
Company will prepare and deliver to the Initial Purchaser a final offering memorandum dated the
date hereof (the “Final Offering Memorandum”).

     The Company and the Guarantors hereby confirm their agreements with the Initial Purchaser as
follows:

SECTION 1. Representations and Warranties. The Company and the Guarantors, jointly and
severally, hereby represent, warrant and covenant to the Initial Purchaser as follows:

          (a) No Registration Required. Subject to compliance by the Initial Purchaser with the
representations and warranties set forth in Section 2 hereof and with the procedures set forth in
Section 7 hereof, it is not necessary in connection with the offer, sale and delivery of the
Securities to the Initial Purchaser and to each Subsequent Purchaser in the manner contemplated by
this Agreement, the Pricing Disclosure Package and the Final Offering Memorandum to register under
the Securities Act the offer and sale of the Securities hereunder or the initial resale of
Securities to Subsequent Purchasers or, until such time as the Exchange Securities are issued
pursuant to an effective registration statement, to qualify the Indenture under the Trust Indenture
Act of 1939 (the “Trust Indenture Act,” which term, as used herein, includes the rules and
regulations of the Commission promulgated thereunder).

          (b) No Integration of Offerings or General Solicitation. Neither the Company nor any
Guarantor has, directly or indirectly, solicited any offer to buy or offered to sell, and will not,
directly or indirectly, solicit any offer to buy or offer to sell, in the United States or to any
United States citizen or resident, any security which is or would be integrated with the sale of
the Securities in a manner that would require the Securities to be registered under the Securities
Act. None of the Company, the Guarantors, their respective affiliates (as such term is defined in
Rule 501 under the Securities Act (each, an “Affiliate”), or any person acting on its or any of
their behalf (other than the Initial Purchaser, as to whom neither the Company nor any Guarantor
makes any representation or warranty) has engaged or will engage, in connection with the offering
of the Securities, in any form of general solicitation or general advertising within the meaning of
Rule 502 under the Securities Act. With respect to those Securities sold in reliance upon
Regulation S, (i) none of the Company, the Guarantors, their respective Affiliates or any person
acting on its or their behalf (other than the Initial Purchaser, as to whom neither the Company nor
any Guarantor makes any representation or warranty) has engaged or will engage in any directed
selling efforts within the meaning of Regulation S and (ii) each of the Company, the Guarantors and
their respective Affiliates and any person acting on its or their behalf (other than the Initial
Purchaser, as to whom neither the Company nor any Guarantor makes any representation or warranty)
has complied and will comply with the offering restrictions set forth in Regulation S and, in
connection therewith, the Pricing Disclosure Package and the Final Offering Memorandum will contain
the disclosure required by Rule 902 of the Securities Act, and (iii) the sale of the Securities

3

 

pursuant to Regulation S is not part of a plan or scheme to evade the registration
requirements of the Securities Act.

          (c) Eligibility for Resale under Rule 144A. The Securities are eligible for resale pursuant
to Rule 144A and will not be, at the Closing Date, of the same class as securities listed on a
national securities exchange registered under Section 6 of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), or quoted in a U.S. automated interdealer quotation system.

          (d) The Pricing Disclosure Package and the Final Offering Memorandum. Neither the Pricing
Disclosure Package (as defined below), as of the Time of Execution, nor the Final Offering
Memorandum, as of its date or (as amended or supplemented in accordance with Section 3(a), as
applicable) as of the Closing Date, contains or will contain an untrue statement of a material fact
or omits or will omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading; provided that this
representation, warranty and agreement shall not apply to statements in or omissions from the
Pricing Disclosure Package, the Final Offering Memorandum or any amendment or supplement thereto
made in reliance upon and in conformity with information furnished to the Company in writing by the
Initial Purchaser expressly for use in the Pricing Disclosure Package, the Final Offering
Memorandum or any amendment or supplement thereto, as the case may be. The Pricing Disclosure
Package contains, and the Final Offering Memorandum will contain, all the information specified in,
and meeting the information requirements of, Rule 144A(d)(4). The Company has not distributed and
will not distribute, prior to the later of the Closing Date and the completion of the Initial
Purchaser’s distribution of the Securities, any offering material in connection with the offering
and sale of the Securities other than the Pricing Disclosure Package and the Final Offering
Memorandum or any amendment or supplement thereto in accordance with Section 3(a).

          (e) The Purchase Agreement. This Agreement has been duly authorized, executed and delivered
by, and is a valid and binding agreement of, the Company and each Guarantor, enforceable in
accordance with its terms, except as rights to indemnification hereunder may be limited by
applicable law and except as the enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the rights and remedies
of creditors or by general equitable principles.

          (f) The Registration Rights Agreement. At the Closing Date, the Registration Rights Agreement
will be duly authorized, executed and delivered by, and will be a valid and binding agreement of,
the Company and each Guarantor, enforceable in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general equitable principles
covered by equity and except as rights to indemnification under the Registration Rights Agreement
may be limited by applicable law.

          (g) The Intercreditor Agreement. At the Closing Date, the Intercreditor Agreement will be
duly authorized, executed and delivered by, and will be a valid and binding agreement of, the
Company and each Guarantor, enforceable in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,

4

 

moratorium or other similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles covered by equity.

          (h) Authorization of the Securities and the Exchange Securities. The Notes to be purchased by
the Initial Purchaser from the Company are in the form contemplated by the Indenture, have been
duly authorized for issuance and sale pursuant to this Agreement and the Indenture and, at the
Closing Date, will have been duly executed by the Company and, when authenticated in the manner
provided for in the Indenture and delivered against payment of the purchase price therefor, will
constitute valid and binding agreements of the Company, enforceable in accordance with their terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and remedies of creditors or
by general equitable principles and will be entitled to the benefits of the Indenture. The
Exchange Notes have been duly and validly authorized for issuance by the Company, and when issued
and authenticated in accordance with the terms of the Indenture, the Registration Rights Agreement
and the Exchange Offer, will constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or
affecting enforcement of the rights and remedies of creditors or by general principles of equity
and will be entitled to the benefits of the Indenture. The Guarantees of the Notes are in the form
contemplated by the Indenture, have been duly authorized for issuance and sale pursuant to this
Agreement and the Indenture and, at the Closing Date, will have been duly executed by each of the
Guarantors and, when the Notes have been authenticated in the manner provided for in the Indenture
and delivered against payment of the purchase price therefor, will constitute valid and binding
agreements of the Guarantors, enforceable in accordance with their terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general equitable principles
and will be entitled to the benefits of the Indenture. The Guarantees of the Exchange Notes are in
the form contemplated by the Indenture, have been duly authorized for issuance and sale pursuant to
this Agreement and the Indenture and, at the time the Exchange Notes are authenticated in the
manner provided for in the Indenture and delivered against payment of the purchase price therefor,
will have been duly executed by each of the Guarantors and will constitute valid and binding
agreements of the Guarantors, enforceable in accordance with their terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general equitable principles
and will be entitled to the benefits of the Indenture.

          (i) Authorization of the Indenture. The Indenture has been duly authorized by the Company and
each Guarantor and, at the Closing Date, will have been duly executed and delivered by the Company
and will constitute a valid and binding agreement of the Company, enforceable against the Company
and each Guarantor in accordance with its terms, except as the enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable principles.

          (j) Authorization of the Notes Security Documents. The Notes Security Documents have been duly
authorized by the Company and each of the Guarantors and, on the

5

 

Closing Date, will have been duly executed and delivered by the Company and each of the
Guarantors. When the Notes Security Documents have been duly executed and delivered by each of the
parties thereto, the Notes Security Documents will (i) create a valid, binding and enforceable
security interest in the Collateral in favor of the Trustee for the benefit of the holders of the
Securities, and all material agreements which are part of the Collateral and to which the Company
or any Guarantor is a party or by which it is bound will be valid, binding and enforceable against
the Company or such Guarantor and (ii) be valid and binding obligations of the Company and each of
the Guarantors, enforceable against the Company and each Guarantor in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors’ rights and to general equity
principles and except that any rights to indemnity and contributions may be limited by applicable
laws and public policy considerations. On the Closing Date, the Notes Security Documents and the
Collateral will conform in all material respects to the statements relating thereto contained in
the Pricing Disclosure Package and the Final Offering Memorandum.

          (k) Collateral. The Company and the Guarantors own the Collateral free and clear of any
security interests, mortgages, liens, encumbrances, equities, claims and other defects (“Liens”),
other than Permitted Liens.

          (l) Perfection of the Collateral. Upon the filing of all necessary Uniform Commercial Code
(“UCC”) financing statements in the proper filing offices and all other actions necessary or
desirable to perfect a security interest in the Collateral (to the extent a security interest in
the Collateral is capable of being perfected by filing), the security interests in the Collateral
granted to the Trustee, for the benefit of the holders of the Securities, will constitute valid and
perfected second priority security interests in the Collateral, securing the obligations of the
Company and the Guarantors under the Indenture, subject only to Permitted Liens and other Liens
expressly permitted under the Indenture. As of the Closing Date, the filing of all necessary
Uniform Commercial Code financing statements in the proper filing offices and other filings and
actions contemplated by the Notes Security Documents and the Indenture, and all other filings and
other actions necessary or desirable to perfect the security interest in the Collateral will have
been duly made or taken and will be in full force and effect.

          (n) Description of the Operative Documents. The Operative Documents will conform in all
material respects to the respective statements relating thereto contained in the Pricing Disclosure
Package and the Final Offering Memorandum.

          (o) No Material Adverse Change. Except as disclosed in the Pricing Disclosure Package and the
Final Offering Memorandum, subsequent to the respective dates as of which information is given in
the Pricing Disclosure Package: (i) there has been no material adverse change, or any development
that could reasonably be expected to result in a material adverse change, in the condition,
financial or otherwise, or in the earnings, business, operations or prospects, whether or not
arising from transactions in the ordinary course of business, of the Company and its subsidiaries,
considered as one entity (any such change is called a “Material Adverse Change”); (ii) the Company
and its subsidiaries, considered as one entity, have not incurred any material liability or
obligation, indirect, direct or contingent, not in the ordinary course of business nor entered into
any material transaction or agreement not in the ordinary

6

 

course of business; and (iii) there has been no dividend or distribution of any kind declared,
paid or made by the Company or, except for dividends paid to the Company or other subsidiaries, any
of its subsidiaries on any class of capital stock or repurchase or redemption by the Company or any
of its subsidiaries of any class of capital stock.

          (p) Independent Accountants. Fitts Roberts & Co., P.C., UHY, LLP and UHY Mann Frankfort Stein
& Lipp CPAs, LLP, which have expressed their opinions with respect to the financial statements
(which term as used in this Agreement includes the related notes thereto) filed with the Commission
included in the Pricing Disclosure Package and the Final Offering Memorandum are each a registered
public accounting firm and independent public or certified public accountants, within the meaning
of Regulation S-X under the Securities Act and the Exchange Act.

          (q) Preparation of the Financial Statements. The historical financial statements, together
with the related schedules and notes, included in the Pricing Disclosure Package and the Final
Offering Memorandum present fairly the consolidated financial position of the Company and its
subsidiaries and Grant Geophysical, Inc. and its subsidiaries, as applicable, as of and at the
dates indicated and the results of their operations and cash flows for the periods specified. Such
financial statements have been prepared in conformity with generally accepted accounting
principles, as applied in the United States, applied on a consistent basis throughout the periods
involved, except as may be expressly stated in the related notes thereto. The financial data set
forth in the Pricing Disclosure Package and the Final Offering Memorandum under the captions
“Offering Memorandum Summary – Summary Historical Consolidated and Pro Forma Combined Financial
Information” and “Selected Historical Consolidated Financial Information” and elsewhere in the
Pricing Disclosure Package and the Final Offering Memorandum fairly present the information set
forth therein on a basis consistent with that of the audited financial statements contained in the
Pricing Disclosure Package and the Final Offering Memorandum. The pro forma consolidated financial
statements of the Company and its subsidiaries and the related notes thereto included under the
caption “Offering Memorandum Summary – Summary Historical Consolidated and Pro Forma Combined
Financial Information”, “Unaudited Pro Forma Combined Financial Information” and elsewhere in the
Pricing Disclosure Package and the Final Offering Memorandum present fairly the information
contained therein, have been prepared in accordance with the Commission’s rules and guidelines with
respect to pro forma financial statements and have been properly presented on the bases described
therein, and the assumptions used in the preparation thereof are reasonable and the adjustments
used therein are appropriate to give effect to the transactions and circumstances referred to
therein.

          (r) Incorporation and Good Standing of the Company and its Subsidiaries. Each of the Company
and its subsidiaries has been duly incorporated or organized and is validly existing as a
corporation or limited liability company in good standing under the laws of the jurisdiction of its
incorporation or organization and has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Pricing Disclosure Package and the Final
Offering Memorandum and, in the case of the Company and the Guarantors, to enter into and perform
its obligations under each of the Operative Documents. Each of the Company and its subsidiaries is
duly qualified as a foreign corporation or limited liability company to transact business and is in
good standing in each jurisdiction in which such

7

 

qualification is required, whether by reason of the ownership or leasing of property or the
conduct of business, except for such jurisdictions where the failure to so qualify or to be in good
standing would not, individually or in the aggregate, result in a Material Adverse Change. All of
the issued and outstanding capital stock or membership interests of each subsidiary has been duly
authorized and validly issued, is fully paid and nonassessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance or claim except for Liens under the PNC Credit Facility (“Permitted Liens”). The
Company does not own or control, directly or indirectly, any corporation, association or other
entity other than the subsidiaries listed in Schedule B hereto.

          (s) Capitalization and Other Capital Stock Matters. At September 30, 2006, on a consolidated
basis, after giving pro forma effect to the issuance and sale of the Securities pursuant hereto,
the Company would have an authorized and outstanding capitalization as set forth in the Pricing
Disclosure Package and the Final Offering Memorandum under the caption “Capitalization” (other than
for subsequent issuances of capital stock, if any, pursuant to employee benefit plans described in
the Pricing Disclosure Package and the Final Offering Memorandum or upon exercise of outstanding
options or warrants described in the Pricing Disclosure Package and the Final Offering Memorandum).
All of the outstanding shares of Common Stock have been duly authorized and validly issued, are
fully paid and nonassessable and have been issued in compliance with federal and state securities
laws. None of the outstanding shares of Common Stock were issued in violation of any preemptive
rights, rights of first refusal or other similar rights to subscribe for or purchase securities of
the Company. There are no authorized or outstanding options, warrants, preemptive rights, rights
of first refusal or other rights to purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any capital stock of the Company or any of its subsidiaries other
than those accurately described in the Pricing Disclosure Package and the Final Offering
Memorandum. The description of the Company’s stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted thereunder, set forth in the Pricing
Disclosure Package and the Final Offering Memorandum accurately and fairly describes such plans,
arrangements, options and rights.

          (t) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals
Required. Neither the Company nor any of its subsidiaries is in violation of its charter or
by-laws or is in default (or, with the giving of notice or lapse of time, would be in default)
(“Default”) under any indenture, mortgage, loan or credit agreement, note, contract, franchise,
lease or other instrument to which the Company or any of its subsidiaries is a party or by which it
or any of them may be bound, or to which any of the property or assets of the Company or any of its
subsidiaries is subject (each, an “Existing Instrument”), except for such Defaults as would not,
individually or in the aggregate, result in a Material Adverse Change. The Company’s and each
Guarantor’s execution, delivery and performance of the Operative Documents, and the issuance and
delivery of the Securities or the Exchange Securities, and consummation of the transactions
contemplated hereby and thereby and by the Pricing Disclosure Package and the Final Offering
Memorandum (i) have been duly authorized by all necessary corporate or limited liability company
action and will not result in any violation of the provisions of the charter or by-laws or
organization documents of the Company or any subsidiary, (ii) will not conflict with or constitute
a breach of, or Default or a Debt Repayment Triggering Event (as defined below) under, or result in
the creation or imposition of any lien,

8

 

charge or encumbrance upon any property or assets of the Company or any of its subsidiaries
pursuant to, or require the consent of any other party to, any Existing Instrument, except for such
conflicts, breaches, Defaults, liens, charges or encumbrances as would not, individually or in the
aggregate, result in a Material Adverse Change and (iii) will not result in any violation of any
law, administrative regulation or administrative or court decree applicable to the Company or any
subsidiary. No consent, approval, authorization or other order of, or registration or filing with,
any court or other governmental or regulatory authority or agency, is required for the Company’s or
each Guarantor’s execution, delivery and performance of the Operative Documents, or the issuance
and delivery of the Securities or the Exchange Securities, or consummation of the transactions
contemplated hereby and thereby and by the Pricing Disclosure Package and the Final Offering
Memorandum, except such as have been obtained or made by the Company or the Guarantors and are in
full force and effect under the Securities Act, applicable state securities or blue sky laws and
except such as may be required by federal and state securities laws with respect to the Company’s
obligations under the Registration Rights Agreement, and filings necessary to perfect the secured
interests in the Collateral. As used herein, a “Debt Repayment Triggering Event” means any event
or condition which gives, or with the giving of notice or lapse of time would give, the holder of
any note, debenture or other evidence of indebtedness (or any person acting on such holder’s
behalf) the right to require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any of its subsidiaries.

          (u) No Material Actions or Proceedings. There are no legal or governmental actions, suits or
proceedings pending or, to the best of the Company’s and each Guarantor’s knowledge, threatened (i)
against or affecting the Company or any of its subsidiaries, (ii) which has as the subject thereof
any property owned or leased by the Company or any of its subsidiaries, where in any such case any
such action, suit or proceeding, if determined adversely, would reasonably be expected to result in
a Material Adverse Change or adversely affect the consummation of the transactions contemplated by
this Agreement. No material labor dispute with the employees of the Company or any of its
subsidiaries, or with the employees of any principal supplier of the Company, exists or, to the
best of the Company’s knowledge, is threatened or imminent.

          (v) Intellectual Property Rights. The Company and its subsidiaries own or possess sufficient
trademarks, trade names, patent rights, copyrights, licenses, approvals, trade secrets and other
similar rights (collectively, “Intellectual Property Rights”) reasonably necessary to conduct their
businesses as now conducted; and the expected expiration of any of such Intellectual Property
Rights, if not renewed or replaced, would not result in a Material Adverse Change. Neither the
Company nor any of its subsidiaries has received any notice of infringement or conflict with
asserted Intellectual Property Rights of others, which infringement or conflict, if the subject of
an unfavorable decision, would result in a Material Adverse Change.

          (w) All Necessary Permits, etc. The Company and each subsidiary possess such valid and
current certificates, authorizations or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct their respective businesses, and neither the
Company nor any subsidiary has received any notice of proceedings relating to the revocation or
modification of, or non-compliance with, any such certificate, authorization or

9

 

permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, could result in a Material Adverse Change.

          (x) Title to Properties. The Company and each of its subsidiaries has good and marketable
title to all the properties and assets reflected as owned in the financial statements referred to
in Section 1(q) above (or elsewhere in the Pricing Disclosure Package and the Final Offering
Memorandum), in each case free and clear of any security interests, mortgages, liens, encumbrances,
equities, claims and other defects, except such as do not materially and adversely affect the value
of such property and do not materially interfere with the current or currently proposed use of such
property by the Company or such subsidiary and Permitted Liens. The real property, improvements,
equipment and personal property held under lease by the Company or any subsidiary are held under
valid and enforceable leases, with such exceptions as are not material and do not materially
interfere with the current or currently proposed use of such real property, improvements,
equipment or personal property by the Company or such subsidiary.

          (y) Tax Law Compliance. The Company and its consolidated subsidiaries have filed all
necessary federal, state and foreign income and franchise tax returns and have paid all taxes
required to be paid by any of them and, if due and payable, any related or similar assessment, fine
or penalty levied against any of them. The Company has made adequate charges, accruals and
reserves in the applicable financial statements referred to in Section 1(q) above in respect of all
federal, state and foreign income and franchise taxes for all periods as to which the tax liability
of the Company or any of its consolidated subsidiaries has not been finally determined.

          (z) Company and Guarantors Each Not an “Investment Company”. The Company has been advised of
the rules and requirements under the Investment Company Act of 1940, as amended (the “Investment
Company Act”). Neither the Company nor any Guarantor is, and after receipt of payment for the
Securities and the use of proceeds thereof as described in the Pricing Disclosure Package and the
Final Offering Memorandum each will not be, an “investment company” within the meaning of
Investment Company Act and the Company and each Guarantor intends to conduct its business in a
manner so that it will not become subject to the Investment Company Act.

          (aa) Insurance. Each of the Company and its subsidiaries are insured by recognized,
financially sound institutions with policies in such amounts and with such deductibles and covering
such risks as are generally deemed adequate and customary for their businesses including, but not
limited to, policies covering real and personal property owned or leased by the Company and its
subsidiaries against theft, damage, destruction, acts of vandalism and earthquakes. The Company
has no reason to believe that it or any subsidiary will not be able (i) to renew its existing
insurance coverage as and when such policies expire or (ii) to obtain comparable coverage from
similar institutions as may be necessary or appropriate to conduct its business as now conducted
and at a cost that would not result in a Material Adverse Change. Neither of the Company nor any
subsidiary has been denied any insurance coverage which it has sought or for which it has applied.

          (bb) No Price Stabilization or Manipulation. The Company has not taken and will not take,
directly or indirectly, any action designed to or that might be reasonably expected

10

 

to cause or result in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.

          (cc) Solvency. The Company and each Guarantor is, and immediately after the Closing Date will
be, Solvent. As used herein, the term “Solvent” means, with respect to the Company and each
Guarantor on a particular date, that on such date (i) the fair market value of its assets is
greater than the total amount of its liabilities (including contingent liabilities), (ii) the
present fair salable value of its assets is greater than the amount that will be required to pay
the probable liabilities on its debts as they become absolute and matured, (iii) it is able to
realize upon its assets and pay its debts and other liabilities, including contingent obligations,
as they mature and (iv) it does not have unreasonably small capital to carry on its business as
conducted and as proposed to be conducted, as set forth in the Pricing Disclosure Package and the
Final Offering Memorandum.

          (dd) No Unlawful Contributions or Other Payments. Neither the Company nor any of its
subsidiaries nor, to the best of the Company’s knowledge, any employee or agent of the Company or
any subsidiary, has made any contribution or other payment to any official of, or candidate for,
any federal, state or foreign office in violation of any law or of the character necessary to be
disclosed in the Pricing Disclosure Package and the Final Offering Memorandum in order to make the
statements therein not misleading.

          (ee) Company’s Internal Control over Financial Reporting. The Company maintains a system of
internal controls over financial reporting sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management’s general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of reliable financial statements in
conformity with generally accepted accounting principles as applied in the United States and to
maintain accountability for assets; (iii) records are maintained in sufficient detail to accurately
and fairly reflect the transactions and dispositions of the Company’s assets (iv) access to assets
is permitted only in accordance with management’s general or specific authorization; and (v) the
recorded accountability for assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. The Company is not aware of (a) any
significant deficiency in the design or operation of internal control over financial reporting
which could adversely affect the Company’s ability to record, process, summarize and report
financial data or any material weaknesses in internal controls or (b) any fraud, whether or not
material, that involves management or other employees who have a significant role in the Company’s
internal controls. There have been no significant changes in internal controls or in other factors
that could significantly affect internal controls since December 31, 2005.

          (ff) Compliance with Environmental Laws. Except as would not, individually or in the
aggregate, result in a Material Adverse Change: (i) neither the Company nor any of its subsidiaries
is in violation of any federal, state, local or foreign law or regulation relating to pollution or
protection of human health or the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife, including without limitation,
laws and regulations relating to emissions, discharges, releases or threatened releases of
chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum and
petroleum products (collectively, “Materials of Environmental Concern”), or

11

 

otherwise relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Materials of Environmental Concern (collectively, “Environmental
Laws”), which violation includes, but is not limited to, noncompliance with any permits or other
governmental authorizations required for the operation of the business of the Company or its
subsidiaries under applicable Environmental Laws, or noncompliance with the terms and conditions
thereof, nor has the Company or any of its subsidiaries received any written communication, whether
from a governmental authority, citizens group, employee or otherwise, that alleges that the Company
or any of its subsidiaries is in violation of any Environmental Law; (ii) there is no claim, action
or cause of action filed with a court or governmental authority, no investigation with respect to
which the Company has received written notice, and no written notice by any person or entity
alleging potential liability for investigatory costs, cleanup costs, governmental responses costs,
natural resources damages, property damages, personal injuries, attorneys’ fees or penalties
arising out of, based on or resulting from the presence, or release into the environment, of any
Material of Environmental Concern at any location owned, leased or operated by the Company or any
of its subsidiaries, now or in the past (collectively, “Environmental Claims”), pending or, to the
best of the Company’s knowledge, threatened against the Company or any of its subsidiaries or any
person or entity whose liability for any Environmental Claim the Company or any of its subsidiaries
has retained or assumed either contractually or by operation of law; and (iii) to the best of the
Company’s knowledge, there are no past or present actions, activities, circumstances, conditions,
events or incidents, including, without limitation, the release, emission, discharge, presence or
disposal of any Material of Environmental Concern, that reasonably could result in a violation of
any Environmental Law or form the basis of a potential Environmental Claim against the Company or
any of its subsidiaries or against any person or entity whose liability for any Environmental Claim
the Company or any of its subsidiaries has retained or assumed either contractually or by operation
of law.

          (gg) ERISA Compliance. The Company and its subsidiaries and any “employee benefit plan” (as
defined under the Employee Retirement Income Security Act of 1974, as amended, and the regulations
and published interpretations thereunder (collectively, “ERISA”)) established or maintained by the
Company, its subsidiaries or their “ERISA Affiliates” (as defined below) are in compliance in all
material respects with ERISA. “ERISA Affiliate” means, with respect to the Company or a
subsidiary, any member of any group of organizations described in Sections 414(b), (c), (m), or (o)
of the Internal Revenue Code of 1986, as amended, and the regulations and published interpretations
thereunder (the “Code”) of which the Company or such subsidiary is a member. No “reportable event”
(as defined under ERISA) has occurred or is reasonably expected to occur with respect to any
“employee benefit plan” established or maintained by the Company, its subsidiaries or any of their
ERISA Affiliates. No “employee benefit plan” established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates, if such “employee benefit plan” were terminated,
would have any “amount of unfunded benefit liabilities” (as defined under ERISA). Neither the
Company, any of its subsidiaries nor any of their ERISA Affiliates has incurred or reasonably
expects to incur any liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code.
Each “employee benefit plan” established or maintained by the Company, its subsidiaries or any of
their ERISA Affiliates that is intended to be qualified under Section 401 of the Code is so
qualified and nothing has occurred, whether by action or failure to act, which would cause the loss
of such qualification.

12

 

          (hh) Regulation S. The Company and its affiliates, the Guarantors and their respective
affiliates and all persons acting on their behalf (other than the Initial Purchaser, as to whom the
Company and the Guarantors make no representation) have complied with and will comply with the
offering restrictions requirements of Regulation S in connection with the offering of the
Securities outside the United States and, in connection therewith, the Pricing Disclosure Package
and the Final Offering Memorandum will contain the disclosure required by Rule 902. The Company is
a “reporting issuer,” as defined in Rule 902 under the Securities Act.

          (ii) Sarbanes-Oxley Act. The Company is in compliance in all material respects with
provisions of the Sarbanes-Oxley Act of 2002 that are applicable to it.

          (jj) Disclosure Controls and Procedures. Except as disclosed in the Pricing Disclosure Package
and the Final Offering Memorandum, the Company has established and maintains “disclosure controls
and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) that are
reasonably designed to ensure that all information (both financial and non-financial) required to
be disclosed by the Company in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified in the rules and
regulations thereunder, and that all such information is accumulated and communicated to the
Company’s management as appropriate to allow timely decisions regarding required disclosure and to
make the certifications of the Chief Executive Officer and Chief Financial Officer of the Company
required under the Exchange Act with respect to such reports. Without limiting the generality of
the foregoing, as disclosed in the Pricing Disclosure Package and the Final Offering Memorandum,
the Company’s disclosure controls and procedures are effective to enable it to record, process,
summarize, and report information required to be included in our SEC filings within the required
time period, and to ensure that such information is accumulated and communicated to its management,
including its Chief Executive Officer and Chief Financial Officer, to allow timely decisions
regarding required disclosure.

          (kk) Payment of Dividends by Subsidiaries. No subsidiary of the Company is currently
prohibited, directly or indirectly, from paying any dividends to the Company or any other
subsidiary, from making any other distribution on such subsidiary’s capital stock, from repaying to
the Company or any other subsidiary any loans or advances to such subsidiary from the Company or
any other subsidiary or from transferring any of such subsidiary’s property or assets to the
Company or any other subsidiary of the Company, except as described in or contemplated in the
Pricing Disclosure Package and the Final Offering Memorandum

          (ll) Forward-Looking Statements. No forward-looking statement (within the meaning of Section
27A of the Act and Section 21E of the Exchange Act) or presentation of market-related or
statistical data contained in either the Pricing Disclosure Package or the Final Offering
Memorandum has been made or reaffirmed without a reasonable basis or has been disclosed in other
than good faith.

          (mm) Statistical and Market-Related Data. Any statistical and market-related data included in
the Pricing Disclosure Package and the Final Offering Memorandum are based on or derived from
sources that the Company believes to be reliable and accurate, and the

13

 

Company has obtained the written consent to the use of such data from such sources to the
extent such written consent is required.

          (nn) Foreign Corrupt Practices Act. Neither the Company nor any Guarantor, nor, to the
knowledge of the Company or such Guarantor, any of their respective directors, officers, agents,
employees, affiliates or other persons acting on behalf of the Company or the Guarantors or their
respective subsidiaries is aware of or has taken any action, directly or indirectly, that would
result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and
the rules and regulations thereunder (the “FCPA”), including, without limitation, making use of the
mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer,
payment, promise to pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any “foreign official” (as
such term is defined in the FCPA) or any foreign political party or official thereof or any
candidate for foreign political office, in contravention of the FCPA and the Company and, to the
knowledge of the Company, its Affiliates have conducted their businesses in compliance with the
FCPA and have instituted and maintain policies and procedures designed to ensure, and which are
reasonably expected to continue to ensure, continued compliance therewith.

          (oo) Money Laundering Laws. The operations of the Company are and have been conducted at all
times in material compliance with applicable financial recordkeeping and reporting requirements of
the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving the Company with
respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

          (pp) Related Parties. No relationship, direct or indirect, that would be required to be
described under Item 404 of Regulation S-K if such Item were applicable, exists that is not
described in the Pricing Disclosure Package or the Final Offering Memorandum.

          (qq) OFAC. Neither the Company nor any Guarantor, nor, to the knowledge of either the Company
or the Guarantor, any director, officer, agent, employee, affiliate or person acting on behalf of
the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly
use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to
any subsidiary, joint venture partner or other person or entity, for the purpose of financing the
activities of any person currently subject to any U.S. sanctions administered by OFAC.

     Any certificate signed by an officer of the Company and delivered to the Initial Purchaser or
to counsel for the Initial Purchaser shall be deemed to be a representation and warranty by the
Company to the Initial Purchaser as to the matters set forth therein.

SECTION 2. Purchase, Sale and Delivery of the Securities.

14

 

          (a) The Securities. The Company agrees to issue and sell to the Initial Purchaser all of the
Securities upon the terms herein set forth. On the basis of the representations, warranties and
agreements herein contained, and upon the terms but subject to the conditions herein set forth, the
Initial Purchaser agrees to purchase from the Company the aggregate principal amount of Securities
set forth on Schedule A, at a purchase price of 97% of the principal amount thereof, payable on the
Closing Date.

          (b) The Closing Date. Delivery of certificates for the Securities in definitive form to be
purchased by the Initial Purchaser and payment therefor shall be made at the offices of Shearman &
Sterling LLP (or such other place as may be agreed to by the Company and the Initial Purchaser) at
9:30 a.m. New York City time, on December 15, 2006, or such other time and date as may be agreed to
by the Initial Purchaser and the Company (the time and date of such closing are called the “Closing
Date”). The Company hereby acknowledges that circumstances under which the Initial Purchaser may
provide notice to postpone the Closing Date as originally scheduled include, but are in no way
limited to, any determination by the Company or the Initial Purchaser to recirculate to investors
copies of an amended or supplemented Final Offering Memorandum or a delay as contemplated by the
provisions of Section 16.

          (c) Delivery of the Securities. The Company shall deliver, or cause to be delivered, to the
Initial Purchaser certificates for the Securities at the Closing Date against the irrevocable
release of a wire transfer of immediately available funds for the amount of the purchase price
therefor. The certificates for the Securities shall be in such denominations and registered in the
name of Cede & Co., as nominee of the Depository, and shall be made available for inspection on the
business day preceding the Closing Date at a location in New York City, as the Initial Purchaser
may designate. Time shall be of the essence, and delivery at the time and place specified in this
Agreement is a further condition to the obligations of the Initial Purchaser.

          (d) Delivery of Offering Memorandum to the Initial Purchaser. Not later than 12:00 p.m. on
the second business day following the date of this Agreement, the Company shall deliver or cause to
be delivered copies of the Pricing Disclosure Package and the Final Offering Memorandum in such
quantities and at such places as the Initial Purchaser shall reasonably request.

          (e) Initial Purchaser as Qualified Institutional Buyers. The Initial Purchaser represents and
warrants to, and agrees with, the Company that it is a “qualified institutional buyer” within the
meaning of Rule 144A under the Securities Act (a “Qualified Institutional Buyer”).

SECTION 3. Additional Covenants. The Company, and as applicable, the Guarantors, jointly and
severally, further covenant and agree with the Initial Purchaser as follows:

          (a) Initial Purchaser’s Review of Proposed Amendments and Supplements. Until the later of (i)
the completion of the placement of the Securities by the Initial Purchaser with the Subsequent
Purchasers and (ii) the Closing Date, prior to amending or supplementing the Pricing Disclosure
Package or the Final Offering Memorandum, the Company shall furnish to the Initial Purchaser for
review a copy of each such proposed amendment or supplement, and

15

 

the Company shall not use any such proposed amendment or supplement to which the Initial
Purchaser reasonably objects.

          (b) Amendments and Supplements to the Offering Memorandum and Other Securities Act Matters.
If, prior to the completion of the placement of the Securities by the Initial Purchaser with the
Subsequent Purchasers, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Pricing Disclosure Package or the Final Offering Memorandum in
order to make the statements therein, in the light of the circumstances under which they were made
or then prevailing, as the case may be, not misleading, or if, in the opinion of the Initial
Purchaser or counsel for the Initial Purchaser, it is otherwise necessary to amend or supplement
the Pricing Disclosure Package or the Final Offering Memorandum to comply with law, the Company
agrees to promptly prepare (subject to Section 3 hereof), furnish at its own expense to the Initial
Purchaser, amendments or supplements to the Pricing Disclosure Package or the Final Offering
Memorandum so that the statements in the Pricing Disclosure Package or the Final Offering
Memorandum as so amended or supplemented will not be, in the light of the circumstances under which
they were made or then prevailing, as the case may be, misleading or so that the Pricing Disclosure
Package or the Final Offering Memorandum, as amended or supplemented, will comply with law.

     Following the consummation of the Exchange Offer or the effectiveness of an applicable shelf
registration statement and for so long as the Securities are outstanding if, in the reasonable
judgment of the Initial Purchaser, the Initial Purchaser or any of its affiliates (as such term is
defined in the rules and regulations under the Securities Act) are required to deliver a prospectus
in connection with sales of, or market-making activities with respect to, such securities, to
periodically amend the applicable registration statement so that the information contained therein
complies with the requirements of Section 10 of the Securities Act, to amend the applicable
registration statement or supplement the related prospectus or the documents incorporated therein
when necessary to reflect any material changes in the information provided therein so that the
registration statement and the prospectus will not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements therein, in the light
of the circumstances existing as of the date the prospectus is so delivered, not misleading and to
provide the Initial Purchaser with copies of each amendment or supplement filed and such other
documents as the Initial Purchaser may reasonably request.

     The Company hereby expressly acknowledges that the indemnification and contribution provisions
of Sections 8 and 9 hereof are specifically applicable and relate to each offering memorandum,
registration statement, prospectus, amendment or supplement referred to in this Section 3.

          (c) Copies of the Offering Memorandum. The Company agrees to furnish the Initial Purchaser,
without charge, as many copies of the Preliminary Offering Memorandum and the Final Offering
Memorandum and any amendments and supplements thereto as it shall have reasonably requested.

          (d) Blue Sky Compliance. The Company shall cooperate with the Initial Purchaser and counsel
for the Initial Purchaser to qualify or register the Securities for sale under (or obtain
exemptions from the application of) the Blue Sky or state securities laws of those

16

 

jurisdictions designated by the Initial Purchaser, shall comply with such laws and shall
continue such qualifications, registrations and exemptions in effect so long as required for the
distribution of the Securities. Neither the Company nor any Guarantor shall be required to qualify
as a foreign corporation or to take any action that would subject it to general service of process
in any such jurisdiction where it is not presently qualified or where it would be subject to
taxation as a foreign corporation. The Company will advise the Initial Purchaser promptly of the
suspension of the qualification or registration of (or any such exemption relating to) the
Securities for offering, sale or trading in any jurisdiction or any initiation or threat of any
proceeding for any such purpose, and in the event of the issuance of any order suspending such
qualification, registration or exemption, the Company shall use its best efforts to obtain the
withdrawal thereof at the earliest possible moment.

          (e) Use of Proceeds. The Company shall apply the net proceeds from the sale of the Securities
sold by it in the manner described under the caption “Use of Proceeds” in the Pricing Disclosure
Package and the Final Offering Memorandum.

          (f) The Depositary. The Company will cooperate with the Initial Purchaser and use its best
efforts to permit the Securities to be eligible for clearance and settlement through the facilities
of the Depositary.

          (g) Additional Issuer Information. Prior to the completion of the placement of the Securities
by the Initial Purchaser with the Subsequent Purchasers, the Company shall file, on a timely basis,
with the Commission all reports and documents required to be filed under Section 13 or 15 of the
Exchange Act. Additionally, at any time when the Company is not subject to Section 13 or 15 of the
Exchange Act, for the benefit of holders and beneficial owners from time to time of Securities, the
Company shall furnish, at its expense, upon request, to holders and beneficial owners of Securities
and prospective purchasers of Securities information (“Additional Issuer Information”) satisfying
the requirements of subsection d(4) of Rule 144A.

          (h) No Integration. The Company agrees that it will not and will cause its Affiliates not to
make any offer or sale of securities of the Company of any class if, as a result of the doctrine of
“integration” referred to in Rule 502 under the Securities Act, such offer or sale would render
invalid (for the purpose of (i) the sale of the Securities by the Company to the Initial Purchaser,
(ii) the resale of the Securities by the Initial Purchaser to Subsequent Purchasers or (iii) the
resale of the Securities by such Subsequent Purchasers to others) the exemption from the
registration requirements of the Securities Act provided by Section 4 thereof or by Rule 144A or by
Regulation S thereunder or otherwise.

          (i) Legended Securities. Each certificate for a Note will bear the legend contained in
“Notice to Investors” in the Pricing Disclosure Package and the Final Offering Memorandum for the
time period and upon the other terms stated in the Pricing Disclosure Package and the Final
Offering Memorandum.

          (j) Agreement Not to Offer or Sell Additional Securities. During the period beginning on the
date hereof and ending on the day that is 90 days following the date of the Final Offering
Memorandum, none of the Company or any Guarantor will, without the prior written consent of the
Initial Purchaser (which consent may be withheld at the sole discretion of the

17

 

Initial Purchaser), directly or indirectly, sell, offer, contract or grant any option to sell,
pledge, transfer or establish an open “put equivalent position” within the meaning of Rule 16a-1
under the Exchange Act, or otherwise dispose of or transfer, or announce the offering of, or file
any registration statement under the Securities Act in respect of, any debt securities of the
Company or any Guarantor substantially similar to the Securities or securities exchangeable for or
convertible into debt securities of the Company or any Guarantor substantially similar to the
Securities (other than as contemplated by this Agreement and to register the Exchange Securities).

          (k) Rating of Securities. The Company and the Guarantors shall take all commercially
reasonable action necessary to enable Standard & Poor’s Rating Services, a division of The
McGraw-Hill, Inc. Companies, and Moody’s Investor Services, Inc. to provide their respective credit
ratings to the Securities at or prior to the time of their initial issuance.

          (l) PORTAL(m) . The Company will use its best efforts to cause such Notes to be eligible for
the National Association of Securities Dealers, Inc. PORTAL market (the “PORTAL market”).

     The Initial Purchaser may in its sole discretion, waive in writing the performance by the
Company of any one or more of the foregoing covenants or extend the time for their performance.

SECTION 4. Payment of Expenses. The Company and the Guarantors, jointly and severally, agree
to pay all costs, fees and expenses incurred in connection with the performance of its obligations
hereunder and in connection with the transactions contemplated hereby, including without limitation
(i) all expenses incident to the issuance and delivery of the Securities (including all printing
and engraving costs), (ii) all necessary issue, transfer and other stamp taxes in connection with
the issuance and sale of the Securities to the Initial Purchaser, (iii) all fees and expenses of
the Company’s and the Guarantors’ counsel, independent registered public accounting firms or
independent certified public accountants and other advisors, (iv) all costs and expenses incurred
in connection with the preparation, printing, filing, shipping and distribution of each Preliminary
Offering Memorandum and the Final Offering Memorandum (including financial statements and
exhibits), and all amendments and supplements thereto, the Operative Documents, all filing fees,
attorneys’ fees and expenses incurred by the Company or the Initial Purchaser in connection with
qualifying or registering (or obtaining exemptions from the qualification or registration of) all
or any part of the Securities for offer and sale under the Blue Sky laws and, if requested by the
Initial Purchaser, preparing and printing a “Blue Sky Survey” or memorandum, and any supplements
thereto, advising the Initial Purchaser of such qualifications, registrations and exemptions, (vi)
the fees and expenses of the Trustee, including the fees and disbursements of counsel for the
Trustee in connection with the Indenture, the Securities, the Exchange Securities, the Notes
Security Documents and the Intercreditor Agreement, (vii) any fees payable in connection with the
rating of the Securities or the Exchange Securities with the ratings agencies and the listing of
the Securities with the PORTAL market, (viii) any filing fees incident to, and any reasonable fees
and disbursements of counsel to the Initial Purchaser in connection with the review by the National
Association of Securities Dealers, Inc., if any, of the terms of the sale of the Securities or the
Exchange Securities, (ix) all fees and expenses (including reasonable fees and expenses of counsel)
of the Company and the

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 Guarantors in connection with approval of the Securities by the transportation and other
expenses incurred by or on behalf of the representatives of the Company in connection with
presentations to prospective purchasers of the Securities, including, but not limited to, the cost
of any chartered aircraft, and (xi) all other costs and expenses incident to the performance by the
Company and the Guarantors of their respective other obligations under this Agreement. Except as
provided in this Section 4, Section 6, Section 8 and Section 9 hereof, the Initial Purchaser shall
pay their own expenses, including the fees and disbursements of their counsel.

SECTION 5. Conditions of the Obligations of the Initial Purchaser. The obligations of the
Initial Purchaser to purchase and pay for the Securities as provided herein on the Closing Date
shall be subject to the accuracy of the representations and warranties on the part of the Company
and the Guarantors set forth in Section 1 hereof as of the date hereof and as of the Closing Date
as though then made and to the timely performance by the Company and the Guarantors of their
covenants and other obligations hereunder, and to each of the following additional conditions:

          (a) Accountants’ Comfort Letter. On the date hereof, the Initial Purchaser shall have
received from each of Fitts Roberts & Co., P.C., UHY, LLP and UHY Mann Frankfort Stein & Lipp CPAs,
LLP, a letter dated the date hereof addressed to the Initial Purchaser, in form and substance
satisfactory to the Initial Purchaser, containing statements and information of the type ordinarily
included in accountant’s “comfort letters” to the Initial Purchaser, delivered according to
Statement of Auditing Standards Nos. 71, 72 and 76 (or any successor bulletins), with respect to
the audited and unaudited and pro forma financial statements and certain financial information
contained in the Pricing Disclosure Package and the Final Offering Memorandum.

          (b) No Material Adverse Change or Ratings Agency Change. For the period from and after the
date of this Agreement and prior to the Closing Date:

     (i) in the reasonable judgment of the Initial Purchaser there shall not have
occurred any Material Adverse Change; and

     (ii) there shall not have occurred any downgrading, nor shall any notice
have been given of any intended or potential downgrading or of any review for a
possible change that does not indicate the direction of the possible change, in
the rating accorded any securities of the Company or any of its subsidiaries by
any “nationally recognized statistical rating organization” as such term is
defined for purposes of Rule 436 under the Securities Act.

          (c) Note Security Documents. On the Closing Date, the Company, each Guarantor, the Trustee,
the Agent and other parties thereto shall have executed and delivered each of the Notes Security
Documents, and the Notes Security Documents shall be in full force and effect, and the Trustee, for
the benefit of the holders of the Securities, shall have a valid and perfected security interest in
respect of the Collateral securing the obligations of the Company under the Indenture and such
security interest of the holders will not be subject to or subordinated to any Liens other than
Permitted Liens.

          (d) Opinion of Counsel for the Company. On the Closing Date the Initial Purchaser shall have
received the favorable opinion of Chamberlain, Hrdlicka, White, Williams

19

 

          & Martin, counsel for the Company, dated as of such Closing Date, the form of which is
attached as Exhibit B.

          (e) Opinion of New York Counsel for the Company(f) . On the Closing Date the Initial
Purchaser shall have received the favorable opinion of Satterlee Stephens Burke & Burke, LLP, New
York counsel for the Company, dated as of such Closing Date, the form of which is attached as
Exhibit C.

          (f) Opinion of Counsel for the Initial Purchaser. On the Closing Date the Initial Purchaser
shall have received the favorable opinion of Shearman and Sterling LLP, counsel for the Initial
Purchaser, dated as of such Closing Date, with respect to such matters as may be reasonably
requested by the Initial Purchaser.

          (g) Officers’ Certificate. On the Closing Date the Initial Purchaser shall have received a
written certificate executed by the Chairman of the Board, Chief Executive Officer or President of
the Company and the Chief Financial Officer or Chief Accounting Officer of the Company, dated as of
the Closing Date, to the effect set forth in subsection (b) of this Section 5, and further to the
effect that:

     (i) for the period from and after the date of this Agreement and prior to
the Closing Date there has not occurred any Material Adverse Change;

     (ii) the representations, warranties and covenants of the Company and the
Guarantors set forth in Section 1 of this Agreement are true and correct with the
same force and effect as though expressly made on and as of the Closing Date; and

     (iii) the Company and the Guarantors have complied with all the agreements
and satisfied all the conditions on its part to be performed or satisfied at or
prior to the Closing Date.

          (h) Bring-down Comfort Letter. On the Closing Date the Initial Purchaser shall have received
from each of Fitts Roberts & Co., P.C., UHY, LLP and UHY Mann Frankfort Stein & Lipp CPAs, LLP, a
letter dated such date, in form and substance satisfactory to the Initial Purchaser, to the effect
that they reaffirm the statements made in the letter furnished by them pursuant to subsection (a)
of this Section 5, except that the specified date referred to therein for the carrying out of
procedures shall be no more than three business days prior to the Closing Date and that their
procedures shall extend to financial information in the Final Offering Memorandum not contained in
the Pricing Disclosure Package.

          (i) PORTAL Listing. At the Closing Date the Notes shall have been designated for trading on
the PORTAL market.

          (j) Registration Rights Agreement. The Company and each of the Guarantors shall have entered
into the Registration Rights Agreement and the Initial Purchaser shall have received executed
counterparts thereof.

20

 

          (k) Security Agreement and Intercreditor Agreement. The security granted to The CIT
Group/Equipment Financing, Inc. (“CIT”) pursuant to the security agreements listed as numbers 2, 7,
8, 9 and 10 on Exhibit A to the release agreement (the “Release Agreement”), to be dated prior to
the Closing Date, among CIT, Quantum Geophysical, Inc., Geophysical Development Corporation, Trace
Energy Services, Ltd., Trace Energy Services, Inc. and the Company, has been released pursuant to
the Release Agreement, and the intercreditor agreement, dated as of July 28, 2006, by and among PNC
Bank, National Association, as agent, the Lenders as defined therein, CIT and the Borrowers, as
defined therein, shall have been terminated.

          (l) Dissolution of Certain Subsidiaries. The Company shall have dissolved its two
subsidiaries, Quantum Geophysical Services, Inc. and Grant Services, Inc.

          (m) Additional Documents. On or before the Closing Date, the Initial Purchaser and counsel
for the Initial Purchaser shall have received such information, documents and opinions as they may
reasonably require for the purposes of enabling them to pass upon the issuance and sale of the
Securities as contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions or agreements, herein
contained.

     If any condition specified in this Section 5 is not satisfied when and as required to be
satisfied, this Agreement may be terminated by the Initial Purchaser by notice to the Company at
any time on or prior to the Closing Date, which termination shall be without liability on the part
of any party to any other party, except that Section 4, Section 6, Section 8 and Section 9 shall at
all times be effective and shall survive such termination.

SECTION 6. Reimbursement of Initial Purchaser’s Expenses. If this Agreement is terminated by
the Initial Purchaser pursuant to Section 5, or if the sale to the Initial Purchaser of the
Securities on the Closing Date is not consummated because of any refusal, inability or failure on
the part of the Company or any Guarantor to perform any agreement herein or to comply with any
provision hereof, the Company and the Guarantors, jointly and severally, agree to reimburse the
Initial Purchaser, upon demand, for all out-of-pocket expenses that shall have been reasonably
incurred by the Initial Purchaser in connection with the proposed purchase and the offering and
sale of the Securities, including but not limited to fees and disbursements of counsel, printing
expenses, travel expenses, postage, facsimile and telephone charges.

SECTION 7. Offer, Sale and Resale Procedures. The Initial Purchaser, on the one hand, and the
Company and each of the Guarantors, on the other hand, hereby establish and agree to observe the
following procedures in connection with the offer and sale of the Securities:

     (A) Offers and sales of the Securities will be made only by the Initial Purchaser or its
Affiliates qualified to do so in the jurisdictions in which such offers or sales are made. Each
such offer or sale shall only be made to persons whom the offeror or seller reasonably believes to
be qualified institutional buyers (as defined in Rule 144A under the Securities Act), or non-U.S.
persons outside the United States to whom the offeror or seller reasonably believes offers and
sales of the Securities may be made in reliance upon Regulation S under the Securities Act, upon
the terms and conditions set forth in Annex I hereto, which Annex I is hereby expressly made a part
hereof.

21

 

     (B) The Securities will be offered by approaching prospective Subsequent Purchasers on an
individual basis. No general solicitation or general advertising (within the meaning of Rule 502
under the Securities Act) will be used in the United States in connection with the offering of the
Securities.

     (C) Upon original issuance by the Company, and until such time as the same is no longer
required under the applicable requirements of the Securities Act, the Securities (and all
securities issued in exchange therefor or in substitution thereof, other than the Exchange
Securities) shall bear the legend set forth in the Pricing Disclosure Package and the Final
Offering Memorandum under the caption “Notice to Investors.”

     Following the sale of the Securities by the Initial Purchaser to Subsequent Purchasers
pursuant to the terms hereof, the Initial Purchaser shall not be liable or responsible to the
Company or any Guarantor for any losses, damages or liabilities suffered or incurred by the
Company, including any losses, damages or liabilities under the Securities Act, arising from or
relating to any resale or transfer of any Security.

SECTION 8. Indemnification.

          (a) Indemnification of the Initial Purchaser. Each of the Company and the Guarantors, jointly
and severally, agrees to indemnify and hold harmless the Initial Purchaser, its directors, officers
and employees, and each person, if any, who controls the Initial Purchaser within the meaning of
the Securities Act and the Exchange Act against any loss, claim, damage, liability or expense, as
incurred, to which the Initial Purchaser or such controlling person may become subject, under the
Securities Act, the Exchange Act or other federal or state statutory law or regulation, or at
common law or otherwise (including in settlement of any litigation, if such settlement is effected
with the written consent of the Company, and/or the Guarantors), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or
is based: (i) upon any untrue statement or alleged untrue statement of a material fact contained in
the Pricing Disclosure Package or the Final Offering Memorandum (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made, not
misleading; or (ii) in whole or in part upon any inaccuracy in the representations and warranties
of the Company or any Guarantor contained herein; or (iii) in whole or in part upon any failure of
the Company or any Guarantor to perform its obligations hereunder or under law; or (iv) any act or
failure to act or any alleged act or failure to act by the Initial Purchaser in connection with, or
relating in any manner to, the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of or based upon any matter
covered by clause (i) above, provided that the Company shall not be liable under this clause (iv)
to the extent that a court of competent jurisdiction shall have determined by a final judgment that
such loss, claim, damage, liability or action resulted directly from any such acts or failures to
act undertaken or omitted to be taken by the Initial Purchaser through its gross negligence or
willful misconduct; and to reimburse the Initial Purchaser and each such controlling person for any
and all expenses (including the fees and disbursements of counsel chosen by the Initial Purchaser)
as such expenses are reasonably incurred by the Initial Purchaser or such controlling person in
connection with investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or

22

 

action; provided, however, that the foregoing indemnity agreement shall not apply to any loss,
claim, damage, liability or expense to the extent, but only to the extent, arising out of or based
upon any untrue statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the Company by the Initial
Purchaser expressly for use in the Pricing Disclosure Package or the Final Offering Memorandum (or
any amendment or supplement thereto). The indemnity agreement set forth in this Section 8(a) shall
be in addition to any liabilities that the Company or the Guarantors may otherwise have.

          (b) Indemnification of the Company, the Guarantors and their respective Directors and
Officers. The Initial Purchaser agrees to indemnify and hold harmless the Company, the Guarantors,
and each of their respective directors and each person, if any, who controls the Company or any
Guarantor within the meaning of the Securities Act or the Exchange Act, against any loss, claim,
damage, liability or expense, as incurred, to which the Company or any Guarantor or any such
director, or controlling person may become subject, under the Securities Act, the Exchange Act, or
other federal or state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written consent of the
Initial Purchaser), insofar as such loss, claim, damage, liability or expense (or actions in
respect thereof as contemplated below) arises out of or is based upon any untrue or alleged untrue
statement of a material fact contained in the Pricing Disclosure Package or the Final Offering
Memorandum (or any amendment or supplement thereto), or arises out of or is based upon the omission
or alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged omission was made in
the Pricing Disclosure Package or the Final Offering Memorandum (or any amendment or supplement
thereto), in reliance upon and in conformity with written information furnished to the Company by
the Initial Purchaser expressly for use therein; and to reimburse the Company, the Guarantors, or
any such director or controlling person for any legal and other expenses reasonably incurred by the
Company, the Guarantors, or any such director or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim, damage, liability,
expense or action. The Company and each Guarantor hereby acknowledges that the only information
that the Initial Purchaser has furnished to the Company expressly for use in the Pricing Disclosure
Package and the Final Offering Memorandum (or any amendment or supplement thereto) are the
statements set forth in the tenth paragraph, concerning stabilization by the Initial Purchaser,
under the caption “Plan of Distribution” in the Pricing Disclosure Package and the Final Offering
Memorandum; and the Initial Purchaser confirms that such statements are correct. The indemnity
agreement set forth in this Section 8(b) shall be in addition to any liabilities that the Initial
Purchaser may otherwise have.

          (c) Notifications and Other Indemnification Procedures. Promptly after receipt by an
indemnified party under this Section 8 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an indemnifying party
under this Section 8, notify the indemnifying party in writing of the commencement thereof, but the
omission so to notify the indemnifying party will not relieve it from any liability which it may
have to any indemnified party for contribution or otherwise than under the indemnity agreement
contained in this Section 8 or to the extent it is not prejudiced as

23

 

a proximate result of such failure. In case any such action is brought against any
indemnified party and such indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to participate in and, to the extent
that it shall elect, jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall have reasonably
concluded that a conflict may arise between the positions of the indemnifying party and the
indemnified party in conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise participate in the defense
of such action on behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of such indemnifying party’s election so to assume the
defense of such action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense thereof unless (i)
the indemnified party shall have employed separate counsel in accordance with the proviso to the
next preceding sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel (together with local counsel), approved
by the indemnifying party, representing the indemnified parties who are parties to such action) or
(ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party
to represent the indemnified party within a reasonable time after notice of commencement of the
action, in each of which cases the fees and expenses of counsel shall be at the expense of the
indemnifying party.

          (d) Settlements. The indemnifying party under this Section 8 shall not be liable for any
settlement of any proceeding effected without its written consent, but if settled with such consent
or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement, compromise or consent to the entry of judgment in any
pending or threatened action, suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity was or could have been sought hereunder by such indemnified
party, unless such settlement, compromise or consent includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of such action, suit or
proceeding.

SECTION 9. Contribution. If the indemnification provided for in Section 8 is for any reason
held to be unavailable to or otherwise insufficient to hold harmless an indemnified party in
respect of any losses, claims, damages, liabilities or expenses referred to therein, then (i) each
indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified
party, as incurred, as a result of any losses, claims, damages, liabilities or expenses referred to
therein in such proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Initial Purchaser, on the other hand, from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) above is not

24

 

 permitted by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of the Company and
the Guarantors, on the one hand, and the Initial Purchaser, on the other hand, in connection with
the statements or omissions or inaccuracies in the representations and warranties herein which
resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the Guarantors, on the
one hand, and the Initial Purchaser, on the other hand, in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as
the total net proceeds from the offering of the Securities pursuant to this Agreement (before
deducting expenses) received by the Company or the Guarantors, and the total discount received by
the Initial Purchaser bear to the aggregate initial offering price of the Securities. The relative
fault of the Company and the Guarantors, on the one hand, and the Initial Purchaser, on the other
hand, shall be determined by reference to, among other things, whether any such untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a material fact or any
such inaccurate or alleged inaccurate representation or warranty relates to information supplied by
the Company or the Guarantors, on the one hand, or the Initial Purchaser, on the other hand, and
the parties’ relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

     The amount paid or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include, subject to the limitations set forth in
Section 8, any legal or other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in Section 8 with respect
to notice of commencement of any action shall apply if a claim for contribution is to be made under
this Section 9; provided, however, that no additional notice shall be required with respect to any
action for which notice has been given under Section 8 for purposes of indemnification.

     The Company, the Guarantors and the Initial Purchaser agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata allocation or by
any other method of allocation which does not take account of the equitable considerations referred
to in this Section 9.

     Notwithstanding the provisions of this Section 9, the Initial Purchaser shall not be required
to contribute any amount in excess of the discount received by the Initial Purchaser in connection
with the Securities distributed by it. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11 of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this Section 9, each
director, officer and employee of the Initial Purchaser and each person, if any, who controls an
Initial Purchaser within the meaning of the Securities Act and the Exchange Act shall have the same
rights to contribution as the Initial Purchaser, and each director of the Company or any Guarantor,
and each person, if any, who controls the Company or any Guarantor within the meaning of the
Securities Act and the Exchange Act shall have the same rights to contribution as the Company or
any Guarantor.

SECTION 10. Termination of this Agreement. Prior to the Closing Date, this Agreement may be
terminated by the Initial Purchaser by notice given to the Company if at any time: (i) trading

25

 

 in securities generally on either the Nasdaq Stock Market or the New York Stock Exchange shall
have been suspended or limited, or minimum or maximum prices shall have been generally established
on any of such stock exchanges by the Commission or the NASD; (ii) a general banking moratorium
shall have been declared by any of federal, New York or California authorities; (iii) there has
been a material disruption in commercial banking or securities settlement, payment or clearance
services in the United States; (iv) there shall have occurred any outbreak or escalation of
national or international hostilities or any crisis or calamity, or any change in the United States
or international financial markets, or any substantial change or development involving a
prospective substantial change in United States’ or international political, financial or economic
conditions, as in the reasonable judgment of the Initial Purchaser is material and adverse and
makes it impracticable to market the Securities in the manner and on the terms described in the
Pricing Disclosure Package and the Final Offering Memorandum or to enforce contracts for the sale
of securities; (v) in the reasonable judgment of the Initial Purchaser there shall have occurred
any Material Adverse Change; or (vi) the Company or any Guarantor shall have sustained a loss by
strike, fire, flood, earthquake, accident or other calamity of such character as in the reasonable
judgment of the Initial Purchaser may interfere materially with the conduct of the business and
operations of the Company regardless of whether or not such loss shall have been insured. Any
termination pursuant to this Section 10 shall be without liability on the part of (i) the Company
or any Guarantor to any Initial Purchaser, except that the Company and the Guarantors shall be
obligated to reimburse the expenses of the Initial Purchaser pursuant to Sections 4 and 6 hereof,
(ii) the Initial Purchaser to the Company or any Guarantor, or (iii) any party hereto to any other
party except that the provisions of Section 8 and Section 9 shall at all times be effective and
shall survive such termination.

SECTION 11. Representations and Indemnities to Survive Delivery. The respective indemnities,
agreements, representations, warranties and other statements of the Company and the Guarantors, of
their respective officers and of the Initial Purchaser set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation made by or on
behalf of the Initial Purchaser or the Company or the Guarantors or any of its or their respective
partners, officers or directors or any controlling person, as the case may be, and will survive
delivery of and payment for the Securities sold hereunder and any termination of this Agreement.

SECTION 12. Notices. All communications hereunder shall be in writing and shall be mailed,
hand delivered or telecopied and confirmed to the parties hereto as follows:

If to the Initial Purchaser:

RBC Capital Markets Corporation

1211 Avenue of the Americas, 32nd Floor

New York, NY 10036

Facsimile: 212-703-2295

Attention: High Yield Capital Markets

with a copy to:

Shearman & Sterling LLP

26

 

599 Lexington Avenue

New York, NY 10022

Facsimile: 646-848-7835

Attention: Bruce Czachor, Esq.

If to the Company or the Guarantors:

Geokinetics, Inc.

One Riverway, Suite 2100

Houston, Texas 77056

Facsimile: 281-398-9996

Attention: Scott A. McCurdy, Vice President and Chief Financial Officer

with a copy to:

Chamberlain, Hrdlicka, White, Williams & Martin

1200 Smith Street, Suite 1400

Houston, Texas 77002

Facsimile: (713) 658-2553

Attention: James J. Spring, III

     Any party hereto may change the address for receipt of communications by giving written notice
to the others.

SECTION 13. Successors. This Agreement will inure to the benefit of and be binding upon the
parties hereto, including any substitute Initial Purchaser or Initial Purchasers pursuant to
Section 16 hereof, and to the benefit of the employees, officers and directors and controlling
persons referred to in Section 8 and Section 9, and in each case their respective successors, and
no other person will have any right or obligation hereunder. The term “successors” shall not
include any purchaser of the Securities as such from the Initial Purchaser merely by reason of such
purchase.

SECTION 14. Partial Unenforceability. The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or enforceability of any
other Section, paragraph or provision hereof. If any Section, paragraph or provision of this
Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be
made such minor changes (and only such minor changes) as are necessary to make it valid and
enforceable.

SECTION 15. Governing Law Provisions. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED IN SUCH STATE.

     (a) Consent to Jurisdiction. Any legal suit, action or proceeding arising out of or based
upon this Agreement or the transactions contemplated hereby (“Related Proceedings”) may be
instituted in the federal courts of the United States of America located in the City and County of
New York or the courts of the State of New York in each case located in the City and County of New
York (collectively, the “Specified Courts”), and each party irrevocably submits to the non-

27

 

exclusive jurisdiction (except for proceedings instituted in regard to the enforcement of a
judgment of any such court (a “Related Judgment”), as to which such jurisdiction is non-exclusive)
of such courts in any such suit, action or proceeding. Service of any process, summons, notice or
document by mail to such party’s address set forth above shall be effective service of process for
any suit, action or other proceeding brought in any such court. The parties irrevocably and
unconditionally waive any objection to the laying of venue of any suit, action or other proceeding
in the Specified Courts and irrevocably and unconditionally waive and agree not to plead or claim
in any such court that any such suit, action or other proceeding brought in any such court has been
brought in an inconvenient forum.

     (b) Waiver of Immunity. With respect to any Related Proceeding, each party irrevocably
waives, to the fullest extent permitted by applicable law, all immunity (whether on the basis of
sovereignty or otherwise) from jurisdiction, service of process, attachment (both before and after
judgment) and execution to which it might otherwise be entitled in the Specified Courts, and with
respect to any Related Judgment, each party waives any such immunity in the Specified Courts or any
other court of competent jurisdiction, and will not raise or claim or cause to be pleaded any such
immunity at or in respect of any such Related Proceeding or Related Judgment, including, without
limitation, any immunity pursuant to the United States Foreign Sovereign Immunities Act of 1976, as
amended. 

SECTION 16. No Fiduciary Duty. The Company and each Guarantor hereby acknowledges that the
Initial Purchaser is acting solely as an initial purchaser in connection with the purchase and sale
of the Securities. The Company further acknowledges that the Initial Purchaser is acting pursuant
to a contractual relationship created solely by this Agreement entered into on an arm’s length
basis and in no event do the parties intend that the Initial Purchaser act or be responsible as a
fiduciary to the Company or any Guarantor, their management, stockholders, creditors or any other
person in connection with any activity that the Initial Purchaser may undertake or has undertaken
in furtherance of the purchase and sale of the Securities, either before or after the date hereof.
The Initial Purchaser hereby expressly disclaims any fiduciary or similar obligations to the
Company or any Guarantor, either in connection with the transactions contemplated by this Agreement
or any matters leading up to such transactions, and the Company and each Guarantor hereby confirms
its understanding and agreement to that effect. The Company, each Guarantor and the Initial
Purchaser agree that they are each responsible for making their own independent judgments with
respect to any such transactions, and that any opinions or views expressed by the Initial Purchaser
to the Company or any Guarantor regarding such transactions, including but not limited to any
opinions or views with respect to the price or market for the Securities, do not constitute advice
or recommendations to the Company or any Guarantor. The Company and each Guarantor hereby waives
and releases, to the fullest extent permitted by law, any claims that the Company or any Guarantor
may have against the Initial Purchaser with respect to any breach or alleged breach of any
fiduciary or similar duty to the Company or any Guarantor in connection with the transactions
contemplated by this Agreement or any matters leading up to such transactions.

SECTION 17. General Provisions. This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter hereof. This
Agreement may be executed in two or more counterparts, each one of which shall be an original,

28

 

 with the same effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the parties hereto, and
no condition herein (express or implied) may be waived unless waived in writing by each party whom
the condition is meant to benefit. The Table of Contents and the section headings herein are for
the convenience of the parties only and shall not affect the construction or interpretation of this
Agreement.

29

 

     If the foregoing is in accordance with your understanding of our agreement, kindly sign and
return to the Company the enclosed copies hereof, whereupon this instrument, along with all
counterparts hereof, shall become a binding agreement in accordance with its terms.

	 	 	 	 	 
	 	Very truly yours,

Geokinetics Inc.

 	 
	 	By:  	 /s/
Scott A. McCurdy
	 
	 	 	Scott A. McCurdy, Vice President 	 
	 	 	 	 
	 
	 	Geokinetics Holdings, Inc.

 	 
	 	By:  	 /s/
Scott A. McCurdy	 
	 	 	Scott A. McCurdy, Vice President 	 
	 	 	 	 
	 
	 	Quantum Geophysical, Inc.

 	 
	 	By:  	 /s/
Scott A. McCurdy	 
	 	 	Scott A. McCurdy, Vice President 	 
	 	 	 	 
	 
	 	Geophysical Development Corporation

 	 
	 	By:  	 /s/
Scott A. McCurdy	 
	 	 	Scott A. McCurdy, Vice President 	 
	 	 	 	 
	 

Purchase Agreement

 

 

	 	 	 	 	 
	 	Trace Energy Services, Inc.

 	 
	 	By:  	 /s/
Scott A. McCurdy	 
	 	 	Scott A. McCurdy, Vice President 	 
	 	 	 	 
	 
	 	Grant Geophysical, Inc.

 	 
	 	By:  	 /s/
Scott A. McCurdy	 
	 	 	Scott A. McCurdy, Vice President 	 
	 	 	 	 
	 
	 	Grant Geophysical Corp.

 	 
	 	By:  	 /s/
Scott A. McCurdy	 
	 	 	Scott A. McCurdy, Vice President 	 
	 	 	 	 
	 
	 	Grant Geophysical (Int’l), Inc.

 	 
	 	By:  	 /s/
Scott A. McCurdy	 
	 	 	Scott A. McCurdy, Vice President 	 
	 	 	 	 
	 
	 	Advanced Seismic Technology, Inc.

 	 
	 	By:  	 /s/
Scott A. McCurdy	 
	 	 	Scott A. McCurdy, Vice President 	 
	 	 	 	 
	 

Purchase Agreement

 

 

     The foregoing Purchase Agreement is hereby confirmed and accepted by the Initial Purchaser as
of the date first above written.

	 	 	 	 	 
	RBC Capital Markets Corporation	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name: David Capaldi
	 	 
	 

	 	Title: Director	 	 

Purchase
Agreement

 

 

SCHEDULE A

	 	 	 	 	 
	 	 	Aggregate	 
	 	 	Principal	 
	 	 	Amount of	 
	 	 	Securities to be	 
	Initial Purchaser	 	Purchased	 
	RBC Capital Markets Corporation
	 	$	110,000,000	 
	 
	 	 	 	 
	Total
	 	$	110,000,000	 
	 
	 	 	 

Schedule A-1

 

 

SCHEDULE B

Advanced Seismic Technology, Inc.

Geokinetics Holdings, Inc.

Geophysical Development Corporation

Grant Geophysical Corp.

Grant Geophysical, Inc.

Grant Geophysical (Int’l), Inc.

Quantum Geophysical, Inc.

Trace Energy Services, Inc.

Exhibit B-1

 

 

EXHIBIT A

Exhibit A-1

 

 

EXHIBIT B

     Opinion of counsel for the Company to be delivered pursuant to Section 5(d) of the Purchase
Agreement.

     (i) The Company has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware.

     (ii) The Company has corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Pricing Disclosure Package and the Final Offering
Memorandum and to enter into and perform its obligations under the Purchase Agreement, the
Registration Rights Agreement, the Indenture, the Securities and the Exchange Securities.

     (iii) The Company is duly qualified as a foreign corporation to transact business and is in
good standing in each other jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business, except for such jurisdictions
where the failure to so qualify or to be in good standing would not, individually or in the
aggregate, result in a Material Adverse Change.

     (iv) Each Guarantor has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct its business as described in the
Pricing Disclosure Package and the Final Offering Memorandum and, to the best knowledge of such
counsel, is duly qualified as a foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except for such jurisdictions where the failure to
so qualify or to be in good standing would not, individually or in the aggregate, result in a
Material Adverse Change.

     (v) The Purchase Agreement has been duly authorized, executed and delivered by the Company and
each Guarantor.

     (vi) The Registration Rights Agreement has been duly authorized, executed and delivered by the
Company.

     (vii) The Indenture has been duly authorized, executed and delivered by the Company and each
Guarantor.

     (viii) The Notes are in the form contemplated by the Indenture, have been duly authorized by
the Company for issuance and sale pursuant to this Agreement and the Indenture.

     (ix) The Exchange Notes have been duly and validly authorized for issuance by the Company.

     (x) The Guarantees of the Notes and the Exchange Notes are in the respective forms
contemplated by the Indenture, have been duly authorized for issuance and sale pursuant to this

Exhibit B-1

 

 

Agreement and the Indenture and, at the Closing Date, will have been duly executed by each of
the Guarantors.

     (xi) The Securities and the Indenture conform in all material respects to the descriptions
thereof contained in the Pricing Disclosure Package and the Final Offering Memorandum.

     (xii) The statements in the Pricing Disclosure Package and the Final Offering Memorandum under
the captions “Description of Other Indebtedness,” “Description of the Notes,” “Material U.S.
Federal Income Tax Considerations” and “Notice to Investors,” insofar as such statements constitute
matters of law, summaries of legal matters, the Company’s charter or by-law provisions, documents
or legal proceedings, or legal conclusions, have been reviewed by such counsel and fairly present
and summarize, in all material respects, the matters referred to therein.

     (xiii) No consent, approval, authorization or other order of, or registration or filing with,
any court or other governmental or regulatory authority or agency, is required for the Company’s
execution, delivery and performance of the Operative Documents, or the issuance and delivery of the
Securities or the Exchange Securities, or consummation of the transactions contemplated hereby and
thereby and by the Pricing Disclosure Package and the Final Offering Memorandum, except such as
have been obtained or made by the Company and are in full force and effect under the Securities
Act, applicable state securities or blue sky laws and except such as may be required by federal and
state securities laws with respect to the Company’s obligations under the Registration Rights
Agreement, and filings necessary to perfect the secured interests in the Collateral.

     (xiv) The execution and delivery of the Operative Documents by the Company and the performance
by the Company of its obligations thereunder: (i) have been duly authorized by all necessary
corporate action on the part of the Company; (ii) will not result in any violation of the
provisions of the charter or by-laws of the Company or any subsidiary; (iii) will not constitute a
breach of, or Default or a Debt Repayment Triggering Event under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of
its subsidiaries pursuant to, the PNC Credit Facility, or to the best knowledge of such counsel,
any other material Existing Instrument; or (iv) to the best knowledge of such counsel, will not
result in any violation of any law, administrative regulation or administrative or court decree
applicable to the Company or any subsidiary.

     (xv) The Company is not, and after receipt of payment for the Securities will not be, an
“investment company” within the meaning of Investment Company Act.

     (xvi) To the best knowledge of such counsel, neither the Company nor any subsidiary is in
violation of its charter or by-laws or any law, administrative regulation or administrative or
court decree applicable to the Company or any subsidiary or is in Default in the performance or
observance of any obligation, agreement, covenant or condition contained in any material Existing
Instrument, except in each such case for such violations or Defaults as would not, individually or
in the aggregate, result in a Material Adverse Change.

Exhibit B-2

 

 

     (xvii) Assuming the accuracy of the representations, warranties and covenants of the Company
and the Initial Purchaser contained herein, no registration of the Notes or the Guarantees under
the Securities Act, and no qualification of an indenture under the Trust Indenture Act with respect
thereto, is required in connection with the purchase of the Securities by the Initial Purchaser or
the initial resale of the Securities by the Initial Purchaser to Qualified Institutional Buyers in
the manner contemplated by this Agreement and the Pricing Disclosure Package and the Final Offering
Memorandum other than any registration or qualification that may be required in connection with the
Exchange Offer contemplated by the Pricing Disclosure Package and the Final Offering Memorandum or
in connection with the Registration Rights Agreement. Such counsel need express no opinion,
however, as to when or under what circumstances any Initial Notes initially sold by the Initial
Purchaser may be reoffered or resold.

     In addition, such counsel shall deliver opinions relating to the Notes Security Documents
substantially similar in all material respects to the opinions such counsel delivered to PNC in
June.

     In addition, such counsel shall state that they have participated in conferences with officers
and other representatives of the Company, representatives of the independent public or certified
public accountants for the Company and with representatives of the Initial Purchaser at which the
contents of the Pricing Disclosure Package and the Final Offering Memorandum, and any supplements
or amendments thereto, and related matters were discussed and, although such counsel is not passing
upon and does not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Pricing Disclosure Package and the Final Offering Memorandum (other
than as specified above), and any supplements or amendments thereto, on the basis of the foregoing,
nothing has come to their attention which would lead them to believe that (i) the Pricing
Disclosure Package (other than the financial statements and other financial data contained therein
or omitted therefrom, as to which they are not requested to comment), as of the Time of Execution,
contained an untrue statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under which they were made,
not misleading, or (ii) the Final Offering Memorandum (other than the financial statements and
other financial data contained therein or omitted therefrom, as to which they are not requested to
comment), as of its date or the Closing Date, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading.

     In rendering such opinion, such counsel may rely as to matters involving the application of
laws of any jurisdiction other than the General Corporation Law of the State of Delaware, the laws
of the State of New York or the federal law of the United States, to the extent they deem proper
and specified in such opinion, upon the opinion (which shall be dated the Closing Date shall be
satisfactory in form and substance to the Initial Purchaser, shall expressly state that the Initial
Purchaser may rely on such opinion as if it were addressed to it and shall be furnished to the
Initial Purchaser) of other counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Initial Purchaser; provided, however, that such counsel shall
further state that they believe that they and the Initial Purchaser is justified in relying upon
such opinion of other counsel, and as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and public officials.

Exhibit B-3

 

 

EXHIBIT C

Opinion of New York counsel for the Company to be delivered pursuant to Section 5(e) of the
Purchase Agreement.

     (i) The Purchase Agreement is enforceable in accordance with its terms, except as
rights to indemnification thereunder may be limited by applicable law and except as
the enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and remedies of
creditors or by general equitable principles.

     (ii) The Registration Rights Agreement is enforceable in accordance with its
terms, except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the rights
and remedies of creditors or by general equitable principles and except as rights to
indemnification may be limited by applicable law.

     (iii) The Intercreditor Agreement is enforceable in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the rights
and remedies of creditors or by general equitable principles and except as rights to
indemnification may be limited by applicable law.

     (iv) The Note Security Documents are enforceable in accordance with their terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the rights
and remedies of creditors or by general equitable principles and except as rights to
indemnification may be limited by applicable law

     (v) The Indenture (assuming due authorization, execution and delivery thereof by
the Trustee) constitutes a valid and binding agreement of the Company and each
Guarantor, enforceable against the Company and each Guarantor in accordance with its
terms, except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the rights
and remedies of creditors or by general principles of equity.

     (vi) The Notes are in the form contemplated by the Indenture and, when executed
by the Company and authenticated by the Trustee in the manner provided in the
Indenture (assuming the due authorization, execution and delivery of the Indenture by
the Trustee) and delivered against payment of the purchase price therefor, will
constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or affecting enforcement of the rights and remedies of

Exhibit C-1

 

 

creditors or by general principles of equity and will be entitled to the benefits
of the Indenture.

     (vii) The Exchange Notes, when issued and authenticated in accordance with the
terms of the Indenture, the Registration Rights Agreement and the Exchange Offer, will
constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or affecting enforcement of the rights and remedies of creditors or by
general principles of equity and will be entitled to the benefits of the Indenture.

     (viii) The Guarantees of the Notes and the Exchange Notes are in the respective forms contemplated
by the Indenture and, when the Notes and Exchange Notes have been authenticated in the manner
provided in the Indenture and delivered against payment of the purchase price therefor, will
constitute valid and binding agreements of the Guarantors, enforceable in accordance with their
terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and remedies of creditors or
by general equitable principles and will be entitled to the benefits of the Indenture.

Exhibit C-2

 

 

ANNEX I

     Resale Pursuant to Regulation S or Rule 144A. The Initial Purchaser understands that:

     The Initial Purchaser agrees that it has not offered or sold and will not offer or sell the
Securities in the United States or to, or for the benefit or account of, a U.S. Person (other than
a distributor), in each case, as defined in Rule 902 under the Securities Act (i) as part of its
distribution at any time and (ii) otherwise until 40 days after the later of the commencement of
the offering of the Securities pursuant hereto and the Closing Date, other than in accordance with
Regulation S of the Securities Act or another exemption from the registration requirements of the
Securities Act. The Initial Purchaser agrees that, during such 40-day restricted period, it will
not cause any advertisement with respect to the Securities (including any “tombstone”
advertisement) to be published in any newspaper or periodical or posted in any public place and
will not issue any circular relating to the Securities, except such advertisements as are permitted
by and include the statements required by Regulation S.

     The Initial Purchaser agrees that, at or prior to confirmation of a sale of Securities by it
to any distributor, dealer or person receiving a selling concession, fee or other remuneration
during the 40-day restricted period referred to in Rule 903 under the Securities Act, it will send
to such distributor, dealer or person receiving a selling concession, fee or other remuneration a
confirmation or notice to substantially the following effect:

“The Securities covered hereby have not been registered under the U.S. Securities
Act of 1933, as amended (the “Securities Act”), and may not be offered and sold
within the United States or to, or for the account or benefit of, U.S. persons (i)
as part of your distribution at any time or (ii) otherwise until 40 days after the
later of the date the Notes were first offered to persons other than “distributors”
(as defined in Regulation S) in reliance upon Regulation S and the Closing Date,
except in either case in accordance with Regulation S under the Securities Act (or
Rule 144A or to Accredited Institutions in transactions that are exempt from the
registration requirements of the Securities Act), and in connection with any
subsequent sale by you of the Notes covered hereby in reliance on Regulation S
during the period referred to above to any distributor, dealer or person receiving a
selling concession, fee or other remuneration, you must deliver a notice to
substantially the foregoing effect. Terms used above have the meanings assigned to
them in Regulation S.”

Annex I-1

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