Document:

Exhibit
10.1

 

PURCHASE AGREEMENT

 

 

By and Among

 

 

Geokinetics Inc.

 

and

 

Certain direct and indirect wholly-owned

subsidiaries of Geokinetics Inc.

 

and

 

 

Petroleum Geo-Services ASA

 

 

and

 

 

Certain direct and indirect wholly-owned

subsidiaries of Petroleum Geo-Services ASA

 

 

Dated December 3, 2009

 

 

TABLE OF CONTENTS

 

	
  ARTICLE
  I. PURCHASE AND SALE

  	
  2

  
	
  Section 1.1

  	
  Transfer
  of Purchased Assets and Purchased Securities

  	
  2

  
	
  Section 1.2

  	
  Excluded
  Assets

  	
  4

  
	
  Section 1.3

  	
  Purchase
  Price

  	
  5

  
	
  Section 1.4

  	
  Payment
  of Purchase Price

  	
  5

  
	
  Section 1.5

  	
  Assumption
  of Liabilities

  	
  6

  
	
  Section 1.6

  	
  Determination
  of Final Cash Consideration

  	
  7

  
	
  Section 1.7

  	
  Post-Closing
  Cash Consideration Adjustment

  	
  8

  
	
  ARTICLE
  II. REPRESENTATIONS AND WARRANTIES REGARDING THE SELLERS 

  	
  8

  
	
  Section 2.1

  	
  Organization

  	
  8

  
	
  Section 2.2

  	
  Authority

  	
  8

  
	
  Section 2.3

  	
  Consents
  and Approvals; No Violation

  	
  9

  
	
  ARTICLE
  III. REPRESENTATIONS AND WARRANTIES REGARDING THE BUSINESS AND THE BUSINESS
  OWNING ENTITIES 

  	
  9

  
	
  Section 3.1

  	
  Organization
  and Qualification

  	
  9

  
	
  Section 3.2

  	
  Capitalization
  and Ownership

  	
  11

  
	
  Section 3.3

  	
  Consents
  and Approvals; No Violation

  	
  12

  
	
  Section 3.4

  	
  Seller
  Financial Statements

  	
  12

  
	
  Section 3.5

  	
  Absence
  of Undisclosed Liabilities

  	
  13

  
	
  Section 3.6

  	
  Absence
  of Certain Changes

  	
  13

  
	
  Section 3.7

  	
  Taxes

  	
  15

  
	
  Section 3.8

  	
  Litigation

  	
  17

  
	
  Section 3.9

  	
  Employee
  Benefit Plans; ERISA

  	
  18

  
	
  Section 3.10

  	
  Environmental
  Liability

  	
  20

  
	
  Section 3.11

  	
  Compliance
  with Applicable Laws; Customs

  	
  21

  
	
  Section 3.12

  	
  Insurance

  	
  22

  
	
  Section 3.13

  	
  Labor
  Matters; Employees

  	
  22

  
	
  Section 3.14

  	
  Permits

  	
  23

  
	
  Section 3.15

  	
  Material
  Contracts

  	
  23

  
	
  Section 3.16

  	
  Intellectual
  Property

  	
  25

  
	
  Section 3.17

  	
  Accounts
  Receivable

  	
  27

  
	
  Section 3.18

  	
  Inventory

  	
  28

  
	
  Section 3.19

  	
  Sufficiency
  of Assets

  	
  28

  
	
  Section 3.20

  	
  Real
  Property

  	
  28

  
	
  Section 3.21

  	
  Equipment
  and Other Personal Property

  	
  28

  
	
  Section 3.22

  	
  Transactions
  with Affiliates

  	
  29

  
	
  Section 3.23

  	
  Brokers

  	
  29

  
	
  Section 3.24

  	
  Securities
  Act Representations

  	
  29

  
	
  Section 3.25

  	
  Bank
  Accounts

  	
  30

  
	
  Section 3.26

  	
  Information
  Supplied in Geokinetics Offering Documents

  	
  30

  
	
  Section 3.27

  	
  Exclusivity
  of Representations and Warranties

  	
  30

  
	
  Section 3.28

  	
  Investigation
  by the Sellers; No Reliance; Purchasers’ Liability

  	
  30

  

 

i

 

	
  ARTICLE
  IV. REPRESENTATIONS AND WARRANTIES REGARDING GEOKINETICS AND ITS SUBSIDIARIES
  

  	
  31

  
	
  Section 4.1

  	
  Organization
  and Qualification

  	
  31

  
	
  Section 4.2

  	
  Capitalization

  	
  31

  
	
  Section 4.3

  	
  Authority

  	
  32

  
	
  Section 4.4

  	
  Consents
  and Approvals; No Violation

  	
  33

  
	
  Section 4.5

  	
  Geokinetics
  SEC Reports

  	
  33

  
	
  Section 4.6

  	
  Geokinetics
  Financial Statements

  	
  35

  
	
  Section 4.7

  	
  Absence
  of Undisclosed Liabilities

  	
  35

  
	
  Section 4.8

  	
  Absence
  of Certain Changes

  	
  35

  
	
  Section 4.9

  	
  Compliance
  with Applicable Laws

  	
  35

  
	
  Section 4.10

  	
  Independent
  Accountants

  	
  35

  
	
  Section 4.11

  	
  No Material Actions or
  Proceedings

  	
  36

  
	
  Section 4.12

  	
  Intellectual
  Property Rights

  	
  36

  
	
  Section 4.13

  	
  All
  Necessary Permits, etc.

  	
  36

  
	
  Section 4.14

  	
  Title
  to Properties

  	
  36

  
	
  Section 4.15

  	
  Taxes

  	
  36

  
	
  Section 4.16

  	
  Investment
  Company

  	
  37

  
	
  Section 4.17

  	
  Insurance

  	
  37

  
	
  Section 4.18

  	
  No
  Unlawful Contributions or Other Payments

  	
  37

  
	
  Section 4.19

  	
  Compliance
  with Environmental Laws

  	
  37

  
	
  Section 4.20

  	
  ERISA
  Compliance

  	
  38

  
	
  Section 4.21

  	
  Sarbanes-Oxley
  Act

  	
  38

  
	
  Section 4.22

  	
  Disclosure
  Controls and Procedures

  	
  38

  
	
  Section 4.23

  	
  Foreign
  Corrupt Practices Act

  	
  39

  
	
  Section 4.24

  	
  Solvency

  	
  39

  
	
  Section 4.25

  	
  Availability
  of Funds

  	
  39

  
	
  Section 4.26

  	
  Geokinetics
  Offering Documents

  	
  40

  
	
  Section 4.27

  	
  Brokers

  	
  40

  
	
  Section 4.28

  	
  Investigation
  by the Purchasers; No Reliance; Sellers’ Liability

  	
  40

  
	
  ARTICLE
  V. CONDUCT OF BUSINESS PENDING THE CLOSING; OTHER AGREEMENTS 

  	
  41

  
	
  Section 5.1

  	
  Conduct
  of Business by the Business Owning Entities Pending the Closing

  	
  41

  
	
  Section 5.2

  	
  Conduct
  of Business by Geokinetics Pending the Closing

  	
  43

  
	
  Section 5.3

  	
  Access
  to Information; Confidentiality

  	
  43

  
	
  Section 5.4

  	
  Further
  Assurances

  	
  44

  
	
  Section 5.5

  	
  Expenses

  	
  44

  
	
  Section 5.6

  	
  Cooperation

  	
  45

  
	
  Section 5.7

  	
  Publicity

  	
  45

  
	
  Section 5.8

  	
  Additional
  Actions

  	
  46

  
	
  Section 5.9

  	
  Filings;
  Competition Laws

  	
  46

  
	
  Section 5.10

  	
  Consents

  	
  47

  
	
  Section 5.11

  	
  Geokinetics
  Board of Directors

  	
  47

  
	
  Section 5.12

  	
  Preemptive
  Rights

  	
  48

  
	
  Section 5.13

  	
  Stock
  Exchange Listing

  	
  49

  
	
  Section 5.14

  	
  Employee
  Matters

  	
  49

  

 

ii

 

	
  Section 5.15

  	
  Notice
  of Certain Events

  	
  54

  
	
  Section 5.16

  	
  Termination
  of Inter-company Indebtedness

  	
  55

  
	
  Section 5.17

  	
  Performance
  Bonds

  	
  55

  
	
  Section 5.18

  	
  Resignation
  of Directors

  	
  56

  
	
  Section 5.19

  	
  Utilities
  and Assessments; Other Allocations

  	
  56

  
	
  Section 5.20

  	
  Condition
  to Transfer of Contracts

  	
  56

  
	
  Section 5.21

  	
  Mail
  Received After Closing

  	
  58

  
	
  Section 5.22

  	
  Refunds
  and Remittances

  	
  58

  
	
  Section 5.23

  	
  Use
  of Name; Removal of Name from Signage

  	
  58

  
	
  Section 5.24

  	
  Supplies;
  Email Addresses

  	
  59

  
	
  Section 5.25

  	
  Powers
  of Attorney

  	
  59

  
	
  Section 5.26

  	
  Financing
  of the Transaction

  	
  59

  
	
  ARTICLE
  VI. CONDITIONS TO CONSUMMATION OF THE PURCHASE

  	
  62

  
	
  Section 6.1

  	
  The
  Closing

  	
  62

  
	
  Section 6.2

  	
  Conditions
  to the Obligation of Each Party

  	
  63

  
	
  Section 6.3

  	
  Conditions
  to the Obligations of Purchasers

  	
  63

  
	
  Section 6.4

  	
  Conditions
  to the Obligations of Sellers

  	
  64

  
	
  Section 6.5

  	
  Deliveries
  at Closing

  	
  64

  
	
  ARTICLE
  VII. INDEMNIFICATION AND SURVIVAL 

  	
  66

  
	
  Section 7.1

  	
  Indemnification
  by Sellers

  	
  66

  
	
  Section 7.2

  	
  Indemnification
  by Purchasers

  	
  66

  
	
  Section 7.3

  	
  Limits
  on Indemnification

  	
  67

  
	
  Section 7.4

  	
  Intentionally
  Omitted

  	
  68

  
	
  Section 7.5

  	
  Indemnification
  Procedures

  	
  68

  
	
  Section 7.6

  	
  Waiver
  of Certain Damages

  	
  69

  
	
  Section 7.7

  	
  Exclusive
  Remedy

  	
  69

  
	
  Section 7.8

  	
  Survival
  of Representations and Warranties

  	
  70

  
	
  Section 7.9

  	
  Survival
  of Covenants

  	
  70

  
	
  Section 7.10

  	
  Expiration
  of Survival Period

  	
  70

  
	
  Section 7.11

  	
  No
  Duplication

  	
  70

  
	
  Section 7.12

  	
  As
  Is and Where Is

  	
  70

  
	
  ARTICLE
  VIII. TERMINATION 

  	
  71

  
	
  Section 8.1

  	
  Termination

  	
  71

  
	
  Section 8.2

  	
  Liability
  Upon Termination

  	
  71

  
	
  ARTICLE
  IX. DEFINED TERMS 

  	
  71

  
	
  Section 9.1

  	
  Defined
  Terms

  	
  71

  
	
  ARTICLE
  X. TAX MATTERS 

  	
  85

  
	
  Section 10.1

  	
  Tax
  Indemnifications

  	
  85

  
	
  Section 10.2

  	
  Tax
  Returns

  	
  87

  
	
  Section 10.3

  	
  Contest
  Provisions

  	
  88

  
	
  Section 10.4

  	
  Transfer
  Taxes

  	
  89

  
	
  Section 10.5

  	
  Value
  Added Taxes

  	
  89

  
	
  Section 10.6

  	
  Tax
  Sharing Agreements and Arrangements

  	
  90

  
	
  Section 10.7

  	
  Section 338
  Elections

  	
  90

  
	
  Section 10.8

  	
  Tax
  Refunds

  	
  90

  
	
  Section 10.9

  	
  Additional
  Tax Indemnifications

  	
  91

  

 

iii

 

	
  Section 10.10

  	
  Assistance
  and Cooperation

  	
  91

  
	
  Section 10.11

  	
  Survival

  	
  92

  
	
  Section 10.12

  	
  Conflict

  	
  92

  
	
  ARTICLE
  XI. MISCELLANEOUS 

  	
  92

  
	
  Section 11.1

  	
  Notices

  	
  92

  
	
  Section 11.2

  	
  Severability

  	
  93

  
	
  Section 11.3

  	
  Assignment

  	
  93

  
	
  Section 11.4

  	
  Interpretation

  	
  93

  
	
  Section 11.5

  	
  Counterparts

  	
  94

  
	
  Section 11.6

  	
  Entire
  Agreement

  	
  94

  
	
  Section 11.7

  	
  Governing
  Law

  	
  94

  
	
  Section 11.8

  	
  Submission
  to Jurisdiction

  	
  94

  
	
  Section 11.9

  	
  Attorneys’
  Fees

  	
  94

  
	
  Section 11.10

  	
  No
  Third Party Beneficiaries

  	
  94

  
	
  Section 11.11

  	
  Authorization

  	
  94

  
	
  Section 11.12

  	
  Disclosure
  Schedules

  	
  96

  
	
  Section 11.13

  	
  Extensions,
  Waivers, Etc.

  	
  96

  
	
  Section 11.14

  	
  Specific
  Performance

  	
  96

  
	
  Section 11.15

  	
  Parent
  Assurances

  	
  96

  
	
  Section 11.16

  	
  Agreement
  with Series B Holders

  	
  97

  
	
  Section 11.17

  	
  Purchase
  Price Allocation

  	
  97

  
	
  Section 11.18

  	
  Control
  of Operations

  	
  98

  
	
  Section 11.19

  	
  Additional
  Sellers and Purchasers

  	
  98

  
	
  Section 11.20

  	
  Additional Services Agreement

  	
  98

  

 

	
  EXHIBITS

  
	
  Exhibit A
  - Form of Assignment and Assumption Agreement

  
	
  Exhibit B
  - Form of Transition Services Agreement

  
	
  Exhibit C
  - Form of License Agreement

  

 

iv

 

PURCHASE AGREEMENT

 

This Purchase Agreement (this “Agreement”)
dated December 3, 2009 (the “Effective Date”),
by and among Geokinetics Inc., a Delaware corporation (“Geokinetics”),
the direct and indirect subsidiaries of Geokinetics listed in Section 1.1
of the Seller Disclosure Schedule and identified therein as purchasers
(together with Geokinetics, each a “Purchaser”
and collectively, the “Purchasers”),
Petroleum Geo-Services ASA, a Norwegian corporation (“PGS”),
and the direct and indirect subsidiaries of PGS listed in Section 1.1
of the Seller Disclosure Schedule and identified therein as sellers (together
with PGS, each a “Seller” and collectively,
the “Sellers”).  Certain terms used in this Agreement are
defined in Article IX.

 

WHEREAS, PGS, directly or indirectly, owns all of
the capital stock or other equity securities of the entities named below (each
a “Purchased Entity” and collectively,
the “Purchased Entities”), which are or
will be as of the Closing Date engaged solely in the Business:

 

PGS Onshore, Inc.

 

PGS Onshore (Canada), Inc.

 

PGS Mexicana, S.A. de C.V.

 

PGS Administración y Servicios, S.A. de C.V.

 

PGS Exploration Morocco SARL

 

PGS (Malta) Holdings Ltd.

 

PGS Malta, Ltd.

 

PGS Onshore Peru S.A.C.

 

PGS Onshore Services S.A.C.

 

WHEREAS, each Seller identified in Section 1.1
of the Seller Disclosure Schedule as a “Securities Seller” (each a “Securities Seller” and collectively,
the “Securities Sellers”) owns as of the
Effective Date the number of shares of capital stock or other equity interests
in the Purchased Entity set forth opposite such Securities Seller’s name in Section 1.1
of the Seller Disclosure Schedule (such shares and equity interests, together
with all additional shares and equity interests issued by the Purchased
Entities prior to the Closing Date pursuant to Section 5.16, the “Purchased Securities”);

 

WHEREAS, upon the terms and subject to the conditions
contained in this Agreement, each Securities Seller desires to sell to the
Purchaser listed opposite such Purchased Entity’s name in Section 1.1
of the Seller Disclosure Schedule, the Purchased Securities owned by such
Securities Seller, and such Purchaser desires to purchase such Purchased
Securities;

 

1

 

WHEREAS, following the purchase and sale of the
Purchased Securities by Sellers to Purchasers, Purchasers will own,
beneficially and of record, all of the issued and outstanding equity interests
of each Purchased Entity, either directly or indirectly through ownership of
another Purchased Entity;

 

WHEREAS, each Seller identified in Section 1.1
of the Seller Disclosure Schedule as an “Asset Seller” (each an “Asset Seller” and collectively, the “Asset Sellers”) owns assets used in
the Business; and

 

WHEREAS, upon the terms and subject to the
conditions contained in this Agreement, each Asset Seller desires to sell to
the Purchaser listed opposite such Asset Seller’s name in Section 1.1
of the Seller Disclosure Schedule the assets owned by such Asset Seller and
used primarily in the Business, and such Purchaser desires to purchase such
assets.

 

NOW, THEREFORE, in consideration of the premises and
the representations, warranties and agreements contained in this Agreement, the
parties hereto agree as follows:

 

ARTICLE
I.

PURCHASE AND SALE

 

Section 1.1            Transfer of Purchased
Assets and Purchased Securities. 
Upon the terms and subject to the conditions contained in this
Agreement, on the Closing Date, (i) each Securities Seller shall sell,
assign, convey, deliver and transfer, free and clear of all Liens, all of the
Purchased Securities held by such Securities Seller in each applicable
Purchased Entity as of the Closing Date to the applicable Purchaser(s) listed
opposite such Purchased Entity’s name in Section 1.1 of the Seller
Disclosure Schedule, and each applicable Purchaser shall purchase the
applicable Purchased Securities, and (ii) each Asset Seller shall sell,
assign, convey, deliver and transfer, free and clear of all Liens, except for
those Liens that constitute Assumed Liabilities and except for Permitted Liens,
to the applicable Purchaser listed opposite such Asset Seller’s name in Section 1.1
of the Seller Disclosure Schedule, and the applicable Purchaser shall purchase
from each Asset Seller, all of such Asset Seller’s right, title and interest as
of the Closing Date in the tangible and intangible property and assets used
primarily by such Asset Seller in the Business (except for the Excluded
Assets), including, without limitation, all Contracts, contract rights and
property (real, personal and mixed) in which such Asset Seller has any right,
title or interest and that are used primarily in the Business (the “Purchased Assets” and, together
with the Purchased Securities, the “Property”).  Without limiting the generality of the
preceding sentence, the Purchased Assets shall include the following (each of
which following described items being limited to the extent the item is
attributable to, or is used primarily in, the Business), other than the
Excluded Assets:

 

(a)           All such Asset
Seller’s interest in owned, leased or rented real property described or listed
in Section 1.1(a) of the Seller Disclosure Schedule (“Real Property”);

 

(b)           All such Asset
Seller’s personal property (other than Intellectual Property) and equipment (“Personal Property”), including
vehicles, boats and other mechanical equipment, owned or leased, including
without limitation, all of the property and equipment listed or described in Section 1.1(b) of
the Seller Disclosure Schedule

 

2

 

reflecting such items as of the date of the Most Recent Balance Sheet
(less any items used or consumed or abandoned in the ordinary course of the
Business between the date of the Most Recent Balance Sheet and the Closing
Date), and all additions thereto and replacements thereof as are made in the
ordinary course of the Business or are required by the provisions of this
Agreement;

 

(c)           All such Asset
Seller’s Inventories, wherever located;

 

(d)           All such Asset
Seller’s Contracts, including, without limitation, those listed opposite such
Asset Seller’s name in Section 1.1(d) of the Seller Disclosure
Schedule, which in any case are not fully performed as of the Closing Date;

 

(e)           All such Asset
Seller’s Accounts Receivable not collected by such Asset Seller as of the
Closing Date;

 

(f)            All such Asset
Seller’s Intellectual Property, including the Intellectual Property listed
opposite such Asset Seller’s name in Section 1.1(f) of the
Seller Disclosure Schedule;

 

(g)           All books and
records of such Asset Seller, including all files, records and logs, as well as
all of such Asset Seller’s counterparts of all Contracts and such Asset Seller’s
counterparts or originals of all documents of title relating to the Purchased
Assets; provided, however, that the Sellers shall be entitled to
retain copies of any such books and records (1) with respect to Taxes, (2) constituting
Tax Returns relating to the Property or the Business or (3) reasonably
required by Sellers for purposes of Tax Audits, other audits or other business
purposes;

 

(h)           All customer and
supplier lists, sales records, working files of correspondence with customers
and suppliers (both actual and prospective), equipment maintenance and warranty
information, operating manuals, personnel records of employees and any other
reports, promotional materials, marketing studies and other documents of such
Asset Seller;

 

(i)            All stationery,
purchase orders, forms, film, supplies, labels, catalogs, brochures, art work,
photographs, advertising material and similar items of such Asset Seller;

 

(j)            All Permits that
are held by such Asset Seller, to the extent the same are transferable;

 

(k)           All rights of each
Asset Seller to causes of action, lawsuits, set offs, judgments, claims,
demands and all rights to manufacturers’ warranties and indemnities, to the
extent assignable of any nature, and all claims of each Asset Seller, including
insurance claims, whether choate or inchoate, known or unknown, contingent or
non-contingent; and

 

(l)            All prepaid claims,
prepaid expense items and deferred charges, credits, advanced payments,
security and other deposits made to any Person; provided that all such
items appear or are included in the Final Closing Balance Sheet.

 

3

 

Section 1.2            Excluded Assets.  Notwithstanding Section 1.1, the
Sellers reserve and do not sell or transfer any right, title or interest in or
to the assets set forth below, including assets listed below that are owned by
a Purchased Entity or a Subsidiary of a Purchased Entity (collectively, the “Excluded Assets”), and, subject to Section 5.20(b) the
Purchased Entities and their Subsidiaries shall distribute or otherwise
transfer the Excluded Assets at or before the Closing Date.  The Excluded Assets shall not be considered
part of the Purchased Assets or part of the Property:

 

(a)           cash and cash
equivalents or restricted cash of any Asset Seller on hand or on deposit,
whether on or after the Closing Date and any cash, cash equivalents or
restricted cash of a Purchased Entity (other than cash, cash equivalents or
restricted cash that Purchasers and Sellers agree not to distribute or to
retain);

 

(b)           all receivables owed
to a Business Owning Entity by a PGS Affiliate (other than a Purchased Entity
or a Subsidiary of a Purchased Entity);

 

(c)           any assets,
including any Intellectual Property, used primarily in providing electromagnetic
services and not used primarily in connection with the Business;

 

(d)           any Intellectual
Property of the Asset Sellers that is not used primarily in connection with the
Business, including the Intellectual Property identified in Section 1.2(d) of
the Seller Disclosure Schedule;

 

(e)           any rights to use
the names “Petroleum Geo-Services” or “PGS” or any derivative thereof or any
trade names, trademarks, service marks, identifying logos or any application or
registration thereof including or comprising the terms “Petroleum Geo-Services”
or “PGS” or any derivative thereof or any term confusingly similar thereto or
related goodwill;

 

(f)            all loans to
employees other than normal travel or expense allowances;

 

(g)           all insurance
policies, rights thereunder, prepaid premiums relating to insurance policies
and proceeds from any insurance policies, that are not related to the Business
and all such items that related to the Business to the extent relating to
periods after the Closing Date;

 

(h)           all personnel and
other records that any Seller is required by Law to retain in its possession; provided,
however, that Purchasers shall be provided copies of any such personnel
and other records pertaining to any employee, contractor, consultant and
temporary employee who becomes an employee, contractor or consultant of a
Purchaser pursuant to this Agreement;

 

(i)            any rights or
claims of any Business Owning Entity against or with respect to any PGS
Affiliates (other than a Purchased Entity or a Subsidiary of a Purchased
Entity) and any other benefit or amount owed by any such Affiliate to any
Business Owning Entity;

 

(j)            rights in
connection with and assets of Plans;

 

4

 

(k)           any computer or
telecommunications network or equipment of PGS or any of its Affiliates (other
than any Purchased Entity or a Subsidiary of a Purchased Entity), the use of
which is made available to the Business by PGS and its Affiliates through a shared
use or similar arrangement;

 

(l)            all rights,
including all rights of recovery and proceeds from settlement associated with
the Legal Action relating to Marsh Island (Cause No. 2007-65726);

 

(m)          any Tax-related
receivable, refund or other asset owed to PGS or any of its Affiliates relating
to prior operations in Saudi Arabia or any interest in such receivable;

 

(n)           all assets,
properties and rights used in the conduct of the Business (i) by the
Kazakhstan branch of PGS Onshore, Inc. and (ii) in India and in
Bolivia;

 

(o)           all rights to the
equity interests held by PGS or one of its Affiliates in PGS Servicios C.A.,
PGS Venezuela de C.A. and PGS Onshore (Algeria) EURL; and

 

(p)           rights of Sellers
under this Agreement and other agreements and documents entered into in
connection with the Transactions.

 

Section 1.3            Purchase Price.  The purchase price for the Property (“Purchase Price”) shall be the Cash
Consideration, the Share Consideration and the assumption of the Assumed
Liabilities.

 

Section 1.4            Payment of Purchase Price.  At least four (4) Business Days prior to
the Closing Date (or such other time as agreed to by the Purchasers and the
Sellers), the Sellers shall prepare in good faith a statement, in accordance
with GAAP, and applied on a basis consistent with the preparation of the
Business Financial Statements, (a) containing (i) an estimate of Net
Working Capital immediately prior to the Closing (“Estimated
Net Working Capital”), and (ii) total Funded Indebtedness
anticipated to be outstanding immediately prior to the Closing (“Estimated Funded Indebtedness”),
and (b) containing the resulting calculation of the Estimated Cash
Consideration. At the Closing: (x) each Purchaser shall pay its share of
the Estimated Cash Consideration to the Sellers by wire transfer of immediately
available funds to such account or accounts as Sellers shall specify to
Geokinetics not less than two (2) Business Days prior to the Closing Date,
and (y) Geokinetics shall deliver the Share Consideration to the
appropriate Sellers by delivering certificates representing the Share
Consideration in such amounts and in the name of such Sellers as PGS shall
specify to Geokinetics not less than two (2) Business Days prior to the
Closing Date.  Because the Sellers have
elected to pay any applicable Mexican Income Taxes resulting from this
Agreement on a net income basis rather than on a gross income basis, all
payments of Purchase Price hereunder will be free of and without deduction or
withholding for, or on account of, any Mexican Taxes provided the Sellers
comply with the requirements set forth below. 
The Sellers will duly and timely comply with all applicable requirements
under Mexican Tax Laws to pay Mexican Income Taxes imposed on the Sellers’
gain, if any, on the sale of the Purchased Securities on a net income basis (or
report loss, if any, on such sale), including, but not limited to: (i) appointing
a legal representative in Mexico by granting a power of attorney; (ii) obtaining
a tax opinion (“dictamen fiscal”) prepared by a
duly certified public accountant; (iii) filing a tax return within 15
business days after Closing and

 

5

 

(iv) filing
a tax opinion, with a copy of the power of attorney appointing the legal
representative, within 30 days after filing the tax return.  The
Sellers will deliver to Geokinetics within 60 days after Closing copies of (i) the
power of attorney appointing the legal representative; (ii) the above
specified tax return and (iii) the above specified tax opinion.

 

Section 1.5            Assumption of Liabilities.

 

(a)           Each Purchaser hereby agrees that at the Closing it will
assume and undertake to pay, satisfy and discharge on a timely basis without
default all obligations and liabilities of each Asset Seller primarily related
to the Property or the Business, from and after the Closing Date, arising from
or in connection with (i) the written terms of Contracts included in the
Purchased Assets listed in this Agreement or the Seller Disclosure Schedule or
not required to be listed by the terms of this Agreement or entered into by an
Asset Seller after the Effective Date in accordance with the terms of this
Agreement; (ii) all other obligations and liabilities arising from or in
connection with Contracts not included in subsection 1.5(a)(i), provided
that such obligations and liabilities do not exceed in the aggregate $100,000;
and (iii) those liabilities or obligations (other than (x) indebtedness
owed to any PGS Affiliate and (y) any accounts payable owed to any PGS
Affiliate) related to the Property or the Business and that are set forth on
the face of the Most Recent Business Balance Sheet, subject to addition and
changes in accordance with the terms of this Agreement, or incurred in the
ordinary course of the Business between the date of such balance sheet and the
Closing Date (all liabilities and obligations described in subsection 1.5(a)(i),
(ii) and (iii) are referred to collectively as “Assumed Liabilities”); provided,
however, that no Purchaser shall assume or be liable for any accounts
payable owed to any PGS Affiliate or for claims arising out of or in connection
with defaults under Contracts, to the extent such defaults existed at the
Closing Date.

 

(b)           Except for the
Assumed Liabilities, each Purchaser shall not assume any liability or
obligation of any Asset Seller, fixed or contingent, disclosed or undisclosed,
or any liability for any claims, debts, defaults, duties, obligations or
liabilities of any Asset Seller of any kind or nature, whether known or
unknown, contingent or fixed, all of which, to the extent that such
liabilities, fixed or contingent, known or unknown, exist on the Closing Date,
regardless of when the claim is made (“Retained Liabilities”),
and such Retained Liabilities shall be retained by the Asset Sellers. No
Purchaser shall be required to defend any Legal Action arising out of any act,
event or transaction occurring prior to the Closing Date, in connection with
the ownership or operation of the Purchased Assets by the Asset Sellers except
for Assumed Liabilities, and the Asset Sellers shall, and each Asset Seller
hereby agrees, to satisfy in due course all Retained Liabilities, except those
being contested or denied by a Seller in good faith.  Without limiting the generality of the
foregoing, Sellers shall be responsible for any expenses incurred after the
Closing Date related to the Excluded Assets.

 

(c)           Prior to Closing,
each Purchased Entity and each Subsidiary of a Purchased Entity will cause the
Unrelated Liabilities to be satisfied and discharged, or to be assumed by a Seller
or another Subsidiary of PGS (other than a Purchased Entity or a Subsidiary of
a Purchased Entity), without any future obligation on the Purchased Entity or
the Subsidiaries of the Purchased Entities. No Purchased Entity or Subsidiary
of a Purchased

 

6

 

Entity shall be required to defend any Legal Action arising out of an
Unrelated Liability, and each Seller agrees to satisfy in due course any
Unrelated Liability, except those being contested or denied in good faith by a
Seller.

 

Section 1.6            Determination of Final Cash
Consideration

 

(a)           Closing
Balance Sheet.  As soon as practicable following
the Closing Date, but in any event within 60 days thereafter, the Sellers shall
prepare and deliver to Geokinetics on behalf of the Purchasers a balance sheet
of the Business as of the Closing Date (the “Preliminary
Closing Balance Sheet”) and a statement based thereon setting
forth the amount of the proposed Final Net Working Capital, Final Funded
Indebtedness and Final Cash and Cash Equivalents, and the Cash Consideration,
in each case, as of immediately prior to Closing, taking into account the
distributions or other transfers of Excluded Assets and cancellation or
satisfaction of the debt and accounts payable owed to PGS or its Affiliates
contemplated by this Agreement, accompanied by a certificate of an officer of
PGS to the effect that the Preliminary Closing Balance Sheet and such statement
has, to his knowledge, been prepared in accordance with the terms of this
Agreement. The Preliminary Closing Balance Sheet shall be prepared in
accordance with GAAP, and applied in a manner consistent with the preparation
of the Business Financial Statements.

 

(b)           Preliminary
Closing Balance Sheet Review.  Sellers
shall permit Geokinetics and the accountants representing Geokinetics (the “Geokinetics Accountants”) to review
the Preliminary Closing Balance Sheet. 
To facilitate such review, Geokinetics and the Geokinetics Accountants
shall have reasonable access to all necessary books and records in order to
permit the Geokinetics Accountants to conduct such review.

 

(c)           Binding and
Conclusive.

 

(i)            Geokinetics
shall have 30 days after the delivery of the Preliminary Closing Balance Sheet
by the Sellers to Geokinetics on behalf of the Purchasers (such 30-day period,
the “Objection Period”) to notify the
Sellers in writing of any and all objections to the Preliminary Closing Balance Sheet (such
written notice, the “Objection Notice”). The
Objection Notice shall (a) identify each item of the Preliminary Closing
Balance Sheet to which Geokinetics on behalf of the Purchasers objects and (b) describe
in reasonable detail the nature of such objection and the Purchasers’
calculation of such disputed item.

 

(ii)           If
Geokinetics on behalf of the Purchasers does not deliver an Objection Notice to
the Sellers within the Objection Period, the Preliminary Closing Balance Sheet
shall be binding and conclusive upon, and deemed accepted by, the Purchasers
for the purpose of calculating the Cash Consideration. Any item of the
Preliminary Closing Balance Sheet not objected to by the Objection Notice shall
be deemed to be final and binding.

 

(d)           Objection
Notice; Closing Balance Sheet Disputes.  If the Purchasers deliver an Objection Notice
to the Sellers within the Objection Period, Geokinetics and the Sellers shall,
during the 30-day period following the receipt by the Sellers of the Objection

 

7

 

Notice, use their reasonable best efforts to negotiate in good faith
and to reach agreement on each item of the Preliminary Closing Balance Sheet
disputed pursuant to the Objection Notice. If, during such period, Geokinetics
and the Sellers are unable to reach agreement, they shall immediately
thereafter refer any such unresolved items (any such referred item, a “Disputed Item”) to Deloitte &
Touche LLP or such other U.S. nationally recognized independent accounting firm
as may be approved by the Sellers and Geokinetics (the “Auditors”),
which firm shall render its opinion as to such Disputed Items.  Based on such opinion, the Auditors will then
send to the Sellers and Geokinetics its written determination of the Disputed
Items, which determination shall be binding and conclusive upon, and deemed
accepted by, the parties. The fees and expenses of the Auditors shall be borne
one-half by the Sellers and one-half by Geokinetics.

 

Section 1.7            Post-Closing Cash Consideration
Adjustment

 

(a)           If the Cash
Consideration exceeds the Estimated Cash Consideration, then the Purchasers
shall pay to the Sellers the amount of such excess in cash.

 

(b)           If the Estimated
Cash Consideration exceeds the Cash Consideration, then the Sellers shall pay
to the Purchasers the amount of such excess in cash.

 

(c)           Any payment required
to be made pursuant to this Section 1.7 shall be made by the
Purchasers or the Sellers, as applicable, within five Business Days after the
determination of the Cash Consideration.

 

(d)           Any payment required
to be made pursuant to this Section 1.7 shall be allocated among
the Sellers and the Purchasers based on a reconciliation between the Cash
Consideration and the Estimated Cash Consideration and a determination as to
the portion of such payment amount, whether owed by Sellers or Purchasers,
attributable to each Asset Seller, each Purchased Entity and each Subsidiary of
a Purchased Entity.

 

ARTICLE
II.

REPRESENTATIONS AND WARRANTIES REGARDING THE SELLERS

 

Except as disclosed in the Seller Disclosure
Schedule, each Seller, jointly and severally, represents and warrants to
Geokinetics and the Purchasers as follows:

 

Section 2.1            Organization.  Each Seller is duly organized,
validly existing and in good standing (in those jurisdictions where the concept
applies) under the laws of its jurisdiction of formation.

 

Section 2.2            Authority.   Each Seller has full corporate or other
organizational power and authority to execute and deliver this Agreement and
any Ancillary Agreements to which it is or will be a party and to consummate
the Transactions.  The execution,
delivery and performance of this Agreement and the Ancillary Agreements to
which each Seller is or will be a party and the consummation of the
Transactions have been duly and validly authorized by all requisite corporate
or other organizational action by each Seller party to this Agreement, and no
other corporate or other organizational proceedings on the part of any such
Seller are necessary to authorize this Agreement and the Ancillary Agreements
to which any such Seller is or will be a

 

8

 

party
or to consummate the Transactions.  This
Agreement has been, and the Ancillary Agreements to which each Seller is or
will be a party are, or upon execution will be, duly and validly executed and
delivered by each Seller party to this Agreement and, assuming the due
authorization, execution and delivery of this Agreement and such Ancillary
Agreements by the other parties hereto and thereto, constitutes, or upon
execution will constitute, valid and binding obligations of such Seller,
enforceable against such Seller in accordance with their respective terms,
except for the Enforceability Exception.

 

Section 2.3                    Consents
and Approvals; No Violation.   The execution and delivery by each Seller of
this Agreement and the Ancillary Agreements to which it is a party, the
consummation of the Transactions and the performance by each Seller of its
respective obligations hereunder and thereunder will not:

 

(a)           conflict with any
provisions of the certificate of incorporation or bylaws (or similar
organizational document) of such Seller;

 

(b)           except as set forth
in Section 2.3(b) of the Seller Disclosure Schedule, require
any consent, waiver, approval, Order, authorization or permit of, or
registration, filing with or notification to, (i) any Governmental
Authority, except for applicable requirements of the HSR Act in the United
States and the Competition Laws in Mexico or (ii) any third party other
than a Governmental Authority, other than such consents, waivers, approvals,
Orders, authorizations and permits the failure of which to obtain would not
result in a Seller Material Adverse Effect; or

 

(c)           except as set forth
in Section 2.3(c) of the Seller Disclosure Schedule, violate
the provisions of any Order or Law applicable to any Seller, except for any
violations that would not result in a Seller Material Adverse Effect.

 

ARTICLE
III.

REPRESENTATIONS AND WARRANTIES REGARDING 

THE BUSINESS AND THE BUSINESS OWNING ENTITIES

 

Except as disclosed in the Seller Disclosure Schedule,
each Seller, jointly and severally, represents and warrants to Geokinetics and
the Purchasers as follows:

 

Section 3.1            Organization and Qualification.

 

(a)           Each Business Owning
Entity is duly organized, validly existing and (in those jurisdictions where
the concept applies) in good standing under the laws of its jurisdiction of
formation, which jurisdiction of formation is listed in Section 3.1(a) of
the Seller Disclosure Schedule.  Each
Business Owning Entity is duly qualified to do business as a foreign Person and
(in those jurisdictions where the concept applies) is in good standing in the
jurisdictions in which the character of such Business Owning Entity’s property
or the conduct of the Business makes such qualification necessary, except in
jurisdictions, if any, where the failure to be so qualified would not result in
a Seller Material Adverse Effect.  The
jurisdictions in which the Business Owning Entities are qualified to conduct
the Business as foreign Persons are listed in Section 3.1(a) of
the Seller Disclosure Schedule.  Each
Business Owning Entity has all requisite corporate or other

 

9

 

organizational power and authority to own, use or lease its properties
and to carry on the Business as it is being conducted at the Effective Date.

 

(b)           Section 3.1(b) of
the Seller Disclosure Schedule lists the name and jurisdiction of organization
of each Purchased Entity and the jurisdictions in which each such Purchased
Entity is qualified or holds licenses to do business as a foreign Person as of
the Effective Date.  Each of the
Purchased Entities has the requisite organizational power and authority to own,
use or lease its properties and to carry on the Business as it is being
conducted at the Effective Date.

 

(c)           Section 3.1(c) of
the Seller Disclosure Schedule lists the name and jurisdiction of organization
of each Subsidiary of a Purchased Entity, the amount and percentage of the
capital stock or other equity interest of such Subsidiary owned by a Purchased
Entity or a Subsidiary of a Purchased Entity and the jurisdictions in which
each such Subsidiary is qualified or holds licenses to do business as a foreign
Person as of the Effective Date.  Each
Subsidiary of a Purchased Entity has the requisite organizational power and
authority to own, use or lease its properties and to carry on its business as
it is being conducted at the Effective Date. 
Other than the Purchased Entity’s Subsidiaries, none of the Purchased
Entities beneficially owns or controls, directly or indirectly, and except for
the Purchased Securities, the Property does not include, 5% or more of any
class of equity or similar securities of any corporation or other organization,
whether incorporated or unincorporated.

 

(d)           The Sellers have made
available to the Purchasers a complete and correct copy of the certificate of
incorporation and bylaws (or similar organizational documents) of each of the
Purchased Entities and any Subsidiary of a Purchased Entity, each as amended to
the Effective Date, and the certificate of incorporation and bylaws (or similar
organizational documents) as made available are in full force and effect.  None of the Purchased Entities or any
Subsidiary of a Purchased Entity is in default in any respect in the performance,
observation or fulfillment of any provision of its certificate of incorporation
or bylaws (or similar organizational documents).

 

(e)           The corporate books
of each Purchased Entity and each Subsidiary of a Purchased Entity, including
the corporate books related to shareholder meetings, board of directors’
meetings (if applicable), share registry, and (if applicable) the variations of
capital, which are being delivered to the applicable Purchaser on the Closing
Date, are the true and complete copies of such books.  All such books comply in all material
respects with applicable Law, include all actions of shareholders and the board
of directors, as applicable, by written consent and all of the meetings of the
shareholders and boards of directors, as applicable, held by the actual
shareholders or board of directors of each such Purchased Entity on or before
the Closing Date, along with all documents presented at and referenced in all
such meetings of shareholders or boards of directors, and all other documents and
publications that evidence and verify the lawful convocation and holding of all
such meetings of shareholders and boards of directors.

 

10

 

Section 3.2            Capitalization and Ownership.

 

(a)           The authorized, issued
and outstanding capital stock or other equity interest of each of the Purchased
Entities (including the capital stock of the Purchased Entities constituted in
Mexico and Peru) as of the Effective Date is listed in Section 3.2
of the Seller Disclosure Schedule.  Section 3.2
of the Seller Disclosure Schedule lists the record owner of capital stock or
other equity interest issued by each Purchased Entity and describes the type of
equity interest owned and the number of such equity interests owned as of the
Effective Date.  There are no irrevocable
proxies with respect to any Purchased Securities (excluding, for this purpose,
shares of any Subsidiary of a Purchased Entity that is listed as an Excluded
Asset), and no equity interest of any Purchased Entity is or may become
required to be issued because of any options, warrants, rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities or
rights convertible into or exchangeable or exercisable for, shares of any capital
stock or other equity interests of any Purchased Entity, and except for this
Agreement there are no Contracts by which PGS or any Subsidiary of PGS is or
may be bound to issue additional shares of capital stock of any Purchased
Entity or any Subsidiary of a Purchased Entity or securities convertible into
or exchangeable or exercisable for any such capital stock or other equity
interests.  All of the Purchased
Securities are, or will be when issued, validly issued, fully paid and
nonassessable and, except as set forth in Section 3.2 of the Seller
Disclosure Schedule, are owned by the applicable Securities Seller free and
clear of all Liens.  Upon delivery by the
Securities Sellers of (i) a communication addressed to each of the
Purchased Entities incorporated in Peru in which the Securities Sellers provide
notice of the transfer of the Purchased Securities in favor of one or more of
the Purchasers and such transfer is registered in the stock ledger of each of
the Purchased Entities incorporated in Peru, or (ii) certificates
representing or other indicia of ownership relating to the Purchased Securities
to the Purchasers, duly endorsed for transfer to a Purchaser, and the notation
in the stock ledger book (Libro de Registro de
Acciones) of such ownership or accompanied by stock powers or
similar instruments duly executed by Securities Sellers, as applicable, and
upon payment for such Purchased Securities by a Purchaser, as contemplated by
this Agreement, the Purchasers will own, directly or indirectly by ownership of
a Purchased Entity, all of the issued and outstanding equity securities of each
of the Purchased Entities free and clear of all Liens, other than Liens created
by a Purchaser.

 

(b)           The capital stock
and reserves of each Purchased Entity incorporated in Mexico or Peru complies
in all material respects with all applicable Law. There exists no definitive or
provisional share certificates evidencing the Purchased Securities issued by
any Purchased Entity incorporated in Peru, and there exist no definitive or
provisional share certificates evidencing the Purchased Securities issued by
any Purchased Entity incorporated in Mexico other than or different from the
certificates identified in Section 3.2 of the Seller Disclosure
Schedule.  All provisional or definitive
share certificates issued by any Purchased Entity in Mexico or Peru prior to
the issuance of the certificates identified in Section 3.2 of the
Seller Disclosure Schedule have been duly canceled and delivered to the issuing
Purchased Entity, or destroyed in accordance with applicable Law.

 

11

 

Section 3.3            Consents and Approvals; No
Violation.   The execution
and delivery by each Seller of this Agreement and the Ancillary Agreements to
which it is a party, the consummation of the Transactions and the performance
by each Seller of its respective obligations hereunder and thereunder will not:

 

(a)           conflict with,
violate or result in any breach of any provision of the certificate of
incorporation or bylaws (or similar organizational document) of any Business
Owning Entity;

 

(b)           except as set forth
in Section 3.3(b) of the Seller Disclosure Schedule, result in
any violation of or the breach of or constitute a default (with notice or lapse
of time or both) under, or give rise to any right of termination, cancellation
or acceleration or guaranteed payments or a loss of a material benefit under,
any of the terms, conditions or provisions of any Contract to which any
Business Owning Entity is a party or by which any Business Owning Entity or any
of their respective properties or assets may be bound, except for such
violations, breaches, defaults, or rights of termination, cancellation or
acceleration, or losses as to which requisite waivers or consents have been obtained
or that, individually or in the aggregate, would not result in a Seller
Material Adverse Effect;

 

(c)           except as set forth
in Section 3.3(c) of the Seller Disclosure Schedule,  violate the provisions of any Order or Law
applicable to any Business Owning Entity, except for such violations as would
not, individually or in the aggregate, result in a Seller Material Adverse
Effect; or

 

(d)           except as set forth
in Section 3.3(d) of the Seller Disclosure Schedule, result in
the creation of any Liens upon the capital stock or other equity interest or
assets of any Purchased Entity or any Subsidiary of a Purchased Entity or upon
any of the Property under any Contract to which any Business Owning Entity is a
party by which any of their properties or assets are bound, in each case except
for such Liens affecting Purchased Assets as would not, individually or in the
aggregate, result in a Seller Material Adverse Effect.

 

Section 3.4            Seller Financial
Statements.  The Sellers
have delivered to the Purchasers on or prior to the Effective Date audited
consolidated financial statements and unaudited consolidated interim financial
statements of the Business (including any related notes and schedules) for each
of the three fiscal years ended December 31, 2008, 2007 and 2006 and for
the nine months ended September 30, 2009 and 2008 (collectively, the “Business Financial Statements” with
the balance sheet dated September 30, 2009 referred to as the “Most Recent Business Balance Sheet”).  Each of the Business Financial Statements has
been prepared from, and is in accordance with, the books and records of the
Business Owning Entities, complies in all material respects with applicable
accounting requirements and with the published rules and regulations of
the SEC with respect thereto, has been prepared in accordance with GAAP applied
on a consistent basis (except as may be indicated in the notes thereto and
subject, in the case of interim financial statements, to normal and recurring
year-end adjustments) and fairly presents, in conformity with GAAP applied on a
consistent basis (except as may be indicated in the notes thereto), the
consolidated financial position of the Business as of the dates thereof and the

 

12

 

consolidated
results of operations and cash flows (and changes in financial position, if
any) of the Business for the periods presented therein (subject to normal
year-end adjustments and the absence of financial footnotes in the case of
interim financial statements).

 

Section 3.5            Absence of Undisclosed
Liabilities.  No Business
Owning Entity is, nor will it be as of the Closing Date, liable for or subject
to any Liabilities except (a) Liabilities specifically identified in the
Most Recent Business Balance Sheet, including any related notes and schedules
thereto, and not heretofore paid or discharged, (b) Liabilities under
Contracts relating to the Business and described in Section 1.1(d) or
Section 3.15 that were not required under GAAP to be disclosed in the Most
Recent Business Balance Sheet, (c) Liabilities disclosed in Section 3.5
of the Seller Disclosure Schedule, (d) Liabilities incurred in the
ordinary course of the Business since the date of the Most Recent Business
Balance Sheet and (e) Liabilities of an Asset Seller that are not Assumed
Liabilities and any Liabilities of a Purchased Entity that have been or will be
assumed prior to the Closing Date by PGS or an Affiliate of PGS (other than the
Purchased Entities).

 

Section 3.6            Absence of Certain
Changes.  Except as set
forth in Section 3.6 of the Seller Disclosure Schedule or as
contemplated by this Agreement, since the date of the Most Recent Business
Balance Sheet, (a) the Business Owning Entities have conducted the
Business only in the ordinary course consistent with past practices and (b) there
has not been any change or development, or combination of changes or
developments that, individually or in the aggregate, would result in a Seller
Material Adverse Effect.  Without
limiting the foregoing and except (i) as listed in Section 3.6
of the Seller Disclosure Schedule, (ii) in connection with a transaction
described in Section 5.16, (iii) for any item that will not be
a Liability of a Purchased Entity at Closing or (iv) as would not,
individually or in the aggregate, result in a Seller Material Adverse Effect,
since the date of the Most Recent Business Balance Sheet, no Business Owning
Entity (solely with respect to the Business conducted by it) has done any of
the following (except that items (m) and (n) are limited to the
Purchased Entities):

 

(a)           incurred any
Liabilities other than Liabilities incurred in the ordinary course of the
Business consistent with past practice, or discharged or satisfied any Lien
(other than Permitted Liens) or paid any Liabilities other than in the ordinary
course of the Business consistent with past practice, or failed to pay or
discharge when due any Liabilities;

 

(b)           sold, assigned or
transferred any of its assets or properties except (i) in the ordinary
course of the Business consistent with past practice or (ii) Subject
Assets;

 

(c)           except for
borrowings from PGS or its Affiliates, created, incurred, assumed or guaranteed
any indebtedness for money borrowed, or mortgaged, pledged or subjected to any
Lien any of its assets, other than Permitted Liens;

 

(d)           breached or
defaulted under any material Contract to which it is a party, or made or
suffered any amendment or termination of any material Contract to which it is
party or by which it or its assets related to the Business are bound or affected,
or cancelled, modified or waived any debts or claims held by it, other than in
the ordinary course of the Business consistent with past practice, or waived
any rights of substantial value, whether or not in the ordinary course of the
Business;

 

13

 

(e)           suffered any damage,
destruction or loss, whether or not covered by insurance, adversely affecting
the Business or assets used in the conduct of the Business, or suffered any
repeated, recurring or prolonged shortage, cessation or interruption of
inventory shipments, supplies or utility services required by a Business Owning
Entity, or suffered any change in its financial condition or in the nature of
its business or operations;

 

(f)            suffered any
adverse change or any threat of an adverse change in its relations with, or any
loss or threat of loss of, any of its major suppliers, customers, franchisees
or distributors;

 

(g)           received notice or
had knowledge of any actual or threatened labor trouble, strike or other
occurrence, event or condition of any similar character;

 

(h)           increased the
salaries or other compensation of, or made any advance (excluding advances for
ordinary and necessary business expenses) or loan to, any of its officers or
employees (excluding increases made to employees consistent with past
practice), or made any increase in, or any additions to, other benefits to
which any of its officers or employees may be entitled;

 

(i)            made any capital
expenditure or capital addition or betterment (including any capitalized lease
transaction) except in the ordinary course of the Business consistent with past
practice, or made any capital investment in, or loan to, or acquisition of the
securities or assets of, any Person other than a Purchased Entity or Subsidiary
of a Purchased Entity outside the ordinary course of the Business or involving
more than $1,000,000;

 

(j)            changed any of the
accounting principles followed by it or the methods of applying such principles
(the Purchasers recognizing, however, that consistent with the practices of the
PGS Group, the Business Owning Entities follow IFRS, rather than GAAP, as of
the Effective Date);

 

(k)           delayed or postponed
the payment of accounts payable or other liabilities outside the ordinary
course of the Business;

 

(l)            granted to a third
party any Contracts or any rights under or with respect to any Intellectual
Property other than any such rights granted in the ordinary course of the
Business, including grants or licenses to customers in connection with licenses
or sales of seismic data in the Multi-Client Library;

 

(m)          made or had any
changes in its certificate of incorporation or bylaws (or similar
organizational documents);

 

(n)           issued, sold or
otherwise disposed of any equity interests, set aside or paid any dividend or
other distribution on its equity interests, or redeemed, purchased or otherwise
acquired any of its equity interests;

 

14

 

(o)           entered into any
transaction with any director or executive officer other than payments of
salary, other compensation, reimbursement of expenses and similar items in the
ordinary course of the Business;

 

(p)           settled any material
Tax Audit, made or changed any material Tax Election or filed any material
amended Tax Return;

 

(q)           entered into any
transaction other than (i) this Agreement and the Transactions and (ii) in
the ordinary course of the Business consistent with past practice;

 

(r)            agreed to do any of
the foregoing; or

 

(s)            received any notice
of any development (exclusive of general economic factors affecting business in
general and changes in the seismic acquisition business) or threatened
development affecting customers, suppliers, employees or other entities that
have contractual relations with such Business Owning Entity.

 

Section 3.7            Taxes.   Except as disclosed in Section 3.7
of the Seller Disclosure Schedule or as would not, individually or in the
aggregate, result in a Seller Material Adverse Effect:

 

(a)           With respect to the
Business Owning Entities, (i) all Tax Returns required to be filed on or
before the Closing Date have been or will be filed on or before the Due Date in
accordance with any applicable Laws and (ii) all Taxes shown as due on
such Tax Returns have been or will be paid or have been or will be accrued or
reserved for in the Business Financial Statements.  Such Tax Returns are true, correct and
complete. Notwithstanding anything to the contrary in this Agreement, no Seller
makes any representation or warranty as to the ability of any Person to
utilize, or otherwise benefit from, any Tax loss or credit carryforward or any
other Tax attribute of any Purchased Entity or any Subsidiary.

 

(b)           With respect to the
Business Owning Entities, (i) there are no audits, adjustments,
assessments or other proceedings with respect to Taxes pending or proposed by a
Governmental Authority, (ii) there are no waivers or extensions of any
applicable statute of limitations for the assessment or collection of Taxes
with respect to any Tax Return that remain in effect, and (iii) there are
no Liens for Taxes upon the Purchased Assets or any of the Purchased Entities
or any Subsidiary of a Purchased Entity, except for Liens for Taxes not yet due
and payable or Liens for Taxes being contested in good faith through appropriate
proceedings.

 

(c)           The Business Owning
Entities have withheld and paid all Taxes required to have been withheld and
paid in connection with any amounts paid or owing to any employee, independent
contractor, creditor, stockholder or other third party.

 

(d)           The Business Owning
Entities have duly and timely collected all amounts on account of any
Non-Income Taxes required by Law to be collected by them and have duly and
timely remitted to the appropriate Tax Authority any such amounts required by

 

15

 

Law to be remitted by them including, but not limited to, all
unemployment compensation and workers’ compensation Taxes.

 

(e)           None of the
Purchased Entities or their Subsidiaries has been at any time within the five-year
period ending on the Closing Date a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Code, and
none of the Purchased Assets is a United States real property interest within
the meaning of Section 897(c)(1) of the Code.

 

(f)            The accruals and
reserves for Taxes, including deferred Taxes, reflected in the Business
Financial Statements are accurate and complete.

 

(g)           Subsequent to the
date of the Most Recent Balance Sheet, the Business Owning Entities have not
incurred any Taxes, other than Taxes in the ordinary course of the Business and
Taxes arising from any of the Transactions.

 

(h)           None of the Business
Owning Entities is a party to any Contract or Plan that has resulted, or could
result, individually or in the aggregate, in the payment of “excess parachute
payments” within the meaning of Section 280G of the Code.

 

(i)            There are no
requests for rulings or determinations in respect of any Tax pending between
any Business Owning Entity and any Tax Authority.

 

(j)            None of the
Business Owning Entities has signed an agreement with any Tax Authority that is
still in effect with respect to any Tax.

 

(k)           The Sellers have
previously delivered or made available to Buyers complete and correct copies of
each of (i) any audit report issued by a Governmental Authority that are
both (x) related to any Tax Audit that has not been finally closed and
settled and (y) related to the United States federal, state or local, or
foreign Taxes due from or with respect to the Purchased Entities or their
Subsidiaries and (ii) all Income Tax Returns filed by each of the
Purchased Entities and their Subsidiaries for its three most recent taxable
periods.

 

(l)            Each of the
Purchased Entities and their Subsidiaries is treated as a corporation for
United States federal income Tax purposes.

 

(m)          None of the Purchased
Entities or any of their Subsidiaries has been a member of any affiliated group
or a member of a combined, consolidated or unitary group or other Tax grouping
for United States federal, state, local or foreign Tax purposes (other than the
PGS Group).

 

(n)           None of the
Purchased Entities or any of their Subsidiaries that is a U.S. corporation has
distributed stock of another Person, or had its stock distributed by another
Person that is a U.S. corporation, in a transaction that was intended to be
governed in whole or in part by Section 355 of the Code within the
two-year period ending on the Closing Date.

 

16

 

(o)           None of the
Purchased Entities or any of their Subsidiaries will be required to include any
material item of income in, or exclude any material item of deduction from,
taxable income for any taxable period (or portion thereof) ending after the
Closing Date as a result of any (i) change in method of accounting for a
taxable period ending on or prior to the Closing Date; (ii) closing
agreement with a Tax Authority executed on or prior to the Closing Date; (iii) intercompany
transactions (within the meaning of Treasury Regulation §1.1502-13(b)(1) or
any similar provision of state, local or foreign Law)  or any excess loss account (within the
meaning of Treasury Regulation § 1.1502-19 or any similar provision of state,
local or foreign Law) relating to periods prior to the Closing Date; (iv) installment
sale or open transaction disposition made on or prior to the Closing Date; or (v) prepaid
amount received on or prior to the Closing Date.

 

(p)           None of the
Purchased Entities or any of their Subsidiaries is or has been a party to any “listed
transaction” or “reportable transaction” as defined in Section 6707A(c) of
the Code and Treasury Regulation §1.6011-4.

 

(q)           None of the
Purchased Entities or any of their Subsidiaries has granted any power of
attorney with respect to any Taxes or Tax Return that will be in effect after
the Closing Date.

 

(r)            Each of the
Business Owning Entities has filed Tax Returns in each jurisdiction where it is
required to file such Tax Returns.

 

Section 3.8            Litigation.  Except as disclosed in Section 3.8
of the Seller Disclosure Schedule, (i) there is no suit, claim, action or
proceeding pending against any Business Owning Entity or directly affecting the
conduct of the Business and (ii) to Sellers’ Knowledge, there is no such
suit, claim, action or proceeding threatened or any investigation pending or
threatened against any Business Owning Entity or directly affecting the conduct
of the Business that, in each case, if adversely determined, would result in a
Seller Material Adverse Effect.  Except
as disclosed in Section 3.8 of the Seller Disclosure Schedule, no
Business Owning Entity has been permanently or temporarily enjoined by any
Order from engaging in or continuing any conduct or practice in or related to
the operation of the Business or ownership of the Property nor, to Sellers’
Knowledge, is a Business Owning Entity under investigation by any Governmental
Authority related to the operation of the Business, the ownership by the
Purchased Entities and their Subsidiaries of their respective assets, or the
ownership of the Property.  Except as
disclosed in Section 3.8 of the Seller Disclosure Schedule, there
is no existing Order enjoining or requiring any Business Owning Entity to take
any action of any kind related to the conduct of the Business or the ownership
of the Purchased Entities and their Subsidiaries or ownership of the
Property.  Notwithstanding the foregoing,
no representation or warranty in this Section 3.8 is made with
respect to Environmental Laws, which are covered exclusively by the provisions
set forth in Section 3.10.

 

17

 

Section 3.9            Employee Benefit Plans; ERISA.

 

(a)           Section 3.9(a) of
the Seller Disclosure Schedule lists all Plans in which employees of the
Purchased Entities or employees dedicated to the Business participate or are
eligible to participate by name.

 

(b)           Section 3.9(b) of
the Seller Disclosure Schedule separately identifies the Plans sponsored by any
Purchased Entity or in which only
employees of any Purchased Entity, or employees dedicated to the Business, and
their dependents and beneficiaries, either participate or are eligible to
participate (“Purchased Entity Plans”).  Sellers have provided or made available to
Purchasers current, accurate and complete copies of (i) the most recent
determination letter received by any Purchased Entity from the IRS regarding
each Purchased Entity Plan, (ii) the most recent determination or opinion
letter ruling from the IRS that each trust established in connection with a
Purchased Entity Plan that is intended to be tax exempt under Section 501(a) or
(c) of the Code is so tax exempt, (iii) all pending applications for
rulings, determinations, opinions, no action letters and the like filed with
any Governmental Authority (including the Department of Labor, IRS, PBGC and
the SEC) with respect to any Purchased Entity Plan, (iv) the financial
statements for each Purchased Entity Plan for the three most recent fiscal or
plan years (in audited form if required by ERISA) and, where applicable, Annual
Report/Return (IRS Form 5500) with disclosure schedules, if any, and
attachments for each Purchased Entity Plan, (v) the most recently prepared
actuarial valuation report for each Purchased Entity Plan (including reports
prepared for funding, deduction and financial accounting purposes), (vi) plan
documents, trust agreements, insurance contracts, service agreements and all
Contracts of a Purchased Entity or its ERISA Affiliate with respect to each
Purchased Entity Plan, and (vii) collective bargaining agreements
(including side agreements and letter agreements) relating to the establishment,
maintenance, funding and operation of any Purchased Entity Plan.

 

(c)           With respect to
continuation rights arising under U.S. federal or state Law as applied to
Purchased Entity Plans that are group health plans (as defined in Section 601
et seq. of ERISA), Section 3.9(c) of the Seller Disclosure
Schedule lists (i) each employee and former employee, or qualifying
beneficiary of an employee or former employee, of any Purchased Entity who has
elected continuation coverage, and (ii) each employee, former employee or
qualifying beneficiary of a Purchased Entity who has not elected continuation
coverage but is still within the period in which such election may be made.

 

(d)           Except as set forth
on Section 3.9(d) of the Seller Disclosure Schedule or as
would not result in a Seller Material Adverse Effect, (i) all Plans
intended to be Tax qualified under Section 401(a) or Section 403(a) of
the Code are so qualified, (ii) all trusts established in connection with
Plans intended to be Tax exempt under Section 501(a) or (c) of
the Code are so Tax exempt, (iii) to the extent required either as a
matter of Law or to obtain the intended Tax treatment and Tax benefits, all
Plans comply with the requirements of ERISA and the Code and other applicable
Laws, and (iv) all Plans have been administered in accordance with the
documents and instruments governing the Plans and applicable Laws.  With respect to the Purchased Entity Plans, (i) to
the extent required either as a matter of Law or to obtain the intended Tax
treatment and Tax benefits, all Purchased Entity Plans comply in all material
respects with the requirements of ERISA, the Code and other applicable Laws,
and (ii) all Purchased Entity Plans have

 

18

 

been administered in all material respects in accordance with the
documents and instruments governing the Purchased Entity Plans and applicable
Laws.

 

(e)           Except as would not
result in a Seller Material Adverse Effect, (i)  all material
contributions, premium payments and other payments required to be made through
the Closing Date in connection with the Purchased Entity Plans have been timely
made, (ii) a proper accrual has been made in all material respects on the
books of account of each Purchased Entity for all contributions, premium
payments and other payments due in the current fiscal year, and (iii) no
contribution, premium payment or other payment has been made in support of any
Purchased Entity Plan that is in excess of the allowable deduction for federal
income Tax purposes for the year with respect to which the contribution was
made (whether under Section 162, Section 280G, Section 404, Section 419,
Section 419A of the Code or otherwise).

 

(f)            No Purchased Entity
Plan is subject to Section 301 et seq. of
ERISA or Section 412 of the Code.

 

(g)           Except as disclosed
in Section 3.9(g) of the Seller Disclosure Schedule, the
consummation of the Transactions will not by themselves or in combination with
any other event (without regard to whether such event has or may occur) (i) cause
any Purchased Entity Plan to increase benefits payable to any participant or
beneficiary, (ii) entitle any Business Employee or other Person to
severance pay, unemployment compensation or any other payment, benefit or award
under a Purchased Entity Plan, or (iii) accelerate or modify the time of
payment or vesting, or increase the amount of any benefit, award or
compensation due to any Business Employee or other Person under a Purchased
Entity Plan.

 

(h)           Except as would not
result in a Seller Material Adverse Effect, (i)  no Legal Action is
pending or, to the Sellers’ Knowledge, threatened with regard to any Purchased
Entity Plan other than routine claims for benefits, (ii) no Purchased
Entity or Purchased Entity Plan is under examination or audit as of the Closing
Date by the United States Department of Labor, the IRS or the PBGC, (iii) no
Purchased Entity has any actual or potential Liability arising under Title IV
of ERISA as a result of any Plan that has terminated in the past six years or is
in the process of terminating, (iv) no Purchased Entity has any actual or
potential Liability under Section 4201 et seq. of
ERISA for either a complete withdrawal or a partial withdrawal from a
multiemployer plan (as defined in Section 3(37) of ERISA), (v) with
respect to the Purchased Entity Plans, no Purchased Entity has any Liability
(either directly or as a result of indemnification) for (and the Transactions
will not cause any material Liability for): 
(A) any excise Taxes under Section 4971 through Section 4980B,
Section 4999, Section 5000 or any other Section of the Code, (B) any
penalty under Section 502(i), Section 502(l), Part 6 of Title I
or any other provision of ERISA, or (C) any excise Taxes, penalties,
damages or equitable relief as a result of any prohibited transaction, breach
of fiduciary duty or other violation under ERISA or any other applicable Law,
and (vi) no Purchased Entity has any Liability for life insurance, death,
long-term care,  medical (or other
health) benefits after separation from employment, including any such coverage
for retirees, other than (A) death benefits

 

19

 

under the Purchased Entity Plans and (B) health care continuation
benefits, as described in Section 4980B of the Code, or other benefits
required by applicable Law.

 

(i)            No Purchased
Entity, Purchased Entity ERISA Affiliate, or any other Person that is treated,
or was previously treated, as a single employer with any Purchased Entity has,
within the past six years, contributed to or had any other Liability under or
with respect to any (i) plan subject to the funding requirements of Section 303
of ERISA or Section 412 of the Code or Title IV of ERISA; (ii) “multiple
employer welfare arrangement” as defined in Section 3(40)(A) of ERISA
or “multiple employer plan” as described in Section 413(c) of the
Code; or (iii) multiemployer plan as defined in Section 3(37) of
ERISA or Section 414(f) of the Code. 
Except as would not result in a Seller Material Adverse Effect, no Purchased
Entity has Liability, nor has taken any action that could give rise to such
Liability, including under any Purchased Entity Plan, arising out of the
treatment of any service provider as a consultant or independent contractor and
not as an employee.

 

Section 3.10         Environmental Liability.  Except as set forth in Section 3.10
of the Seller Disclosure Schedule or as would not result in a Seller Material
Adverse Effect, in connection with the conduct of the Business:

 

(a)           The Business is
conducted in compliance with all applicable Environmental Laws in effect on the
Effective Date.

 

(b)           To Seller’s
Knowledge, no Business Owning Entity has caused or allowed the generation,
treatment, manufacture, processing, distribution, use, storage, discharge,
release, disposal, transport or handling by it of any Hazardous Material,
except in compliance with all Environmental Laws, and no generation, treatment,
manufacture, processing, distribution, use, storage, discharge, release,
disposal, transport or handling of any Hazardous Material by it has occurred at
any property or facility owned, leased or operated by any Business Owning
Entity except in compliance with all Environmental Laws.

 

(c)           Since January 1,
2006, no Business Owning Entity has received any written notice from any
Governmental Authority or third party or, to Sellers’ Knowledge, any other
communication alleging or concerning any material violation by any Business
Owning Entity of, or responsibility or liability of any Business Owning Entity
under, any Environmental Law, including liability or responsibility for
investigation costs, cleanup costs, governmental response costs, natural
resource damages, attorneys’ fees or penalties. 
There are no pending, or to Sellers’ Knowledge, threatened, Legal
Actions with respect to the Business alleging or concerning any material
violation of, or responsibility or liability under, any Environmental Law,
including liability or responsibility for investigation costs, cleanup costs,
governmental response costs, natural resource damages, attorneys’ fees or
penalties.

 

(d)           The Business Owning
Entities have obtained and are in compliance with all Permits from all
Governmental Authorities under all Environmental Laws required for the conduct
of the Business as presently conducted; there are no pending or, to Sellers’

 

20

 

Knowledge, threatened, Legal Actions alleging violations of or seeking
to modify, revoke or deny renewal of any of such Permits.

 

(e)           To Seller’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 Hazardous Materials, that
could reasonably be expected to result in a violation of or liability under any
Environmental Law by any Business Owning Entity.

 

(f)            Without in any way
limiting the generality of the foregoing, to Sellers’ Knowledge, (i) no
offsite locations where any Business Owning Entity has transported, released,
discharged, stored, disposed or arranged for the disposal of Hazardous Material
since January 1, 2006 have experienced releases of Hazardous Material
reasonably likely to result in liability to the Business under any
Environmental Law, and (ii) no polychlorinated biphenyls (“PCBs”), PCB-containing items,
asbestos-containing materials, or radioactive materials are used or stored in
the conduct of the Business at any property owned, leased or operated by any
Business Owning Entity since January 1, 2006 except in compliance with
Environmental Laws; provided, however, that Sellers make no
representation or warranty about whether any leased premises used in the
Business may contain any such items or materials.

 

(g)           Since January 1,
2006, no claims have been asserted or, to Sellers’ Knowledge, threatened to be
asserted against any Business Owning Entity for any personal injury (including
wrongful death) or property damage (real or personal) arising out of alleged
exposure or otherwise related to Hazardous Material used, handled, generated,
transported or disposed by any Business Owning Entity.

 

Section 3.11         Compliance with Applicable Laws;
Customs.

 

(a)           Except as would not,
individually or in the aggregate, result in a Seller Material Adverse Effect, (i) each
Business Owning Entity holds all Permits necessary for the lawful conduct of
the Business as conducted by it on the Effective Date, and (ii) the
Business is not being, and to Sellers’ Knowledge, no Business Owning Entity has
received since January 1, 2006 any notice from any Person that the
Business has been or is being, conducted in violation of any Law, including any
Law relating to occupational health and safety; provided, however,
no representation or warranty in this Section 3.11 is made with
respect to Environmental Laws, which are covered exclusively in Section 3.10.

 

(b)           No Business Owning
Entity, nor, to Sellers’ Knowledge, any director, officer, agent, employee or
other person acting on behalf of any Business Owning Entity, has used any
corporate or other funds for unlawful contributions, payments, gifts, or
entertainment, or made any unlawful expenditures relating to political activity
to government officials or others, or established or maintained any unlawful or
unrecorded funds in violation of the Foreign Corrupt Practices Act of 1977, as
amended (the “FCPA”), or any other Law,
except for possible violations that either individually or in the aggregate
have not resulted and would not result in a Seller Material Adverse Effect.

 

21

 

(c)           Except as would not
result in a Seller Material Adverse Effect, (i) all of the assets imported
and used, held, or owned by each Business Owning Entity have been imported and
are being used, held, or owned in compliance with all applicable customs Laws,
including, as applicable, the requirements of any treaty or Tax Authority
published from time to time and (ii) all of the assets temporarily
imported into a jurisdiction by any Business Owning Entity and that are not
physically located within such jurisdiction on the Closing Date have been
properly exported out of such foreign jurisdiction or properly
and permanently imported into such jurisdiction in accordance with
applicable Law, including the requirements of any applicable Tax Authority.

 

Section 3.12         Insurance.  Section 3.12 of the Seller
Disclosure Schedule lists each insurance policy or self-insurance arrangement
of each Business Owning Entity in effect as of the Effective Date insuring
against Liabilities arising from conduct of the Business or ownership of the
Property.  Sellers have made available to
Purchasers a true, complete and correct copy of each such policy or the binder
therefor.  In the opinion of Sellers, the
Business is covered by valid policies of insurance or self-insurance
arrangements of such types and in such amounts (including deductibles) as are
customary for businesses similarly situated to the Business.

 

Section 3.13         Labor Matters; Employees.

 

(a)           Except as set forth
in Section 3.13 of the Seller Disclosure Schedule and except as
would not, individually or in the aggregate, result in a Seller Material
Adverse Effect, (i) there is no labor strike, dispute, slowdown, work stoppage or
lockout actually pending or, to the Sellers’ Knowledge, threatened against or
affecting employees who are employed in the Business and, during the past three
years, there has not been any such action, (ii) no Business Owning Entity
is a party to or bound by any collective bargaining, pre-hire agreement or
similar agreement with any trade union or labor organization, or work rules or
practices agreed to with any trade union or labor organization or employee
association applicable to employees of such Business Owning Entity with respect
to conduct of the Business, (iii) none of the employees of any Business
Owning Entity are represented by any labor organization and to Sellers’
Knowledge, as of the Effective Date, none of the Business Owning Entities have
any union organizing activities among the employees of the Business Owning
Entities, (iv) the Business Owning Entities have each at all times been in
compliance with all Laws respecting employment and employment practices, terms
and conditions of employment, wages, hours of work and occupational safety and
health, and are not engaged in any unfair labor practices as defined in the
National Labor Relations Act or other Law, (v) there is no unfair labor
practice charge or complaint against any Business Owning Entity relating to
employees who are or were employed in the Business pending or, to Sellers’
Knowledge, threatened before the National Labor Relations Board or any similar
state or foreign agency, (vi) there is no grievance or arbitration
proceeding arising out of any collective bargaining agreement or other
grievance procedure with respect to any Business Owning Entity relating to
employees who are employed or were employed in the Business, (vii) neither
the Occupational Safety and Health Administration nor any other Governmental
Authority has threatened to file any citation, and there are no pending
citations, with respect to a Business Owning Entity relating to employees who are
or were employed in the Business, (viii) there is no employee or governmental
claim

 

22

 

or investigation, including any charges to the Equal Employment
Opportunity Commission or other Governmental Authority, investigations
regarding Fair Labor Standards Act compliance, audits by the Office of Federal
Contractor Compliance Programs or similar Government Authority, Workers’
Compensation claims, sexual harassment, discrimination or retaliation
complaints or demand letters or threatened claims and (ix) all current and
former employees of any Business Owning Entity have been, or will have been on
or before the Closing Date, paid in full (or appropriate accruals will have
been made in accordance with GAAP) for all wages, salaries, commissions,
bonuses, vacation pay, severance and termination pay, sick pay, and any other
compensation for all services performed by them and accrued up to the Closing
Date, payable in accordance with the obligations of the Business Owning Entity
under any Law, employment or labor practice and policy, or any collective
bargaining agreement or individual agreement to which the Business Owning
Entity is a party, or by which the Business Owning Entity is bound.

 

(b)           Since January 1,
2006, no Business Owning Entity has effectuated (i) a “plant
closing” (as defined in the WARN Act) affecting
any site of employment or one or more facilities or operating units within any
site of employment or facility used in the Business, or (ii) a “mass layoff” (as defined
in the WARN Act) affecting any site of employment or facility used in the
Business, nor has a Business Owning Entity been affected by any transaction or
engaged in layoffs or employment terminations sufficient in number to trigger
application of any similar state or local law, in either case that would result
in a Seller Material Adverse Effect.

 

Section 3.14         Permits.  Immediately prior to the Closing Date and
except for Customary Post-Closing Consents, the Business Owning Entities will
hold all of the Permits required or necessary to own, operate, use and/or
maintain the assets of each Purchased Entity and any Subsidiary of such Purchased
Entity, the Properties and conduct the Business, except for such Permits, the
lack of which, individually or in the aggregate, would not have a Seller
Material Adverse Effect; provided, however, that no
representation or warranty in this Section 3.14 is made with
respect to Permits issued pursuant to Environmental Laws, which are covered
exclusively in Section 3.10.

 

Section 3.15         Material Contracts.  Except (i) as listed and described in Section 1.1(d) of
the Seller Disclosure Schedule or in Section 3.15 of the Seller
Disclosure Schedule or (ii) for such Contracts that will not be binding on
any Purchased Entity or the Property as of the Closing Date, as of the
Effective Date, no Business Owning Entity is a party to and none of the
Business Owning Entities, the Property or the Business is bound by any written
or oral Contract, including the following:

 

(a)           Contract with any
present or former stockholder, director or officer, or material Contract with
any present or former employee, independent contractor, consultant or advisor
of PGS, a Seller, a Purchased Entity or any Affiliate of any of the foregoing;

 

(b)           Contract with any
labor union or other representative of employees;

 

23

 

(c)           Contract or
understanding in the nature of a bonus, deferred compensation, pension, profit
sharing, retirement, stock purchase, stock option, hospitalization, insurance,
vacation, severance or similar plan or practice, formal or informal, with
respect to its officers, employees or others;

 

(d)           Contract or other
arrangement in the nature of a settlement or a conciliation agreement arising
out of any allegation or claim, actual or potential, of any illegal, unfair or
improper employment practices or policies of any Seller or Purchased Entity;

 

(e)           Contract for the
future purchase of, or payment for, supplies or products, or for the
performance of services by a third party, involving payment or potential
payment by a Business Owning Entity, of $1,000,000 or more under any one
Contract or series of related Contracts;

 

(f)            Contract to sell or
supply products or to perform services in an aggregate amount in excess of
$1,000,000, including any contract for the acquisition of any seismic data
included in the Multi-Client Library entered into since December 31, 2008;

 

(g)           Distributorship,
representative or sales agency agreement, contract or commitment;

 

(h)           Conditional sale
agreement or lease under which an Asset Seller with respect to its conduct of
the Business, or a Purchased Entity is either the seller or purchaser, lessor
or lessee;

 

(i)            Contract
(including, without limitation, any note, debenture, bond, conditional sale or
equipment trust agreement, letter of credit agreement or loan agreement) for
the borrowing or lending of money (including, without limitation, those to or
from officers, directors or stockholders of a Business Owning Entity, or any
Affiliates or members of their immediate families, for a line of credit, or for
a guarantee, pledge or undertaking of the indebtedness of any other Person);

 

(j)            Contract for any
charitable or political contribution that exceeds, individually or in the
aggregate, $10,000;

 

(k)           Contract with any
Governmental Authority;

 

(l)            Contract for any
capital expenditure involving future payments that, together with future
payments under all other existing Contracts for the same capital project,
exceed $1,000,000;

 

(m)          Contract limiting or
restraining a Business Owning Entity from engaging or competing in any lines of
business with any Person;

 

(n)           License, franchise,
distributorship or other Contract relating in whole or in part to any
Intellectual Property used in the Business;

 

24

 

(o)           Contracts to acquire
seismic data that have been completed since September 30, 2008 but that
have ongoing warranty or indemnification provisions; or

 

(p)           Material Contract
not made in the ordinary course of the Business, except for those listed in any
section of the Seller Disclosure Schedule.

 

Except as may be disclosed in such Section 3.15
of the Seller Disclosure Schedule, to Sellers’ Knowledge each of the Contracts
listed on any section of the Seller Disclosure Schedule hereto is valid and
enforceable in accordance with its terms, except for the Enforceability
Exception; each Business Owning Entity and, to Sellers’ Knowledge, the other
parties thereto are in material compliance with the provisions thereof; and
except as may be disclosed in Section 3.15 of the Seller Disclosure
Schedule, to Sellers’ Knowledge, no Business Owning Entity is in default in the
performance, observance or fulfillment of any material obligation, covenant or
condition contained therein and no event has occurred that with or without the
giving of notice or lapse of time, or both, would constitute a default
thereunder.  All Contracts listed in Section 3.15
of the Seller Disclosure Schedule that were entered into or executed on or
after the date of the Most Recent Business Balance Sheet and prior to the
Effective Date are specifically identified in Section 3.15 of the
Seller Disclosure Schedule.

 

Section 3.16         Intellectual Property.

 

(a)           Section 3.16
of the Seller Disclosure Schedule identifies each (i) patent, copyright
registration, trademark registration and service mark registration owned by
each of the Business Owning Entities, (ii) patent application, application
to register a copyright, trademark and service mark application, including
applications for reissuances, continuations, continuations-in-part, revisions,
extensions and reexaminations filed by any Business Owning Entity, and (iii) Contract
pursuant to which any of the Business Owning Entities has granted to a third
party rights under or with respect to any of its Intellectual Property used in
the conduct of the Business as of the Effective Date.  Section 3.16(a) of the Seller
Disclosure Schedule also identifies each material unregistered trademark, and
unregistered service mark each of the Business Owning Entities uses in the
conduct of the Business.

 

(b)           Except as set forth
in Section 3.16 of the Seller Disclosure Schedule, to the Sellers’
Knowledge, the Business Owning Entities own all right, title and interest in
and to, or have valid and continuing rights to use, sell and license, all
Intellectual Property used in the conduct of the Business, free and clear of
all Liens other than Permitted Liens. 
Except for the Excluded Assets and except as identified in Section 3.16
of the Seller Disclosure Schedule, each item of material Intellectual Property
owned or used by each of the Business Owning Entities immediately prior to the
Closing will be owned or available for use by the Purchased Entities on
identical terms and conditions immediately subsequent to the Closing without
the need for any further right, license, permission or consent in respect thereof
and the consummation of the Transactions will not impair, alter or limit in any
way such ownership or rights, except to the extent of limitations arising from
the License Agreement.  All such
Intellectual Property owned or purported to be owned by the Business Owning
Entities is subsisting, and all necessary registration, maintenance, renewal,
and other relevant filing fees due through the Effective Date in

 

25

 

connection therewith have been timely paid and all necessary documents
and certificates in connection therewith have been timely filed with the
relevant patent, copyright, trademark, or other authorities in the United
States or foreign jurisdictions, as the case may be, for the purposes of maintaining
such registered Intellectual Property in full force and effect.  To the Sellers’ Knowledge, the Business and
operations of the Business Owning Entities, their products and services and the
designing, development, manufacturing, reproduction, use, marketing, sale,
distribution, maintenance and modification of any of the foregoing as presently
performed and as contemplated to be performed on the Effective Date does not
infringe upon, misappropriate or otherwise violate any Intellectual Property of
any third party.  To the Sellers’
Knowledge, all of the Intellectual Property owned or purported to be owned by
the Business Owning Entities is valid and enforceable.

 

(c)             Except as set forth in Section 3.16
of the Seller Disclosure Schedule, the Purchased Entities set forth in Section 3.16(c)
of the Seller Disclosure Schedule own all right, title and interest in and
to the data contained in the Multi-Client Library, and there are no, and
following the Closing there will be no, restrictions or limitations on the
license, use, sale or other transfer of the Multi-Client Library, and no
license fees, royalties or other fees are or will be payable as a result of the
license, use, sale or other transfer of the Multi-Client Library.  Except as set forth in Section 3.16
of the Seller Disclosure Schedule and in restricted, non-transferrable,
non-exclusive internal use only licenses granted to customers of the Business
in the ordinary course of business, immediately following the Closing no party
other than the Purchased Entities will own any right, title or interest in or
to the Multi-Client Library or any of its data.

 

(d)             Except as set forth in Section 3.16
of the Seller Disclosure Schedule, there is no Legal Action pending or, to
Sellers’ Knowledge, threatened, by any third party (i) relating to any
Intellectual Property whose ownership is, or is purported to be, transferred to
Geokinetics hereunder; (ii) challenging the validity, enforceability, use
or exclusive ownership of any Intellectual Property whose ownership is, or is
purported to be, transferred to Geokinetics hereunder; or (iii) alleging
any infringement, misappropriation, or violation of any Intellectual Property
of any third party, or any unfair competition or trade practices, by the
Business Owning Entities in connection with the Business.

 

(e)             There are no Contracts between the Business
Owning Entities and any third party relating to any Intellectual Property of
the Business Owning Entities or any third party, with respect to the Business,
under which there is, as of the Effective Date, any dispute or Legal Action.

 

(f)              Except for Orders customary in the process of
obtaining a governmental registration for Intellectual Property, no
Intellectual Property whose ownership is, or is purported to be, transferred to
Geokinetics hereunder is subject to any outstanding Order or stipulation that
restricts in any manner the use, transfer or licensing thereof by the Business
Owning Entities or affects the validity, use or enforceability of any such
Intellectual Property.

 

26

 

(g)           Except as set forth
in Section 3.16 of the Seller Disclosure Schedule, the Business
Owning Entities:  (i) have taken
reasonable measures to protect the confidentiality of all trade secrets owned
or purported to be owned by the Business Owning Entities that are used in the
Business as conducted on the Effective Date; (ii)  have, except as would
not result in a Seller Material Adverse Effect, executed valid written
agreements with all of their past and present employees who have contributed to
the development of Intellectual Property pursuant to which such employees have
assigned to the Business Owning Entities all their rights in and to all
Intellectual Property they may develop in the course of their employment and
agreed to hold all trade secrets and confidential information of the Business
Owning Entities, as applicable, in confidence both during and after their
employment; and (iii)  have, except as would not result in a Seller
Material Adverse Effect, executed valid written agreements with all past and
present consultants and independent contractors who have been retained in
connection with the development of Intellectual Property used in the Business
as conducted on the Effective Date by which the consultants and independent
contractors have assigned to the Business Owning Entities all their rights in
and to such Intellectual Property and agreed to hold all trade secrets and
confidential information of the Business Owning Entities, as applicable, in
confidence both during and after the term of their engagements.  To the Sellers’ Knowledge, with respect to
the Business:  (x) no trade secrets
or other confidential information owned or purported to be owned by the
Business Owning Entities used in the Business as conducted on the Effective
Date have been disclosed or authorized to be disclosed by the Business Owning
Entities to any of their employees or any third party other than pursuant to a
written non-disclosure or confidentiality agreement; and (y)  no employee,
consultant or independent contractor of the Business Owning Entity is, as a
result of or in the course of such employee’s, consultant’s or independent
contractor’s engagement by the Business Owning Entities, in default or breach
of any term of any employment agreement, non-disclosure agreement, assignment
of invention agreement or similar agreement that conveys rights to Seller of
Intellectual Property used in the Business as of the Effective Date.

 

Section 3.17         Accounts Receivable.  All Accounts Receivable for the Business
reflected on the Most Recent Business Balance Sheet, all Accounts Receivable
for the Business constituting part of the Property, and all Accounts Receivable
of a Purchased Entity on the Closing Date, have arisen only in the ordinary
course of the Business for goods sold and delivered or services performed.  All of such Accounts Receivable are and will
be collectible, in full in the aggregate recorded amounts thereof, less the
amount of the allowance for doubtful accounts reflected on the Most Recent
Business Balance Sheet, free of any, and subject to no, defenses, offsets of
counterclaims other than general warranty claims for products sold or services
rendered on or before the Closing Date. 
For purposes of determining whether an Account Receivable has been paid
within such period, all payments of accounts shall be deemed payment of the
invoice specified by the Person paying such account and, where no specification
is made, shall be deemed payment of the oldest account receivable from such
Person.  The allowances for such doubtful
accounts have been, and will be, determined in accordance with GAAP consistent
with past practice.

 

27

 

 

Section 3.18         Inventory.  Any Inventory of the Business constituting
part of the Property, or owned by a Purchased Entity on the Closing Date will
be of a quality and quantity usable or salable in the ordinary course of the
Business consistent with past practice.

 

Section 3.19         Sufficiency of Assets.  Except for (i) the Excluded Assets,
(ii) any assets and services to be provided as contemplated by the
Transition Services Agreement and (iii) any financing previously provided
to the Business by PGS or an Affiliate of PGS, the assets owned by the
Purchased Entities and the Subsidiaries of the Purchased Entities and the
Purchased Assets constitute all material real, personal, tangible and, to the
Sellers’ Knowledge, intangible property and assets reasonably necessary for the
conduct of the Business at the Effective Date.

 

Section 3.20         Real Property.  Section 3.20 of the Seller
Disclosure Schedule contains (i) a complete list and brief description of
all Real Property owned by or leased to a Business Owning Entity and used in
the Business, indicating whether the property is owned or leased, (ii) a
brief description of the principal facilities located thereon.  To Sellers’ Knowledge and except as would not
result in a Seller Material Adverse Effect, each Business Owning Entity
(A) has good and marketable title to all Real Property purported to be
owned by it, (B) owns outright all the facilities and structures referred
to as owned by such Business Owning Entity in Section 3.20 of the
Seller Disclosure Schedule, in each case free and clear of Liens (other than
Permitted Liens), except in each case as set forth in Section 3.20
of the Seller Disclosure Schedule, (C) enjoys quiet possession of the
property, facilities, structures and other improvements purported to be leased
to it under leases with respect thereto, and (D) is the holder and enjoys
the benefit of the easements and similar rights that a Business Owning Entity
owning real property purports to hold or to which a Business Owning Entity
purports to have any rights, and the rights of each Business Owning Entity with
respect to each such easement or similar right are in full force and effect.

 

Section 3.21         Equipment and Other
Personal Property.  Section 3.21
of the Seller Disclosure Schedule contains a complete list of (i) all
material equipment, fixtures, vehicles and other Personal Property, other than
Inventory, owned by a Business Owning Entity, including the location thereof,
and (ii) all material items of Personal Property leased by a Business Owning
Entity, together with a brief description of the terms of the leases relating
thereto, in each case, as reflected in the Most Recent Business Balance Sheet
and used in the Business.  On the Closing
Date, except as would not result in a Seller Material Adverse Effect, each
Business Owning Entity:

 

(i)            will have good title to all
the Personal Property reflected as owned on the Most Recent Business Balance
Sheet and all Personal Property acquired since the date of the Most Recent
Business Balance Sheet (except for sales and other dispositions of property in
the ordinary course of the Business), and

 

(ii)           will enjoy quiet possession
of each item of Personal Property shown on the Most Recent Business Balance
Sheet as leased, and all items of Personal Property leased to an Asset Seller
and used in the Business, or a Purchased Entity since such date (except for
leases terminated or cancelled in the ordinary course of the Business but
including each leased item listed in Section 1.1(b) of the
Seller Disclosure Schedule) in each case, free and clear of Liens other than
Permitted Liens.  The Personal Property

 

28

 

owned
or leased by a Business Owning Entity or otherwise used in the conduct of the
Business and necessary for the conduct of such Business at the Effective Date
are in operating condition and repair, ordinary wear and tear excepted, such as
to permit the conduct of the Business, except for any failure to be in such
condition or repair as would not, individually or in the aggregate, result in a
Seller Material Adverse Effect.

 

Section 3.22         Transactions with
Affiliates.   Except for
(i) receivables from and payables and indebtedness owed to PGS or its
Affiliates, (ii) the data processing business unit of PGS, which processes
data acquired by the Business, and (iii) the shared services arrangements
between the Business and one or more Affiliates of PGS, no director, officer or
stockholder of a Business Owning Entity, or any member of his immediate family,
owns, directly or indirectly, or has an ownership interest, either of record,
beneficially or equitably, in any business, corporate or otherwise, that is a
party to, or in any property that is the subject of, any business arrangements
or relationships of any kind that is material to the conduct of the Business.

 

Section 3.23         Brokers.  No broker, finder or investment banker (other
than Pareto Securities, the fees and expenses of which will be paid by PGS) is
entitled to any brokerage, finder’s fee or other fee or commission payable by a
Business Owning Entity in connection with the Transactions based upon
arrangements made by and on behalf of PGS or a Business Owning Entity.

 

Section 3.24         Securities
Act Representations.

 

(a)           The shares of Geokinetics
Common Stock (collectively, “Purchased Common Stock”)
being acquired by each Seller, if any, are being acquired for such Seller’s own
account, not as a nominee or agent, and such Seller does not have a present
intention of selling or granting any participation in or otherwise distributing
the Purchased Common Stock in any transaction in violation of the securities
laws of the United States of America or any state, without prejudice, however,
to such Seller’s right at all times to sell or otherwise dispose of all or any
part of the Purchased Common Stock under a registration statement under the
Securities Act and applicable state securities laws or under an exemption from
such registration available thereunder. 
Such Seller understands and agrees that if it should in the future decide
to dispose of any of the Purchased Common Stock, such Seller may do so only
(i) in compliance with the Securities Act and applicable state securities
law, as then in effect, or pursuant to an exemption therefrom or (ii) in
the manner contemplated by any registration statement pursuant to which such
securities are being offered.

 

(b)           It is understood that any
certificates evidencing the Purchased Common Stock will bear the following
legend:  “These
securities have not been registered under the Securities Act of 1933, as
amended, or any state securities law. 
These securities may not be sold, offered for sale, pledged or
hypothecated in the absence of a registration statement in effect with respect
to the securities under the Securities Act of 1933, as amended, and any such
state securities laws or the issuer has received documentation reasonably
satisfactory to it that such transaction does not require registration under
the Securities Act of 1933, as amended, and state securities laws.”

 

29

 

(c)           Each Seller (i) is an “accredited investor” within the
meaning of Rule 501 of Regulation D promulgated by the SEC pursuant to the
Securities Act and (ii) by reason of its business and financial experience
it has such knowledge, sophistication and experience in business and financial
matters so as to be capable of evaluating the merits and risks of the
prospective investment in the Purchased Common Stock.

 

Section 3.25         Bank Accounts.   Section 3.25 of the Seller
Disclosure Schedule lists the account numbers and names of each bank, broker or
other depositary institution at which any of the Purchased Entities maintains a
depository account (other than any depository account relating to Excluded
Assets) relating to the Business and the names of all Persons authorized to
sign on or withdraw funds from each such account.

 

Section 3.26         Information Supplied in
Geokinetics Offering Documents.  The information
to be supplied in writing by PGS for inclusion in the Geokinetics Offering
Documents (the “Supplied Information”) will
not, as of the respective date of such Geokinetics Offering Document, contain
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements in such Supplied Information, in the
light of the circumstances under which they were made, not misleading.

 

Section 3.27         Exclusivity of
Representations and Warranties.  None of the
Sellers nor any of their Affiliates or representatives is making any
representation or warranty on behalf of any Person of any kind or nature
whatsoever, oral or written, express or implied (including, but not limited to,
any relating to financial condition, results of operations, assets or
liabilities of the Business), except as expressly set forth in Article II
and this Article III, and each Seller hereby disclaims any such
other representations or warranties. 
Except as expressly set forth in this Agreement, all representations and
warranties of the Sellers in this Agreement relate only to the Purchased
Entities, the Business or the Purchased Assets and not to any other business or
assets of the Sellers.

 

Section 3.28         Investigation by the
Sellers; No Reliance; Purchasers’ Liability. 
In entering into this Agreement, each of the Sellers
has relied solely upon its own investigation and analysis and the specific
representations and warranties of the Purchasers set forth in Article IV
of this Agreement, and each of the Sellers:

 

(a)           acknowledges and agrees
that, except for the specific representations and warranties of the Purchasers
set forth in Article IV of this Agreement, none of the Purchasers
or any of their respective directors, officers, shareholders, employees,
Affiliates, agents, advisors or representatives (collectively, the “Purchaser Representatives”) makes
or has made any representation or warranty, either express or implied, as to
the accuracy or completeness of any of the information provided or made
available to such Seller or its directors, officers, employees, Affiliates,
controlling persons, agents or representatives (collectively, the “Seller Representatives”), including
any information, document, or material provided or made available, or
statements made, to such Seller or Seller Representative in “data rooms,”
management presentations or supplemental due diligence information provided to
such Seller or Seller Representative in connection with discussions with
management of the Business or in any other form in expectation of the
Transactions (collectively, “Purchaser Due Diligence
Information”);

 

30

 

(b)           acknowledges and agrees that
(i) the Purchaser Due Diligence Information includes certain projections,
estimates and other forecasts, and certain business plan information,
(ii) there are uncertainties inherent in attempting to make such
projections, estimates and other forecasts and plans and such Seller is
familiar with such uncertainties, and (iii) such Seller is taking full
responsibility for making its own evaluation of the adequacy and accuracy of
all projections, estimates and other forecasts and plans included in such
Purchaser Due Diligence Information so furnished to it and any use of or
reliance by such Seller on such projections, estimates and other forecasts and
plans shall be at its sole risk; and

 

(c)           agrees, to the fullest
extent permitted by Law, that none of the Purchasers or any Purchaser
Representative shall have any liability or responsibility whatsoever to such
Seller or Seller Representative on any basis (including in contract or tort,
under federal or state securities laws or otherwise) resulting from the
distribution to such Seller, or such Seller’s use of, any Purchaser Due
Diligence Information, except that the foregoing limitations shall not apply to
the extent the Purchasers make the specific representations and warranties set
forth in Article IV of this Agreement, but always subject to the
limitations and restrictions contained in this Agreement.

 

ARTICLE
IV.

REPRESENTATIONS AND WARRANTIES REGARDING

GEOKINETICS AND ITS SUBSIDIARIES

 

Except as disclosed in the Purchaser Disclosure
Schedule, each of Geokinetics and the Purchasers, jointly and severally,
represent and warrant to the Sellers as follows:

 

Section 4.1            Organization and
Qualification.  Each of
Geokinetics and its Subsidiaries is duly organized, validly existing and  (in those jurisdictions where the concept
applies) in good standing under the Laws of its jurisdiction of formation.  Each of Geokinetics and its Subsidiaries is
duly qualified to do business as a foreign Person and (in those jurisdictions
where the concept applies) is in good standing in the jurisdictions in which
the character of its properties or the nature of its business makes such
qualification necessary, except in jurisdictions, if any, where the failure to
be so qualified would not result in a Purchaser Material Adverse Effect.  Each of Geokinetics and its Subsidiaries has
all requisite corporate or other organizational power and authority to own, use
or lease its properties and to carry on its business as it is being conducted
at the Effective Date.

 

Section 4.2            Capitalization.

 

(a)           The authorized capital stock
of Geokinetics as of the Effective Date consists of 100,000,000 shares of
common stock, par value $.01 per share (“Geokinetics Common Stock”),
and 2,500,000 shares of preferred stock of Geokinetics, par value $10.00 per
share.  As of the Effective Date,
Geokinetics has (i) 10,822,192 shares of Geokinetics Common Stock issued
and outstanding, (ii) no shares of Geokinetics Common Stock held in
treasury, (iii) 284,321 shares of Series B-1 Senior Convertible
Preferred Stock (the “Series B-1 Preferred
Stock”) outstanding, (iv) 131,270 shares of Series B-2
Senior Convertible Preferred Stock (together with the Series B-1 Preferred
Stock, the “Series B

 

31

 

Preferred Stock”) outstanding,
(v) outstanding stock options to acquire 321,082 shares of Geokinetics
Common Stock under Geokinetics’ 2002 Stock Awards Plan and 2007 Stock Awards
Plan and (vi) 514,105 shares issuable upon the exercise of outstanding
warrants. All of the issued and outstanding shares of capital stock of
Geokinetics have been duly authorized and are validly issued, fully paid and
nonassessable and are free of preemptive rights, except as set forth in Section 4.2
of the Purchaser Disclosure Schedule. Except as set forth on Section 4.2
of the Purchaser Disclosure Schedule, none of Geokinetics or any of its
Subsidiaries has any issued or outstanding bonds, debentures, notes, securities
or other obligations or other securities that entitle the holders thereof to
vote with any stockholders of Geokinetics or its Subsidiaries, whether together
or as a separate class, on any matters on which the stockholders of Geokinetics
or its Subsidiaries may vote, or that are convertible into or exercisable for
shares of Geokinetics Common Stock or other securities of Geokinetics or its
Subsidiaries having a right to vote. 
Except as set forth above, and other than this Agreement, there are no
outstanding subscriptions, options, calls, rights, warrants, convertible
securities, stock appreciation rights, phantom equity, or other Contracts
(including “rights plans” or “poison pills”) obligating Geokinetics or any of
its Subsidiaries to issue, transfer, sell, redeem, repurchase or otherwise
acquire any shares of capital stock or other equity interests of Geokinetics or
its Subsidiaries.  There are no voting
trusts or other agreements, arrangements or understandings to which Geokinetics
or any of its Subsidiaries is a party with respect to the holding, voting or
disposing of any shares of capital stock or other equity interests of
Geokinetics or its Subsidiaries.

 

(b)           Geokinetics owns, directly
or indirectly, all of the issued and outstanding capital stock or other equity
interests of each of its Subsidiaries.

 

(c)           The Share Consideration has
been duly and validly authorized by Geokinetics and, when issued will consist
of Geokinetics Common Stock that is validly issued, fully paid and
nonassessable, and free of any preemptive rights.

 

Section 4.3            Authority.  Geokinetics and each Purchaser has full
corporate or other organizational power and authority to execute and deliver
this Agreement and the Ancillary Agreements to which it is or will be a party
and to consummate the Transactions.  The
execution, delivery and performance of this Agreement and the Ancillary
Agreements to which Geokinetics or each Purchaser is or will be a party and the
consummation of the Transactions have been duly and validly authorized by each
of Geokinetics and the Purchasers’ respective Boards of Directors, and no other
corporate or other organizational proceedings on the part of either Geokinetics
or the Purchasers are necessary to authorize this Agreement and the Ancillary
Agreements to which any of them are or will be a party or to consummate the
Transactions.  This Agreement has been,
and the Ancillary Agreements to which Geokinetics or any Purchaser is or will
be a party are, or upon execution will be, duly and validly executed and delivered
by each of Geokinetics and the Purchasers and, assuming the due authorization,
execution and delivery of this Agreement and such Ancillary Agreements by the
other parties hereto and thereto, constitutes or upon execution will
constitute, valid and binding obligations of each of Geokinetics and the
Purchasers enforceable against such Persons in accordance with their respective
terms, except for the Enforceability Exception.

 

32

 

Section 4.4            Consents and Approvals; No
Violation.  The
execution and delivery by each of Geokinetics and the Purchasers of this
Agreement and the Ancillary Agreements to which it is a party, the consummation
of the Transactions and the performance by each of Geokinetics and the Purchasers
of its respective obligations hereunder and thereunder will not:

 

(a)           conflict with, violate or
result in any breach of any provision of the certificate of incorporation or
bylaws, as amended, of Geokinetics or the certificates of incorporation or
bylaws (or other similar organizational documents) of any of its Subsidiaries,
including the Purchasers;

 

(b)           except as set forth in Section 4.4(b) of
the Purchaser Disclosure Schedule, require any consent, waiver, approval,
Order, authorization or permit of, or registration, filing with or notification
to, (i) any Governmental Authority, except for applicable requirements of
the HSR Act in the United States and the Competition Laws in Mexico or
(ii) any third party other than a Governmental Authority, other than such
consents, waivers, approvals, Orders, authorizations and permits that would not
result in a Purchaser Material Adverse Effect;

 

(c)           except as set forth in Section 4.4(c) of
the Purchaser Disclosure Schedule, result in any violation of or the breach of
or constitute a default (with notice or lapse of time or both) under, or give
rise to any right of termination, cancellation or acceleration or guaranteed
payments or a loss of a material benefit under, any of the terms, conditions or
provisions of any Contract to which Geokinetics or any of its Subsidiaries is a
party or by which Geokinetics or any of its Subsidiaries or any of their
respective properties or assets may be bound, except for such violations,
breaches, defaults, or rights of termination, cancellation or acceleration, or
losses as to which requisite waivers or consents have been obtained or that,
individually or in the aggregate, would not result in a Purchaser Material
Adverse Effect;

 

(d)           violate the provisions of
any Order or Law applicable to Geokinetics or any of its Subsidiaries;

 

(e)           result in the creation of
any Lien upon any material properties or assets or on any shares of capital
stock of Geokinetics or its Subsidiaries (other than the Purchased Entities and
their Subsidiaries after the Closing Date) under any Contract to which
Geokinetics or any of its Subsidiaries is a party or by which Geokinetics or
any of its Subsidiaries or any of their properties or assets is bound; or

 

(f)            result in any holder of any
securities of Geokinetics being entitled to appraisal, dissenters’ or similar
rights.

 

Section 4.5            Geokinetics
SEC Reports.

 

(a)           Geokinetics has filed with
the SEC true and complete copies of the Geokinetics SEC Reports.  As of the respective dates the Geokinetics
SEC Reports were filed or, if any such Geokinetics SEC Reports were amended, as
of the date such amendment was filed, each Geokinetics SEC Report, including
any financial statements or schedules included therein, (a) complied in
all material respects with all applicable requirements of

 

33

 

the
Securities Act and the Exchange Act, as the case may be, and (b) did not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.  No event since the date of
the last Geokinetics SEC Report has occurred that would require Geokinetics to
file a Current Report on Form 8-K other than the execution of this
Agreement.  Each document filed with the
SEC by Geokinetics that is a registration statement, as amended or
supplemented, if applicable, filed pursuant to the Securities Act, as of the
date such registration statement or amendment became effective, did not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading.  None of Geokinetics’ Subsidiaries
is or has been required to file any forms, reports or other documents with the
SEC that have not been filed.  The
reports of Geokinetics’ independent auditors regarding Geokinetics’
consolidated financial statements in the SEC filings have not been withdrawn,
supplemented or modified, and none of Geokinetics or any of the Subsidiaries
has received any communication from its independent auditors concerning any
such withdrawal, supplement or modification.

 

(b)           The chief executive officer
and chief financial officer of Geokinetics have made all certifications
(without qualification or exceptions to the matters certified) required by, and
would be able to make such certifications (without qualification or exception
to the matters certified) as of the Effective Date and as of the Closing Date
as if required to be made as of such dates pursuant to, the Sarbanes-Oxley Act
and any related rules and regulations promulgated by the SEC, and the
statements contained in any such certifications are complete and correct;
neither Geokinetics nor its officers has received notice from any Governmental
Authority questioning or challenging the accuracy, completeness, form or manner
of filing or submission of such certification. 
Geokinetics is in substantial compliance with all applicable listing
standards of the NYSE AMEX.

 

(c)           Geokinetics 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 GAAP and to maintain accountability for assets;
(iii) records are maintained in sufficient detail to accurately and fairly
reflect the transactions and dispositions of Geokinetics’ 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.

 

(d)           Geokinetics is not aware of
(a) any significant deficiency in the design or operation of internal
control over financial reporting that could adversely affect Geokinetics’
ability to record, process, summarize and report financial data or any material
weaknesses in internal controls over financial reporting or (b) any fraud,
whether or not material, that involves management or other employees who have a
significant role in Geokinetics’ internal controls. There have been no
significant changes in internal

 

34

 

controls
or in other factors that could significantly affect internal controls since
December 31, 2008.

 

Section 4.6            Geokinetics Financial
Statements.  Each of the
audited consolidated financial statements and unaudited consolidated interim
financial statements of Geokinetics (including any related notes and schedules)
included (or incorporated by reference) in its Report on Form 10-K made
for the year ended December 31, 2008 and Form 10-Q for the nine
months ended September 30, 2009 (collectively, the “Geokinetics
Financial Statements”)   have been prepared from, and are in accordance
with, the books and records of Geokinetics and its consolidated Subsidiaries,
comply in all material respects with applicable accounting requirements and
with the published rules and regulations of the SEC with respect thereto,
have been prepared in accordance with GAAP applied on a consistent basis
(except as may be indicated in the notes thereto and subject, in the case of
quarterly financial statements, to normal and recurring year-end adjustments)
and fairly present, in conformity with GAAP applied on a consistent basis (except
as may be indicated in the notes thereto), the consolidated financial position
of Geokinetics and its Subsidiaries as of the date thereof and the consolidated
results of operations and cash flows (and changes in financial position, if
any) of Geokinetics and its Subsidiaries for the periods presented therein
(subject to normal year-end adjustments and the absence of financial footnotes
in the case of any unaudited interim financial statements).

 

Section 4.7            Absence of Undisclosed
Liabilities.  Except as set
forth in the 2009 Geokinetics SEC Reports, neither Geokinetics nor any of its
Subsidiaries is, nor will it be as of the Closing Date, liable for or subject
to any Liabilities except (a) Liabilities specifically identified in
Geokinetics’ consolidated balance sheet as of September 30, 2009,
including any related notes and schedules thereto (the “Geokinetics
Balance Sheet”) and not heretofore paid or discharged,
(b) Liabilities specifically disclosed in Section 4.7 of the
Purchaser Disclosure Schedule, and (c) Liabilities incurred in the
ordinary course of the business, and in accordance with this Agreement, since
the date of the Geokinetics Balance Sheet.

 

Section 4.8            Absence of Certain
Changes.  Except as
set forth in Section 4.8 of the Purchaser Disclosure Schedule or in
the 2009 Geokinetics SEC Reports, or as contemplated by this Agreement, since
September 30, 2009, (a) Geokinetics and its Subsidiaries have
conducted its and their respective businesses only in the ordinary course of
business consistent with past practices and (b) there has not been any
change or development, or combination of changes or developments that,
individually or in the aggregate, would have a Purchaser Material Adverse
Effect.

 

Section 4.9            Compliance with Applicable
Laws.  Except as
would not result in a Purchasers Material Adverse Effect, each of the
respective businesses of Geokinetics and its Subsidiaries are not being
conducted in violation of any Law, including any Law relating to occupational
health and safety, and to Purchasers’ Knowledge, none of Geokinetics or its
Subsidiaries has received since January 1, 2006 any notice from any Person
that such business has been or is being conducted in violation of any Law,
including any Law relating to occupational health and safety.

 

Section 4.10         Independent Accountants.  UHY, LLP, which has expressed its opinions
with respect to the financial statements, the related notes thereto and
supporting schedules

 

35

 

included in the Geokinetics
SEC Reports, is an independent registered public accounting firm with respect
to Geokinetics and independent public or certified public accountants within
the meaning of Regulation S-X under the Securities Act and the Exchange Act.

 

Section 4.11         No Material Actions or Proceedings.  There
are no Legal Actions pending or, to Purchasers’ Knowledge, threatened
(i) against or affecting Geokinetics or any of its
Subsidiaries or (ii) that has as the subject thereof any property owned or
leased by, Geokinetics or any of its Subsidiaries, where in any such case any such Legal
Action, if so determined adversely, would result in a Purchaser Material
Adverse Effect.  No material labor
dispute with the employees of Geokinetics or any of its Subsidiaries exists or, to Purchasers’
Knowledge, is threatened or imminent.

 

Section 4.12         Intellectual Property
Rights.  Geokinetics 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
Purchaser Material Adverse Effect. 
Neither Geokinetics 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 Purchaser Material Adverse Effect.

 

Section 4.13         All Necessary Permits,
etc.  Geokinetics and each
Subsidiary possess such valid and current Permits issued by the appropriate
Governmental Authority necessary to conduct their respective businesses, and
neither Geokinetics nor any Subsidiary has received any notice of proceedings relating to
the revocation or modification of, or non-compliance with, any such Permit
which, singly or in the aggregate, if the subject of an unfavorable decision, ruling
or finding, would result in a Purchaser Material Adverse Effect.

 

Section 4.14         Title to Properties.  Geokinetics and each of its
Subsidiaries have good and marketable title to all the properties and assets
reflected as owned in the financial statements included in the Geokinetics SEC Reports filed
with the SEC from January 1, 2009 to the Effective Date (collectively, the
“2009 Geokinetics SEC Reports”) at the time of
such reports, in each case free and clear of any Liens, except for Permitted
Liens and Liens under the Second Amended and Restated Revolving Credit and
Security Agreement, by and among Geokinetics, the Subsidiaries named therein and PNC Bank,
National Association.  The real property,
improvements, equipment and personal property held under lease by Geokinetics or any Subsidiary
of Geokinetics 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 Geokinetics or such Subsidiary.

 

Section 4.15         Taxes.  Geokinetics and its
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.  Geokinetics has made adequate
charges, accruals and reserves in the financial statements included as part of
the 2009 Geokinetics SEC Reports in respect of all federal, state and foreign income and
franchise taxes for all periods as to which the tax liability

 

36

 

of Geokinetics or any of its
subsidiaries has not been finally determined. 
There are no audits, adjustments, assessments or other proceedings with
respect to Taxes of Geokinetics or any of its subsidiaries except as listed on Section 4.15
of the Purchaser Disclosure Schedule.

 

Section 4.16         Investment Company. 
Neither Geokinetics nor any of its Subsidiaries is an “investment
company” within the meaning of the Investment Company Act of 1940, as amended
(the “Investment Company
Act”), and each of Geokinetics and its Subsidiaries intends to conduct its
respective business in a manner so that it will not become subject to
regulation as an “investment company” under the Investment Company Act.

 

Section 4.17         Insurance.  Each
of Geokinetics 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
respective businesses including, but not limited to, policies covering real and
personal property owned or leased by Geokinetics and its Subsidiaries against theft, damage,
destruction, acts of vandalism and earthquakes. 
Geokinetics 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 Purchaser Material Adverse Effect.  Neither of Geokinetics nor any
Subsidiary has been denied any insurance coverage which it has sought or for
which it has applied.

 

Section 4.18         No Unlawful Contributions
or Other Payments.  Neither Geokinetics nor any of its
Subsidiaries nor, to Purchasers’ Knowledge, any employee or agent of Geokinetics or any Subsidiary
of Geokinetics, 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 Geokinetics SEC Reports in
order to make the statements therein not misleading.

 

Section 4.19         Compliance with
Environmental Laws.  Except as would not,
individually or in the aggregate, result in a Purchaser Material Adverse
Effect:  (i) neither Geokinetics nor any of its
Subsidiaries is in violation of any Environmental Laws, which violation
includes, but is not limited to, noncompliance with any Permits required for
the operation of the business of Geokinetics or its Subsidiaries under applicable
Environmental Laws, or noncompliance with the terms and conditions thereof, nor
has Geokinetics or any of its Subsidiaries received any written communication, whether
from a Governmental Authority, citizens group, employee or otherwise, that
alleges that Geokinetics or any of its Subsidiaries is in violation of any
Environmental Law; (ii) there is no Legal Action filed with a Governmental
Authority, no investigation with respect to which Geokinetics 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 Hazardous Materials at
any location owned, leased or operated by Geokinetics or any of its
Subsidiaries, now or in the past, pending or, to Purchasers’ Knowledge,
threatened against Geokinetics or any of its Subsidiaries; and (iii) to
Purchasers’ 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

 

37

 

any Hazardous Materials, that reasonably could
result in a violation of any Environmental Law by Geokinetics or any of its
Subsidiaries.

 

Section 4.20         ERISA Compliance.  Except
as could not result in a Purchaser Material Adverse Effect, (i) Geokinetics and its
subsidiaries and any “employee benefit plan” (as defined under the ERISA)
established or maintained by Geokinetics, its Subsidiaries or their ERISA Affiliates
are in compliance in all material respects with ERISA; (ii) 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 Geokinetics, its Subsidiaries
or any of their ERISA Affiliates; (iii) no “employee benefit plan”
established or maintained by Geokinetics, 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);
(iv) neither Geokinetics, any of its Subsidiaries nor any of their ERISA Affiliates
has incurred or reasonably expects to incur any liability under (a) Title
IV of ERISA with respect to termination of, or withdrawal from, any “employee
benefit plan” or (b) Sections 412, 4971, 4975 or 4980B of the Code.  Except as could not result in a Purchaser
Material Adverse Effect, each “employee benefit plan” established or maintained
by Geokinetics, 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, that would cause the loss of
such qualification. Except as could not result in a Purchaser Material Adverse
Effect, or except as disclosed in Section 4.20 of the Purchaser
Disclosure Schedule, the consummation of the Transactions will not by
themselves or in combination with any other event (without regard to whether
such event has or may occur) (i) cause any Purchaser Plan to increase
benefits payable to any participant or beneficiary, (ii) entitle any current
or former employee or director, or any other service provider, of Geokinetics or any of its
Affiliates to severance pay, unemployment compensation or any other payment,
benefit or award under a Purchaser Plan, or (iii) accelerate or modify the
time of payment or vesting, or increase the amount of any benefit, award or
compensation due any current or former employee or director, or any other
service provider, under a Purchaser Plan.

 

Section 4.21         Sarbanes-Oxley Act.  Geokinetics is in compliance
in all material respects with provisions of the Sarbanes-Oxley Act of 2002 that
are applicable to it.

 

Section 4.22         Disclosure Controls and
Procedures.  Geokinetics has established
and maintains “disclosure controls and procedures” (as defined in
Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are
reasonably designed to ensure that all information (both financial and
non-financial) required to be disclosed by Geokinetics 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 Geokinetics’ 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 Geokinetics required under
the Exchange Act with respect to such reports. 
Without limiting the generality of the foregoing, Geokinetics’ disclosure
controls and procedures are effective to enable it to record, process,
summarize, and report information required to be included in its filings with
the SEC within the required time period, and to ensure that such information is
accumulated and communicated to its management,

 

38

 

including its Chief Executive Officer and Chief
Financial Officer, to allow timely decisions regarding required disclosure.

 

Section 4.23         Foreign Corrupt Practices
Act.  Neither Geokinetics nor any of its
Subsidiaries, nor, to Purchasers’ Knowledge, any of its directors, officers,
agents, employees, Affiliates or other persons acting on behalf of Geokinetics or its
Subsidiaries is aware of or has taken any action, directly or indirectly, that
would result in a violation by such persons of the FCPA or any other Law,
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 or other Law, and Geokinetics and, to
Purchasers’ Knowledge, its Affiliates have conducted their businesses in
compliance with the FCPA and other Laws and have instituted and maintain policies
and procedures designed to ensure, and that are reasonably expected to continue
to ensure, continued compliance therewith.

 

Section 4.24         Solvency.  As of the Closing Date,
Geokinetics and each Purchaser, both before and immediately after consummation
of the Transactions, will not be insolvent, as insolvency is defined under any
of the Uniform Fraudulent Transfer Act, as approved by the National Conference
of Commissioners on Uniform State Laws in 1984, as amended (the “UFTA”) and the U.S. Bankruptcy Code,
11 U.S.C. §101 et seq., as amended (the “Bankruptcy Code”).
Without limiting the generality of the foregoing, as of the Closing Date, with
respect to Geokinetics and each Purchaser, both before and immediately after
consummation of the Transactions: (i) the sum of such entity’s debts will
not be greater than all of such entity’s assets at a fair valuation (as such
terms are defined in the UFTA), and the sum of such entity’s debts will not be
greater than all of such entity’s property, at a fair valuation (as such terms
are defined in the Bankruptcy Code); (ii) such entity will not intend to
incur, or believe or reasonably should believe that it would incur, debts
beyond its ability to pay as they become due (as such terms are defined in the
UFTA), and such entity will not intend to incur, or believe that it would
incur, debts that would be beyond its ability to pay as such debts mature (as
such terms are defined in the Bankruptcy Code); and (iv) such entity will
not be engaged and will not be about to engage in a business or transaction for
which the remaining assets of such entity are unreasonably small in relation to
such business or transaction (as such terms are defined in the UFTA), and such
entity will not be engaged in business or a transaction, and will not be about
to engage in business or a transaction, for which any property remaining with
such entity is an unreasonably small capital (as such terms are defined in the
Bankruptcy Code).

 

Section 4.25         Availability of
Funds.  Geokinetics has
delivered to the Sellers true and complete copies of the executed Commitment
Letter related to the Bridge Financing. 
The Commitment Letter has not been amended or modified, no provision of
the Commitment Letter has been waived, no such amendment, modification or waiver
has been agreed to or is contemplated, and the commitments contained in the
Commitment Letter have not been withdrawn or rescinded in any respect.
Geokinetics has fully paid any and all commitment fees or other fees in
connection with the Commitment Letter that are payable on or prior to the
Effective Date.  The Commitment Letter is
in full force and effect and is the legal, valid and binding obligation of
Geokinetics and, to Purchasers’ Knowledge, the other parties thereto and

 

39

 

does not restrict any
transfer of the cash portion of the Purchase Price from any of the Purchasers
to the Sellers in connection with the Transactions.  No event has occurred that, with or without
notice, lapse of time or both, would constitute a default or breach on the part
of Geokinetics or its Affiliates under any term or condition of the Commitment
Letter.  There are no conditions
precedent or other contingencies relating to the funding of the full amount of
the Bridge Financing, other than as set forth in the Commitment Letter.
Geokinetics and its Affiliates (as applicable) are in a position to satisfy
timely all conditions to be satisfied by them to fund the Bridge Financing, and
Geokinetics has no reason to believe that any of the conditions relating to the
funding of the full amount of the Bridge Financing will not be satisfied on or
prior to the Closing Date. At the Closing, the Financing, together with
Geokinetics’ immediately available funds, in cash, will be sufficient to
provide the Business with sufficient working capital and to pay all amounts
payable by the Purchasers under this Agreement and to effect the Transactions,
all without any third-party consent or approval required.

 

Section 4.26         Geokinetics
Offering Documents.

 

(a)           In connection with any
Capital Markets Financing, the relevant disclosure document used to offer and
sell securities did not and will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading.

 

(b)           No Geokinetics Offering
Documents, as of the respective date of such Geokinetics Offering Document,
will contain an untrue statement of a material fact or 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.

 

Section 4.27         Brokers.    No broker, finder or investment banker (other
than RBC Capital Markets Corporation and Stifel, Nicolaus & Company,
Incorporated the fees and expenses of which will be paid by Geokinetics) is
entitled to any brokerage, finder’s fee or other fee or commission payable by
Geokinetics or any of its Subsidiaries in connection with the Transactions based
upon arrangements made by and on behalf of Geokinetics or any of its
Subsidiaries.

 

Section 4.28         Investigation by the
Purchasers; No Reliance; Sellers’ Liability. 
In entering into this Agreement, each of the
Purchasers has relied solely upon its own investigation and analysis and the
specific representations and warranties of the Sellers set forth in Article II
and Article III of this Agreement, and each of the Purchasers:

 

(a)           acknowledges and agrees
that, except for the specific representations and warranties of the Sellers set
forth in Article II and Article III of this Agreement,
none of the Sellers or any Seller Representative makes or has made any
representation or warranty, either express or implied, as to the accuracy or
completeness of any of the information provided or made available to such
Purchaser or Purchaser Representative, including any information, document, or
material provided or made available, or statements made, to such Purchaser or
Purchaser Representative in “data rooms,” management presentations or
supplemental due diligence information provided to such Purchaser or Purchaser
Representative in connection with discussions with management

 

40

 

of
the Business or in any other form in expectation of the Transactions
(collectively, “Seller Due Diligence Information”);

 

(b)           acknowledges and agrees that
(i) the Seller Due Diligence Information includes certain projections,
estimates and other forecasts, and certain business plan information,
(ii) there are uncertainties inherent in attempting to make such
projections, estimates and other forecasts and plans and such Purchaser is
familiar with such uncertainties, and (iii) such Purchaser is taking full
responsibility for making its own evaluation of the adequacy and accuracy of
all projections, estimates and other forecasts and plans included in such
Seller Due Diligence Information so furnished to it and any use of or reliance
by such Purchaser on such projections, estimates and other forecasts and plans
shall be at its sole risk; and

 

(c)           agrees, to the fullest
extent permitted by Law, that none of the Sellers or any Seller Representative
shall have any liability or responsibility whatsoever to such Purchaser or
Purchaser Representative on any basis (including in contract or tort, under
federal or state securities laws or otherwise) resulting from the distribution
to such Purchaser, or such Purchaser’s use of, any Seller Due Diligence
Information, except that the foregoing limitations shall not apply to the
extent the Sellers make the specific representations and warranties set forth
in Article II and Article III of this Agreement, but
always subject to the limitations and restrictions contained in this Agreement.

 

ARTICLE
V.

CONDUCT OF BUSINESS PENDING THE CLOSING; 

OTHER AGREEMENTS

 

Section 5.1            Conduct of Business by the
Business Owning Entities Pending the Closing.  From the Effective Date until the Closing
Date, except as Purchasers otherwise consent to in writing (which consent shall
not be unreasonably withheld), as set forth in Section 5.1 of the
Seller Disclosure Schedule, or as otherwise contemplated by this Agreement,
Sellers shall cause the Business Owning Entities to conduct the Business in the
ordinary course consistent with past practice and shall use all commercially
reasonable efforts to preserve intact their business organizations and
relationships with third parties with respect to the Business and to keep
available the services of the officers and key employees of the Business as of
the Effective Date, subject to the terms of this Agreement.  Except as otherwise provided in this
Agreement (including in connection with any transaction described in Section 5.16),
and without limiting the generality of the foregoing, from the Effective Date
until the Closing Date, without Purchasers’ written consent (which consent
shall not be unreasonably withheld):

 

(a)           no Purchased Entity shall
adopt or propose any change to its certificate of incorporation or bylaws (or
similar organizational documents);

 

(b)           no Purchased Entity shall
declare, set aside or pay any dividend or other distribution with respect to
any shares of its capital stock; provided, however, that, subject
to Section 5.20, the Purchased Entity shall distribute or otherwise
transfer or assign the Subject Assets and Unrelated Liabilities to PGS, any of
its Subsidiaries or any Person other than a Purchaser;

 

41

 

(c)                                  no Purchased
Entity shall repurchase, redeem or otherwise acquire any outstanding shares of
its capital stock or other ownership interests;

 

(d)                                 no Business
Owning Entity shall merge or consolidate with any other Person (other than
another Business Owning Entity or any Subsidiary of a Business Owning Entity);
and no Business Owning Entity shall acquire assets of any Person (other than
another Business Owning Entity or any Subsidiary of a Business Owning Entity)
to be used in the Business for aggregate consideration in excess of $1,000,000;

 

(e)                                  except in the
ordinary course of the Business and except for the Excluded Assets or other
assets not used primarily in the conduct of the Business, (i) no Purchased
Entity shall sell, lease, license or otherwise surrender, relinquish or dispose
of any of its assets with an aggregate fair market value of in excess of
$1,000,000, and (ii) no Asset Seller shall sell, lease, license or
otherwise surrender, relinquish or dispose of any of its Property used primarily
in the Business with an aggregate fair market value of in excess of $1,000,000;

 

(f)                                    no Purchased
Entity or Subsidiary of a Purchased Entity shall issue any securities or agree
to issue any securities (whether through the issuance or granting of options,
warrants, rights), except for issuances of capital stock solely to its parent
companies, or otherwise enter into any amendment of any term of any outstanding
security;

 

(g)                                 no Purchased
Entity or Subsidiary of a Purchased Entity shall change any method of accounting
or accounting practice, except for any such changes made in connection with
such Purchased Entity’s or Subsidiary’s use of IFRS or any such change required
by GAAP, and no Asset Seller shall change any method of accounting or
accounting practice with respect to the Business conducted by it or the
ownership of the Property, except for any change required by IFRS or GAAP;

 

(h)                                 no Seller nor
any Purchased Entity or Subsidiary of a Purchased Entity shall take any action
that would give rise to a claim under the WARN Act or any similar state Law or
regulation because of a “plant closing” or “mass layoff” (each as defined in
the WARN Act) without complying in material respects with the WARN Act;

 

(i)                                     no Purchased
Entity or Subsidiary of a Purchased Entity will license, sell, dispose of, or
contract to license, sell or dispose of, any of the Multi-client Library,
except in the ordinary course of the Business;

 

(j)                                     no Seller shall
incur any Liability that will constitute an Assumed Liability and no Purchased Entity
or Subsidiary of a Purchased Entity shall incur any Liability, except (in each
case) for Liabilities incurred in the ordinary course of the Business;

 

(k)                                  no Business
Owning Entity shall enter into any material Contract that would require the
consent of the other party to the Contract to assign or transfer the Contract
to a Purchaser as contemplated by this Agreement, or that would terminate,
create a default or breach, or require a payment by reason of the transfer of a
Purchased Entity as required by this Agreement;

 

42

 

(l)                                     no Business
Owning Entity shall adopt a plan of complete or partial liquidation,
dissolution, or reorganization except as contemplated by or reasonably
necessary to carry out the Transactions; and

 

(m)                               no Business
Owning Entity shall agree or commit to do any of the foregoing.

 

Section 5.2                                   Conduct
of Business by Geokinetics Pending the Closing.  From the Effective Date until the Closing
Date, except as the Sellers otherwise consent to in writing (which consent
shall not be unreasonably withheld), as set forth in Section 5.2 of
the Purchaser Disclosure Schedule, or as otherwise contemplated by this
Agreement, Geokinetics shall, and shall cause each of its Subsidiaries to,
conduct its business in the ordinary course consistent with past practice and
shall use, and shall cause of its Subsidiaries to use, all commercially
reasonable efforts to preserve intact its business and relationships with third
parties.  Except (i) as specifically
contemplated by Section 11.16 or the Financing, (ii) pursuant to any
Interim Financing, (iii) as otherwise provided in this Agreement and
(iv) as set forth in Section 5.2 of the Purchaser Disclosure
Schedule, and without limiting the generality of the foregoing, from the
Effective Date until the Closing Date, without the Sellers’ written consent
(which consent shall not be unreasonably withheld):

 

(a)                                  Geokinetics
shall not adopt or propose any change to its certificate of incorporation or
bylaws;

 

(b)                                 Geokinetics
shall not declare, set aside or pay any dividend or other distribution with
respect to any shares of Geokinetics Common Stock;

 

(c)                                  Geokinetics
shall not repurchase, redeem or otherwise acquire any outstanding shares of its
capital stock or other ownership interests;

 

(d)                                 Geokinetics
shall not merge or consolidate with any other Person or enter a new line of
business;

 

(e)                                  Geokinetics
shall not, and shall cause its Subsidiaries not to, issue any securities or
agree to issue any securities (whether through the issuance or granting of
options, warrants or rights), except for issuances by a wholly owned Subsidiary
of Geokinetics to its parent company, or otherwise enter into any amendment of
any term of any outstanding security;

 

(f)                                    Geokinetics
shall not adopt a plan of complete or partial liquidation, dissolution, or
reorganization; and

 

(g)                                 Geokinetics
shall not agree or commit to do any of the foregoing.

 

Section 5.3                                   Access
to Information; Confidentiality.

 

(a)                                  Subject to
applicable Law, Geokinetics will provide and will cause Geokinetics’
Subsidiaries and its and their respective directors, officers, employees,
accountants, consultants, legal counsel, investment bankers, advisors, and
agents and other representatives (collectively, “Representatives”)
to provide Sellers and their authorized 

 

43

 

Representatives, during normal business hours and upon reasonable
advance notice, access to the offices, employees, properties, books and records
of Geokinetics and its Subsidiaries (so long as such access does not
unreasonably interfere with the operations of Geokinetics) as Sellers may
reasonably request. Subject to applicable Law, Sellers will provide and will
cause the Purchased Entities and their respective Representatives to provide
Geokinetics and its authorized Representatives, during normal business hours
and upon reasonable advance notice, access to the offices, employees,
properties, books and records of each Business Owning Entity related to the Business
(so long as such access does not unreasonably interfere with the operations of
a Business Owning Entity or the Business) as Geokinetics may reasonably
request. With respect to any information disclosed pursuant to this Section 5.3,
each of the parties shall comply with, and shall cause each of its
Representatives to comply with, all of its obligations under the
Confidentiality and Nondisclosure Agreement, dated February 27, 2008,
previously executed by Geokinetics and PGS Onshore, Inc. (the “Confidentiality Agreement”). No
party shall be required to provide access to or disclose any information where
such access or disclosure would jeopardize any attorney-client privilege of
such party or any Subsidiary of such party or contravene any Contract or Law
(it being agreed that the parties shall use their respective reasonable best
efforts to cause such information to be provided in a manner that would not
result in such jeopardy or contravention).

 

(b)                                 From and after
the Closing, the Sellers and the Purchasers shall, and shall cause the Business
Owning Entities to, furnish each other with such financial and operating data
and other information with respect to the Business as either Sellers or
Purchasers may from time to time reasonably request, in each case (A) to
comply with reporting, disclosure, filing or other requirements imposed on the
Sellers or Purchasers (including under applicable securities Laws),
(B) for use in any Legal Action or assessment or in order to satisfy
audit, accounting, claims, regulatory, litigation, subpoena or other similar
requirements or (C) to comply with the obligations of the Sellers or
Purchasers under this Agreement or any Ancillary Agreements, as the case may
be.

 

Section 5.4                                   Further
Assurances.  Each party
shall use commercially reasonable efforts to obtain all consents and approvals
and to do all other things necessary for the consummation of the
Transactions.  The parties shall take
such further action to deliver or cause to be delivered to each other at the
Closing and at such other times thereafter as shall be reasonably agreed by
such parties such additional agreements or instruments as any of them may
reasonably request for the purpose of carrying out this Agreement and the
Transactions.  Each party shall duly
preserve all files, records or any similar items received or obtained as a
result of the Transactions with the same care and for the same period of time
as it would preserve its own similar assets.

 

Section 5.5                                   Expenses.

 

(a)                                  Geokinetics and
the Purchasers shall bear solely and entirely and shall pay all Expenses (as
hereinafter defined) incurred by Geokinetics, the Purchasers and their
respective Affiliates.  The Sellers shall
bear solely and entirely and shall pay all Expenses incurred by the Sellers
and, except as provided in the proviso to the next sentence, all Expenses
incurred by the Purchased Entities prior to Closing.  If, following the Closing, a 

 

44

 

Purchased Entity is invoiced for an Expense that was incurred by such
Purchased Entity prior to Closing, the Sellers agree to promptly pay and
reimburse the Purchased Entity for the amount of such Expense; provided,
however, that (i) the Sellers shall have no obligation to pay or
reimburse for any Expenses incurred by the Purchased Entities in connection
with the Financing or any Alternate Financing, including but not limited to any
such Expenses incurred to have the independent auditors for the Business
prepare “comfort letters,” assist in the preparation of pro forma financial
statements or otherwise to assist as contemplated by
Section 5.26(e) in the preparation of disclosure materials relating
to the Financing or any Alternate Financing (and any substitutions or
replacements of either the Financing or any Alternate Financing) and
(ii) to the extent any Expenses of the type described in clause
(i) have the effect of reducing Net Working Capital as of the Closing
Date, the Purchasers shall pay or reimburse Sellers for such Expenses.  Notwithstanding the foregoing, if this
Agreement is terminated for any reason, then the allocable share of the
Purchasers and Sellers for all Expenses (including any fees and expenses of
accountants, experts, and consultants, but excluding the fees and expenses of
legal counsel and investment bankers) related to preparing, filing and payment
of fees incurred in connection with filings made under the HSR Act or any other
Competition Laws related to the Transactions shall be allocated one-half each.

 

(b)                                 “Expenses” as used in
this Agreement shall include all reasonable out-of-pocket expenses (including
all reasonable fees and expenses of outside counsel, accountants, auditors,
financing sources, investment bankers, experts and consultants to a party
hereto and its Affiliates but excluding any liability for Taxes) incurred by a
party or on its behalf in connection with or related to the due diligence,
authorization, preparation, negotiation, execution and performance of this
Agreement, requisite filings under the HSR Act and other Competition Laws and
all other matters related to the consummation of the Transactions (subject to
reasonable documentation).

 

Section 5.6                                   Cooperation.  Subject to compliance with applicable Law,
from the Effective Date until the Closing, (i) the Business Owning Entities
shall keep Purchasers’ designated representatives reasonably informed about
significant issues relating to the Business and the Purchased Assets,
(ii) the Purchasers shall keep Sellers’ designated representatives
reasonably informed about significant issues relating to the business of
Geokinetics and its Subsidiaries, the Geokinetics Common Stock and the
Financing, (iii) each party shall cooperate with and use commercially
reasonable efforts to provide assistance to transfer any Permits that must be
transferred in connection with the Transactions and that are required for the
conduct of the Business and (iv) each party shall promptly provide the
other party or its counsel with copies of all filings (excluding any
confidential or privileged filings) made by such party with any Governmental
Authority in connection with this Agreement and the Transactions.

 

Section 5.7                                   Publicity.  Neither Geokinetics, Sellers nor any of their
respective Affiliates shall issue or cause the publication of any press release
or other announcement, or otherwise make any public statements, with respect to
this Agreement and the Transactions without the prior written consent of the
other parties, except as may be required by Law or by any listing agreement
with or rules and regulations of a national securities exchange on which
securities of Geokinetics or PGS are listed and traded, in which case the party
issuing or causing the publication of such press release or other announcement,
or making such statement, shall use 

 

45

 

commercially
reasonable efforts to provide copies thereof to the other parties hereto, and
give due consideration to such comments as each such other party may have,
prior to such release or other announcement or the making of such statement.

 

Section 5.8                                   Additional
Actions.  Upon the
terms and subject to the conditions of this Agreement, each party agrees to use
commercially reasonable efforts to take, or cause to be taken, all action and
to do, or cause to be done, all things necessary, proper or advisable under
applicable Law, or to remove any injunctions or other impediments or delays, to
consummate and make effective the Transactions. 
Each of Sellers and Purchasers agrees that, from and after the Effective
Date and prior to the Closing Date, and except as may be agreed in writing by
the other or as may be expressly permitted pursuant to this Agreement, it shall
not, and shall not permit any of its Subsidiaries, to make any acquisition,
enter into any agreement, or take any other action, or agree, in writing or
otherwise, to do any of the foregoing, that could reasonably be expected to
prevent the consummation of the Transactions or result in the failure to
satisfy any condition to consummation of the Transactions

 

Section 5.9                                   Filings;
Competition Laws.  Each
party shall make all material filings such party is required to make in
connection herewith or desirable to achieve the purposes contemplated by this
Agreement, and shall cooperate as needed with respect to any such filing by any
other party.  Each such party shall use
its reasonable best efforts to resolve any objections, if any, as may be
asserted by any Governmental Authority with respect to the Transactions under
the HSR Act and any other Laws that are designed to prohibit, restrict or
regulate actions having the purpose or effect of monopolization, restraint of
trade or combinations (collectively, together with the HSR Act, “Competition Laws”).  Each such party shall use its reasonable best
efforts to take such action as may be required to cause or obtain, if possible
under the applicable Competition Laws, the expiration or early termination of
the applicable notice or waiting periods or favorable ruling under the
Competition Laws with respect to the Transactions as promptly as possible after
the Effective Date.  Without limiting the
foregoing, each such party shall take any and all of the following actions to
the extent necessary to obtain the approval of any Governmental Authority with
jurisdiction over the enforcement of any applicable Competition Laws regarding
the Transactions:  (i) entering into
negotiations, (ii) providing information required by the applicable
Competition Laws or by competent competition authorities, and
(iii) substantially complying with any request (including any “second
request”) for information pursuant to the applicable Competition Laws; provided,
however, that none of the Purchasers or the Sellers shall be required to
dispose of any of their respective assets or to limit their freedom of action
with respect to any of their respective assets or businesses, whether prior to
or after the Closing Date, or to commit or agree to any of the foregoing, in
order to obtain any consents, approvals, permits or authorizations or to remove
any impediments to the Transactions relating to the HSR Act or any other
Competition Law or to avoid the entry of, or to effect the dissolution of, any
injunction or other order in any suit or proceeding relating thereto, other
than dispositions, limitations, commitments, or agreements that in each such
case may be conditioned upon the consummation of the Transactions and that in
each such case would not result in a material adverse effect on the business,
assets or financial condition of Geokinetics and its Subsidiaries together with
the Property taken as a whole as constituted after the Closing Date.  The filing fees incurred in connection with
any filings respecting the HSR Act and any other Competition Laws shall be an
Expense as defined in Section 5.5.

 

46

 

Section 5.10                            Consents.  Each of Geokinetics and Sellers and their
respective Affiliates shall use commercially reasonable efforts to obtain all
consents necessary in connection with its obligations hereunder.

 

Section 5.11                            Geokinetics
Board of Directors.

 

(a)                                  Geokinetics
shall use its reasonable best efforts to cause two individuals whose names
shall be provided by PGS to Geokinetics a reasonable period of time prior to
the Closing Date (the “Director Nominees”)
to be appointed as members of Geokinetics’ board of directors by Geokinetics’
existing board of directors simultaneous with Closing, subject to applicable
Law, provided that at least one of such Director Nominees is
“independent” as defined by the rules of the NYSE AMEX and Geokinetics’
policies.  Each Director Nominee shall
serve as a director for a term expiring at Geokinetics’ next annual meeting of
stockholders following the Closing Date and until his successor is elected and
qualified.  Geokinetics shall take such
action, including amending its bylaws, as required to cause the number of
directors constituting Geokinetics’ board of directors immediately after the
Closing Date to be increased as necessary to reflect the addition of the
Director Nominees.

 

(b)                                 If, on the date
that the nominating committee of Geokinetics’ board of directors meets to
nominate directors for election at any annual meeting of stockholders of
Geokinetics, PGS and its wholly owned Subsidiaries own at least 10% of the then
outstanding shares of Geokinetics Common Stock, Geokinetics shall use its
reasonable best efforts to cause the two Director Nominees to be elected as
directors of Geokinetics; provided that at least one of such Director
Nominees is “independent” as defined by the rules of the NYSE AMEX (or
such other securities exchange on which the Geokinetics Common Stock is then
listed) and Geokinetics’ policies.  If,
on the date that the nominating committee of Geokinetics’ board of directors
meets to nominate directors for election at any annual meeting of stockholders,
PGS and its wholly owned Subsidiaries own at least 5% but less than 10% of the
then outstanding shares of Geokinetics Common Stock, Geokinetics shall use its
reasonable best efforts to cause one Director Nominee selected by PGS to be
elected as a director of Geokinetics.

 

(c)                                  As a condition
to its obligation to use its reasonable best efforts to cause a Director
Nominee to be elected to Geokinetics’ board of directors, Geokinetics may
require each Director Nominee to provide to Geokinetics such directors
questionnaires and similar materials as the other members of Geokinetics’ board
of directors are required to complete.

 

(d)                                 If at any time,
a Director Nominee is unable or unwilling to serve as a director, or PGS
otherwise determines to replace a Director Nominee, PGS may nominate another
individual to serve in such individual’s place and be a “Director Nominee”
hereunder; provided that if PGS has the right to appoint two directors
to Geokinetics’ board of directors, at least one of the Director Nominees is
“independent” as defined by the rules of the NYSE AMEX and Geokinetics’
policies.

 

47

 

(e)                                  Geokinetics
shall use its reasonable best efforts to take, or cause to be taken, all
actions to do, or cause to be done, all things necessary, proper or advisable
to enter into an agreement with the Series B Holders, in which the
Series B Holders shall agree to take all action within their power
(including, but not limited to, (i) attending all stockholder meetings of
Geokinetics for the purposes of ensuring that a quorum is obtained and
(ii) voting all shares of Geokinetics Common Stock and Series B
Preferred Stock owned or held by the Series B Holders at any stockholder
meeting of Geokinetics or, if under applicable Law stockholders of Geokinetics
are permitted to take action by written resolution or consent in lieu of a
meeting, executing any written resolution or consent with respect to all voting
shares of Geokinetics owned by the Series B Holders) to cause the Director
Nominees to be elected or appointed as a member of the board of directors of
Geokinetics at each of the annual meetings of stockholders of Geokinetics to be
held in 2010 and 2011 following the Closing Date.  In addition, each of the Series B
Holders shall agree to vote all shares of Geokinetics Common Stock and
Series B Preferred Stock owned or held by such Series B Holder and
that such holders are entitled to vote against any resolution that may be
proposed at such meetings to remove any Director Nominee that is serving as a
member of the board of directors of Geokinetics, unless PGS otherwise requests
in writing.

 

Section 5.12                            Preemptive
Rights.

 

(a)                                  Unless waived
by the Sellers, if at any time Geokinetics authorizes the issuance and sale of
any shares of Geokinetics Common Stock or shares that are convertible into or
exercisable for Geokinetics Common Stock or that will vote as a single class as
Geokinetics Common Stock in a transaction exempt from registration under
Section 4(2) of the Securities Act or Regulation D thereunder, or in
a “registered direct offering” pursuant to a registration statement filed with
the SEC directly to a limited number of investors (and not through a placement
agent or underwriter), then Geokinetics shall offer to PGS the right to
purchase a Pro Rata Number of Shares on the same terms as other purchasers in
the offering.  A Pro Rata Number of
Shares shall mean an amount of securities so that the percentage of shares of
Common Stock (on a fully diluted basis) owned or deemed to be beneficially
owned by PGS after the offering is equal to the percentage of shares of Common
Stock (on a fully diluted basis) owned or deemed to be beneficially owned by
PGS before such offering.  Geokinetics
shall provide PGS such notice of the applicable offering and related closing
date as Geokinetics’ board of directors determines is reasonable to facilitate
the offering of securities, and PGS shall have such time period as specified in
such notice to agree to purchase all or any portion of its Pro Rata Number of
Securities in the offering on the same terms as the other purchasers in the
offering.

 

(b)                                 Geokinetics’
board of directors may place such restrictions on the preemptive rights granted
to PGS in this section as the board determines is reasonably necessary to
facilitate a successful offering, provided that any such restrictions are
considered with the terms that apply to other investors or potential investors
in the particular offering.

 

(c)                                  Notwithstanding
the foregoing, if applicable Law or the rules of any securities exchange
on which Geokinetics Common Stock is listed restrict or prohibit, or adversely 

 

48

 

condition or restrict the participation of PGS in any offering subject
to this Section 5.12, Geokinetics’ board of directors may vary the
preemptive rights provided herein, in its discretion, solely to comply with
such Law or securities exchange rule.

 

(d)                                 The rights
granted in this Section shall terminate on the date that PGS and its
wholly owned Subsidiaries own less than 10% of the outstanding shares of
Geokinetics Common Stock.

 

Section 5.13                            Stock
Exchange Listing. 
Geokinetics shall use commercially reasonable efforts to cause the
Geokinetics Common Stock to be issued pursuant to this Agreement to be approved
and admitted for listing on the NYSE AMEX prior to Closing.

 

Section 5.14                            Employee
Matters.

 

(a)                                  On or before
the Closing, Seller shall take any actions necessary to cause the Purchased Entities
to cease to be sponsoring, adopting or participating employers, as applicable,
of all Plans except the Purchased Entity Plans listed in Section 5.14(a) of
the Seller Disclosure Schedule.  Any
Purchased Entity Plans listed in Section 5.14 of the Seller
Disclosure Schedule that, as of the Effective Date, are sponsored by an
Affiliate of Seller other than a Purchased Entity will be transferred to and
assumed by a Purchased Entity as of the Closing.  Except as expressly provided in the remaining
paragraphs of this Section 5.14 and as set forth in Section 5.14(a) of
the Seller Disclosure Schedule (with respect to a Purchased Entity Plan that is
assumed by a Purchased Entity), Purchaser shall not, and from and after the
Closing Date the Purchased Entities shall not, have any responsibility or
Liability with respect to any Plan established prior to the Closing Date, and
Seller shall be responsible for such responsibilities and Liabilities.  Subject to Section 3.9, Purchaser
shall assume and have complete responsibility for all Liabilities associated
with the Purchased Entity Plans identified on Section 5.14(a) of
the Seller Disclosure Schedule, and Seller and its Affiliates shall have no
responsibility or Liability with respect to the Purchased Entity Plans.

 

Sellers
and Purchaser shall take all actions necessary to cause all liabilities
associated with the Business Employees’ participation in the Petroleum
Geo-Services ASA - 2008 Deferred Bonus Arrangement (the “2008
Bonus Arrangement”) and the Petroleum Geo-Services ASA - 2009
Bonus Plan (the “2009 Bonus Plan”) to be
transferred to and assumed by a Purchaser or a Purchased Entity as of the
Closing.  Notwithstanding the foregoing,
Seller retains the sole discretion to pay to Business Employees and Affiliated
Employees the amounts owed pursuant to the 2008 Bonus Arrangement and the 2009
Bonus Plan as of the Closing; provided that if Seller chooses not to
exercise such discretion, Seller shall provide to Buyer, on or before
March 1, 2010, a schedule, in a readily-accessible electronic format,
listing for each Business Employee his or her (i) name, (ii) bonus
entitlement under the 2008 Bonus Arrangement, if any, and (iii) bonus
entitlement under the 2009 Bonus Plan, if any. 
Purchaser shall pay such amounts to the listed Business Employees and
Affiliated Employees in a lump-sum cash payment on or before March 15,
2010.  If Purchaser or an Affiliate
terminates the employment of a Business Employee for reasons other than willful
misconduct or similar good cause or if his or her employment terminates due to
death or disability prior to the 

 

49

 

payment of amounts owed under the 2008 Bonus Arrangement or the 2009
Bonus Plan, he or she shall remain entitled to any scheduled payments from the
applicable Purchased Entity under such plans. 
If Purchaser or an Affiliate terminates the employment of a Business
Employee for willful misconduct or similar good cause or he or she voluntarily
resigns prior to the payment of amounts owed under the 2008 Bonus Arrangement,
he or she shall remain entitled to the payment from the applicable Purchased
Entity of the reduced bonus amount as provided under the terms of such plan.

 

Sellers
and Purchaser shall take all actions necessary to cause all liabilities
associated with the Business Employees’ participation in the Petroleum
Geo-Services ASA - PGS Retention Bonus Plan 2006-2010 and the Petroleum
Geo-Services ASA - PGS Retention Bonus Plan 2007-2010 (collectively, the “Retention Bonus Plans”) to be
transferred to and assumed by a Purchaser or a Purchased Entity as of the
Closing.  If Purchaser or an Affiliate
terminates the employment of a Business Employee for reasons other than willful
misconduct or similar good cause or if his or her employment terminates due to
death or disability prior to the payment of amounts owed under the Retention
Bonus Plans, he or she shall be paid any unpaid retention payments owed under
the Retention Bonus Plans within 10 days following such termination.

 

(b)                                 All Business
Employees employed by the Purchased Entities immediately prior to the Closing
shall remain employed by the Purchased Entities immediately following the
Closing, and shall be the responsibility of Purchaser and its Affiliates
thereafter.  Section 5.14(b) of
the Seller Disclosure Schedule sets forth a list of certain employees of Seller
or its Affiliates (other than the Purchased Entities or their Subsidiaries) who
provide services relating to the Business Owning Entities and who Seller and
such Affiliates shall make available to Purchaser to discuss potential
employment, with any such employment to be contingent upon, and to begin after,
the Closing (such employees being collectively the “Affiliate
Employees”).  Section 5.14(b) of
the Seller Disclosure Schedule shall be divided into two lists, one containing
the Affiliate Employees who are assigned on a full time or primary basis to any
function of the Purchased Entities (the “Dedicated Employees”)
and another containing those Affiliate Employees who provide services to the
Business on less than a full-time basis or on a secondary basis (the “Support Employees”).

 

As
soon as practicable following the execution of this Agreement, Seller will
provide to Purchaser a schedule in a readily-accessible electronic format
listing for each Business Employee and Affiliate Employee his or her
(i) name, employee identification number, job title, and assigned work
location, (ii) dates of employment by Seller or its Affiliates and date of
employment for each of the purposes identified in Section 5.14(d),
(iii) base salary or hourly rate of compensation, prior year’s actual, and
current year’s targeted, bonus and incentive compensation (if any), and
(iv) whether or not such employee is actively at work and if not, whether
on an approved leave, and for those employees on an approved leave, the reason
for, and the expected duration of, the approved leave.  Following the Effective Date, Seller shall
not, and shall cause each of its Affiliates not to, except in the ordinary course
of the Business, alter, promise to alter, or take any action that would have
the effect of altering, with respect to any Business Employee or Affiliate
Employee, any term or aspect of employment of such Business 

 

50

 

Employee or Affiliate Employee that is required to be disclosed to
Purchaser pursuant to this Section 5.14(b) or that is the
subject of any obligation of Purchaser under this Section 5.14  without the prior written consent of Purchaser.  Without limiting the foregoing, Seller shall
update Section 5.14(b) of the Seller Disclosure Schedule and
the information provided to Purchaser pursuant to this Section 5.14(b) immediately
prior to Closing.

 

Subject
to Seller’s timely provision of complete and accurate information as required
by this Section 5.14 within twenty (20) days after the
Effective Date, Purchaser shall, or shall cause its Affiliates to,
(i) provide continued employment to each Business Employee employed by the
Purchased Entities, (ii) offer employment (which shall be contingent on
the occurrence of the Closing) to each Dedicated Employee and (iii) may,
or may cause its Affiliates to, at its discretion after interviews, offer
employment (which shall be contingent on the occurrence of the Closing), to any
or all Support Employees, in each case under clauses (i), (ii) and
(iii) above, (A) at a base salary or hourly rate that is at least
equal to such employee’s then current base salary or hourly rate as then
correctly reflected in the information provided to Purchaser pursuant to this Section 5.14(b),
(B) with a principal place of employment no greater than forty-nine (49)
miles from the location where such employee is employed as of the Effective
Date as then correctly reflected in the information provided to Purchaser
pursuant to this Section 5.14(b), (C) with benefits that are
the same as, or comparable in the aggregate to, the benefits provided to
similarly-situated employees of Purchaser under the Purchaser’s Plans,
including but not limited to benefits provided pursuant to Purchaser’s
retirement plans, severance plans, vacation plans, health, dental and vision
insurance and incentive compensation plans, with such benefits continuing in
substantially the same form for at least one year following Closing, and
(D) with restricted stock or stock unit awards granted as soon as
practicable following Closing (which may be subject to Geokinetics stockholder
approval) with vesting terms over a three-year period and in an amount as
determined by the compensation committee of Geokinetics’ board of directors
equal to the intrinsic value of the PGS unvested options held by such employee
on the Effective Date, valuing the Geokinetics Common Stock at the Geokinetics
Common Stock Price (a “Qualifying Offer”).  Each Qualifying Offer shall be consistent
with the provisions of this Section 5.14, may contain such other
provisions and terms not inconsistent with this Section 5.14 as the
Purchaser or its Affiliates may deem appropriate, and shall remain open for a
period of at least five (5) days. 
On or before the date that is five (5) Business Days prior to the
Closing Date, Purchaser shall notify Seller as to each Affiliate Employee who
has accepted a Qualifying Offer and each Affiliate Employee who has not accepted
a Qualifying Offer.  The employment with
Purchaser or an Affiliate of Purchaser of each Affiliate Employee who accepts a
Qualifying Offer and reports to work with Purchaser or an Affiliate of
Purchaser in a timely manner and otherwise in accordance with the Qualifying
Offer shall be effective as of the Closing Date and such individuals shall be
referred to as “Transferred Employees.”

 

Purchaser
shall retain all liability for severance and other benefits (including any
liability arising under the WARN Act) to any Business Employee employed by a
Purchased Entity who is terminated (whether as a result of Purchaser’s decision
to terminate such individual’s employment or due to “constructive termination”
or similar 

 

51

 

concept under applicable Law) as of or after Closing.  Seller shall retain all liability for
severance and other benefits (including liability arising under the WARN Act)
to any Affiliate Employee who does not receive or who receives but does not
accept a Qualifying Offer from Purchaser; provided, however, that
Purchaser shall be responsible for any claims that its decisions to hire or not
hire any particular Affiliate Employee violate applicable Law, or any claims
with respect to the terms and conditions under which Purchaser offers
employment to or employs any Business Employee or Affiliate Employee.

 

Subject
to Applicable Law, Seller and Purchaser acknowledge and agree that any
employment offered by Purchaser to a Business Employee, Affiliate Employee or
Transferred Employee will be “at will” and may be terminated by the Purchaser,
Business Employee, Affiliate Employee or Transferred Employee at any time for
any reason.

 

(c)                                  Subject to
Seller’s timely provision of complete and accurate information as required by
this Section 5.14(c), Purchaser shall cause each Business Employee
and such Business Employee’s eligible dependents who are covered as of the
Closing Date by a Plan that is a group health, prescription drug, dental or
vision benefit plan to be offered coverage under group health, prescription
drug, dental or similar type of benefit plan, as the case may be, maintained by
Purchaser or an Affiliate of Purchaser, under which the Business Employee and
any eligible dependents of the Business Employee shall be (i) eligible
effective immediately upon the inception of their employment with Purchaser or
an Affiliate of Purchaser, and (ii) credited, for the year during which
such coverage under such plans begin, with any deductibles, out-of-pocket
maximums and co-payments already incurred during such year under Plans that
provide similar benefits (or Purchaser will provide an economically equivalent
benefit).  Seller shall provide, or shall
cause to be provided, to Purchaser within ten Business Days of Purchaser’s
request all information reasonably requested by Purchaser for the purpose of
complying with the provisions of this Section 5.14(c).

 

(d)                                 Subject to
Seller’s timely provision of complete and accurate information as required by
this Section 5.14(d), Purchaser shall cause the Purchaser Plans
maintained after the Closing by Purchaser to recognize each Business Employee’s
years of service prior to the Closing Date with Seller for purposes of terms of
employment and eligibility, vesting and benefit determination under such plans
and programs, including paid vacation, paid sick time, severance benefits and
employer contribution rates under profit sharing and retirement plans but not
for purposes of benefit accrual under any Purchaser Plan subject to
Section 301 et seq. of ERISA or Section 412 of the Code.  Purchaser shall cause each group health plan
sponsored by Purchaser (or one of its Affiliates) under which a Business
Employee is eligible to participate on or after the Closing Date to waive any preexisting
condition exclusions otherwise applicable to such Business Employee and his
eligible dependents to the same extent as waived or satisfied under Seller’s
Plan.  Seller shall provide, or shall
cause to be provided, to Purchaser within ten Business Days of Purchaser’s
request all information reasonably requested by Purchaser for the purpose of
complying with the provisions of this Section 5.14(d).

 

52

 

(e)                                  Claims of
Business Employees and their eligible beneficiaries and dependents for medical,
dental, prescription, drug, life insurance, and/or other welfare benefits (“Welfare Benefits”)
(other than disability benefits) that are incurred before the Closing Date
shall be the sole responsibility and Liability of the Seller’s Plans except to
the extent such benefits claims are incurred but unpaid under a Purchased
Entity Plan in which case Purchaser and the Purchased Entity Plans shall bear
sole responsibility for such Liability. 
For purposes of the preceding provisions of this paragraph, a
medical/dental claim shall be considered incurred on the date when the
medical/dental services are rendered or medical/dental supplies are provided,
and not when the condition arose or when the course of treatment began.  Claims of individuals receiving disability
benefits under a Seller’s Plan as of the Closing Date shall be the sole
responsibility of the Seller’s Plan pursuant to its terms and conditions except
to the extent such benefits claims are incurred but unpaid under a Purchased
Entity Plan in which case Purchaser and the Purchased Entity Plans shall bear
sole responsibility for such Liability.

 

(f)                                    Seller shall be
responsible for all Liabilities (including Liabilities for associated
administrative functions) for workers’ compensation claims made for compensable
injuries of Transferred Employees that first occurred before the Closing
Date, except to the extent such Liability arises under a workers’ compensation
insurance policy that is transferred to a Purchaser with a Purchased
Entity.  Purchaser shall be responsible for all Liabilities (including
liabilities for associated administrative functions) for all workers’
compensation claims that occurred on or after the inception of employment of
the Transferred Employee by Purchaser or its Affiliates.  For purposes of this Section 5.14(f),
a workers’ compensation claim shall be “made” at the time of the occurrence of
the event giving rise to eligibility for workers’ compensation benefits or at
the time the occupational disease becomes manifest, as applicable, under the
respective workers’ compensation act governing the alleged injury or
disease.  Seller will notify applicable
Governmental Authorities, if and as appropriate, of any on-the-job injuries or
workers’ compensation claims for which they are responsible under this Section 5.14(f).  Purchaser will notify applicable Governmental
Authorities, if and as appropriate, of any on-the-job injuries or workers’
compensation claims for which it is responsible under this Section 5.14(f).  Seller and Purchaser will promptly cooperate
in providing to each other such information as is reasonably needed for these
notifications and related filings.

 

(g)                                 During the
period between the Effective Date and the Closing Date, except in the ordinary
course of business or as otherwise expressly contemplated by this Agreement or
agreed to by Purchasers in writing, the Sellers shall cause the Purchased
Entities to not (i) grant any severance, retention or termination pay to,
or amend any existing severance, retention or termination arrangement with, any
director, officer, employee, independent contractor or consultant of any
Purchased Entity as of the Effective Date or any former director, officer
employee, independent contractor or consultant of any Purchased Entity,
(ii) increase or accelerate the payment or vesting of, benefits payable
under any existing severance, retention or termination pay policies or
employment agreements, (iii) enter into or amend any employment,
consulting, deferred compensation or other similar agreement with any Person
working in the Business (except as required by applicable Law or required by
the terms of such Plan prior to amendment), (iv) establish, adopt, amend or
terminate, or increase the benefits provided under, any collective bargaining

 

53

 

agreement, retention agreement or Plan (except as required by
applicable Law or the terms of such Plan prior to amendment), (v) amend or
terminate any Purchased Entity Plan except to the extent required by Law, or
(vi) increase the compensation, bonus, severance, incentive awards or
benefits payable to any current or former officer, director, employee,
independent contractor or consultant of any Purchased Entity.

 

(h)                                 With respect to
any Business Employees who become employed by Geokinetics or a Subsidiary of
Geokinetics after the Closing Date, (i) Geokinetics or such Subsidiary
will permit such Business Employees to schedule and take vacation days that
have accrued prior to the Closing Date with pay for the maximum length of time
as permitted under Seller’s vacation policy as in effect on the Closing Date,
(ii) Geokinetics or such Subsidiary shall give service credit for purposes
of determining post Closing Date vacation, sick leave and any other paid time
off entitlements that Geokinetics or such Subsidiary provides to its employees
generally and (iii) Geokinetics or such Subsidiary shall permit each
Business Employee to use or receive payment for all amounts of Accrued Time Off
(as defined in the policies of PGS) earned by such Business Employee prior to
the Closing under the policies of Sellers and their Affiliates.  Sellers shall provide, or shall cause to be
provided, to Purchasers within ten (10) Business Days of a Purchaser’s
request all information reasonably requested by Purchaser for the purpose of
complying with the provisions of this Section 5.14(h).

 

(i)                                     Geokinetics,
Sellers and the Purchased Entities shall cooperate with each other in all
reasonable respects relating to any actions to be taken pursuant to this Section 5.14.

 

(j)                                     Notwithstanding
any other provision of this Agreement, the provisions of this Section 5.14
are not intended to and shall not create or confer any third party beneficiary
rights respecting any Business Employee, Affiliate Employee, Transferred
Employee or any other Person.

 

(k)                                  To the extent,
following Closing, a Seller retains the employment of any Business Employee or
Affiliate Employee who worked primarily for the Business prior to Closing, such
Seller agrees to utilize all commercially reasonable legal and equitable
remedies available to it to enforce any applicable covenant not to compete
and/or non-solicitation agreement in the event such employee is no longer
employed by such Seller or its Affiliate.

 

Section 5.15                            Notice
of Certain Events.

 

(a)                                  Each party to
this Agreement shall promptly as reasonably practicable notify the other
parties of:

 

(i)                                     any notice or other
communication from any Person alleging that the consent of such Person (or
other Person) is or may be required in connection with the Transactions;

 

(ii)                                  any notice or other
communication from any Governmental Authority in connection with the
Transactions;

 

54

 

(iii)                               any Legal Action commenced
or, to the best of its knowledge, threatened against, relating to or involving
or otherwise affecting it or any of its Subsidiaries that, if pending on the
Effective Date, would have been required to have been disclosed pursuant to
this Agreement, or that relates to the consummation of the Transactions;

 

(iv)                              any notice of, or other
communication relating to, a default or event that, with notice or lapse of
time or both, would become a default, received by it or any of its Subsidiaries
subsequent to the Effective Date, under any material agreement (in case of the
Sellers, solely with respect to the Business); and

 

(v)                                 any Seller Material Adverse
Effect or Purchaser Material Adverse Effect or the occurrence of any event that
would result in a Seller Material Adverse Effect or a Purchaser Material
Adverse Effect, as the case may be.

 

(b)                                 If, prior to
the Closing, PGS or any Subsidiary of PGS, other than a Purchased Entity or a
wholly-owned subsidiary of a Purchased Entity, conducts the Business in any
jurisdiction in which a Business Owning Entity does not conduct the Business as
of the Effective Date, PGS will promptly notify the Purchasers of (i) the
jurisdiction in which the Business is being conducted, (ii) the identity
of the entity conducting the Business, and (iii) the nature (including a
brief summary) of the Business being conducted, and shall provide the
Purchasers with copies of all Contracts and other documents related to such
Business, provided, that, for this purpose, submitting a bid for work
will not constitute the conduct of Business.

 

Section 5.16                            Termination
of Inter-company Indebtedness.  At or prior to the Closing, PGS shall cause
each Purchased Entity and each Subsidiary of a Purchased Entity to terminate,
settle or otherwise satisfy any indebtedness or accounts payable owed by the
Purchased Entity or such Subsidiary to PGS or any Affiliate of PGS.  Such termination, settlement or satisfaction
shall be effected by means of causing at least 95% of the total amount of such
indebtedness or accounts payable to be either paid off, contributed to capital
or converted into common or preferred equity of the respective Purchased
Entities and Subsidiaries.  For any
remaining such indebtedness or accounts payable, in the event PGS intends to
cause such termination, settlement or satisfaction to be effected by some other
means, it will not do so without obtaining the prior written consent of
Geokinetics, which consent shall not be unreasonably withheld.

 

Section 5.17                            Performance
Bonds.  Section 5.17
of the Seller Disclosure Schedule lists all of the performance, local import,
bid or other bond, letter of credit or other guarantee related primarily to the
conduct of the Business posted by an Asset Seller or any Affiliate of an Asset
Seller (other than a Purchased Entity or a Subsidiary of a Purchased Entity as
of the Effective Date).  If any Seller or
any of its Affiliates (other than any Purchased Entity or its Subsidiaries) has
posted a performance, local import, bid or other bond, letter of credit or
other guarantee related primarily to the conduct of the Business, the
Purchasers and the Sellers shall use commercially reasonable efforts and
cooperate with each other in order (i) for such Seller or any such
Affiliate to obtain the release of any such bond, letter of credit or guarantee
and (ii) to the extent required, for a Purchaser to obtain a substitute
bond, letter of credit or guarantee or to assume such Seller’s or such
Affiliate’s existing bond, letter of credit or guarantee, in each case

 

55

 

on
or prior to the Closing Date.  The
Purchasers shall indemnify and reimburse promptly the Sellers and their
Affiliates for all costs and liabilities incurred by the Sellers or any such
Affiliate as a result of the Seller’s or such Affiliate’s leaving a
performance, local import, bid or other bond, letter of credit or other
guarantee in place after the Closing Date relating to the Business.

 

Section 5.18                            Resignation
of Directors.  Effective as
of the Closing Date, the Sellers will cause each member of the board of
directors (or similar governing body) of each Purchased Entity and each
Subsidiary of a Purchased Entity serving immediately prior to the Closing Date
to resign as a director of the Purchased Entity.

 

Section 5.19                            Utilities
and Assessments; Other Allocations.   In the case of the Purchased Assets, any
charges for utilities or similar costs or assessments, common area maintenance
reimbursements to lessors, local business or other license fees and other
similar periodic charges and all payments under any leases for Real Property
and the Contracts shall be prorated on a per diem basis through the Closing
Date (based on estimates or the most recent amounts paid), with the Sellers
being responsible for all of such prorated charges attributable to the period
on or prior to the Closing Date and the Purchasers being responsible for all of
such prorated charges attributable to the period after the Closing Date.  Promptly upon receipt, the Purchasers or the
Sellers, as appropriate, shall provide the other with copies of all bills for
such items for which the other party is responsible pursuant to this Section 5.19.  The resulting amount payable by the Purchasers
or the Sellers shall be paid promptly upon demand by the party hereto to whom
such payment is owed.

 

Section 5.20                            Condition
to Transfer of Contracts.

 

(a)                                  Notwithstanding
anything in this Agreement to the contrary, the parties hereto acknowledge and
agree that at the Closing (i) no Asset Seller is assigning to any
Purchaser any Contract or other right that by its terms requires the consent of
any other party unless such consent has been obtained prior to the Closing and
(ii) no Asset Seller is assigning to any Purchaser any Contract or other
right in any jurisdiction where such Purchaser is not qualified under
applicable Law to own or perform such Contract or right.  With respect to each such unassigned Contract
or right, after the Closing, the applicable Asset Seller shall, if requested by
the applicable Purchaser, continue as the prime contracting party and shall use
its commercially reasonable efforts (without being required to make any payment
or incur any economic obligation or liability in connection therewith) to
obtain the consent of all required parties to the assignment of such Contract
or right, but such Purchaser shall be entitled to the benefits of such Contract
or right accruing after the Closing to the extent that such Asset Seller is entitled
to such benefits and may provide the Purchaser with such benefits without
violating the terms of such Contract or right, provided, that the applicable
Purchaser agrees to perform and assume, at its sole expense, all of the
obligations of such Asset Seller to be performed under such Contract or right
the benefits of which the applicable Purchaser is receiving after the Closing
Date.

 

(b)                                 Prior to the
Closing Date, the Sellers shall use their commercially reasonable efforts to
cause to be distributed or transferred out of the Purchased Entities and their
respective Subsidiaries, or otherwise settled, (i) any Excluded Assets or
(ii) any assets,

 

56

 

including Contracts, that are not used primarily in the conduct of the
Business (collectively, the “Subject Assets”).  If immediately prior to the Closing Date the
Sellers have not received any consent of any party to a Contract identified in Section 5.20(b) of
the Seller Disclosure Schedule that is necessary in connection with any such
distribution, transfer or settlement, after the Closing, upon the terms and
subject to conditions in this Section 5.20, the Purchasers shall
cause the relevant Purchased Entity or Subsidiary to continue as the prime
contracting party under such Contract and shall use their commercially
reasonable efforts (without being required to make any payment or incur any
economic obligation or liability in connection therewith) to obtain the consent
of all required parties to the assignment of such Contract.  If all required consents are obtained after
the Closing Date, the Purchasers shall cause the relevant Purchased Entity or
Subsidiary to assign such Contract and all other Subject Assets relating to such
Contract to the Seller designated by PGS promptly following the receipt of all
such required consents, without the payment of any additional consideration
therefor, other than as provided in this Section 5.20.  If any Subject Assets are not distributed or
transferred out of the Purchased Entities and their respective Subsidiaries, or
otherwise settled, prior to the Closing, Geokinetics, the Purchased Entity or
Subsidiary holding any such Subject Assets and the Sellers designated by PGS
shall enter into an agreement on the Closing Date, in form and substance
reasonably satisfactory to PGS, Geokinetics and the Purchased Entity or
Subsidiary, with respect to the relevant Contract and the related Subject
Assets to the effect that such Purchased Entity or Subsidiary shall continue to
perform its obligations thereunder at the Sellers’ sole expense and each Seller
or other Affiliate of PGS shall provide, at the sole expense of such Seller or
Affiliate, the personnel, equipment, Intellectual Property or other assets
necessary or desirable for such purpose and such assistance as such Purchased
Entity may require for such purpose, including, without limitation, the use of
assets, software and Intellectual Property (by license, lease or otherwise) of
such Seller or Affiliate (to the extent such Purchased Entity does not have
such use already) of the type and quantity that such Purchased Entity would
have used to perform such Contract had the Transactions not been
consummated.  Such agreement shall also
provide that, in consideration of the provision of such personnel and
assistance, and to the extent it will not violate or breach the terms of the
Contract, such Purchased Entity shall, promptly after payment of any amounts to
such Purchased Entity or the Purchasers by the other party to such Contract,
pay such amounts to the particular Sellers after subtracting therefrom the
costs, expenses, Taxes and Liabilities incurred by such Purchased Entity as a
result of its continuing to hold, or its performance, of such Contract so that
such Sellers receive the same benefits arising under such Contract as the
relevant Purchased Entity or Subsidiary provided the Sellers and their
Affiliates prior to the Closing Date.

 

(c)                                  Within a
reasonable period of time after the Effective Date, Sellers shall provide
Purchasers with a copy of the Contract described in Section 5.20(b) of
the Seller Disclosure Schedule, which copy may be redacted to exclude
confidential, proprietary or competitive information.  The Sellers shall keep the Purchasers
reasonably informed with respect to all material activity concerning the status
of distributions, transfers and settlements described in Section 5.20(b) and
shall give the Purchasers prompt notice of any material adverse change with
respect to the ability of the Sellers to consummate any such distribution,
transfer or settlement prior to the Closing Date.

 

57

 

(d)                                 The agreement
contemplated by Section 5.20(b) shall contain appropriate
mutual indemnification provisions and shall provide that the Purchased Entity
holding the Subject Assets shall not be liable, except for gross negligence,
willful misconduct or intentional breach.

 

Section 5.21                            Mail
Received After Closing.   Following the Closing, the Purchasers may
receive and open all mail addressed to the Business Owning Entities and, to the
extent that such mail and the contents thereof relate to the Business or the
Purchased Assets, deal with the contents thereof in their discretion.  The Purchasers shall notify the applicable
Seller of (and provide such Seller copies of) any mail that on its face obliges
such Seller or any of its Subsidiaries to take any action.

 

Section 5.22                            Refunds
and Remittances.   After
the Closing, if the Sellers or any of their respective Affiliates receive any
refund or other amount that is a Purchased Asset or is otherwise properly due
and owing to a Purchaser or any of its Affiliates in accordance with the terms
of this Agreement, the Sellers promptly shall remit, or shall cause to be
remitted, such amount to the applicable Purchaser.  After the Closing, if the Purchasers or any
of their respective Affiliates receive any refund or other amount that is a
Subject Asset or is otherwise properly due and owing to a Seller or any of its
Affiliates in accordance with the terms of this Agreement, subject to Section 5.20(b) the
Purchasers promptly shall remit, or shall cause to be remitted, such amount to
the applicable Seller.  After the
Closing, if the Purchasers or any of their respective Affiliates receive any
refund or other amount that is related to claims (including workers’
compensation), litigation, insurance or other matters for which any of the
Sellers or their respective Affiliates is responsible hereunder, and which
amount is not a Purchased Asset, or is otherwise properly due and owing to any
of the Sellers or their respective Affiliates in accordance with the terms of
this Agreement, the Purchasers promptly shall remit, or cause to be remitted,
such amount to the Sellers.  After the
Closing, if the Sellers or any of their respective Affiliates receive any
refund or other amount that is related to claims (including workers’
compensation), litigation, insurance or other matters for which any of the
Purchasers or their respective Affiliates is responsible hereunder, and which
amount is not a Subject Asset, or is otherwise properly due and owing to any of
the Purchasers or their respective Affiliates in accordance with the terms of
this Agreement, the Sellers promptly shall remit, or cause to be remitted, such
amount to the Purchasers. 
Notwithstanding the foregoing, the parties to this Agreement agree that
this Section 5.22 shall not cover or apply to any refunds related
to Taxes, which are covered exclusively by the provisions set forth in Section 10.7.

 

Section 5.23                            Use
of Name; Removal of Name from Signage. Each of the Purchasers
acknowledges and agrees that the name “Petroleum Geo-Services” shall not be
deemed a Purchased Asset and that the Sellers shall be permitted (but shall not
be required), on or prior to the Closing, to cause each Purchased Entity to
change its name such that the name “Petroleum Geo-Services” and any
abbreviation or derivation thereof is not used in any such entity’s name.  Within 60 days following the Closing Date,
the Purchasers shall (i) cause any Purchased Entity the name of which
includes the name “Petroleum Geo-Services” and any abbreviation or derivation
thereof to change its name to exclude the name “Petroleum Geo-Services” or any
such abbreviation or derivation thereof, (ii) remove from any and all
Purchased Assets or assets of Purchased Entities that carry the name “Petroleum
Geo-Services” or any abbreviation or derivation thereof or any logos related
thereto or signage used in the Business the name

 

58

 

“Petroleum
Geo-Services,” any abbreviation or derivation thereof and any logos related
thereto and (ii) dispose of any marketing or other materials used in the
Business that use the name “Petroleum Geo-Services,” any abbreviation or
derivation thereof and any logos related thereto.

 

Section 5.24                            Supplies;
Email Addresses.

 

(a)                                  At any time
after 45 days after the Closing Date, the Purchasers shall not use, and shall
not permit their employees or controlled Affiliates to use, stationery,
purchase order forms, labels, material safety data sheets, business cards or
other similar paper goods or supplies that state or otherwise indicate thereon
that the Business is a division or unit of PGS.

 

(b)                                 Within 45 days
following the Closing Date, the Purchasers shall cause each of their employees,
and any employees of any Affiliates of a Purchaser, to cease to use any email
address, email signature or similar electronic media or information that
includes the name “Petroleum Geo-Services” or any abbreviation or derivation
thereof or that otherwise indicates that such individual may be an employee of
PGS or one of its Affiliates.

 

Section 5.25                            Powers
of Attorney.   At the
Closing, the Sellers will deliver to the Purchasers a true, accurate, and
complete list of the Persons holding any powers of attorney from any Purchased
Entity or Subsidiary of a Purchased Entity as of the Closing Date (excluding
any powers of attorney solely covering the authority to perform ministerial or
clerical tasks for or on behalf of such Purchased Entity or Subsidiary of a
Purchased Entity), and of the information that follows: (i) the name of
the Purchased Entity or Subsidiary of a Purchased Entity that issued any such
powers of attorney; (ii) the name of each Person holding such power of attorney
from such Purchased Entity or Subsidiary of a Purchased Entity, (iii) the
date such power of attorney was issued, and (iv) the jurisdiction where
such power of attorney was issued.  In
addition, Sellers will deliver true, correct, and complete copies of such all
such powers of attorney contemporaneously with the Closing.

 

Section 5.26                            Financing
of the Transaction.

 

(a)                                  Geokinetics
shall use its reasonable best efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable to arrange and consummate the Financing on or prior to the Closing
Date.

 

(b)                                 Without
limiting the generality of paragraph (a) immediately above, Geokinetics
shall use its reasonable best efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable to arrange and consummate the Bridge Financing on the terms and
conditions described in the Commitment Letter, including using reasonable best
efforts to (i) satisfy on a timely basis all terms, covenants and
conditions set forth in the Commitment Letter; (ii) enter into definitive
agreements with respect thereto on the terms and conditions contemplated by the
Commitment Letter; (iii) enforce its rights under the Commitment Letter;
and (iv) consummate the Bridge Financing at or prior to Closing, provided
that Geokinetics’ obligations to arrange and consummate the Bridge Financing
shall be suspended and the Bridge Commitment may 

 

59

 

terminate, upon consummation by Geokinetics of the Financing.  Geokinetics shall not create, incur or suffer
to exist any Lien (including any escrow arrangement) on any proceeds from the
Financing that would materially delay or prevent consummation of the
Transactions.  Without limiting the
generality of the preceding sentence, if any such proceeds are subject to an
escrow arrangement, Geokinetics shall cause such arrangement to be on
commercially reasonable terms and otherwise to provide that (i) such
arrangement shall not be terminated, nor the funds subject thereto be returned
to the applicable investors or other Persons, prior to the Closing or the
termination of this Agreement in accordance with its terms and (ii) prior
to such termination of the escrow arrangement, a portion of such funds in an
amount sufficient to pay the Cash Consideration portion of the Purchase Price
shall not be used for any purpose other than to pay the Cash Consideration
portion of the Purchase Price. 
Geokinetics will furnish correct and complete copies of all definitive
agreements relating to the Financing (including any escrow agreement) to the
Sellers promptly upon their execution.

 

(c)                                  Geokinetics
shall keep the Sellers informed with respect to all material activity
concerning the status of the Financing, including activity contemplated by the
Commitment Letter, and shall give the Sellers prompt notice of any material
adverse change with respect to the Financing. 
Without limiting the foregoing, Geokinetics agrees to notify the Sellers
promptly, and in any event within two Business Days, if at any time
(i) the Commitment Letter shall expire or be terminated, rescinded or
withdrawn for any reason, (ii) any financing source that is a party to the
Commitment Letter notifies Geokinetics that such source no longer intends to
provide financing to Geokinetics on the terms set forth therein, or
(iii) for any reason Geokinetics no longer believes in good faith that it
will be able to obtain all or any portion of the Financing on the terms set
forth in the Commitment Letter. 
Geokinetics shall not, and shall not permit any of its Subsidiaries to,
without the prior written consent of the Sellers (which consent may be granted
or withheld in the Sellers’ sole discretion), take or fail to take any action
or enter into any transaction, including any merger, acquisition, joint
venture, disposition, lease, contract or debt or equity financing, that
breaches any representation or warranty contained in the Commitment Letter or
any definitive agreement entered into in connection with the Financing, unless
waived, or that prevents consummation of the Financing or delays the
consummation of the Financing past the Termination Date, including the Bridge
Financing contemplated by the Commitment Letter.  Geokinetics shall not (x) amend or
alter, or agree to amend or alter, the Commitment Letter or (y) waive, or
agree to waive, any provision in the Commitment Letter, in each case in any
manner that would prevent or materially impair the consummation of
Transactions, without the prior written consent of the Sellers (which consent
may be granted or withheld in the Sellers’ sole discretion).

 

(d)                                 If any portion
of the Bridge Financing becomes unavailable on the terms and conditions
contemplated in the Commitment Letter or the Commitment Letter shall be
terminated or modified in a manner materially adverse to Geokinetics for any
reason other than completion of a Financing other than the Bridge Financing, or
if, after completion of a Financing other than the Bridge Financing,
Geokinetics no longer has immediately available funds (including funds held in
escrow pursuant to an arrangement satisfying the requirements of Section 5.26(b))
on or before the Closing Date in an

 

60

 

amount exceeding the amount required to provide for all obligations of
the Purchasers under this Agreement to pay the Cash Consideration portion of
the Purchase Price, Geokinetics shall use its reasonable best efforts to
arrange to obtain alternative financing from alternative sources in an amount
equal to the amount required by the Financing (“Alternate
Financing”) and to obtain, and, if obtained, will provide the
Sellers with a copy of, a new financing commitment that provides for at least
the same amount of financing as the Commitment Letter as originally issued and
on terms and conditions (including termination rights and funding conditions)
no less favorable to Geokinetics than those included in the Commitment Letter
(the “New Commitment Letter”).  To the extent applicable, Geokinetics shall
use its reasonable best efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all things necessary, proper or advisable to
arrange promptly and consummate the Alternate Financing on the terms and
conditions described in any New Commitment Letter, including using reasonable
best efforts to (i) satisfy on a timely basis all terms, covenants and
conditions set forth in the New Commitment Letter; (ii) enter into definitive
agreements with respect thereto on the terms and conditions contemplated by the
New Commitment Letter; (iii) enforce its rights under the New Commitment
Letter; and (iv) consummate the Alternate Financing at or prior to the
Closing.  Geokinetics will furnish correct
and complete copies of all such definitive documents to the Sellers promptly
upon their execution.  In the event
Alternate Financing is obtained and a New Commitment Letter is entered into,
references in this Agreement to the Commitment Letter shall be deemed to refer
to the New Commitment Letter, as applicable.

 

(e)                                  The Sellers
agree to provide, and prior to the Closing Date will cause the Purchased
Entities and each of their respective officers and employees to provide,
reasonable cooperation in connection with the arrangement and consummation of,
and the negotiation of agreements with respect to, the Financing (and any
substitutions or replacements thereof). 
In furtherance of and not in limitation of the foregoing, the Sellers
shall (i) cause the senior officers of the Business to be reasonably
available, on reasonable advance notice, to Geokinetics and the financial
institutions providing the Financing to participate in due diligence sessions
and to participate in presentations (including any “road shows” or similar
presentations) related with the Financing, (ii) assist in the preparation
of one or more appropriate and customary offering documents and assisting
Geokinetics and the financial institutions providing the Financing in preparing
other appropriate and customary marketing materials, in each case to be used in
connection with the Financing, and (iii) request the independent auditors
with respect to the Business to prepare and deliver “comfort letters,” dated
the date of each offering document used in connection with any transaction in
connection with the Financing (with appropriate bring down comfort letters
delivered on the closing date of the Financing), in compliance with
professional standards and otherwise on terms reasonably acceptable to
Geokinetics, as the case may be, in each of the foregoing cases as may be
necessary and customary in connection with a financing substantially similar to
the Capital Markets Financings; provided, however, that the
Sellers shall be reimbursed promptly (and in any event within 10 Business Days
of providing invoices to Geokinetics) by Geokinetics for all out-of-pocket
expenses incurred by Sellers in connection with the foregoing.  Nothing contained in this Section 5.26
shall require (i) the Sellers or any senior officers of the Business to
engage in any action that would

 

61

 

interfere unreasonably with the business of the Sellers and their
Subsidiaries or the Business or (ii) the Sellers or any of their respective
Subsidiaries to pay any commitment or other similar fee or incur any other
liability in connection with the Financing prior to the Closing.  Geokinetics shall indemnify and hold harmless
the Sellers and their respective Subsidiaries, officers, directors and other
representatives from and against any and all losses or damages suffered or
incurred by them in connection with the arrangement and completion of the
Financing and any information utilized in connection therewith except with
respect to information in respect of the Business supplied by the Sellers and
their respective Subsidiaries and representatives specifically for inclusion or
incorporation by reference therein.

 

(f)                                    PGS shall
ensure that the Supplied Information, as of the respective date of such
Geokinetics Offering Document, will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements in such Supplied Information, in the light of the circumstances
under which they were made, not misleading; provided, that such Supplied
Information is included in such Geokinetics Offering Document in conformity
with the Supplied Information as provided by PGS.  Geokinetics shall ensure that each
Geokinetics Offering Document, as of the respective date of such Geokinetics
Offering Document, will not contain an untrue statement of a material fact or
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.

 

(g)                                 If requested by
Purchasers, PGS will use its commercially reasonable efforts (i) to
prepare, in accordance with GAAP, financial statements of the Business as of
and for the year ended December 31, 2009 (the “PGS
2009 Audited Financial Statements”) and (ii) to cause KPMG
to audit the PGS 2009 Audited Financial Statements in a manner consistent with
the audit of the Business Financial Statements; provided, that
Geokinetics shall pay all incremental costs and expenses of such audit (or a
good faith estimate thereof), or shall reimburse PGS for such incremental costs
and expenses (or estimate thereof), over the amount that PGS would have
otherwise incurred by reason of the review of the accounts of the Business in
having PGS’s 2009 consolidated financial statements audited under IFRS.  Notwithstanding anything to the contrary in
the preceding sentence, PGS shall not be required to prepare, or cause to be
prepared, the PGS 2009 Audited Financial Statements until such time as the IFRS
audit of PGS’s consolidated financial statements as of and for the year ended
December 31, 2009 has been completed.

 

ARTICLE
VI.

CONDITIONS
TO CONSUMMATION OF THE PURCHASE

 

Section 6.1                                   The
Closing.  The closing
of the Transactions (“Closing”)
shall be held at the offices of Haynes and Boone, LLP, 1221 McKinney Street,
Suite 2100, Houston, Texas 77010 at 10:00 a.m. Houston, Texas time on
the second Business Day after the date on which all conditions set forth in
this Article VI have been satisfied (other than those conditions
that by their nature are to be satisfied at the Closing, but subject to the
fulfillment or waiver of those conditions); provided, that,
notwithstanding the foregoing, the Closing may take place at such

 

62

 

other
place, at such other time, or on such other date as the parties hereto may
mutually agree (“Closing Date”).

 

Section 6.2                                   Conditions
to the Obligation of Each Party.  The respective obligations of each party to
close the Transactions shall be subject to the fulfillment on or prior to the
Closing Date of the following conditions:

 

(a)                                  No judgment,
injunction or Order shall be in effect that has the effect of making the
Transactions illegal or otherwise restraining or prohibiting the consummation of
the Transactions (each party agreeing to use its best efforts, including
appeals to higher courts, to have any judgment, injunction or Order).

 

(b)                                 The Share
Consideration must have been approved and admitted for listing on the NYSE
AMEX, subject to official notice of issuance.

 

(c)                                  Any applicable
waiting periods and approvals applicable to the consummation of the
Transactions under the Competition Laws of the jurisdictions described in Section 6.2(c) of
the Seller Disclosure Schedule shall have expired, been terminated or been
obtained, as applicable, in each case, without any conditions or terms that,
individually or in the aggregate, would result in a material adverse effect on
the business, assets or financial condition of Geokinetics and its Subsidiaries
together with the Property taken as a whole as constituted after the Closing
Date.  Any consents, approvals, permits
and authorizations required to be obtained prior to the Closing Date under the
Competition Laws of any jurisdiction other than as set forth in Section 6.2(c) of
the Seller Disclosure Schedule shall have been obtained, and any applicable
waiting period shall have expired or been terminated, except where the failure
to comply, individually or in the aggregate, would not result in a material
adverse effect on the business, assets or financial condition of Geokinetics
and its Subsidiaries together with the Property taken as a whole as constituted
after the Closing Date.

 

Section 6.3                                   Conditions
to the Obligations of Purchasers.  The obligation of each Purchaser to close the
Transactions is subject to the satisfaction on or prior to the Closing Date of
the following conditions:

 

(a)                                  Each Seller
shall have performed in all material respects its obligations under this
Agreement required to be performed by it at or prior to the Closing Date, and
the representations and warranties of the Sellers contained in this Agreement,
to the extent qualified with respect to materiality, shall be true and correct
in all respects, and to the extent not so qualified, shall be true and correct
except to the extent that a failure to be true and correct would not,
individually or in the aggregate, result in a Seller Material Adverse Effect,
in each case as of the Effective Date and at and as of the Closing as if made at
and as of such time, except that the accuracy of representations and warranties
that by their terms speak as of the Effective Date or some other date shall be
determined as of such date, and Purchasers shall have received a certificate of
the Chief Executive Officer and Chief Financial Officer of PGS as to the
satisfaction of this condition.

 

63

 

(b)           Each consent, waiver
and approval set forth in Sections 2.3(b) or (c) of the
Seller Disclosure Schedule and each consent, waiver and approval that would be
required to be disclosed in such Sections of the Seller Disclosure Schedule
dated as of the Closing Date, shall have been obtained, and Sellers shall have
provided Purchasers with copies thereof.

 

Section 6.4            Conditions to the
Obligations of Sellers. 
The obligation of each Seller to close the Transactions is subject to
the satisfaction on or prior to the Closing Date of the following conditions:

 

(a)                                  Geokinetics and
each Purchaser shall have performed in all material respects its respective
obligations under this Agreement required to be performed by it at or prior to
the Closing Date, and the representations and warranties of Geokinetics and
Purchasers contained in this Agreement, to the extent qualified with respect to
materiality, shall be true and correct in all respects, and to the extent not
so qualified, shall be true and correct except to the extent that a failure to
be true and correct would not, individually or in the aggregate, result in a
Purchaser Material Adverse Effect, in each case as of the Effective Date and at
and as of the Closing Date as if made at and as of such time, except that the
accuracy of representations and warranties that by their terms speak as of the
Effective Date or some other date shall be determined as of such date, and
Sellers shall have received a certificate of the Chief Executive Officer and
Chief Financial Officer of Geokinetics as to the satisfaction of this
condition.

 

(b)                                 Each consent,
waiver and approval set forth in Section 4.4(b) or (c) of
the Purchaser Disclosure Schedule, and each consent, waiver and approval that
would be requested to be disclosed in such Sections of the Purchaser Disclosure
Schedule dated as of the Closing Date, shall have been obtained, and
Geokinetics shall have provided Sellers with copies thereof.

 

Section 6.5            Deliveries at Closing.  At the Closing:

 

(a)                                  the Sellers
will deliver to Purchasers:

 

(i)            as
applicable for a particular Purchased Entity, certificates evidencing, or other
indicia of ownership for, the Purchased Securities, which shall, as applicable
under applicable Law of each jurisdiction where a Purchased Entity is organized,
be duly endorsed in blank or in favor of the applicable Purchaser, such
endorsement to be in form and content reasonably satisfactory to the
Purchasers, a copy of the notation in the stock ledger book (Libro de Registro de Acciones) or, as applicable, accompanied
by duly executed transfer powers;

 

(ii)           as
applicable for a particular Purchased Entity, true, correct, and complete
copies (certified by the notary public before which the documents were
protocolized) of the duly convened and notified stockholders’ meeting approving
the sale and containing a waiver of any preferential rights of purchase (or, to
the extent allowed under the organizational documents of such Purchased Entity
and applicable Law, of the unanimous consent of the shareholders in lieu of a
formal meeting with the above-referenced content), all in form and content
reasonably satisfactory to the Purchasers. 
If

 

64

 

applicable for a particular
Purchased Entity, such copies must evidence that the shareholders’ meeting was
protocolized before a notary public of the applicable jurisdiction, and that
the protocolized shareholders’ meeting was registered or is in the process of
registration with the applicable Governmental Authority (if so required under
applicable Law to give effect to such meeting).

 

(iii)          the
certificate contemplated by Section 6.3(a) (the “Seller Certificate”);

 

(iv)          copies
of the consents, waivers and approvals contemplated by Section 6.3(b);

 

(v)           a
counterpart of the Registration Rights Agreement, duly executed by or on behalf
of each applicable Seller party thereto;

 

(vi)          a
counterpart of the Transition Services Agreement, duly executed by or on behalf
of each applicable Seller party thereto;

 

(vii)         a
counterpart of the Assignment and Assumption Agreement, duly executed by or on
behalf of each applicable Asset Seller party thereto;

 

(viii)        counterparts
of any Additional Assignment and Assumption Documents, duly executed by or on
behalf of each applicable Seller party thereto;

 

(ix)           a
counterpart of the License Agreement, duly executed by or on behalf of each
applicable Seller party thereto;

 

(x)            the
books and records, excluding Tax Returns, of the Purchased Entities and their
Subsidiaries to the extent not in the possession of the Purchased Entities or
their Subsidiaries;

 

(xi)           the
resignations contemplated by Section 5.18; and

 

(xii)          such
other documents and instruments as may be required by any other provision of
this Agreement or any Ancillary Agreement or as may reasonably be required to
consummate the Transactions.

 

(b)                                 Purchasers will deliver to Sellers:

 

(i)            the
Estimated Cash Consideration, payable in U.S. Dollars by wire transfer of
immediately available funds;

 

(ii)           certificates
representing the Share Consideration;

 

(iii)          the
certificate contemplated by Section 6.4(a) (the “Purchaser Certificate”);

 

(iv)          copies
of the consents, waivers and approvals contemplated by Section 6.4(b);

 

65

 

(v)           a
counterpart of the Registration Rights Agreement, duly executed by Geokinetics
and by the Series B Holders;

 

(vi)          a
counterpart of the Transition Services Agreement, duly executed by or on behalf
of each applicable Purchaser party thereto;

 

(vii)         a
counterpart of the Assignment and Assumption Agreement, duly executed by or on
behalf of each applicable Purchaser party thereto;

 

(viii)        counterparts
of any Additional Assignment and Assumption Documents, duly executed by or on
behalf of each applicable Purchaser party thereto;

 

(ix)           a
counterpart of the License Agreement, duly executed by or on behalf of each
applicable Purchaser party thereto;

 

(x)            a
statement described in Treasury Regulation §1.897-2(h) to the effect that
shares in Geokinetics do not constitute United States real property interests
within the meaning of Section 897(c)(1) of the Code; and

 

(xi)           such
other documents and instruments as may be required by any other provision of
this Agreement or any Ancillary Agreement or as may reasonably be required to
consummate the Transactions.

 

ARTICLE
VII.

INDEMNIFICATION
AND SURVIVAL

 

Section 7.1            Indemnification by
Sellers.  Effective upon
Closing, each Seller (the “Seller Indemnitors”),
jointly and severally, shall indemnify, defend and hold harmless Geokinetics
and Purchasers, their respective officers, directors, partners, employees,
agents and representatives and any and all of Purchasers’ Affiliates
(collectively, the “Purchaser Group”) from
and against any and all claims, liabilities, suits, controversies, losses,
costs and expenses (including, without limitation, claims for personal injury
or death or property damage and including all court costs and reasonable
attorneys’ fees) (collectively, “Losses”) to the extent arising
out of, resulting from or attributable to any of the following:  (a) any breach of any representation or
warranty made by Sellers in Article II or Article III
(other than Section 3.7) or the
corresponding representations and warranties made by such Seller in its Seller
Certificate, (b) any breach of any covenant made by Sellers set
forth in this Agreement, (c) any Retained Liabilities, (d) any
Unrelated Liabilities and (e) any Expenses the Sellers are obligated to
pay under Section 5.5.  THIS INDEMNITY OBLIGATION IS INTENDED TO ALLOCATE LIABILITY FOR STRICT
LIABILITY AND ALL OTHER CLAIMS ARISING UNDER ENVIRONMENTAL LAWS, INCLUDING
CERCLA, TO THE EXTENT INCLUDED IN THE RETAINED LIABILITIES.

 

Section 7.2            Indemnification by
Purchasers.  Effective
upon the Closing, each of Geokinetics and the Purchasers (the “Purchaser Indemnitors”), jointly
and severally, shall indemnify, defend and hold harmless the Sellers, their
respective officers, directors, partners, employees, agents and representatives
and any and all of the Sellers’ Affiliates, other than the Purchased Entities
(collectively, the “Seller Group”) from and
against any and all Losses to the

 

66

 

extent
arising out of, resulting from or attributable to any of the following:  (a) any breach of any representation or
warranty made by Geokinetics or the Purchasers in Article IV (other
than Section 4.11) or the corresponding representations and
warranties made by Geokinetics or the Purchasers in the Purchaser Certificate;
(b) any breach of any covenants made by Geokinetics or the Purchasers set forth
in this Agreement; (c) the Assumed Liabilities and (d) any Expenses the
Purchasers are obligated to pay under Section 5.5.

 

Section 7.3            Limits on Indemnification.

 

(a)                                  Deductible.

 

(i)            No
Seller Indemnitor shall have any obligation or liability under Section 7.1(a) or
Section 7.1(b) unless and until the aggregate amount of the
Losses suffered by the Purchaser Group for which the Seller Indemnitors are
obligated to indemnify the Purchaser Group under Section 7.1(a) or
Section 7.1(b) exceeds $1,000,000 (the “Seller
Deductible Amount”); provided, however, that once
the amount of such Losses suffered exceeds the Seller Deductible Amount with
respect to the Purchaser Group, as a whole, the Seller Indemnitors shall be
obligated to indemnify the Purchaser Group only to the extent that such Losses
exceed, and only in amounts that exceed, the Seller Deductible Amount.  The Seller Indemnitors’ obligation to pay
Retained Liabilities and Unrelated Liabilities shall not be limited by this Section 7.3(a)(i).

 

(ii)           No
Purchaser Indemnitor shall have any obligation or liability under Section 7.2(a) or
Section 7.2(b) unless and until the aggregate amount of the
Losses suffered by the Seller Group for which the Purchaser Indemnitors are
obligated to indemnify the Seller Group under Section 7.2(a) or
Section 7.2(b) exceeds $1,000,000 (the “Purchaser
Deductible Amount”); provided, however, that once
the amount of such Losses suffered exceeds the Purchaser Deductible Amount with
respect to the Seller Group, as a whole, the Purchaser Indemnitors shall be
obligated to indemnify the Seller Group only to the extent that such Losses
exceed, and only in amounts that exceed, the Purchaser Deductible Amount.

 

(b)                                 Cap.

 

(i)            The
Seller Indemnitors shall have no obligation or liability under Section 7.1(a) or
Section 7.1(b) for Losses suffered by the Purchaser Group, in
the aggregate, in excess of $20,000,000 (the “Seller
Cap Amount”); provided, however, that the Seller
Cap amount shall not apply in respect of any and all Losses to the extent
arising out of, resulting from or attributable to a breach of the
representations and warranties in Section 2.1, Section 2.2,
and Section 3.24.  The Seller
Indemnitors’ obligation to pay Retained Liabilities or Unrelated Liabilities
shall not be limited by this Section 7.3(b)(i).

 

(ii)           The
Purchaser Indemnitors shall have no obligation or liability under Section 7.2(a) or
Section 7.2(b) for Losses suffered by the Seller Group, in the
aggregate, in excess of $20,000,000 (the “Purchaser Cap Amount”);
provided, however, that the Purchaser Cap amount shall not apply
in respect of any and all Losses to the extent arising out of, resulting from
or attributable to a breach of the representations and

 

67

 

warranties in Section 4.1
and Section 4.3.  The
Purchaser Indemnitors’ obligation to pay Assumed Liabilities shall not be
limited by this Section 7.3(b)(ii).

 

(c)           The limits set forth
in this Section 7.3 shall not apply to, or be affected by, amounts
payable under Section 1.7.

 

Section 7.4            Intentionally Omitted.

 

Section 7.5            Indemnification Procedures.

 

(a)           If (i) a party
entitled to indemnity pursuant to Sections 7.1 or 7.2 (an “Indemnitee”) believes in good faith
that it has suffered or incurred a Loss that is subject to indemnification
under this Article VII or elsewhere under this Agreement, or (ii) a
claim (an “Indemnity Claim”) is asserted against an Indemnitee, then
in each case the Indemnitee shall give the party that the Indemnitee reasonably
believes owes an obligation of indemnity under this Article VII or
elsewhere under this Agreement (such party, the “Indemnitor”) written notice of
the underlying claim setting forth the particulars associated with the
underlying claim (including a copy of the written underlying claim, if any) as
then known by the Indemnitee (“Indemnity Claim Notice”).  The Indemnitee shall, to the extent
practicable, give an Indemnity Claim Notice within such time as will allow the
Indemnitor a reasonable period in which to evaluate and timely respond to the
underlying claim; provided, however, that (a) failure to do
so shall not affect an Indemnitee’s rights hereunder except for, and only to
the extent of, any incremental increase in the cost of the Indemnity Claim
resulting from the failure to give notice; and (b) the foregoing shall not
extend the time period set forth in Sections 7.8 or 7.9 (as
applicable to the claim), but if an Indemnity Claim Notice is given to an
Indemnitor within the applicable time period (if any) with respect to such
claim set forth in Article VII, such Indemnity Claim Notice shall
be effective, subject to the other limitations in Section 7.3 (if
applicable), as to costs and expenses incurred or suffered after the expiration
of any such time period, with respect to the matter described in such Indemnity
Claim Notice.

 

(b)           Upon receipt of an
Indemnity Claim Notice involving a claim by a Third Party (a “Third
Party Claim”) for which an Indemnitor believes it may have an
obligation of indemnity under this Agreement, the Indemnitor shall, if it so
elects in accordance with this Section 7.5 (without prejudice to
its right to contest its obligation of indemnity under this Agreement), assume
the defense of the Third Party Claim with counsel selected by the Indemnitor,
and the Indemnitee shall cooperate in all reasonable respects with such
defense.  If any Third Party Claim
involves a fact pattern wherein each party may have an obligation to indemnify
the other party, each party may assume the defense of and hire counsel for that
portion of the Third Party Claim for which it may have an obligation of
indemnity.  In all instances, the
Indemnitee may employ separate counsel and participate in the defense of any Third
Party Claim; provided, however, if the Indemnitor has assumed the
defense of a Third Party Claim pursuant to this Section 7.5, the
fees and expenses of counsel employed by the Indemnitee shall be borne solely
by the Indemnitee.  If the Indemnitor
elects by written notice to undertake the defense of the Third Party Claim
within thirty (30) days after receipt of the Indemnity Claim Notice, then
(i) the

 

68

 

Indemnitor shall defend the Indemnitee against such Third Party Claim,
(ii) the Indemnitor shall not consent to the entry of any judgment or
enter into any settlement with respect to such Third Party Claim that requires
any action of the Indemnitee other than the payment of money (the payment of
which is assume by Indemnitor) without the prior written consent of the
Indemnitee (it being acknowledged and agreed that any such judgment or
settlement may be rejected by the Indemnitee in its sole discretion if such
judgment or settlement (1) does not fully release the Indemnitee as part
of such judgment or settlement, or (2) imposes any obligation or
restriction upon the Indemnitee, other than the payment of obligations that the
Indemnitor assumes), and (iii) the Indemnitee shall not consent to the
entry of any judgment or enter into any settlement with respect to such Third
Party Claim without the Indemnitor’s prior written consent.  If the Indemnitor fails to undertake timely
the defense of a Third Party Claim, then the Indemnitee shall have the right to
defend, at the sole cost and expense of the Indemnitor (to the extent the
Indemnitee is entitled to indemnification hereunder), the Third Party Claim by
all appropriate proceedings.  In such
instances, the Indemnitee shall have full control of such defense and proceedings;
provided that the Indemnitee shall not settle such Third Party Claim
without the written consent of the Indemnitor. 
The Indemnitor may participate in, but not control, any defense or
settlement controlled by an Indemnitee pursuant to this Section 7.5,
and the Indemnitor shall bear its own costs and expenses with respect to such
participation.  Notwithstanding the other
provisions of this Section 7.5, if the Indemnitor disputes its
potential liability to the Indemnitee under this Section 7.5 and if
such dispute is resolved in favor of the Indemnitor, the Indemnitor shall not
be required to bear the costs and expenses of the Indemnitee’s defense pursuant
to this Section 7.5. The party controlling the defense of the
proceedings agrees to afford the other relevant party and its counsel a reasonable
opportunity to be present at conferences with all Persons, including
Governmental Authorities, asserting any Indemnity Claim or conferences with
representatives of or counsel for such Persons.

 

Section 7.6            Waiver of Certain Damages.  Each of the parties expressly waives and
agrees not to, and to cause its Affiliates not to seek indirect, consequential,
incidental, punitive (including multiple or treble damages) or exemplary
damages or damages for lost profits of any kind with respect to any dispute
arising under, related to, or in connection with this Agreement or breach of
this Agreement or the Transactions, except to the extent any party or its
Affiliates suffers such damages (including costs of defense and reasonable
attorneys fees incurred in connection with defending against such damages) to a
Third Party in connection with a claim by a Third Party, which damages
(including costs of defense and reasonable attorneys fees incurred in
connection with defending against such damages) shall not be excluded by this
provision as to the recovery hereunder.

 

Section 7.7            Exclusive Remedy.   If Closing occurs, the express indemnities
set forth in this Article VII and elsewhere in this Agreement shall
be the exclusive monetary remedies for the parties for the breach of any
representation, warranty, covenant or agreement set forth in this Agreement and
for any claim arising out of, resulting from or related to the Transactions,
and each party hereby releases, waives and discharges, and covenants not to sue
(and shall cause its Affiliates to release, waive, discharge and covenant not
to sue) with respect to, any cause of action not expressly provided for in this
Agreement, including claims under statutes and claims available at common law
or in equity.

 

69

 

Section 7.8            Survival of Representations and
Warranties.

 

(a)           The representations
and warranties of the Sellers contained in Sections 2.1, 2.2 and 3.24 shall
survive the Closing.  The representations
and warranties of the Sellers contained in all other sections of Articles II
and III and the corresponding representations and warranties with respect to
such sections made by the Sellers in the Seller Certificates shall survive the
Closing until May 1, 2011.

 

(b)           The representations
and warranties of Geokinetics and the Purchasers contained in Sections 4.1 and
4.3 shall survive the Closing.  The
representations and warranties of Geokinetics and the Purchasers contained in
all other sections of Article IV and the corresponding representations and
warranties with respect to such sections made by Geokinetics and the Purchasers
in the Purchaser Certificates shall survive the Closing until May 1, 2011.

 

Section 7.9            Survival of Covenants.  The covenants and agreements of Geokinetics,
the Purchasers and the Sellers contained in this Agreement that are to be
performed at or prior to the Closing shall survive Closing for the time
period(s) set forth in the respective Sections contained in this
Agreement.  The post-closing covenants
and agreements of Geokinetics, the Purchasers and the Sellers contained in this
Agreement that are to be performed following the Closing shall survive Closing
for the time period(s) set forth in the respective Sections contained in
this Agreement.

 

Section 7.10         Expiration of Survival
Period.  No party may
bring a claim for indemnification pursuant to Article VII
to the extent notice of such claim is received after the expiration of the
survival periods set forth above with respect to the subject matter of such
claim.

 

Section 7.11         No Duplication.  Any liability for indemnification hereunder
shall be determined without duplication of recovery by reason of the state of
facts (i) giving rise to such liability constituting a breach of more than
one representation, warranty, covenant or agreement, or (ii) being taken
into account in determining any adjustment to the Cash Consideration pursuant
to Section 1.6 and 1.7.

 

Section 7.12         As Is and Where Is.  EXCEPT AS EXPRESSLY PROVIDED IN ARTICLE II
OR ARTICLE III OF THIS AGREEMENT, ALL OF THE PURCHASED ASSETS AND THE
ASSUMED LIABILITIES SHALL BE CONVEYED “AS IS” AND “WHERE IS” IN THEIR CONDITION
ON THE CLOSING DATE, WITH ALL FAULTS ACCEPTED BY THE PURCHASERS, AND NO OTHER
REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS, IMPLIED, STATUTORY OR
OTHERWISE, INCLUDING THOSE OF VALUE, DESIGN, OPERATION, PHYSICAL CONDITION,
PERFORMANCE, NON-INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS, MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE, USE OR ANY PARTICULAR TRADE, SHALL EXTEND
TO THE PURCHASED ASSETS OR THE ASSUMED LIABILITIES, AND THE SELLERS HEREBY
EXPRESSLY DISCLAIM ANY SUCH REPRESENTATIONS AND WARRANTIES.  THE PURCHASERS ACKNOWLEDGE AND AGREE THAT
THEY HAVE NOT ENTERED INTO THIS AGREEMENT IN RELIANCE UPON ANY SUCH REPRESENTATIONS
OR WARRANTIES, AND HEREBY

 

70

 

WAIVE
AS AGAINST THE SELLERS ALL WARRANTIES OR REMEDIES OR LIABILITIES WITH RESPECT
THERETO ARISING BY LAW OR OTHERWISE WITH RESPECT TO THE PURCHASED ASSETS AND
THE ASSUMED LIABILITIES.  EXCEPT AS
EXPRESSLY PROVIDED IN THIS AGREEMENT, THE SELLERS HEREBY DISCLAIM, AND THE
PURCHASERS HEREBY RELEASE THE SELLERS FROM AND WAIVE, ALL LIABILITIES (ACCRUED
OR UNACCRUED, ABSOLUTE OR CONTINGENT, KNOWN OR UNKNOWN OR OTHERWISE) IN RESPECT
OF THE PURCHASED ASSETS AND THE ASSUMED LIABILITIES NOTWITHSTANDING THE STRICT
LIABILITY OR NEGLIGENCE (INCLUDING GROSS NEGLIGENCE), WHETHER SOLE, JOINT OR
CONCURRENT OR ACTIVE OR PASSIVE, OF THE SELLER OR WHETHER ASSERTED IN CONTRACT,
IN WARRANTY, IN TORT, BY STATUTE OR OTHERWISE.

 

ARTICLE
VIII.

TERMINATION

 

Section 8.1            Termination.  This Agreement may be terminated and the
Transactions may be abandoned prior to the Closing by:

 

(a)           mutual written
consent of PGS and Geokinetics; or

 

(b)           PGS or Geokinetics
if the Closing shall not have occurred on or before February 15, 2010 (the
“Termination Date”); provided,
however, that no party shall have the right to terminate this Agreement
pursuant to this Section 8.1(b) if such party or its
Affiliates are at such time in material breach of any provision of this
Agreement.

 

Section 8.2            Liability Upon
Termination.  If the
obligation to close the Transactions is terminated pursuant to any provision of
Section 8.1, then, except as provided in Sections 5.5 and 5.7,
this Agreement shall forthwith become void and the parties shall have no
liability or obligation hereunder except and to the extent such termination
results from the breach by a party of any of its representations, warranties,
covenants or agreements hereunder.

 

ARTICLE
IX.

DEFINED
TERMS

 

Section 9.1            Defined Terms.  The following terms which are capitalized and
used in this Agreement have the meanings set forth below:

 

“Accounts Receivable” means the
rights of the Business Owning Entities (but solely with respect to their
conduct of the Business) to payment for services rendered and all other amounts
that would be classified as an account receivable on the asset side of a
balance sheet of the Business prepared in accordance with GAAP; provided
that “Accounts Receivable” shall not include (i) any rights of the
Business Owning Entities to payment from any Affiliate of PGS, or (ii) any
rights to payment or accounts receivable that are included in Excluded Assets,
including any such rights or accounts receivable relating to the Marsh Island
Legal Proceeding.

 

71

 

“Ancillary Agreements” means the
following agreements: the Assignment and Assumption Agreement, any Additional
Assignment and Assumption Documents, the Registration Rights Agreement, the
Series B Agreement, the Transition Services Agreement and the License
Agreement.

 

“Affiliate”
means, with respect to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with, such
specified Person through one or more intermediaries or otherwise.  For the purposes of this definition,
“control” means, where used with respect to any Person, the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise, and the terms “controlling” and
“controlled” have correlative meanings.

 

“Additional Assignment and
Assumption Documents” means any bills of sale, deeds, assignments
and other instruments and documents providing for the conveyance, assignment
and transfer of any particular Purchased Asset by an Asset Seller and the
assumption of the Assumed Liabilities by the Purchasers, in each case as may be
required under applicable Law of each jurisdiction in which such Purchased
Asset is located or where any applicable Asset Seller or Purchaser is formed,
which Additional Assignment and Assumption Documents shall be in such forms as
the parties shall agree, acting reasonably, and shall not have any terms or
provisions inconsistent with this Agreement or the Assignment and Assumption
Agreement.

 

“Assignment and Assumption
Agreement” means the General Assignment, Bill of Sale,
Conveyance and Assumption Agreement substantially in the form attached hereto
as Exhibit A.

 

“Bridge Financing” means the
bridge loan facility contemplated by the Commitment Letter between Geokinetics
and Royal Bank of Canada, dated December 2, 2009.

 

“Business” means PGS’s
onshore business segment, including its Multi-Client Library relating thereto
but excluding any data processing operations, including those data processing
operations used to process geophysical data acquired by the Business.

 

“Business Day” means any day
that is not a Saturday, Sunday or a day that banks in the Kingdom of Norway or
the States of Texas or New York are authorized or required by Law to be closed.

 

“Business Employee”
means (i) an individual who is employed by a Business Owning Entity prior
to the Closing Date and who thereafter remains or becomes an employee of
Geokinetics or a Subsidiary of Geokinetics or (ii) any Affiliate Employee
who becomes a Transferred Employee as of the Closing.

 

“Business Owning Entity” means each
Purchased Entity, each Subsidiary of a Purchased Entity and each Asset Seller; provided,
however, that with respect to each Asset Seller, only to the extent that
such Asset Seller owns Purchased Assets and conducts a portion of the Business.

 

“Capital Markets Financings” means the
issuance by Geokinetics of its debt securities and or capital stock in one or
more private placements or public offerings during the period between the
Effective Date and the Closing Date.

 

72

 

“Capitalized Lease Obligation” of any Person
means the obligations of such Person to pay rent or other amounts under any
lease (or other arrangement conveying the right to use) of real or personal
property, or a combination thereof, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such
Person prepared under GAAP.

 

“Cash Consideration” means an
amount equal to $210 million: (a) plus the excess, if any, of Final Net
Working Capital over Target Working Capital, (b) less the excess, if any,
of Target Working Capital over Final Net Working Capital, (c) less Final
Funded Indebtedness and (d) less the Value of the Share Consideration.

 

“CERCLA” means the
Comprehensive Environmental Response, Compensation and Liability Act, 41 USC
Section 9601 et seq.

 

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

 

“Commitment Letter” means that
executed letter, together with all agreements, arrangements or undertakings
related thereto and all schedules, annexes, exhibits and other attachments
thereto (except that amounts of fees payable under documents relating solely to
fee arrangements in connection therewith may be redacted), a copy of which has
been provided to PGS on or prior to the Effective Date, by which Royal Bank of
Canada commits to provide to Geokinetics a commitment to extend the Bridge
Financing to Geokinetics.

 

“Contract” means any
mortgage, indenture, agreement, contract, commitment, lease, plan, license,
third-party permit, authorization or other instrument, document, arrangement or
understanding, written or unwritten.

 

“Current Assets” means, without
duplication, all cash and cash equivalents and all restricted cash (to the
extent such cash, cash equivalents and restricted cash are not Excluded
Assets), all Accounts Receivable (without regard to any allowance for doubtful
accounts), Inventories (without regard to any reserves) and prepaid and other
current assets of the Business Owning Entities reflected on the Final Closing
Balance Sheet (but with respect to any Asset Seller, only with respect to its
ownership of Purchased Assets or conduct of the Business), but excluding
(i) (without duplication) all Subject Assets, (ii) all Deferred Tax
Assets and (iii) all accrued Tax assets that are related to Income Taxes
other than payroll taxes (including, but not limited to, the “income tax
receivable” and “paid foreign tax and withholding tax” in the “Other current
assets” category on the Final Closing Balance Sheet).

 

“Current Liabilities” means, without
duplication, all accounts payable, accrued expenses and other short-term
liabilities of the Business Owning Entities relating to the conduct of the
Business (but with respect to any Asset Seller, only with respect to its
ownership of Purchased Assets or conduct of the Business), and excluding:
(a) any portion of Current Liabilities that are included in Funded
Indebtedness and (b) all Income Taxes Payable and Deferred Tax
Liabilities.  For the avoidance of doubt,
Current Liabilities shall not include any liabilities or accrued expenses
associated with (i) any Retained Liability or Unrelated Liability, or
(ii) any liabilities or accrued expenses that either (A) are
associated with any Contract or Plan that will not be binding on any Purchased
Entity or the Property following the Closing, or (B) will be assumed at or
prior 

 

73

 

to Closing by PGS or an
Affiliate of PGS (other than the Purchased Entities or any Subsidiary of a
Purchased Entity), including liabilities or accruals under the PGS Retention
Bonus Plans, Executive Retention Bonus Plans, 2009 Bonus Plan, 2008 Deferred
Bonus Arrangement, any stock option plan or any other incentive or retention
arrangement in respect of any Affiliate Employee who does not become a
Transferred Employee as of Closing.

 

“Customary
Post-Closing Consents” means approvals that are
ministerial in nature and are customarily obtained from Governmental
Authorities after the Closing Date in connection with transactions of the same
nature as are contemplated by this Agreement.

 

“Debt,” without duplication, means
(a) all indebtedness (including the principal amount thereof or, if
applicable, the accreted amount thereof and the amount of accrued and unpaid
interest thereon) of the Business Owning Entities (but solely with respect to
their conduct of the Business), whether or not represented by bonds,
debentures, notes or other securities, for the repayment of money borrowed,
(b) all deferred indebtedness of the Business Owning Entities (but solely
with respect to their conduct of the Business) for the payment of the purchase
price of property or assets purchased, (c) all obligations of the Business
Owning Entities (but solely with respect to their conduct of the Business) to
pay rent or other payment amounts under a Capitalized Lease Obligation, as
determined under GAAP, (d) any outstanding reimbursement obligation of the
Business Owning Entities (but solely with respect to their conduct of the
Business) with respect to letters of credit, bankers’ acceptances or similar
facilities issued for the account of the Business Owning Entities (but solely
with respect to their conduct of the Business), (e) any outstanding
payment obligation of the Business Owning Entities (but solely with respect to
their conduct of the Business) under any interest rate swap agreement, forward
rate agreement, interest rate cap or collar agreement or other financial
agreement or arrangement entered into for the purpose of limiting or managing
interest rate risks, (f) all indebtedness for borrowed money secured by
any Lien existing on property owned by the Business Owning Entities (but solely
with respect to their conduct of the Business), whether or not indebtedness
secured thereby shall have been assumed, (g) all guaranties, endorsements,
assumptions and other contingent obligations of the Business Owning Entities
(but solely with respect to their conduct of the Business) in respect of, or to
purchase or to otherwise acquire, indebtedness for borrowed money of others,
and (h) all premiums, penalties and change of control payments required to
be paid or offered in respect of any of the foregoing as a result of the
consummation of the Transactions regardless if any of such are actually paid.

 

“Due Date” means, with
respect to any Tax Return or the payment of any Taxes, the date such Tax Return
is required to be filed or the date such payment is required to be made (in
each case, taking into account any valid extensions).

 

“Enforceability
Exception” means the effects of
bankruptcy, insolvency, reorganization, moratorium and other Laws in effect as
of or after the Closing relating to or affecting the rights of creditors and of
general principles of equity.

 

“Environmental Law” means all Laws
relating to: (i) the protection of public health, welfare, the environment
or natural resources, including ambient air, indoor air, surface water,
groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic
species and vegetation; (ii) the manufacture, processing, generation,
distribution, use, treatment, storage, 

 

74

 

disposal, cleanup,
transport, presence, testing, discharging or handling of chemicals, hazardous
substances (as that term is defined by CERCLA), petroleum (including crude oil
or any fraction thereof), natural gas, natural gas liquids, synthetic gas,
waste materials and other hazardous materials; (iii) the release,
reporting, investigation or remediation of waste materials, hazardous
substances (as that term is defined by CERCLA), petroleum (including crude oil
or any fraction thereof), natural gas, natural gas liquids, synthetic gas, or
other hazardous materials; or (iv) the protection of threatened or
endangered species.

 

“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended.

 

“Estimated Cash Consideration” means an
amount equal to $210 million: (a) (i) plus the amount by which
Estimated Net Working Capital exceeds Target Net Working Capital or
(ii) less the amount by which Target Working Capital exceeds Estimated Net
Working Capital; (b) minus Estimated Funded Indebtedness and (c) less
the Value of the Share Consideration.

 

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

 

“Final Closing Balance Sheet” means the
Preliminary Closing Balance Sheet that has become final and binding pursuant to
Section 1.6(c)(ii) or 1.6(d).

 

“Final Funded Indebtedness” means the
Funded Indebtedness calculated based upon the Final Closing Balance Sheet.

 

“Final Net Working Capital” means the Net
Working Capital calculated based upon the Final Closing Balance Sheet.

 

“Financing” means the
Bridge Financing, or any additional or alternative financing arrangements,
including sales of common or preferred equity, notes, loan agreements, joint
ventures or asset sales, the net proceeds of which are the same as contemplated
by the Commitment Letter for the Bridge Financing.

 

“Funded Indebtedness” means, as of
any date, without duplication, (a) the outstanding principal amount of
accrued and unpaid interest on and other payment obligations (including
premiums, fees, expenses and bank overdrafts) arising under any obligations of
the Business Owning Entities (but solely with respect to their conduct of the
Business) of the Purchased Entities consisting of (i) Debt for borrowed
money or Debt issued in substitution or exchange for borrowed money or for the
deferred purchase price of property or services (other than trade payables or
undrawn letters of credit), or (ii) Debt evidenced by any note, bond,
debenture or other debt security, in each case, as of such date, (b) all
Capitalized Lease Obligations of the Business Owning Entities (but solely with
respect to their conduct of the Business) and (c) all other obligations
that are required to be shown as indebtedness on a balance sheet of the
Business prepared in accordance with GAAP.

 

“GAAP”  means generally
accepted accounting principles in the United States.

 

“Geokinetics Common Stock Price” means $12.11.

 

75

 

“Geokinetics Group” means the
affiliated group of corporations of which Geokinetics is the common parent.

 

“Geokinetics Offering Documents” means, with
respect to any Capital Markets Financing, any prospectus, prospectus supplement
(whether in preliminary or final form), any “free writing prospectus” (as
defined in Rule 405 of the Securities Act) related thereto, any offering
memorandum, offering circular, private placement memorandum or similar document
(whether in preliminary or final form) and any other supplemental or additional
information delivered to investors in connection with such Capital Markets
Financing, and (iii) in the case of both (i) and (ii) above, the
documents incorporated by reference into each such referenced document, or
deemed to be incorporated by reference therein, including Geokinetics’ most
recent Annual Report on Form 10-K and all subsequent documents filed with
the SEC pursuant to Section 13(a), 13(c) or 15(d) of the
Exchange Act, on or prior to the date of each such document.

 

“Geokinetics SEC Reports” means each form,
registration statement, report, schedule, proxy or information statement and
other document (including exhibits and amendments thereto), including its
Annual Reports to Stockholders incorporated by reference in certain of such
reports, required to be filed by Geokinetics with the SEC since January 1,
2006 under the Securities Act or the Exchange Act.

 

“Governmental Authority” means any
supranational, multi-national, national, state, municipal, local,
quasi-governmental body, any legislature, instrumentality, subdivision, court,
administrative agency, bureau, branch, department, division, commission,
tribunal, magistrate, justice or commission thereof or other local or foreign
governmental authority.

 

“Hazardous
Materials” means any material
regulated because of its effect or potential effect on public health and the
environment including (i) any substance, waste or material that is
regulated as a hazardous substance, toxic substance, hazardous waste, extremely
hazardous waste, restricted hazardous waste, contaminant, hazardous
constituent, solid waste, special waste or pollutant pursuant to any
Environmental Law, or (ii) petroleum or any fraction or by-product
thereof, asbestos, polychlorinated byphenyls (PCBs) or any radioactive
substance, waste or material.

 

“HSR Act” means the
Hart-Scott-Rodino Anti-Trust Improvements Act of 1976, as amended, and the rules and
regulations promulgated thereunder.

 

“IFRS” means the
accounting standards, principles and interpretations adopted by the
International Accounting Standards Board.

 

“Income Tax” means all
Taxes based upon, measured by, or calculated with respect to (i) gross or
net income, gains or profits  (but not including sales, value added, use,
excise, real or personal property, transfer (including real property transfer
or gains) or other similar Taxes); and (ii) multiple bases (including
corporate franchise, doing business or occupation Taxes) if one or more of the
bases upon which such Tax may be imposed, measured by, or calculated with
respect to, is described in clause (i) above.

 

“Intellectual
Property” means all intellectual or
industrial property and rights therein, however denominated, throughout the
world, whether or not registered, including all patent

 

76

 

applications, patents,
trademarks, service marks, trade names, copyrights (including copyrights in
computer programs, software, computer code, documentation, drawings,
specifications and data), works of authorship, rights in designs, trade
secrets, technology, inventions, invention disclosures, improvements,
proprietary rights, formulae, processes, methods, technical and business
information, and confidential and proprietary information, and, with respect to
each of the foregoing, all registrations and applications for registration,
renewals, extensions, continuations, reexaminations, reissues, divisionals,
improvements, modifications, derivative works and causes of action relating to
any of the foregoing.

 

“Interim Financing” means any
sales of common or preferred equity, notes, loan agreements, joint ventures or
asset sales during the period between the Effective Date and the Closing, the
net proceeds of which are used to fund working capital requirements of Geokinetics
or otherwise to fund the operations of Geokinetics.

 

“Inventory” means, all
parts, raw materials, work-in-process, finished goods, supplies and other items
related to the sale of services and products by the Business Owning Entities
(but solely with respect to their conduct of the Business), and all other items
that would be classified as inventory on a balance sheet of the Business
prepared in accordance with GAAP, but excluding all Excluded Assets.

 

“IRS” means the
United States Internal Revenue Service.

 

“Law” means any law
(statutory, common or otherwise), constitution, treaty, convention, ordinance,
equitable principle, code, rule, regulation, executive order, or other similar
authority enacted, adopted, promulgated or applied by any Governmental
Authority, each as amended or replaced.

 

“Legal Action” means any
legal action, claim, demand, arbitration, hearing, charge, complaint,
investigation, examination, indictment, litigation, suit or other civil,
criminal, administrative or investigative proceeding, at law, in equity or
otherwise, or by or before any Governmental Authority.

 

“Liability”
means any liability or obligation of whatever kind or nature (whether known or
unknown, whether asserted or unasserted, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated, and whether due or to
become due), including any liability for Taxes.

 

“License Agreement” means the
License Agreement substantially in the form attached hereto as Exhibit C.

 

“Liens” means all liens,
mortgages, pledges, security interests, encumbrances, claims or charges of any
kind.

 

“Material Adverse Effect” shall mean with
respect to a specified Person, any change, effect, event, circumstance or
occurrence with respect to the business, financial condition, results of
operations, properties, assets, liabilities or obligations of such Person or
its Subsidiaries, that has, or would be reasonably expected to result in a
material adverse effect on the business, assets, properties, liabilities or obligations,
results of operations or financial condition of the

 

77

 

Person and its Subsidiaries,
taken as a whole; provided, that, solely with respect to the references
to Seller Material Adverse Effect or Purchaser Material Adverse Effect in Sections
3.6 and 4.8 (including any bring down of the representations and
warranties in those sections as of the Closing for purposes of Sections 6.3(a) and
6.4(a)) and 5.15, none of the following shall constitute, or shall
be considered in determining whether there has occurred, and no event,
circumstance, change or effect resulting from or arising out of any of the
following shall constitute, a Material Adverse Effect pursuant to such
sections: (i) any change or effect resulting from changes in general
economic, regulatory, political, financial market or business conditions, (ii) any
outbreak, continuation or escalation of hostilities or war (including acts of
terrorism), natural disasters, weather, meteorological events or other force
majeure events, in each case in the United States, Mexico or elsewhere, (iii) any
change or effect that affects the onshore geophysical service sector (including
the onshore acquisition of geophysical data and the processing of such data) generally
(including changes in oil and gas commodity prices, general market prices and
regulatory changes affecting the geophysical service sector (including the
onshore acquisition of geophysical data and the processing of such data)
generally), (iv) any failure by such Person to meet any published or
internally prepared estimates of revenues, earnings, cash flow or other
financial projections, performance measures or operating statistics (whether
such projections or predictions were made by such Person or otherwise) (unless
due to a circumstance which would separately constitute a Material Adverse
Effect), (v) any adoption, implementation, promulgation, repeal,
modification, reinterpretation or proposal of any Law of or by any Governmental
Authority, (vi) any changes in GAAP, IFRS or any other applicable
accounting standards or any interpretations thereof, (vii) any change or
effect resulting from the announcement, pendency or consummation of this
Agreement or the Transactions (including any cancellations of or delays in
customer orders or other decreases in customer demand, any reduction in
revenues, any disruption in supplier, distributor, customer, partner or similar
relationships, work stoppages, any loss or threatened loss of employees or
other employee disruptions) or any actions taken by such Person or its
Subsidiaries or Affiliates in compliance with the terms of this Agreement, (viii) any
changes in foreign currency exchange rates; (ix) the bankruptcy,
insolvency or other financial distress of any customers of such Person or its
Subsidiaries, (x) the failure by a party to or bound by this Agreement to
take any action as a result of any restrictions or prohibitions contained in
this Agreement or any Ancillary Agreement with respect to which the other parties
have refused, following a request by the first party, to provide a waiver or
consent in a timely manner or at all, or (xi) any change in the market price of
the equity shares of such Person.

 

“Multi-Client Library” means all
onshore (which may include contiguous offshore and transition zone areas of 2D
data in the Gulf of Mexico) 2D and 3D seismic data for the contiguous 48 United
States, Alaska and Canada contained in the multi-client seismic library
used and/or offered to customers by the Purchased Entities, including
approximately 644 linear miles of 2D seismic data in the United States,
additional 2D data in Canada and approximately 4,937 square miles of 3D seismic
data overall in North America plus any additions to such library between the
Effective Date and the Closing Date.

 

“Net Working Capital” means for any
date of determination, without duplication, the aggregate of the following:

 

(a)           for
each Asset Seller,

 

78

 

(i)            the Current Assets of such Asset
Seller to the extent acquired by a Purchaser; less

 

(ii)           the Current Liabilities of such Asset
Seller to the extent such Current Liabilities constitute Assumed Liabilities;

 

(b)           plus,
to the extent positive, and less (to the extent negative) for each Purchased
Entity, the Current Assets of such Entity minus the Current Liabilities of such
Entity;

 

in each case, as calculated
in accordance with GAAP on a basis consistent with the preparation of the
Business Financial Statements.  For
clarification purposes, Section 1.6 of the Seller Disclosure
Schedule provides an illustration of the calculation of Net Working Capital as
of September 30, 2009, including all adjustments indicated in the
definitions of Current Assets and Current Liabilities.

 

“Non-Income Tax” means any Tax other than an Income Tax.

 

“Order” means any
order, ruling, decision, verdict, decree, mandate or other similar determined
issued by or under the supervision of a Governmental Authority of competent
jurisdiction or arbitrator.

 

“PBGC” means the
Pension Benefit Guaranty Corporation.

 

“PGS Group” means the
affiliated group of corporations of which Petroleum Geo-Services, Inc. is
the common parent.

 

“Permits” means permits,
licenses, certificates, consents, approvals, entitlements, plans, surveys,
relocation plans, environmental impact reports and other authorizations of
Governmental Authorities.

 

“Permitted Liens” means (i) Liens,
if any, created or permitted to be imposed by the Purchasers, (ii) mechanics’,
carriers’, workmen’s, repairmen’s, landlord’s or other like Liens arising or
incurred in the ordinary course of business, (iii) Liens arising under
original purchase price conditional sales contracts and equipment leases with
third parties entered into in the ordinary course of business, (iv) Liens
for Taxes and other governmental charges that are not yet due and payable, that
are being contested in good faith through appropriate proceedings or that may
thereafter be paid without penalty, (v) with respect to each Capitalized
Lease Obligation, the interest of the lessor thereunder, (vi) any Liens to
be released on or prior to the Closing Date, and (vii) other imperfections
of title, licenses or other Liens, if any, that do not materially and adversely
affect the value of the Purchased Assets to which they relate and do not
materially interfere with the current use of the Purchased Assets to which they
relate as of the Effective Date.

 

“Person” means an
individual, a corporation, a limited liability company, a partnership, an
association, a trust or any other entity or organization, including any
Governmental Authority.

 

“Plan” means every
plan, fund, Contract, program and arrangement for the benefit of present or
former employees or other service providers or their respective spouses,
dependents or

 

79

 

beneficiaries including
those intended to provide (i) medical, surgical, health care,
hospitalization, dental, vision, workers’ compensation, life insurance, death,
disability, legal services, severance, sickness or accident benefits (whether
or not defined in Section 3(1) of ERISA), (ii) pension, profit
sharing, stock bonus, retirement, supplemental retirement or deferred
compensation benefits (whether or not tax qualified and whether or not defined
in Section 3(2) of ERISA) or (iii) salary continuation,
unemployment, supplemental unemployment, severance, termination pay,
change-in-control, vacation, paid time-off or holiday benefits (whether or not
defined in Section 3(3) of ERISA), (x) that is adopted,
maintained or contributed to by any Purchased Entity or Purchased Entity ERISA
Affiliate, (y) that any Purchased Entity or Purchased Entity ERISA
Affiliate has committed to implement, establish, adopt or contribute to in the
future.  Plan does not include any
arrangement that has been terminated and completely wound up prior to the
Effective Date and for which no Purchased Entity or Purchased Entity ERISA
Affiliate has any present or potential Liability.

 

“Purchased Entity ERISA Affiliate” means any trade
or business, whether or not incorporated, which together with any Purchased
Entity would be deemed a “single employer” within the meaning of Section 414(b),
(c) or (m) of the Code or Section 4001(b)(1) of ERISA.

 

“Purchased Entity Plans” means each Plan
that is sponsored by a Purchased Entity as the designated plan sponsor under
such Plan.

 

“Purchaser” and “Purchasers” have the meanings set
forth in the preamble to this Agreement.

 

“Purchaser Disclosure Schedule” means the
disclosure letter delivered by Geokinetics to Sellers contemporaneously with
the execution of this Agreement.

 

“Purchaser ERISA Affiliate” means any trade
or business, whether or not incorporated, which together with Geokinetics would
be deemed a “single employer” within the meaning of Section 414(b), (c) or
(m) of the Code or Section 4001(b)(1) of ERISA.

 

“Purchaser Material Adverse
Effect” means (i) a Material Adverse Effect on
Geokinetics and its Subsidiaries, taken as a whole, or (ii) a material
adverse effect on the ability of the Purchasers to perform in a timely manner
their respective obligations under this Agreement or consummate the
Transactions.

 

“Purchaser Plans” means every
plan, fund, Contract, program and arrangement for the benefit of present or
former employees or other service providers or their respective spouses,
dependents or beneficiaries, including those intended to provide (i) medical,
surgical, health care, hospitalization, dental, vision, workers’ compensation,
life insurance, death, disability, legal services, severance, sickness or
accident benefits (whether or not defined in Section 3(1) of ERISA), (ii) pension,
profit sharing, stock bonus, retirement, supplemental retirement or deferred
compensation benefits (whether or not tax qualified and whether or not defined
in Section 3(2) of ERISA) or (iii) salary continuation,
unemployment, supplemental unemployment, severance, termination pay,
change-in-control, vacation or holiday benefits (whether or not defined in Section 3(3) of
ERISA), (x) that is maintained or contributed to by Geokinetics or any
Purchaser ERISA Affiliate, (y) that Geokinetics or any Purchaser ERISA
Affiliate has committed to

 

80

 

implement, establish, adopt
or contribute to in the future.  Plan does
not include any arrangement that has been terminated and completely wound up
prior to the Effective Date and for which Geokinetics or any Purchaser ERISA
Affiliate has any present or potential Liability.

 

“Purchaser Tax Representative” means
Geokinetics.

 

“Purchasers’ Knowledge” or words to
such effect means the actual knowledge of the executive officers of Geokinetics
listed in Section 9.1 of the Purchasers Disclosure Schedule after
due inquiry by one or more of such executive officers of appropriate personnel
of the business of Geokinetics and its Subsidiaries.

 

“Registration Rights Agreement”  a registration
rights agreement in a form mutually agreed by and among the Series B
Holders, PGS and Geokinetics in accordance with the Agreement Regarding Registration
Rights dated as of the date hereof among Geokinetics, PGS and certain Series B
Holders.

 

“SEC” means the U.S.
Securities and Exchange Commission and any successor thereof.

 

“Securities Act” means the U.S.
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

 

“Seller Disclosure Schedule” means the
disclosure letter delivered by PGS and the Sellers to Purchasers
contemporaneously with the execution of this Agreement.

 

“Seller Material Adverse Effect” means (i) a
Material Adverse Effect on the Business Owning Entities, taken as a whole, but
solely with respect to the Business, or (ii) a material adverse effect on
the ability of the Sellers to perform in a timely manner their respective
obligations under this Agreement or consummate the Transactions.

 

“Seller Tax Representative” means PGS.

 

“Sellers’ Knowledge” or words to
such effect means the actual knowledge of the executive officers of the
Business listed in Section 9.1 of the Seller Disclosure Schedule
after due inquiry by one or more of such executive officers of appropriate
personnel of the Business.

 

“Series B Holders” means each of
Avista Capital Partners, L.P., Avista Capital Partners (Offshore), L.P., Levant
America S.A. and their respective Affiliates that own or may be deemed to
beneficially own Series B Preferred Stock.

 

“Share Consideration” means a number
of fully paid and non-assessable shares (rounded to the nearest whole share) of
Geokinetics Common Stock equal to the lesser of (i) $50 million divided by
the Geokinetics Common Stock Price and (ii) 19.9% of the number of shares
of Geokinetics Common Stock outstanding on the Effective Date.

 

“Straddle Period”
means any taxable year or period beginning on or before the Closing Date and
ending after the Closing Date.

 

“Subsidiary” means, with
respect to any party, any corporation or other organization, whether
incorporated or unincorporated, of which (i) at least a majority of the
securities or other

 

81

 

interests having by their
terms voting power to elect a majority of the board of directors or others
performing similar functions with respect to such corporation or other
organization is directly or indirectly beneficially owned or controlled by such
party or by any one or more of its subsidiaries, or by such party and one or
more of its subsidiaries, or (ii) such party or any Subsidiary of such
party is a general partner of a partnership or a manager of a limited liability
company.

 

“Target Net Working Capital” means an
amount equal to $37.5 million.

 

“Tax
Authority” means the IRS and any other
domestic or foreign Governmental Authority responsible for the imposition,
collection or administration of any Taxes.

 

“Tax Election”
means any election, including any schedule or attachment thereto, made with
respect to Taxes.

 

“Tax Item” means, with
respect to Taxes, any item of income, gain, deduction, loss or credit or other
Tax attribute.

 

“Tax Representatives” means the
Seller Tax Representative and the Purchaser Tax Representative.

 

“Tax
Returns” means all Federal, state,
local and foreign returns, declarations, statements, reports, forms and
information returns, including any schedule or attachment thereto and any
amendment thereof, relating to Taxes.

 

“Taxes” means taxes of
any kind, levies or other like assessments, customs, duties, imposts, charges
or fees, including income, gross receipts, ad valorem, value added, excise,
real or property, asset, sales, use, license, payroll, transaction, capital,
net worth, withholding, estimated, social security, utility, workers’
compensation, severance, production, unemployment compensation, occupation,
premium, windfall profits, transfer and gains taxes or other governmental
taxes, imposed or payable to the United States, or any state, county, local or
foreign government or subdivision or agency thereof, together with any
interest, penalties or additions with respect thereto and any interest in
respect of such additions or penalties. Taxes includes all Income Taxes and
Non-Income Taxes, but excludes Transfer Taxes and Value Added Tax.

 

“Transactions” shall mean the
transactions contemplated by this Agreement and by the Ancillary Agreements.

 

“Transfer Taxes” means any and
all transfer, documentary, stamp duty, sales, use, registration, and other
similar taxes (including all applicable real estate transfer taxes) imposed or
payable to the United States, or any state, county, local or foreign government
or subdivision or agency thereof, together with any interest, penalties or additions
with respect thereto and any interest in respect of such additions or
penalties, other than Value Added Tax, resulting directly from the sale and
transfer by the Sellers to the Purchasers of the Purchased Assets or the
Purchased Securities or the issuance of the Share Consideration; provided,
however, that any Value Added Tax that is not recoverable by the Purchasers
(whether by payment, credit, offset or otherwise) shall be treated as a
Transfer Tax for all purposes of this Agreement.

 

82

 

“Transition Services Agreement” means a
transition services agreement substantially in the form attached hereto as Exhibit B.

 

“Unrelated Liability” means any
Liability of a Business Owning Entity that does not arise primarily out of the
conduct of the Business, including all Liabilities arising out of or
attributable to (i) the Subject Assets or (ii) the transfer of the
Subject Assets out of a Purchased Entity or a Subsidiary of a Purchased Entity.

 

“Value Added Tax” or “VAT” means any value added tax,
goods and services tax or similar recoverable indirect tax imposed or payable
to the United States, or any state, county, local or foreign government or
subdivision or agency thereof, together with any interest, penalties or
additions with respect thereto and any interest in respect of such additions or
penalties resulting directly from the sale and transfer by the Sellers to the
Purchasers of the Purchased Assets or the Purchased Securities, the issuance of
the Share Consideration or any other sale or transfer directly resulting from
this Agreement but not from other transactions, including any prior transaction
of the Sellers, the Purchased Entities or their Subsidiaries.

 

“Value of the Share Consideration” shall mean the
lesser of (i) $50 million and (ii) 19.9% of the number of shares of
Geokinetics Common Stock outstanding on the Effective Date; provided,
that the calculation described in (ii) above shall be based on the number
of shares of Geokinetics Common Stock outstanding on the Closing Date if the
NYSE AMEX permits such calculation without the need for a vote of the
stockholders of Geokinetics and such number of shares is greater than the
number of shares calculated as of the Effective Date.

 

“WARN Act” means the U.S.
Worker Adjustment and Retraining Notification Act of 1988.

 

In addition, the following terms capitalized and
used in this Agreement are defined in the sections set forth below:

 

	
  2008
  Bonus Arrangement

  	
   

  	
  Section 5.14(a)

  
	
  2009
  Bonus Plan

  	
   

  	
  Section 5.14(a)

  
	
  2009
  Geokinetics SEC Reports

  	
   

  	
  Section 4.14

  
	
  Agreement

  	
   

  	
  Preamble

  
	
  Alternate
  Financing

  	
   

  	
  Section 5.26(d)

  
	
  Affiliate
  Employees

  	
   

  	
  Section 5.14(b)

  
	
  Asset
  Seller

  	
   

  	
  Recitals

  
	
  Assumed
  Liabilities

  	
   

  	
  Section 1.5(a)

  
	
  Auditors

  	
   

  	
  Section 1.6(d)

  
	
  Bankruptcy
  Code

  	
   

  	
  Section 4.24

  
	
  Breaching
  Party

  	
   

  	
  Section 7.4(b)

  
	
  Business
  Financial Statements

  	
   

  	
  Section 3.4

  
	
  Closing

  	
   

  	
  Section 6.1

  
	
  Closing
  Date

  	
   

  	
  Section 6.1

  
	
  Competition
  Laws

  	
   

  	
  Section 5.9

  
	
  Confidentiality
  Agreement

  	
   

  	
  Section 5.3

  
	
  Director
  nominees

  	
   

  	
  Section 5.11(a)

  

 

83

 

	
  Disputed
  Item

  	
   

  	
  Section 1.6(d)

  
	
  Effective
  Date

  	
   

  	
  Preamble

  
	
  Estimated
  Net Working Capital

  	
   

  	
  Section 1.4

  
	
  Estimated
  Funded Indebtedness

  	
   

  	
  Section 1.4

  
	
  Expenses

  	
   

  	
  Section 5.5(b)

  
	
  Excluded
  Assets

  	
   

  	
  Section 1.2

  
	
  FCPA

  	
   

  	
  Section 3.11

  
	
  Final
  Allocation Schedule

  	
   

  	
  Section 11.17(b)

  
	
  Geokinetics

  	
   

  	
  Preamble

  
	
  Geokinetics
  Accountants

  	
   

  	
  Section 1.6(b)

  
	
  Geokinetics
  Balance Sheet

  	
   

  	
  Section 4.7

  
	
  Geokinetics
  Common Stock

  	
   

  	
  Section 4.2(a)

  
	
  Geokinetics
  Financial Statements

  	
   

  	
  Section 4.6

  
	
  Indemnity
  Claim

  	
   

  	
  Section 7.5(a)

  
	
  Indemnity
  Claim Notice

  	
   

  	
  Section 7.5(a)

  
	
  Indemnitee

  	
   

  	
  Section 7.5(a)

  
	
  Indemnitor

  	
   

  	
  Section 7.5(a)

  
	
  Intellectual
  Property Rights

  	
   

  	
  Section 4.12

  
	
  Investment
  Company Act

  	
   

  	
  Section 4.16

  
	
  Knowledge
  Party

  	
   

  	
  Section 7.4(b)

  
	
  Losses

  	
   

  	
  Section 7.1

  
	
  Most
  Recent Business Balance Sheet

  	
   

  	
  Section 3.4

  
	
  New
  Commitment Letter

  	
   

  	
  Section 5.26(d)

  
	
  Objection
  Notice

  	
   

  	
  Section 1.6(c)

  
	
  Objection
  Period

  	
   

  	
  Section 1.6(c)

  
	
  PCB

  	
   

  	
  Section 3.10(f)

  
	
  PGS

  	
   

  	
  Preamble

  
	
  PGS
  2009 Audited Financial Statements

  	
   

  	
  Section 5.26(g)

  
	
  Payor

  	
   

  	
  Section 10.2(f)

  
	
  Payor
  Portion

  	
   

  	
  Section 10.2(f)

  
	
  Personal
  Property

  	
   

  	
  Section 1.1(b)

  
	
  Preemptive
  Notice Period

  	
   

  	
  Section 5.12(b)

  
	
  Preliminary
  Closing Balance Sheet

  	
   

  	
  Section 1.6(a)

  
	
  Preparer

  	
   

  	
  Section 10.2(f)

  
	
  privilege
  period

  	
   

  	
  Section 10.1(d)

  
	
  Proceeding
  Notice

  	
   

  	
  Section 10.3

  
	
  Property

  	
   

  	
  Section 1.1

  
	
  Purchase
  Price

  	
   

  	
  Section 1.3

  
	
  Purchased
  Assets

  	
   

  	
  Section 1.1

  
	
  Purchased
  Common Stock

  	
   

  	
  Section 3.24

  
	
  Purchased
  Entity

  	
   

  	
  Recitals

  
	
  Purchased
  Entity Plans

  	
   

  	
  Section 3.9(b)

  
	
  Purchased
  Securities

  	
   

  	
  Recitals

  
	
  Purchaser

  	
   

  	
  Preamble

  
	
  Purchaser
  Cap Amount

  	
   

  	
  Section 7.3(b)(ii)

  
	
  Purchaser
  Certificate

  	
   

  	
  Section 6.5(b)(iii)

  

 

84

 

	
  Purchaser
  Deductible Amount

  	
   

  	
  Section 7.3(a)(ii)

  
	
  Purchaser
  Due Diligence Information

  	
   

  	
  Section 3.28(a)

  
	
  Purchaser
  Group

  	
   

  	
  Section 7.1

  
	
  Purchaser
  Indemnitors

  	
   

  	
  Section 7.2

  
	
  Purchaser
  Representatives

  	
   

  	
  Section 3.28(a)

  
	
  Purchaser
  Tax Benefit

  	
   

  	
  Section 10.9

  
	
  Qualifying
  Officer

  	
   

  	
  Section 5.14(b)

  
	
  Real
  Property

  	
   

  	
  Section 1.1(a)

  
	
  Recipient

  	
   

  	
  Section 10.3

  
	
  Representative

  	
   

  	
  Section 5.3

  
	
  Retained
  Liabilities

  	
   

  	
  Section 1.5(b)

  
	
  Retention
  Bonus Plans

  	
   

  	
  Section 5.14(a)

  
	
  Securities
  Seller

  	
   

  	
  Recitals

  
	
  Seller

  	
   

  	
  Preamble

  
	
  Seller
  Cap Amount

  	
   

  	
  Section 7.3(b)(i)

  
	
  Seller
  Certificate

  	
   

  	
  Section 6.5(a)(iii)

  
	
  Seller
  Deductible Amount

  	
   

  	
  Section 7.3(a)(i)

  
	
  Seller
  Due Diligence Information

  	
   

  	
  Section 4.28

  
	
  Seller
  Group

  	
   

  	
  Section 7.2

  
	
  Seller
  Indemnitors

  	
   

  	
  Section 7.1

  
	
  Seller
  Representatives

  	
   

  	
  Section 3.28(a)

  
	
  Seller
  Tax Detriment

  	
   

  	
  Section 10.9

  
	
  Separate
  Company Tax Return

  	
   

  	
  Section 10.2(d)

  
	
  Series B
  Agreement

  	
   

  	
  Section 11.16

  
	
  Series B
  Preferred Stock

  	
   

  	
  Section 4.2(a)

  
	
  Series B-1
  Preferred Stock

  	
   

  	
  Section 4.2(a)

  
	
  Subject
  Assets

  	
   

  	
  Section 5.20(b)

  
	
  Supplied
  Information

  	
   

  	
  Section 3.26

  
	
  Support
  Employees

  	
   

  	
  Section 5.14(b)

  
	
  Tax
  Audit

  	
   

  	
  Section 10.3

  
	
  Termination
  Date

  	
   

  	
  Section 8.1(b)

  
	
  Third
  Party Claim

  	
   

  	
  Section 7.5(b)

  
	
  Transferred
  Employees

  	
   

  	
  Section 5.14(b)

  
	
  UFTA

  	
   

  	
  Section 4.24

  
	
  Welfare
  Benefits

  	
   

  	
  Section 5.14(e)

  

 

ARTICLE
X.

TAX MATTERS

 

Section 10.1         Tax Indemnifications.

 

(a)           The Sellers shall
jointly and severally  indemnify the
Purchasers from, against and in respect of (A) any Taxes that are imposed
on or with respect to the Purchased Assets or any Purchased Entity or any of
its Subsidiaries and are payable after the Closing Date with respect to any
taxable period, or portion thereof, ending on or before the Closing Date,
including, without limitation, Income Taxes attributable to the sales of
Purchased Assets and Purchased Securities described in this Agreement, any
Taxes for which any

 

85

 

Purchased Entity or any of its Subsidiaries is or may be or become
severally liable under Treasury Regulation §1.1502-6 or 1.1502-78(b)(2) (or
any similar provision under any applicable foreign, state or local Law) by
reason of its having been a member of the PGS Group or any other affiliated,
combined, consolidated or unitary group or other Tax grouping (other than such
a group or grouping that includes the Purchasers or any of their Affiliates) on
or before the Closing Date, and any Mexican Income Taxes that are imposed on
PGS Mexicana S.A. de C.V. that are payable after the Closing Date with respect
to any taxable period, or portion thereof, ending on or before the Closing Date
as a result of certain damages payments made by PGS Mexicana S.A. de C.V. that
are currently under dispute with the Mexican Tax Authority or items that are
similar to such payments, and excluding (i) any Taxes arising from an
event that is not in the ordinary course of business and that occurs on the
Closing Date but after the Closing as a result of any action taken by the
Purchasers or their Affiliates and (ii) any Taxes that are taken into
account in determining Current Liabilities, (B) any Transfer Taxes for
which Sellers are liable under Section 10.4 of this Agreement and (C) any
breach of a representation or warranty contained in Section 3.7  or any breach or violation of any provision in this Article X.

 

(b)           The Purchasers shall
jointly and severally  indemnify the
Sellers from, against and in respect of (A) any Taxes that are imposed on or
with respect to the Purchased Assets or any Purchased Entity or any Subsidiary
thereof with respect to any taxable period, or portion thereof, beginning after
the Closing Date, (B) any Taxes arising from an event that is not in the
ordinary course of business and that occurs on the Closing Date but after the
Closing as a result of any action taken by the Purchasers or their Affiliates, (C) any
Taxes that are actually paid by the Sellers or their Affiliates (other than the
Purchased Entities or their Subsidiaries) that are taken into account in
determining Current Liabilities, (D) any Transfer Taxes for which the
Purchasers are liable under Section 10.4 and (E) any breach of
a representation or warranty contained in Section 4.15 or any
breach or violation of any provision in this Article X.

 

(c)           To the extent
permitted by Law, the taxable periods of the Business Owning Entities shall end
at the close of business on the Closing Date. 
Whenever it is necessary to determine the liability for Taxes of the
Business Owning Entities for a portion of a taxable year or period that begins
on or before and ends after the Closing Date, the determination of the Taxes
for the portion of the taxable year or period ending on, and the portion of the
taxable year or period beginning after, the Closing Date shall be determined by
an interim closing of the books by assuming that the taxable year or period
ended at the close of business on the Closing Date, except
that exemptions, allowances or deductions that are calculated on an annual
basis shall be prorated on the basis of the number of days in the annual period
elapsed through the Closing Date as compared to the number of days in the
annual period elapsing after the Closing Date. 
With regard to ad valorem, property or similar Taxes, the total amount
of such Taxes allocable to the Sellers shall be the product of (i) such
Tax for the entirety of the Tax period including the Closing Date, multiplied
by (ii) a fraction, the numerator of which is the number of days in such
Tax period prior to the Closing Date and the denominator of which is the total
number of days in the Tax period, and the balance of such Taxes shall be
allocated to Purchasers.

 

86

 

(d)              For purposes of this Agreement, in the case
of the Texas franchise tax or any other Tax that is (i) paid for the
privilege of doing business during a period (a “privilege
period”) and (ii) computed based on business activity
occurring during an accounting period ending prior to the privilege period
(including, for Texas franchise tax purposes, the accounting periods prescribed
by Texas Tax Code Section 171.1532), any reference to a “taxable period,” “taxable
year” or “annual period” shall mean such accounting period and not the privilege
period.

 

Section 10.2         Tax Returns.

 

(a)              Petroleum Geo-Services, Inc. shall cause
to be included in the consolidated federal income Tax Returns (and the state
income Tax Returns of any state that permits consolidated, combined, unitary or
similar income Tax Returns, if any) of the PGS Group all Tax Items of PGS
Onshore, Inc. through the Closing Date that are required to be included
therein and shall cause such Tax Returns to be properly filed on or before the
Due Date and shall timely and properly pay any Taxes shown to be due on such
Tax Returns.  For purposes of such Tax
Returns, the Tax Items of PGS Onshore, Inc. will, to the extent permitted
by Law, be allocated to the period up to and including the Closing Date and the
period after the Closing Date by closing the books of PGS Onshore, Inc. as
of the end of the Closing Date.

 

(b)              The Sellers shall prepare, or cause to be
prepared, and properly file or cause to be properly filed when due all Tax
Returns with respect to the Purchased Entities and their Subsidiaries, other
than the Tax Returns described in Section 10.2(a) and Tax Returns
of PGS Mexicana, S.A. de C.V. and PGS Administración y Servicios S.A. de C.V.,
that are required to be filed after the Closing Date for the 2009 calendar
year, and shall timely and properly pay any Taxes shown to be due on such Tax
Returns.

 

(c)              The Purchasers shall prepare, or cause to be
prepared, and properly file or cause to be properly filed when due all Tax
Returns with respect to the Purchased Entities and their Subsidiaries, other
than the Tax Returns described in Section 10.2(a) and Section 10.2(b),
that are required to be filed after the Closing Date and shall timely and
properly pay any Taxes shown to be due on such Tax Returns.

 

(d)              Except as required by Law, without the prior
written consent of the Purchaser Tax Representative (which consent shall not be
unreasonably withheld), all Tax Returns that are prepared by the Sellers
pursuant to Section 10.2(b), and the portion of any Tax Return
described in Section 10.2(a) relating exclusively to PGS
Onshore, Inc. (a “Separate Company Tax
Return”), shall be prepared on a basis consistent with prior
periods and none of the Purchased Entities or their Subsidiaries shall make or
change any election, adopt or change an annual accounting period, change any
accounting method, or file any amended Tax Return if such change or amendment
would have the effect of increasing the Tax liability of the Purchased Entities
for any taxable period, or portion thereof, beginning after the Closing Date.

 

87

 

 

(e)           The Sellers and Purchasers shall cooperate with
each other and shall make available all necessary records and timely take all
action necessary to allow each party to prepare and file any Tax Return
described in this Section 10.2.

 

(f)            If any of the Purchasers
or the Sellers may be liable for any portion of the Tax payable in connection
with any Tax Return to be filed by the other, the Tax Representative of the
party responsible under this Agreement for filing such Tax Return (the “Preparer”) shall prepare and
deliver to the Tax Representative of the other party (the “Payor”)
not later than 14 days before the Due Date a draft of such Tax Return (or, in
the case of a Tax Return described in Section 10.2(a), the Separate
Company Tax Return), any schedules, work papers and other documentation then
available that are relevant to the preparation of the portion of such Tax
Return or Separate Company Tax Return for which the Payor is or may be liable
under this Agreement and a statement setting forth in reasonable detail the
amount of Taxes proposed to be payable with respect to such Tax Return or
Separate Company Tax Return for which the Payor is liable under this
Agreement.  The Payor shall, prior to the
filing of the Tax Return, have the opportunity to review and consent (which
consent shall not be unreasonably withheld) at any time not later than 5
Business Days after receipt of such draft and statement with respect to Tax
Items for which the Payor may be liable under this Agreement (the “Payor Portion”).  In the event that the Payor does not consent
to the treatment of the Payor Portion, the Tax Representatives shall work
together, each acting in good faith, to agree on the treatment of such Payor
Portion.  Not later than 30 days after
filing, the Purchasers shall provide the Seller Tax Representative with copies
of all Tax Returns filed, or caused to be filed, by the Purchasers with respect
to the Purchased Entities for taxable periods ending on or before the Closing
Date, for Straddle Periods and for the 2009 calendar year Tax Returns of PGS
Mexicana, S.A. de C.V. and PGS Administración y Servicios, S.A. de C.V., and
the Sellers shall provide the Purchaser Tax Representative with copies of any
Separate Company Tax Return and of all Tax Returns filed, or caused to be
filed, after the Closing Date by the Sellers pursuant to Section 10.2(b).  The Payor shall pay to the Preparer the
amount of the Taxes with respect to any such Tax Return or Separate Company Tax
Return for which the Payor is liable on or before the date one day before the
Due Date for such Taxes (provided that the Preparer has provided written
notification to the Payor of such Due Date).

 

(g)           The Seller Tax
Representative shall provide to the Purchaser Tax Representative within 90 days
after the Closing Date copies of Tax Returns and all books and records with
respect to Taxes of the Purchased Entities and their Subsidiaries that are in
the possession of PGS or an Affiliate of PGS, but are not in the possession of
the Purchased Entities or their Subsidiaries, as of the Closing Date.

 

Section 10.3         Contest Provisions.   The Purchasers, on the one hand, and the
Sellers, on the other hand (the “Recipient”),
shall notify the Tax Representative of the other party in writing not later
than the earlier of (i) 30 days after receipt by the Recipient or an
Affiliate thereof of written notice (a “Proceeding Notice”)
of any pending or threatened audits, adjustments, assessments or other
proceedings (a “Tax Audit”) that may affect
the liability for Taxes of such other party or (ii) 15 days prior to the
deadline for responding to the Proceeding Notice.  If the Recipient fails to give such notice to
the Tax Representative of the other party, it shall not be 

 

88

 

entitled
to indemnification for any Taxes arising in connection with such Tax Audit to
the extent such failure to give notice adversely affects the other party’s
right to participate in the Tax Audit or otherwise prejudices the other
party.  If, as a result of a “Determination”
(as defined in Section 1313 of the Code), a party to this Agreement is
entitled to indemnification for any Taxes arising in connection with a Tax
Audit, the party responsible for such indemnification shall pay the amount of
such Taxes due to the Tax Representative of the party entitled to
indemnification no later than 15 days after the date the payment of such
additional Taxes is made, provided the Tax Representative of the party
responsible for such indemnification has received a written request for such
payment setting forth in reasonable detail the amount of the requested
payment.  If such Tax Audit relates to
any taxable period ending on or before the Closing Date (and including the 2009
calendar year if the Closing occurs in 2009), the Sellers shall, at their
expense, control the defense and settlement of such Tax Audit.  If such Tax Audit relates to any taxable
period ending after the Closing Date (but excluding the 2009 calendar year if
the Closing occurs in 2009), the Purchasers shall, at their expense, control
the defense and settlement of such Tax Audit. 
The Tax Representative of the party in control of the defense or
settlement of any Tax Audit that relates to Taxes for which the other party may
be liable under this Agreement shall keep the Tax Representative of the other
party informed of the progress of such Tax Audit.  The parties shall cooperate with each other
and with their respective Affiliates in the negotiation and settlement of any Tax
Audit described in this Section 10.3.  The
Sellers shall provide or cause to be provided to the Purchaser Tax
Representative necessary authorizations, including powers of attorney, to
control the defense or settlement of any Tax Audit that the Purchasers are
entitled to control pursuant to this Section 10.3 and shall execute
or cause to be executed any documents necessary for the Sellers to defend or
settle any such Tax Audit.   Likewise
the Purchasers shall provide or cause to be provided to the Seller Tax
Representative necessary authorizations, including powers of attorney, to
control the defense or settlement of any Tax Audit that the Sellers are
entitled to control pursuant to this Section 10.3 and shall execute
or cause to be executed any documents necessary for the Sellers to defend or settle
any such Tax Audit.  For any Tax Audit
where both Sellers and Purchasers are liable for Taxes under this Agreement,
such Tax Audit shall not be finally settled without the prior written consent
of the non-controlling party, which consent shall not be unreasonably withheld.

 

Section 10.4         Transfer Taxes.   Transfer Taxes shall be borne 50 percent by
the Sellers and 50 percent by the Purchasers. 
Notwithstanding Section 10.2 of this Agreement, which shall
not apply to Tax Returns relating to Transfer Taxes, any Tax Returns that must
be filed in connection with Transfer Taxes shall be prepared and filed when due
by the party primarily or customarily responsible under the applicable local
law for filing such Tax Returns, and such party shall use its commercially
reasonable efforts to provide such Tax Returns to the Tax Representative of the
other party at least 10 days prior to the Due Date for such Tax Returns.  Purchasers and Sellers further agree to use
(and to cause their Affiliates to use) their reasonable best efforts to obtain
any certificate or other document from any Tax Authority or any other Person as
may be necessary to mitigate, reduce or eliminate any Transfer Taxes, provided
such efforts will not adversely affect the party to whom the request is made.

 

Section 10.5         Value
Added Taxes

 

(a)           Any
VAT payable with respect to the Transactions shall, as between the Sellers and
Purchasers, be payable by the Purchasers. 
The Purchaser shall, within 10 days of a 

 

89

 

written demand being made by Seller (such
demand being accompanied by a valid VAT tax invoice issued by Seller to
Purchaser and reasonable evidence of Seller’s liability to account for such
VAT), pay to Seller the amount of VAT payable in respect of such
Transaction.  If the relevant Tax
Authorities subsequently determine that a supply should have been exempt,
subject to a reduced rate of VAT or zero-rated for VAT purposes, either as the
supply of a going concern or pursuant to Article 56 of the European Union
Directive on VAT, or pursuant to any other applicable Law, Seller shall repay
to Purchaser the amount of any VAT previously paid by Purchaser.

 

(b)           If
Purchaser reasonably determines that any portion of the Transactions meets the
requirements for VAT exemption or zero-rating for VAT purposes as the supply of
a going concern, or pursuant to Article 56 of the European Union Directive
on VAT, or pursuant to any other applicable Law, then the provisions of Section 1.2(a) shall
not apply and instead Sellers agree that the Transactions are exempt or
zero-rated (as applicable) for VAT purposes. 
If it later is determined by any Taxing Authority that any portion of
the Transactions are subject to VAT, the VAT will, as between the relevant
Seller and Purchasers, be payable by the Purchaser, and Purchaser shall,
immediately upon written demand made by Seller (such demand being accompanied
by a valid VAT tax invoice issued by relevant Seller to Purchaser reasonable
evidence of Seller’s liability to account for such VAT), pay or cause the
relevant Purchaser to pay to Seller the amount of VAT payable in respect of
that portion of the Transaction.

 

Section 10.6         Tax Sharing Agreements and
Arrangements.  All Tax
sharing agreements, Tax allocation agreements or other similar agreements or
arrangements relating to the allocation or responsibility for Taxes between or
among any of the Purchased Entities or any of their Subsidiaries, the Sellers
or any of their Affiliates shall be terminated with respect to any of the
Purchased Entities and any of their Subsidiaries prior to Closing, and all
obligations of the Purchased Entities and their Subsidiaries thereunder shall
be released in full so that as of Closing none of the Purchased Entities or any
of their Subsidiaries shall have any liability under any such agreement or
arrangement.

 

Section 10.7         Section 338
Elections.  Purchasers or
their Affiliates will not make an election under Section 338 of the Code
for PGS Onshore, Inc. or any of its Subsidiaries without the prior written
consent of Sellers.  Should the
Purchasers or their Affiliates make any election under Section 338 of the
Code for any other of the Purchased Entities or their Subsidiaries, written
notice will be provided to the Seller Tax Representative.

 

Section 10.8         Tax Refunds.  The Purchasers agree to pay to the Seller Tax
Representative any refund received (whether by payment, credit, offset or
otherwise) by the Purchasers or their Affiliates in respect of any Taxes for
which any Seller is liable hereunder, other than Taxes that are taken into
account in determining Current Assets (whether such Taxes were paid before or
after the Closing), within 30 days after such refund is received.  The parties (and their Affiliates) shall
cooperate in order to take any necessary steps to claim any such refund
provided that the out-of-pocket costs of obtaining such a refund shall be borne
by the Sellers.

 

90

 

Section 10.9         Additional Tax Indemnifications.

 

In the event the liability of a non-U.S. Business
Owning Entity for Taxes for which the Sellers are liable under Section 10.1(a) is
increased and the particular Tax Item that produced such increase results,
directly or indirectly, in a reduction in the liability of the Purchased
Entities or their Affiliates for Taxes (a “Purchaser Tax Benefit”),
the Purchasers shall be liable for and shall pay to the Seller Tax
Representative the amount of such Purchaser Tax Benefit, provided that
such amount shall not exceed the amount of the additional Taxes payable by the
Sellers or their Affiliates resulting from such Tax Item (a “Seller Tax Detriment”).  Such payment shall be made within 30 days of
the Due Date of the Tax Return for the taxable period during which the
Purchaser Tax Benefit was recognized.  In
no event shall the Purchaser or its Affiliates have an obligation to pay the
Seller or its Affiliates until such time as any Purchaser Tax Benefit is
actually recognized by use of the particular Tax Item giving rise to the
Purchaser Tax Benefit on a Tax Return. 
In the event of the later adjustment, in whole or in part, of any Tax
Item that produced the Purchaser Tax Benefit or the Seller Tax Detriment, the
Seller Tax Representative shall refund to the Purchaser Tax Representative any
amount previously paid under this Section 10.9 that is determined
not to be owing as a result of such adjustment, or the Purchaser Tax
Representative shall further remit to the Seller Tax Representative the amount
of any increase in the amount required to be paid under this Section 10.9
as a result of such adjustment.  The Tax
Representatives shall promptly notify each other of any Purchaser Tax Benefit
and Seller Tax Detriment and provide details supporting the calculation of the
amount of such Purchaser Tax Benefit or Seller Tax Detriment.  The amount of any Purchaser Tax Benefit or
Seller Tax Detriment shall be determined by comparing the Taxes payable without
the adjustment in question with the Taxes payable after taking into account
such adjustment.

 

Section 10.10       Assistance and
Cooperation.   The parties
agree that, after the Closing Date:

 

(a)           Each party shall
cooperate fully in assisting (and causing their respective Affiliates to
assist) the other party in preparing any Tax Returns that such other party is
responsible for preparing and filing;

 

(b)           The parties shall
cooperate fully (and cause their respective Affiliates to cooperate fully) in
preparing for any Tax Audits, or disputes with Tax Authorities, relating to any
Tax Returns or Taxes on or with respect to the Purchased Assets or any of the
Purchased Entities, including providing access to relevant books and records
relating to Taxes at issue;

 

(c)           The parties shall
make available (and cause their respective Affiliates to make available) to each
other as reasonably requested all relevant books and records relating to Taxes;

 

(d)           Each party shall
promptly furnish the Tax Representative of the other party with copies of all
relevant correspondence received by such party or its Affiliates from any Tax
Authority in connection with any liability for Taxes for which such other party
may have an indemnification obligation under this Agreement;

 

(e)           The Purchasers will
retain (and will cause the Purchased Entities to retain) copies of all Tax
Returns and books and records with respect to Taxes for which the Sellers may

 

91

 

have an indemnification obligation under this Agreement until the
expiration of the applicable statute of limitations of the respective taxable
periods to which such obligation may relate, and to abide by all record
retention agreements entered into with any Tax Authority with respect thereto;
and

 

(f)            Except as otherwise
provided in this Agreement, the party requesting assistance or cooperation
shall bear the other party’s (or its Affiliates’) out-of-pocket expenses in
complying with such request to the extent that those expenses are attributable
to fees and other costs of unaffiliated third-party service providers.

 

Section 10.11       Survival.   The provisions of this Article X
shall survive until such time as the statute of limitations runs for the Tax
matter to which the relevant provision applies.

 

Section 10.12       Conflict.   In the event of a conflict between the
provisions of this Article X and any other provision of this
Agreement, the provisions of this Article X shall control.  The provisions of Article VII
shall not apply to any Taxes or any indemnification claims relating to Taxes.

 

ARTICLE
XI.

MISCELLANEOUS

 

Section 11.1         Notices.  All notices or communications hereunder shall
be in writing (including facsimile or similar writing) addressed as follows:

 

To Geokinetics or Purchaser:

 

Geokinetics, Inc.

1500 CityWest Blvd #800

Houston, Texas 77042

Attention:  Richard F. Miles

Facsimile:  (713) 850-7330

 

With a copy (which shall not
constitute notice) to:

 

Haynes
and Boone, LLP

1221
McKinney Street, Suite 2100

Houston,
Texas 77010

Attention:  Guy Young

Facsimile:  (713) 236-5699

 

To
PGS or a Seller:

 

Petroleum
Geo-Services ASA

Strandveien
4

P.O. Box
89

N-1325
Lysaker

Norway

Attention:  General Counsel

Facsimile:  +47 67 53 68 83

 

92

 

With a copy (which shall not
constitute notice) to:

 

Baker
Botts L.L.P.

One
Shell Plaza

910
Louisiana Street

Houston,
Texas 77002

Attention:  Joe S. Poff

Facsimile:  713.229.7710

 

Any such notice or
communication shall be effective when actually received, in each case addressed
as above (or to such other address as such party may designate in writing from
time to time).

 

Section 11.2         Severability.  If any provision of this Agreement shall be
declared invalid or illegal, in whole or in part, or is incapable of being
enforced by Law or public policy, such invalidity, illegality or
unenforceability shall not affect the remaining provisions of this Agreement,
which shall remain in full force and effect.

 

Section 11.3         Assignment.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, legal
representatives, successors, and assigns; provided, however, that
neither this Agreement nor any rights hereunder shall be assignable by any of
the parties hereto without the prior written consent of (i) in the case of
an assignment by any Purchaser, PGS or (ii) in the case of an assignment
by any Seller, Geokinetics; provided, that any Seller and any Purchaser may
assign and delegate its rights, interests and obligations hereunder to one or
more wholly-owned direct or indirect Subsidiaries of PGS (in the case of a
Seller) or of Geokinetics (in the case of a Purchaser), upon written notice to
the other parties to this Agreement (which notice shall contain a
representation that the assignee is a wholly-owned Subsidiary of PGS or
Geokinetics, as the case may be) at or before the Closing Date, in which event
assignor shall remain liable for all of its obligations under this Agreement
and such assignee Subsidiary or Subsidiaries shall, together with the assignor,
be jointly and severally liable for such obligations.  Notwithstanding the proviso contained in the
immediately preceding sentence, a party to this Agreement may not assign its
rights, interests and obligations hereunder if such assignment could reasonably
be expected to result in a delay or impediment to consummating the Transactions,
including, without limitation, due to the need to obtain the consent of any
third party, including any Governmental Authority, not otherwise required to
consummate the Transactions.  Any
assignment in violation of this Agreement shall be null and void.

 

Section 11.4         Interpretation.  The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. All article, section, subsection, clause,
schedule and exhibit references used in this Agreement are to articles,
sections, subsections, clauses, schedules and exhibits to this Agreement unless
otherwise specified.  All schedules and
exhibits attached to this Agreement constitute a part of this Agreement and are
incorporated herein for all purposes. 
Unless the context of this Agreement clearly requires otherwise, (a) the
singular shall include the plural and the plural shall include the singular
wherever and as often as may be appropriate, (b) the words 

 

93

 

“includes”
or “including” shall mean “includes without limitation” and “including without
limitation” or (c) the words “hereof,” “hereby,” “herein,” “hereunder” and
similar terms in this Agreement shall refer to this Agreement as a whole and
not any particular Section or Article in which such words appear.

 

Section 11.5         Counterparts.  This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same Agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to each party.

 

Section 11.6         Entire Agreement.  This Agreement, the Ancillary Agreements and
the Confidentiality Agreement represent the entire Agreement of the parties
with respect to the subject matter of this Agreement and shall supersede any
and all previous contracts, arrangements or understandings between the parties
with respect to the subject matter of this Agreement.

 

Section 11.7         Governing Law.  This Agreement shall be construed,
interpreted, and governed in accordance with the laws of the State of Texas,
without reference to rules relating to conflicts of law.

 

Section 11.8         Submission to
Jurisdiction.  Each party
consents to personal jurisdiction in any action arising out of or relating to
this Agreement brought in the U.S. District Court for the Southern District of
Texas, Houston Division, or any Texas state court in Harris County having
subject matter jurisdiction as to a matter arising out of or relating to this
Agreement (and the appropriate appellate courts), and each of the parties
hereto agrees that any action instituted by it arising out of or relating to
this Agreement will be instituted exclusively in one of the above specified
courts.  Each party agrees that a final
judgment in any dispute or action so brought will be conclusive and may be
enforced by dispute or action on the judgment or in any other manner provided
at law (common, statutory or other) or in equity.  Each party waives any defense of inconvenient
forum to the maintenance of any dispute or action so brought.

 

Section 11.9         Attorneys’ Fees.  If any action at law or equity, including an
action for declaratory relief, is brought to enforce or interpret any provision
of this Agreement, the prevailing party shall be entitled to recover reasonable
attorneys’ fees and expenses from the other party, which fees and expenses
shall be in addition to any other relief which may be awarded.

 

Section 11.10       No Third Party
Beneficiaries.  Except as
provided in Section 7.1 and Section 7.2, no Person
other than the parties is an intended beneficiary of this Agreement or any
portion of this Agreement.

 

Section 11.11       Authorization.

 

(a)           Each Seller, by its
execution of this Agreement, hereby irrevocably authorizes PGS to provide all
notices on behalf of such Seller, to make all decisions that are to be made by
the Sellers under this Agreement, to exercise or waive any rights of such
Seller under this Agreement and to take all other actions to be taken by the
Sellers under this Agreement.  Any action
or inaction of PGS under or pursuant to this Agreement shall be 

 

94

 

binding upon all the Sellers as if performed by all the Sellers, and,
thus, whenever the “Sellers” are authorized, empowered or directed to exercise
any right, take any action or inaction or make any decision or determination
under or pursuant to this Agreement, such may be taken and accomplished only by
PGS (and not by the Sellers) and shall not require the consent or approval of
the Sellers.  The Purchasers shall have
the right to deal exclusively with PGS, as the representative of the Sellers,
with respect to all matters arising under or relating to this Agreement.  The Purchasers may rely upon any action taken
by PGS on behalf of the Sellers under this Agreement.  Without limiting the generality of the
foregoing, PGS may (a) receive or give all written notices, instructions
and other communications hereunder and (b) grant waivers and consents to the
Purchasers in connection with this Agreement and the Transactions.  PGS shall have no liability to the Sellers
for decisions made by it or actions taken by it on behalf of the Sellers as
permitted pursuant to this Section 11.11(a) unless such
decision or action is due to the gross negligence or intentional misconduct of
PGS.  Notwithstanding the foregoing,
nothing in this Section 11.11(a) shall relieve any Seller from
any obligation it may have under this Agreement, and each Seller shall be
required to take each affirmative action as to which such Seller has an
obligation hereunder (including, without limitation, the obligation to execute
and deliver to the Purchasers the documents to be delivered to the Purchasers
at Closing in accordance with Section 6.5(a) and the other
provisions of this Agreement).

 

(b)           Each Purchaser, by
its execution of this Agreement, hereby irrevocably authorizes Geokinetics to
provide all notices on behalf of such Purchaser, to make all decisions that are
to be made by the Purchasers under this Agreement, to exercise or waive any
rights of such Purchaser under this Agreement and to take all other actions to
be taken by the Purchasers under this Agreement.  Any action or inaction of Geokinetics under
or pursuant to this Agreement shall be binding upon all the Purchasers as if
performed by all the Purchasers, and, thus, whenever the “Purchasers” are
authorized, empowered or directed to exercise any right, take any action or
inaction or make any decision or determination under or pursuant to this
Agreement, such may be taken and accomplished only by Geokinetics (and not by
the Purchasers) and shall not require the consent or approval of the
Purchasers.  The Sellers shall have the
right to deal exclusively with Geokinetics, as the representative of the
Purchasers, with respect to all matters arising under or relating to this
Agreement.  The Sellers may rely upon any
action taken by Geokinetics on behalf of the Purchasers under this Agreement.  Without limiting the generality of the foregoing,
Geokinetics may (a) receive or give all written notices, instructions and
other communications hereunder and (b) grant waivers and consents to the
Sellers in connection with this Agreement and the Transactions.  Geokinetics shall have no liability to the
Purchasers for decisions made by it or actions taken by it on behalf of the
Purchasers as permitted pursuant to this Section 11.11(b) unless
such decision or action is due to the gross negligence or intentional
misconduct of Geokinetics.  Notwithstanding
the foregoing, nothing in this Section 11.11(b) shall relieve
any Purchaser from any obligation it may have under this Agreement, and each
Purchaser shall be required to take each affirmative action as to which such
Purchaser has an obligation hereunder (including, without limitation, the
obligation to execute and deliver to the Sellers the documents to be delivered
to the Sellers at Closing in accordance with Section 6.5(b) and
the other provisions of this Agreement).

 

95

 

Section 11.12       Disclosure Schedules.  The disclosures made on any disclosure
schedule, including the Seller Disclosure Schedule and the Purchaser Disclosure
Schedule, with respect to any representation or warranty shall be deemed to be
made with respect to any other representation or warranty requiring the same or
similar disclosure to the extent that the relevance of such disclosure to other
representations and warranties is reasonably evident from the face of the
disclosure schedule.  The inclusion of
any matter on any disclosure schedule will not be deemed an admission by any
party that such listed matter is material or that such listed matter has or
would have a Seller Material Adverse Effect or a Purchaser Material Adverse
Effect, as applicable.

 

Section 11.13       Extensions, Waivers, Etc.  At any time prior to the Closing Date,
Purchasers and Sellers may:

 

(a)           extend the time for
the performance of any of the obligations or acts of the other party; or

 

(b)           waive any
inaccuracies in the representations and warranties of the other party contained
in this Agreement or in any document delivered pursuant hereto.

 

Notwithstanding the foregoing, no failure or delay
by any Purchaser or any Seller in exercising any right hereunder shall operate
as a waiver thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other right
hereunder.  Any agreement on the part of
a party hereto to any such extension or waiver shall be valid only if set forth
in an instrument in writing signed on behalf of such party.

 

Section 11.14       Specific Performance.  The parties to this Agreement agree that, if
the obligations to pay the Purchase Price or to consummate the Transactions or
other covenants or agreements in this Agreement were not performed in
accordance with their specific terms or were otherwise breached, irreparable
damage would occur, no adequate remedy at law would exist and damages would be
difficult to determine, and that the parties shall be entitled to specific
performance of such terms of this Agreement and immediate injunctive relief,
without the necessity of proving the inadequacy of money damages as a remedy,
in addition to any other remedy to which they are entitled at law or in equity;
provided, however, that from and after Closing, this Section 11.14
shall not apply to covenants or agreements in this Agreement that by their
terms are to be performed prior to or at Closing.

 

Section 11.15       Parent Assurances.  Geokinetics hereby unconditionally and
irrevocably guarantees to the Sellers the performance in full by each Purchaser
of the obligations of such Purchaser hereunder, including, without limitation,
the obligation of such Purchaser to pay the Purchase Price payable by such
Purchaser in accordance with Section 1.4 and the obligations of
such Purchaser under Article VII. 
Geokinetics hereby waives all defenses as a surety including notice, and
agrees that its obligations under this Section 11.15 shall not be
impaired, diminished or discharged by any extension of time granted by the
Sellers, by any course of dealing between the parties, or by any events or
circumstances that might operate to discharge a guarantor.  Geokinetics shall remain liable on its
obligations hereunder until such time as the obligations of the Purchasers
under this Agreement have expired. 
Geokinetics waives the right to require any Seller to first proceed
against any Purchaser with respect to any dispute, controversy, or claim 

 

96

 

arising
out of or related to this Agreement, and agrees that any such dispute,
controversy, or claim may be brought directly against Geokinetics, the
Purchasers, or against any one or more of them.

 

Section 11.16       Agreement with Series B
Holders.  At or prior to
the Effective Time, Geokinetics has entered into an agreement with the Series B
Holders related to the Transactions (the “Series B Agreement”).  Since the Effective Time, the Series B
Agreement has not been amended, modified or terminated.  Geokinetics shall use its best efforts to
take, or cause to be taken, all actions to do, or cause to be done, all things
necessary, proper or advisable to implement and enforce the Series B
Agreement. Without the Sellers’ written consent (which shall not be
unreasonably withheld in the case of actions required by the NYSE AMEX, but
which may be granted or withheld in the Sellers’ sole discretion in all other
instances), Geokinetics shall not change, amend, terminate or otherwise modify
the Series B Agreement or cancel or waive any obligation of the applicable
Series B Holders under the Series B Agreement.  The parties agree and understand that it
shall not be unreasonable for any Seller to withhold consent to any change,
amendment, termination or modification contemplated in the previous sentence if
such action adversely impacts such Seller.

 

Section 11.17       Purchase Price Allocation.

 

(a)           The portion of the
Purchase Price (without regard to Assumed Liabilities, Net Working Capital and
Funded Indebtedness) allocated among the Purchased Assets and the Purchased
Securities shall be as set forth in Section 11.17(a) of the
Seller Disclosure Schedule. No party (or its Affiliates) will assert or
maintain a position inconsistent with this allocation in connection with any
Tax Return, Tax Audit or other matter related to Taxes.

 

(b)           Within 60 days after
the amount of the Cash Consideration has been determined under Section 1.6,
the Purchaser Tax Representative shall prepare and deliver to the Seller Tax
Representative a draft of a revised Section 11.17(a) of the
Seller Disclosure Schedule (the “Final Allocation Schedule”)
that takes into account the Cash Consideration and the Assumed
Liabilities.  The allocations set forth
on the Final Allocation Schedule will be consistent with those in Section 11.17(a) of
the Seller Disclosure Schedule and will be made in accordance with the
principles of Section 1060 of the Code. 
The template of the Final Allocation Schedule is attached hereto as Section 11.17(b) of
the Seller Disclosure Schedule.  The Tax
Representatives shall work together, each acting in good faith, to agree on the
Final Allocation Schedule. In the event the Tax Representatives are unable to
agree on the Final Allocation Schedule in such manner, then each of the
Purchasers and the Sellers and their respective Affiliates (acting reasonably
and in good faith) shall be free to use their own allocation of the Purchase
Price among the Purchased Assets and the Purchased Securities, provided
that any such allocation must be consistent with the allocation set forth in Section 11.17(a) of
the Seller Disclosure Schedule. In the event the Tax Representatives do agree
on the Final Allocation Schedule, then such allocation shall be binding on the
Purchasers, the Sellers, and their respective Affiliates for federal, state,
local, foreign and other Tax reporting purposes, and none of them will assert
or maintain a position inconsistent with such allocation in connection with any
Tax Return, Tax Audit or other matter related to Taxes.

 

97

 

Section 11.18       Control of
Operations.  Nothing
contained in this Agreement shall give Geokinetics or the Purchasers, directly
or indirectly, the right to control or direct the conduct of the Business prior
to the Closing. Prior to the Closing, Sellers shall exercise, consistent with
the terms and conditions of this Agreement, complete control and supervision
over their operations, including the Business.

 

Section 11.19       Additional Sellers and Purchasers.

 

(a)           If, prior to
Closing, PGS or a Subsidiary of PGS, other than a Business Owning Entity,
engages in the Business, PGS shall promptly notify Purchasers of (i) the
identity of the Subsidiary engaging in the Business, (ii) the jurisdiction
in which the Business is being conducted by the Subsidiary, and (iii) a
brief description of the Business conducted, and shall provide copies of any
Contracts related to such Business; provided, that for this purpose,
submitting a bid for work will not constitute the conduct of the Business.  PGS and Geokinetics shall cooperate in good
faith to transfer such Business to a Purchaser (or another Subsidiary of
Geokinetics which shall become a Purchaser hereunder) at the Closing.  Such cooperation shall include PGS causing
the Subsidiary engaged in the Business to enter into a counterpart of this
Agreement as an Asset Seller (or the parent of such Subsidiary as a Seller) and
Geokinetics designating a Purchaser (or another Subsidiary of Geokinetics which
shall become a party to this Agreement as a Purchaser) to acquire the assets
and assume the liabilities used in the Business.

 

(b)           Prior to Closing,
PGS shall cause any Seller that is not a party to this Agreement as of the
Effective Date to (i) duly and validly authorize by all requisite
corporate or other organizational action the execution, delivery and
performance of this Agreement and the Ancillary documents to which such Seller
is or will be a party, and (ii) execute and deliver to the Purchasers a
counterpart to this Agreement.  In
addition, PGS shall cause each Seller listed on Section 1.1 of the Seller
Disclosure Schedule that has not executed this Agreement on the Effective Date
to comply with this Agreement as if such Seller were a party to this Agreement
from and after the Effective Date to the date such Seller executes a
counterpart of this Agreement as contemplated by this Section.  Nothing in this Section shall amend,
alter or qualify any representation, warranty, covenant or agreement that a
Seller has made in this Agreement.

 

Section 11.20       Additional Services
Agreement.  If requested
by Sellers, Purchasers and Sellers shall use commercially reasonable efforts to
prepare, execute and deliver, or cause to be prepared, executed and delivered,
at Closing a services agreement, the form of which shall be similar in form and
scope to the Transition Services Agreement, in which PGS Mexicana, S.A. de C.V.
(or its successor) shall provide certain mutually agreed services to the data
processing business unit of PGS conducted in Mexico.

 

 

[SIGNATURE PAGES FOLLOW]

 

98

 

 

Geokinetics, the Purchasers, PGS and the Sellers
have duly executed this Agreement as of the Effective Date.

 

	
   

  	
  GEOKINETICS
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott
  A. McCurdy

  
	
   

  	
  Name:

  	
  Scott
  A. McCurdy

  
	
   

  	
  Title:

  	
  Vice
  President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GEOKINETICS
  INTERNATIONAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott
  A. McCurdy

  
	
   

  	
  Name:

  	
  Scott
  A. McCurdy

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GEOKINETICS
  INTERNATIONAL HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott
  A. McCurdy

  
	
   

  	
  Name:

  	
  Scott
  A. McCurdy

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GEOKINETICS
  EXPLORATION, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott
  A. McCurdy

  
	
   

  	
  Name:

  	
  Scott
  A. McCurdy

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GEOKINETICS
  EXPLORATION PERU S.A.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott
  A. McCurdy

  
	
   

  	
  Name:

  	
  Scott
  A. McCurdy

  
	
   

  	
  Title:

  	
  Vice
  President

  

 

 

	
   

  	
  GEOKINETICS
  SINGAPORE PTE LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott
  A. McCurdy

  
	
   

  	
  Name:

  	
  Scott
  A. McCurdy

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GEOKINETICS GEOPHYSICAL DO
  BRASIL LTDA.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott
  A. McCurdy

  
	
   

  	
  Name:

  	
  Scott
  A. McCurdy

  
	
   

  	
  Title:

  	
  Vice
  President

  

 

 

	
   

  	
  PETROLEUM
  GEO-SERVICES ASA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jostein
  Ueland

  
	
   

  	
  Name:

  	
  Jostein
  Ueland

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PETROLEUM
  GEO-SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jostein
  Ueland

  
	
   

  	
  Name:

  	
  Jostein
  Ueland

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PGS
  EXPLORATION (UK) LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jostein
  Ueland

  
	
   

  	
  Name:

  	
  Jostein
  Ueland

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PGS
  GEOPHYSICAL AS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jostein
  Ueland

  
	
   

  	
  Name:

  	
  Jostein
  Ueland

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PGS
  ONSHORE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jostein
  Ueland

  
	
   

  	
  Name:

  	
  Jostein
  Ueland

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

 

	
   

  	
  PGS
  OVERSEAS AS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jostein
  Ueland

  
	
   

  	
  Name:

  	
  Jostein
  Ueland

  
	
   

  	
  Title:

  	
  Authorized SignatoryExhibit 10.2

 

AMENDMENT
AND

EXCHANGE
AGREEMENT

 

This
Amendment and Exchange Agreement, dated December 2, 2009, by and among
Geokinetics Inc., (the “Corporation”), Avista Capital Partners, L.P. (“Avista
Domestic”), Avista Capital Partners (Offshore), L.P. (“Avista Offshore” and
together with Avista Domestic, “Avista”), and Levant America S.A. (“Levant,”
and together with Avista, the “Holders”). 
Capitalized terms not otherwise defined herein shall have the meanings
specified for such terms in the Second Amended Certificate of Designation of Series B
Senior Convertible Preferred Stock of Geokinetics Inc. filed with the Secretary
of State of the State of Delaware February 23, 2009 (the “Certificate of
Designation”).

 

WHEREAS,
simultaneous with the execution and delivery of this Agreement the Company is
entering an agreement to acquire the world-wide, on-shore seismic business and
on-shore multi-client library business of Petroleum Geo-Services ASA and
certain of its subsidiaries (collectively, “Pegasus”) (the “Acquisition”); and

 

WHEREAS,
as partial payment for the purchase price in the Acquisition, the Company has
agreed to issue  shares of Common Stock (as
hereinafter defined) pursuant to the definitive agreement for the Acquisition
to Pegasus;

 

WHEREAS,
in connection with the financing of the Acquisition and for other good and
valid reasons, the Company is contemplating making a public offering (the “Public
Offering”) of shares of its common stock, par value $0.01 per share (the “Common
Stock”) ; and

 

WHEREAS,
in order to consummate the Acquisition and the Public Offering, the Company has
requested that (a) the Holders agree to certain changes to the terms of
the Series B-1 Senior Convertible Preferred Stock of the Corporation held
by them, as reflected in the Certificate of Designation and (b) that
Avista agree to exchange (the “Exchange”) the outstanding shares of Series B-2
Senior Convertible Preferred Stock of the Corporation for newly issued shares
of a new series of preferred stock designated “Series C Preferred Stock” (“Series C
Preferred Stock”); and

 

WHEREAS,
subject to the terms and conditions set forth herein, the Holders have agreed
to consent to the changes in the terms of the Series B-1 Convertible
Preferred Stock of the Corporation as requested by the Corporation and Avista
has agreed to exchange the shares of Series B-2 Convertible Preferred
Stock it holds; and

 

WHEREAS,
in consideration for the Holders (or, in the case of Avista, Avista Capital
Holdings, L.P.) consenting to the aforementioned changes in terms of the Series B-1
Convertible Preferred Stock and the Exchange, the Corporation has agreed to pay
the Holders an aggregate fee equal to 2% of (a) Liquidation Preference
Amount of the outstanding Series B Preferred Shares and (b) accrued
but unpaid dividends at the time of such payment (the “Consent Fee”), and has
agreed to issue 750,000 shares of Common Stock to Avista; and

 

NOW
THEREFOR, in consideration of the foregoing, the Corporation and the Holders
agree as follows:

 

 

1.             Consent.

 

Each of the Holders hereby consents to:

 

(a)           The amendment and restatement of the
Certificate of Designation in the form attached hereto as Exhibit 1 (the “Amendment”),
and the filing of the Amendment as part of the Certificate of Incorporation of
the Corporation with the Secretary of State of the State of Delaware, subject
to the satisfaction of the conditions set forth in Paragraph 2 hereof.

 

(b)           The adoption by the Company of a new
class of a new class of shares, the Series C Preferred Stock, or the terms
set forth on the Certificate of Designation of Series C Preferred Stock of
Geokinetics, Inc. set forth as Exhibit 2 hereto (the “Series C
Certificate”).

 

(c)           This Consent shall expire if the
conditions set forth in Section 2 have not been fully satisfied and the
Amendment and the Series C Certificate have not been filed with the
Secretary of State of the State of Delaware, as amendments to the Certificate
of Incorporation of the Corporation in Delaware by February 15, 2010.

 

2.             Conditions.

 

(a)           The consent of the Holders set forth in Section 1
is subject to satisfaction of the following conditions: (A) the
consummation of either (i) the Public Offering (as hereinafter defined),
or (ii) the Acquisition has occurred; (B) the payment of the Consent
Fee by the Corporation to the Holders such fee to be paid to each of the
Holders in the percentages set forth in Exhibit 3, by wire transfer to the
accounts specified in Exhibit 3 or otherwise designated in writing by any
Holder to the Corporation and (C) the issuance to Avista of an aggregate
of 750,000 shares of Common Stock (of which 156,500 shares of Common Stock
shall be issued to Avista Offshore and 593,500 shares shall be issued to Avista
Domestic, unless Avista instructs the Corporation to such shares of Common Stock
in different proportions) (the “Avista Common Stock”) as consideration for the
Exchange.  For all purposes of this
Agreement, the term “Public Offering” shall be deemed to include any sale,
offer or issuance of shares of Common Stock by the Corporation, in an offering
registered under the Securities Act of 1933, as amended (the “Securities Act”)
or exempt from registration under the Securities Act pursuant to Section 4
thereof, or Rule 144A or Regulation D promulgated under the Securities Act
(other than the issuance of shares of Common Stock pursuant to options,
warrants, convertible securities or similar securities outstanding as of the
date the Amendment is filed with the Secretary of State of the State of
Delaware or shares issued as consideration in the Acquisition) which occurs at
any time on or prior to June 30, 2010.

 

(b)           Notwithstanding anything to the contrary
set forth herein, in no event shall (i) the aggregate number of shares of
Common Stock issued in connection with the Acquisition and the Public Offering
exceed eight million seven hundred fifty thousand (8,750,000)  or (ii) the aggregate number of shares
of Common Stock issued in connection with the Public Offering (including any
shares of Common Stock issued pursuant to any, “over-allotment” or “green shoe”
option) exceed five million seven hundred fifty thousand (5,750,000).

 

2

 

3.             Closing.

 

(a)           The closing of the transactions
contemplated by this Agreement (the “Closing”), including the exchange of the Series B-2
preferred stock for Series C Preferred Stock and the issuance of the
Avista Common Stock shall occur simultaneously with the earlier to occur of the
consummation of the Acquisition or the Public Offering.  The Closing shall occur at the offices of
Haynes and Boone, One Houston Center, 1221 McKinney Street, Suite 2100,
Houston, Texas 77002, at 10:00 a.m. local time, simultaneous with the
closing of the [Pegasus Transaction]. 
The date upon which the Closing occurs shall be referred to herein as
the “Closing Date”.

 

(b)           At the Closing, the Company shall deliver
to Avista duly endorsed certificates representing a numbered shares of Series C
Preferred Stock equal to the numbered shares of Series B-2 Preferred Stock
owned by Avista, plus accrued but unpaid dividends divided by $250, and the
Avista Common Stock in consideration for the Exchange.  At the Closing, Avista shall deliver to the
Corporation certificates representing all of the shares of Series B-2
Preferred Stock owned by it, duly endorsed or with stock powers duly endorsed
by it in blank.

 

(c)           At the Closing, the Corporation shall pay
the Consent Fees to the Holders  (or, in
the case of Avista, Avista Capital Holdings, L.P.) in the proportions specified
on Schedule 3 in consideration for the amendments to the Series B-1
Preferred Stock reflected in the Amendment.

 

(d)           The certificates representing the Avista
Common Stock and the Series C Preferred Stock shall set forth in a
prominent place the following legend:

 

THE
SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I) SUCH
SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF
1933, AS AMENDED, (II) SUCH SECURITIES ARE SOLD PURSUANT TO RULE 144 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (III) THE COMPANY HAS RECEIVED
AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY
BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 OR QUALIFICATION
UNDER APPLICABLE STATE SECURITIES LAWS. 
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY THE SECURITIES.

 

4.             Waiver and Consent.

 

(a)           Each of the Holders hereby waives any and
all preemptive rights it has under Section (h) of the Certificate of
Designation with respect to the shares of Common Stock to be issued in
connection (i) with the Acquisition and (ii) this Agreement.

 

(b)           Each of the Holders hereby consents to
the increase in the number of members of the Board of Directors of the
Corporation from seven (7) to nine (9) in connection with the
Acquisition.

 

(c)           Each of the Holders hereby consents to
the formation of a Delaware corporation (“Holdings”) as a wholly owned
subsidiary of the Company and the contribution to 

 

3

 

Holdings of the
capital stock of the subsidiaries of the Company directly owned by the Company.

 

(d)           Each of the Holders hereby agrees to take
all action within its power (including, but not limited to, (i) attending
all stockholder meetings of the Corporation for the purposes of ensuring that a
quorum is obtained and (ii) voting all shares of Common Stock and Series B
Preferred Stock owned or held by such Holder at any stockholder meeting of the
Corporation or, if under applicable law stockholders of the Corporation are
permitted to take action by written resolution or consent in lieu of a meeting,
executing any written resolution or consent with respect to all voting shares
of Common Stock and Series B Preferred Stock owned or held by such Holder)
to cause the nominees of Pegasus, which shall not exceed two nominees, as
directors of the Company nominated in accordance with the definitive agreement
for the Acquisition (the “Director Nominees”) to be elected or appointed as
members of the board of directors of the Corporation at each of the annual
meetings of stockholders of the Corporation to be held in 2010 and 2011
following the closing date of the Acquisition. 
In addition, each of the Holders hereby agrees to vote all shares of
Common Stock and Series B Preferred Stock owned or held by such Holder and
that such Holder is entitled to vote against any resolution that may be
proposed at any such meeting to remove any Director Nominee that is serving as
a member of the board of directors of the Corporation, unless Pegasus otherwise
requests in writing.

 

(e)           The waivers and consents specified in Section 4(a)(i),
4(b) and 4(d) shall only be effective upon, and are conditioned upon,
the consummation of the Acquisition.  The
waiver and consent set forth in Section 4(a)(ii) shall only be
effective upon, and are conditioned upon, the consummation of either the
Acquisition or the Public Offering. The
waiver and consent in Section 4(c) shall only be effective upon, and
are conditioned upon, the consummation of either the Acquisition or an offering
of senior secured notes by Holdings pursuant to Rule 144A under the
Securities Act, the proceeds of which are used to pay or are placed in escrow
to pay the cash portion of the purchase price of the Acquisition; and provided
that if the Acquisition does not occur on or before February 15, 2010, the
Company shall promptly merge Holding into the Company.

 

5.             Post-Closing Covenant.  In the event
the Public Offering is consummated prior to the consummation of the Acquisition,
if the Acquisition is thereafter consummated, (a) the Series C
Certificate (as filed with the Secretary of State of the State of Delaware)
shall be amended substantially simultaneously with the consummation of the
Acquisition, as necessary, to change, retroactively to the date of issuance of
the Series C Preferred Stock, the dividend rate to the HY Rate (as defined
in footnote 1  to the Series C
Certificate attached as Exhibit 2 to this Agreement), (ii) to change
the date in Section 1(a) of the Series C Certificate in
accordance with the principles set forth in footnote 2 to the Series C
Certificate attached as Exhibit 2 to this Agreement and (iii) to
adjust the redemption date specified in Section 1(c) of the Series C
Certificate in accordance with the principles set forth in footnote 3 to the Series C
Certificate attached as Exhibit 2 to this Agreement and (b) the
Amendment (as filed with the Secretary of State of the State of Delaware) shall
be amended substantially simultaneously with the consummation of the
Acquisition, as necessary, to (i) change the dates in Section 1(a)(i) of
the Amendment in accordance with the principles set forth in footnotes 1 and 2,
respectively, in the Amendment set forth as Exhibit 1 to this Agreement
and (ii) to change the date in Section 1(c) of the Amendment in
accordance with the principles set forth in footnote 3 to the Amendment set 

 

4

 

forth as Exhibit 1
to this Agreement.  All of the parties
hereto acknowledge, agree and consent to the Corporation making the amendments
and changes referred to in this Section 5, and the Corporation represents
and warrants that it has duly authorized and approved the making of such
amendments and changes.

 

6.             The Company represents and warrants to the Holders
that:

 

(a)           Due Organization; Power and Authority. 
The Company and each domestic subsidiary of the Company (a) is a
corporation or limited partnership duly incorporated or formed, as the case may
be, validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization, (b) is duly qualified as a foreign
corporation or extra provincial partnership or a foreign partnership, as the
case may be, to transact business and is in good standing in each jurisdiction
in which such qualification is required, (c) has full corporate or
partnership, as he case may be, power and authority to own, lease and operate
its properties and to conduct its businesses as they are currently conducted,
and (d) has full corporate or partnership, as the case may be, power and
authority to enter into and perform its obligations under this Agreement.

 

(b)           As of the date hereof (i) the
authorized number of shares of Capital Stock of the Company will consists of
100,000,000 common shares (the “Common Stock”), of which 10,822,192 shares have
been issued and are outstanding, (ii) 2,500,000 preferred shares, of which
only (x) shares of Series B Preferred Stock previously issued to
Avista and Levant have been issued and are outstanding, and (iii) no
shares of any class of he capital stock of the Company will be held by the
Company in its treasury of by the Company’s Subsidiaries.  All of the issued and outstanding shares of
capital stock of the Corporation shall have been duly authorized and validly
issued, fully paid and nonassessable and shall be free of preemptive rights
except as set forth in the Certificate of Designation.  Upon the Closing the shares of Series C
Preferred Stock and the Avista Shares will be duly authorized, validly issued,
fully paid and nonassessable.  Upon
issuance of the Series C Preferred Stock to the Purchasers, except as set
forth on Schedule 5, there shall be no securities of he Corporation or any of
its subsidiaries that will be convertible into or exchangeable for shares of
any capital stock of the Corporation or any of its subsidiaries, and no
options, calls, subscriptions, convertible securities, or other rights,
agreements or commitments which will obligate the Corporation or any of its
subsidiaries to issue, transfer or sell any shares of capital stock of, or
other interests in, the Corporation or any of its subsidiaries.  Except as set forth on Schedule 5,
upon consummation of the Closing, there shall be no outstanding obligations of
the Corporation or any of its subsidiaries to repurchase, redeem or otherwise
acquire any shares of capital stock of the Corporation or any of its
Subsidiaries and none of the Corporation or any of its subsidiaries shall have
any awards or options outstanding under any stock option plans or agreements or
any other outstanding stock-related awards. 
As of the Closing Date and immediately after the Closing, except as set
forth on Schedule 5, none of the Corporation or any of its subsidiaries
will have any obligation to issue, transfer or sell any shares of capital stock
of the Corporation or its subsidiaries. 
Except as set forth on Schedule 5, there are no voting trusts or other
agreements or understandings to which the Corporation or any of its
subsidiaries is a party with respect to the holding, voting or disposing of
capital stock of the Corporation or any of its subsidiaries.  Except as set forth on Schedule 5,
none of the Corporation or any of its subsidiaries has any outstanding bonds,
debentures, notes or other obligations or other securities that entitle the
holders thereof to vote 

 

5

 

with the
shareholders of the Corporation or any of its subsidiaries on any matter or
which are convertible into or exercisable for securities having such a right to
vote.

 

7.             Avista represents and warrants to the Corporation as
of the date hereof as follows:

 

(a)           Avista is acquiring the Series C
Preferred Stock and the Avista Common Stock for its own account, for investment
purposes only and not with a view to any distribution thereof within the
meaning of the Securities Act of 1933, as amended (the “Securities Act”).

 

(b)           Avista understands that the Series C
Preferred Stock and the Avista Common Stock have not been and, except as
provided in the Registration Rights Agreement, will not be registered under the
Securities Act or any state or other securities law, that the Series C
Preferred Stock and the Avista Common Stock are being issued by the Company in
transactions exempt from the registration requirements of the Securities Act,
that it must hold the Series C Preferred Stock indefinitely and not offer
or sell the Series C Preferred Stock or the Avista Common Stock except
pursuant to effective registration statements under the Securities Act or
pursuant to applicable exemptions from registration under the Securities Act
and in compliance with applicable state securities laws.

 

(c)           Avista further understands that the
exemption from registration afforded by Rule 144 (the provisions of which
are known to Avista) promulgated under the Securities Act depends on the
satisfaction of various conditions, and that, if applicable, Rule 144 may
afford the basis for sales only in limited amounts.

 

(d)           Avista did not employ any broker or
finder in connection with the transactions contemplated in this Agreement and
no fees or commissions are payable to Avista except as otherwise provided for
in this Agreement.

 

(e)           Avista is an Accredited Investor (as
defined under the rules promulgated under the Securities Act).

 

(f)            Avista has been furnished with or has had
access to the information it has requested from the Corporation and its
subsidiaries and has had an opportunity to discuss with the management of the
Corporation and its subsidiaries the business and financial affairs of the
Corporation and its Subsidiaries, and has generally such knowledge and
experience in business and financial matters and with respect to investments in
securities of privately held companies so as to enable it to understand and
evaluate the risks of such investment and form of investment decision with
respect thereto, and is capable of bearing the economic risks of such
investment.

 

8.             Avista and Levant, severally and not jointly, each
represents and warrants as follows:  The
execution, delivery and performance of this Agreement to which such Holder is a
party within its corporate or limited partnership, as the case may be, power
and authority and have been duly authorized by all necessary action of such
Holder, do not conflict with or result in a breach of or violate any such
Holder’s governing documents or any contract to which such Holder is a party or
by which its assets are bound or any applicable laws and constitute legal,
valid and binding agreements of such Holder enforceable against it in
accordance with their respective terms.

 

6

 

9.             At such time as the Avista Purchasers do not hold of
record a sufficient number of shares of Series B Preferred Stock (without
the vote of any other stockholder) to elect a director to the Board of
Directors of the Company to represent the holders of Series B Preferred
Stock as a separate class pursuant to the terms of the Certificate of
Designation, the Board of Directors shall nominate and slate for election at
each of the Company’s annual meetings of stockholders one director designated
by Avista if Avista holds a number of shares of Common Stock and/or Series B
Preferred Stock (calculated assuming the conversion of any Series B
Preferred Stock held by the Avista Purchasers into Common Stock) equal to or
greater than (i) 10% of the then outstanding Common Stock or (ii) 25%
of the Common Stock the Avista Purchasers are entitled to upon conversion of
the Series B Preferred Stock purchased by the Avista Purchasers.

 

10.           No later than (90) days following the Closing, the
Company and the Holders will mutually agree on an allocation of the purchase
price between the Series C Preferred Stock and the Avista Common Stock
issued to the Holders pursuant to the terms of this Agreement.

 

11.           Expenses.  The Corporation will, following the
execution and delivery this Agreement, after presentation of a summary invoice
therefore, promptly reimburse the Holders for all expenses (including attorney’s
and accountant’s fees and disbursements) incurred by the Holders in connection
with the transactions contemplated by this Agreement and in connection with any
amendments, waivers or consents under or in respect of this Agreement.

 

12.           Notices.  Except as otherwise expressly provided
herein, all notices and other communications shall have been duly given and
shall be effective (a) when delivered, b) when transmitted via telecopy
(or other facsimile device) to the number set out below if the sender on the
same day sends a confirming copy of such notice by a recognized overnight
delivery service (charges prepaid), (c) the day following the day (except
if not a business day then the next business day) on which the same has been
delivered prepaid to a reputable national overnight air courier service or (d) the
third business day following the day on which the same is sent by certified or
registered mail, postage prepaid, in each case to the respective parties at the
address set forth on the signature pages hereto, or at such other address as
such party may specify by written notice to the other party hereto.

 

13.           Benefit of Agreement and Assignments.

 

(a)           Nothing in this Agreement, express or implied, shall
give to any person other than the parties hereto and Pegasus any benefit or any
legal or equitable right, remedy or claim under this Agreement, it being
expressly agreed by the parties hereto that Pegasus is a third-party
beneficiary solely to enable it to enforce the provisions of Sections 4(d) and
15 hereof in accordance with their respective terms and for no other
purpose.  The parties hereto acknowledge
that the agreement of the Holders pursuant to Section 4(d) is a
material part of the consideration for the agreements of Pegasus in the
definitive agreement for the Acquisition.

 

(b)           No party hereto may assign or otherwise transfer any
of its rights or obligations hereunder without the prior written consent of the
other parties hereto.

 

14.           No Waiver Remedies Cumulative.     No failure or delay on the part of any party hereto in
exercising any right, power or privilege hereunder and no course of dealing
between the 

 

7

 

Corporation and
any other party shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege hereunder or thereunder.  The
rights and remedies provided herein are cumulative and not exclusive of any
rights or remedies that the parties would otherwise have.  No notice to or demand on the Corporation in
any case shall entitle the Corporation to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the
other parties hereto to any other or further action in any circumstances
without notice or demand.

 

15.           Amendments, Waivers and Consents. 
This Agreement may be amended, and the observance of any term hereof may
be waived (either retroactively or prospectively), with the written consent of
the Corporation and each of the Holders; provided that any amendment or waiver
of Section 4(d), Section 13(a) or this Section 15 shall
also require the written consent of Pegasus. 
No amendment or waiver of this Agreement will extend to or affect any
obligation, covenant, agreement not expressly amended or waived or thereby
impair any right consequent thereon.  As
used herein, the term this “Agreement” and references thereto shall mean this
Agreement, as it may from time to time be amended, supplemented or modified.

 

16.           Counterparts.  This Agreement
may be executed in any number of counterparts, each of which when so executed
and delivered shall be an original, but all of which shall constitute one and
the same instrument.  It shall not be necessary
in making proof of this Agreement to produce or account for more than one such
counterpart.  Each counterpart may
consist of a number of copies hereof, each signed by less than all, but
together signed by all, of the parties hereto. 
Signatures transmitted via telecopy (or other facsimile device) will be
accepted as original signatures.

 

17.           Headings.  The headings
of the sections and subsections hereof are provided for convenience only and
shall not in any way affect the meaning or construction of any provision of
this Agreement.

 

18.           Governing Law; Submission to Jurisdiction; Venue.

 

(a)             THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED
BY, THE LAW OF THE STATE OF NEW YORK, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE
LAW OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A
JURISDICTION OTHER THAN SUCH STATE.

 

(b)             If any action, proceeding or litigation
shall be brought by any party hereto in order to enforce any right or remedy
under this Agreement the parties hereby consents and will submit, to the
jurisdiction of any stale or federal court of competent jurisdiction sitting
within the area comprising the Southern District of New York on the date of
this Agreement.  The Corporation hereby
irrevocably waives any objection, including, but not limited to, any objection
to the laying of venue or based on the grounds of forum non conveniens, which
it may now or hereafter have to the bringing of any such action, proceeding, or
litigation in such jurisdiction.  The
Corporation further agrees that it shall not bring any action, proceeding or
litigation arising out of this Agreement in any state or federal court other
than any state or 

 

8

 

federal court of
competent jurisdiction sitting within the area comprising the Southern District
of New York on the date of this Agreement

 

(c)             The Corporation irrevocably consents to
the service of process of any of the aforementioned courts in any such action,
proceeding or litigation by the mailing of copies thereof by registered or
certified mail, postage prepaid, to the Corporation at its address set forth on
its signature page hereto, such service to become effective ten (10) days
after such mailing.

 

(d)             Nothing herein shall affect the right of
any Holder to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against the Corporation in any other
jurisdiction.  If service of process is
made on a designated agent it should be made by either (i) personal
delivery or (ii) mailing a copy of summons and complaint to the agent via
registered or certified mail, return receipt requested.

 

(e)             THE CORPORATION AND EACH HOLDER HEREBY
WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
ACTION, PROCEEDING OR LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH, THIS AGREEMENT.

 

19.           Entirety.  This Agreement represents the entire
agreement of the parties hereto and thereto, and supersedes all prior
agreements and understandings, oral or written, if any, relating to
transactions contemplated herein or therein.

 

20.           Incorporation.  All Exhibits attached hereto are
incorporated as part of this Agreement as if fully set forth herein.

 

21.           Non-Recourse.  Except as explicitly provided in this
Agreement, no past, present or future director, officer, employee,
incorporator, member, partner, stockholder, affiliate, agent) attorney or
representative of the Corporation or the Holders shall in such capacity have
any liability for any obligations or liabilities of the Corporation or any
Holder, respectively, under this Agreement or for any claim (under tort or
contract law) based on, in respective of, or by reason of, the transactions
contemplated hereby.

 

22.           Further Assurances.  Each of the parties hereto shall, upon
reasonable request of any other party hereto, do, make and execute all such
documents, acts, matters and things as may be reasonably required in order to
give effect to the transactions contemplated hereby.

 

9

 

IN WITNESS
WHEREOF, each of the parties hereto has caused a counterpart of this agreement
to be duly executed and delivered as of the date first above written.

 

 

	
   

  	
  GEOKINETICS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott McCurdy

  
	
   

  	
   

  	
  Name: Scott McCurdy

  
	
   

  	
   

  	
  Title: Vice President
  & CFO

  
	
   

  	
   

  
	
   

  	
  1500 Citywest Blvd #800

  
	
   

  	
  Houston, Texas
  77042-2380

  
	
   

  	
  Telephone: (713) 850-7600

  

 

Signature page to the Amendment
and Exchange Agreement

 

 

	
   

  	
  AVISTA CAPITAL
  PARTNERS, LP.

  
	
   

  	
   

  	
   

  
	
   

  	
  By: AVISTA CAPITAL
  PARTNERS GP, LLC, its general partners

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ben Silbert

  
	
   

  	
   

  	
  Name: Ben Silbert

  
	
   

  	
   

  	
  Title: General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
  AVISTA CAPITAL PARTNERS
  (OFFSHORE), L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: AVISTA CAPITAL
  PARTNERS GP, LLC, its general partners

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ben Silbert

  
	
   

  	
   

  	
  Name: Ben Silbert

  
	
   

  	
   

  	
  Title: General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address for each of the
  Avista Holders:

  
	
   

  	
   

  
	
   

  	
  65 E. 55th St., 18th Floor

  
	
   

  	
  New York, NY 10022

  
	
   

  	
  Attn: General Counsel

  
	
   

  	
  Telephone: (212)
  593-6900

  

 

Signature page to the Amendment
and Exchange Agreement

 

 

	
   

  	
  LEVANT AMERICA S.A.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth H. Harman,
  Jr.

  
	
   

  	
   

  	
  Name: Kenneth H. Harman, Jr.

  
	
   

  	
   

  	
  Title: Attorney-in-Fact

  
	
   

  	
   

  	
   

  
	
   

  	
  c/o Colonial Navigation
  Company, Inc.

  
	
   

  	
  750 Lexington Ave. - 26th Floor

  
	
   

  	
  New York, NY 10022

  
	
   

  	
  Telephone:

  	
  212-319-2828

  
				

 

Signature page to the Amendment
and Exchange Agreement

 

 

EXHIBIT 1

 

THIRD AMENDED

 

CERTIFICATE OF DESIGNATION OF

 

SERIES B SENIOR CONVERTIBLE PREFERRED STOCK

 

OF

 

GEOKINETICS INC.

 

PURSUANT TO SECTION 151(g) OF THE

 

GENERAL CORPORATION LAW OF THE STATE OF DELAWARE

 

Geokinetics Inc (the “Corporation”),
a corporation organized and existing under the laws of the State of Delaware,
hereby certifies that:

 

ONE:                  The Certificate
of Designation of Series B Senior Convertible Preferred Stock of the
Corporation was filed with the Secretary of State of the State of Delaware on September 8,
2006.

 

TWO:             The Certificate of
Designation of Series B Senior Convertible Preferred Stock of the
Corporation was amended by that certain Amended Certificate of Designation of Series B
Senior Convertible Preferred Stock of the Corporation, filed with the Secretary
of State of the State of Delaware on July 28, 2008 and which provided
that: (i) the Series B Senior Convertible Preferred Stock of the
Corporation be designated Series B-1 Senior Convertible Preferred Stock
(the “Series B-1 Preferred Stock”) and (ii) a new series of
preferred stock of the Corporation, par value $10.00 per share, be created out
of the authorized but unissued shares of capital stock of the Corporation and
be authorized to be issued, with such series to be designated Series B-2
Senior Convertible Preferred Stock (the “Series B-2 Preferred Stock”),
and consist of 350,000 shares, par value $10.00 per share, of which the powers,
preferences and relative, participating, optional and other rights, and the
qualifications, limitations, and restrictions of the Series B-1 Preferred
Stock and the Series B-2 Preferred Stock (collectively, (the “Series B
Preferred Stock”), shall be, in addition to those set forth in the
Corporation’s Certificate of Incorporation, all in accordance with the
provisions of Section 151(g) of the General Corporation Law of the
State of Delaware, as set forth therein.

 

THREE:    The Certificate of
Designation of Series B Senior Convertible Preferred Stock of the
Corporation was further amended by the Second Amended Certificate of
Designation of Series B Senior Convertible Preferred Stock of the
Corporation, filed with the Secretary of State of the State of Delaware on February 23,
2009.

 

FOUR:          Pursuant to the authority
expressly granted to and vested in the Board of Directors of the Corporation by
Article FOURTH of the Corporation’s Certificate of Incorporation (the “Certificate
of Incorporation”), the Board of Directors for the Corporation, at a
meeting duly and properly called and held                               2009,
duly adopted a resolution 

 

 

providing that the Second
Amended Certificate of Designation of Series B Senior Convertible
Preferred Stock of the Corporation be amended in its entirety, as follows:

 

FIVE:                 The shares of Preferred
Stock previously designated “Series B-1 Preferred Stock” shall for all
purposes of this Third Amended Certificate of Series B Convertible
Preferred Stock of the Corporation shall be renamed and designated “Series B
Preferred Stock.”

 

SIX:                       The share of
Preferred Stock previously designated “Series B-2 Preferred Stock” shall
be cancelled.

 

(1)                                  Series B Preferred Stock.

 

(a)                                  Dividends.

 

(i)                                     The holders of Series B Preferred
Stock, prior and in preference to any declaration or payment of any dividend on
any class or series of capital stock of this Corporation, shall be entitled to
receive cumulative dividends at the applicable Dividend Rate (as defined
below).  For purposes of this Section 1(a)(i),
“Dividend Rate” shall mean 9.75% per annum, compounded quarterly, of the
Original Issue Price (defined in Section 1(b)(i) below) for each
share of Series B Preferred Stock. 
At the option of the Corporation, all or any portion of dividends
payable on shares of Series B Preferred Stock on any quarterly dividend
payment date through and including                                (1) may
be paid in additional shares of Series B Stock, instead of cash.  The value of each share of Series B
Preferred Stock paid in lieu of cash shall be equal to the Original Issue
Price.  After                        (2),
all dividends shall be paid in cash when, and if declared. All unpaid dividends
on Series B Preferred Stock shall be cumulative and shall accrue,
compounding annually, regardless of whether or not the Corporation shall have
funds legally available for the payment of such dividends.

 

(ii)                                  After payment of the dividends provided
for in Section 1(a)(i), any additional dividends or distributions shall be
distributed among all holders of Common Stock and, Series B Preferred
Stock, and other preferred securities which are convertible into shares of
Common Stock, in proportion to the number of shares of Common Stock that would
be held by each such holder if all shares of Series B Preferred Stock and
other preferred securities were converted to Common Stock at the then-effective
conversion rate.

 

(b)                                 Liquidation Preference.

 

(i)                                     The holders of Series B Preferred
Stock, in the event of any Liquidation Event (as defined below), either
voluntary or involuntary, shall be entitled to receive, 

 

(1) Date to be October 31, 2011, unless the
Acquisition is consummated in which event the date shall be the earlier of (a) the
maturity date of the HY Securities plus one year and one day and (b) March 31,
2016.

 

(2) Date to be October 31, 2011,
unless the Acquisition is consummated in which event the date shall be the
earlier of (a) the maturity date of the HY Securities plus one year and
one day and (b) March 31, 2016.

 

 

prior and in preference to the distribution of any
proceeds of such Liquidation Event (the “Proceeds”) to the holders of
Common Stock and other preferred securities (but pari passu
to any holder of Series C Preferred Stock), an amount per share (the “Liquidation
Preference Amount”) equal to (A) the sum of the Original Issue Price
(as defined below) for the Series B Preferred Stock, plus (B) any
accrued but unpaid dividends, which have been accrued to the date of payment.
In case the net assets of the Corporation legally available therefor are
insufficient to permit the payment upon all outstanding shares of Series B
Preferred Stock of the full preferential amount to which the holders of such
shares are entitled, then such net assets shall be distributed ratably upon
outstanding shares of Series B Preferred Stock in proportion to the full
preferential amount to which each such share is entitled. For purposes hereof, “Original
Issue Price” shall mean $250.00 per share for each share of Series B
Preferred Stock (as adjusted for any stock splits, stock dividends,
combinations, subdivisions, recapitalizations or the like with respect to the Series B
Preferred Stock).

 

(ii)                                  After the payment of the Liquidation
Preference Amount with respect to each share of Series B Preferred Stock,
the holders of Series B Preferred Stock will have the right following a
Liquidation Event to receive an additional distribution for each share of Series B
Preferred Stock equal to the excess, if any, of (i) the aggregate amount
distributable with respect to each share of Common Stock following the
Liquidation Event multiplied times the number of shares of Common Stock into
which each share of Series B Preferred Stock is convertible at the
Conversion Rate effective at the time of the Liquidation Event over (ii) the
Liquidation Preference Amount.  As a
result, the total amount distributed with respect to each share of Series B
Preferred Stock following a Liquidation Event will be not less than the amount
determined as if all shares of Series B Preferred Stock had been converted
to Common Stock at the conversion rate applicable at the time of the
Liquidation Event.  In view of this
additional distribution right, the Corporation and the holders of the Series B
Preferred Stock expect that the Series B Preferred Stock will not be
treated as “preferred stock” for federal income tax purposes under Treasury
Regulation § 1.305-5(a).

 

(iii)                               For purposes of this Section 1(b), a “Liquidation
Event” shall include (A) the sale, transfer or other disposition of
all or substantially all of the Corporation’s assets, (B) the merger or
consolidation of the Corporation with or into another entity (except a merger
or consolidation in which the holders of capital stock of the Corporation
immediately prior to such merger or consolidation continue to hold at least 50%
of the voting power of the capital stock of the Corporation or the surviving or
acquiring entity following such merger or consolidation), (C) the transfer
(whether by merger, consolidation, exchange, reorganization or otherwise), in
one transaction or a series of related transactions, to a person or group of
affiliated persons (other than Avista Capital Partners, L.P. and its
affiliates), of the Corporation’s equity securities if, after such transfer,
such person or group of affiliated persons would hold 50% or more of the
outstanding voting stock of the Corporation (or the surviving or acquiring
entity) or (D) a liquidation, dissolution or winding up of the
Corporation; provided, however, that a transaction shall not constitute a
Liquidation Event if its sole purpose is to change the state of the Corporation’s
incorporation or to create a holding company that will be owned in
substantially the same proportions by the persons who held the Corporation’s
securities immediately prior to such transaction. The treatment of any
particular transaction or series of related transactions as a Liquidation Event
hereunder may be waived by the vote or written consent of the holders of a
majority of the outstanding Series B Preferred Stock (voting on an as
converted basis).

 

 

(iv)                              In any Liquidation Event, if Proceeds
received by the Corporation or its stockholders are other than cash, their
value will be deemed their fair market value. The determination of such fair
market value shall be made by the Board of Directors of the Corporation or as
otherwise may be set forth in the definitive agreements governing such
Liquidation Event.

 

(c)                                  Redemption Rights.

 

(i)                                     If, at any time after                               (3),
the holders of not less than a majority of the shares of Series Preferred
Stock then outstanding deliver written notice to the Corporation of such
holders’ desire to have the Series B Preferred Stock redeemed, all
outstanding shares of Series B Preferred Stock, if not previously
converted pursuant to Section 1(d), shall be redeemed by the Corporation
on a date which is not more than 90 days after the date on which such written
notice was given to the Corporation by the holders of the Series B
Preferred Stock.  Each share of Series B
Preferred Stock to be redeemed hereunder shall be redeemed by payment by the
Corporation in cash of the Redemption Price (as defined below). For purposes
hereof, the term “Redemption Price” shall mean, with respect to each
share of Series B Preferred Stock, an amount equal to the Liquidation
Preference Amount.

 

(ii)                                  Any redemption pursuant to Sections 1(c)(i) above
shall be preceded by written notice from the Corporation to each holder of Series B
Preferred Stock stating the date fixed for redemption, the Redemption Price and
the place at which holders of Series B Preferred Stock may obtain payment
of the Redemption Price upon surrender of their respective stock certificates.

 

(iii)                               All shares of Series B Preferred Stock redeemed,
otherwise acquired or returned (as a result of conversion or otherwise) by the
Corporation shall immediately be canceled and shall not be reissued.

 

(d)                                 Conversion. The holders of the Series B Preferred Stock
shall have conversion rights as follows (the “Conversion Rights”):

 

(i)                                     Right to Convert. Each share of Series B Preferred
Stock shall be convertible, at the option of the holder thereof, at any time
after the date of issuance of such share, at the office of the Corporation or
any transfer agent for such stock, into such number of fully paid and
nonassessable shares of Common Stock as is determined by dividing the
Liquidation Preference Amount for the Series B Preferred Stock by the
applicable Conversion Price (as defined below) for the Series B Preferred
Stock (the conversion rate for Series B Preferred Stock into Common Stock
is referred to herein as the “Conversion Rate”), determined as hereafter
provided, in effect on the date the certificate is surrendered for conversion.
The “Conversion Price” per share for Series B Preferred Stock shall
be $20.00 (which amount takes into account the 1-for-10 stock split of the
Corporation effective as of November 3, 2006); 

 

(3) Date to be March 31, 2014, unless the
Acquisition is consummated in which event the date shall be the earlier of (a) the
maturity date of the HY Securities plus one year and one day and (b) March 31,
2016.

 

 

provided, however, that the Conversion Price for the Series B
Preferred Stock shall be subject to adjustment as set forth in subsection
1(e)(iv).

 

(ii)                                  Corporation Conversion Election. At the election of the Corporation,
each share of Series B Preferred Stock shall be converted into shares of
Common Stock at the Conversion Rate at the time in effect for Series B
Preferred Stock immediately upon the Corporation’s sale of its Common Stock in
an underwritten public offering pursuant to an effective registration statement
under the Securities Act of 1933, as amended (the “Securities Act”),
covering the offer and sale of Common Stock (A) at an offering price per
share of not less than $35.00 (as adjusted for any stock splits, stock dividends,
combinations, subdivisions or the like), (B) which results in net proceeds
to the Corporation and the selling stockholders, if any, of not less than
$75,000,000, and (C) after which the Common Stock is listed on the NYSE,
AMEX or the NASDAQ National Market (a “Qualified Public Offering”).

 

(iii)                               Mechanics of Conversion. Before any holder of Series B Preferred Stock
shall be entitled to voluntarily convert the same into shares of Common Stock,
such holder shall surrender the certificate or certificates therefore, duly
endorsed, at the office of the Corporation or of any transfer agent for the Series B
Preferred Stock, and shall give written notice to the Corporation at its
principal corporate office, of the election to convert the same and shall state
therein the name or names in which the certificate or certificates for shares
of Common Stock are to be issued. The Corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Series B
Preferred Stock, or to the nominee or nominees of such holder, a certificate or
certificates for the number of shares of Common Stock to which such holder
shall be entitled as aforesaid. Such conversion shall be deemed to have been
made immediately prior to the close of business on the date of such surrender
of the shares of Series B Preferred Stock to be converted, and the person
or persons entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders of
such shares of Common Stock as of such date. If the conversion is in connection
with an underwritten offering of securities registered pursuant to the
Securities Act of 1933, as amended, the conversion may, at the option of any
holder tendering Series B Preferred Stock for conversion, be conditioned
upon the closing with the underwriters of the sale of securities pursuant to
such offering, in which event the persons entitled to receive the Common Stock
upon conversion of the Series B Preferred Stock shall not be deemed to
have converted such Series B Preferred Stock until immediately prior to
the closing of such sale of securities. If the conversion is in connection with
automatic conversion provisions of subsection 1(d)(ii) above, such
conversion shall be deemed to have been made on the conversion date described
in the stockholder consent approving such conversion, and the persons entitled
to receive shares of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holders of such shares of Common Stock
as of such date.

 

(iv)                              Conversion Price Adjustments of Series B
Preferred Stock for Certain Dilutive Issuances, Splits and Combinations. The Conversion Price of the Series B
Preferred Stock shall be subject to adjustment from time to time as follows:

 

 

(A)                              Conversion Price Adjustments.

 

1.               If the Corporation shall issue, on or
after the date upon which this Third Amended Certificate of Designation is
accepted for filing by the Secretary of State of the State of Delaware (the “Filing
Date”), any Additional Stock (as defined below) for a consideration per
share less than the Conversion Price applicable to the Series B Preferred
Stock in effect immediately prior to the issuance of such Additional Stock, and
if the aggregate dollar amount of (A) all previous issuances of Additional
Stock since the Filing Date and (B) all issuances of Additional Stock as
consideration in the Acquisition or pursuant to the Public Offering, as such
terms are defined in that certain Amended and Exchange Agreement dated December       ,
2009, by and among the Corporation, Avista Capital Partners, L.P., Avista
Capital Partners (Offshore), L.P. and Levant America S.A., is less than
$50,000,000 (determined by aggregating all issuances of Additional Stock made
after the Filing Date and as consideration in the Acquisition or pursuant to
the Public Offering) the Conversion Price for the Series B Preferred Stock
in effect immediately prior to each such issuance shall forthwith be adjusted
to a price equal to the per share consideration paid or given for such
Additional Stock; provided, however, if the Corporation shall
issue, on or after the Filing Date, any Additional Stock after the aggregate
amount of previous issuances made after the Filing Date are in excess of
$50,000,000 (determined by aggregating all previous issuances of Additional
Stock made after the Filing Date and as consideration in the Acquisition or
pursuant to the Public Offering) for a consideration per share less than the
Conversion Price applicable to the Series B Preferred Stock in effect
immediately prior to the issuance of such Additional Stock, the Conversion
Price for the Series B Preferred Stock in effect immediately prior to each
such issuance shall forthwith be adjusted to a price determined by multiplying
such Conversion Price by a fraction, the numerator of which shall be the number
of shares of Common Stock Outstanding (as defined below) immediately prior to
such issuance plus the number of shares of Common Stock that the aggregate consideration
received by the Corporation for such issuance would purchase at such Conversion
Price; and the denominator of which shall be the number of shares of Common
Stock Outstanding (as defined below) immediately prior to such issuance plus
the number of shares of such Additional Stock. 
For purposes of this Section 1(d)(iv)(A), the term “Common Stock
Outstanding” shall mean and include the following: (1) outstanding
Common Stock, (2) Common Stock issuable upon exercise of outstanding stock
options, (3) Common Stock issuable upon exercise of outstanding warrants
to purchase Common Stock, (4) Common Stock issuable upon conversion of the
Series B Preferred Stock, and (5) Common Stock issuable upon the
conversion of any other series or class of equity securities issued after the
date hereof which is convertible into shares of Common Stock.  Shares described in (1) through (3) above
shall be included whether vested or unvested, whether contingent or
non-contingent and whether exercisable or not yet exercisable.

 

2.               Notwithstanding anything to the contrary
set forth in this Certificate of Designation: (x) no adjustment of the
Conversion Price for the Series B Preferred Stock shall be made in respect
of the Acquisition or the Public Offering (as long as the price per share for
shares of Common Stock sold in the Public Offering, net of underwriting
discounts and commissions, equals or exceed $10 per share) and (y) in the
event the price per share for shares of Common Stock sold in the Public
Offering, net of underwriting discounts and commissions, is less than $10 per
share, then the Conversion Price shall be adjusted, upon the consummation of
any such offering, to an amount equal to (i) two 

 

 

multiplied by (ii) the price per share of Common
Stock sold in the Public Offering, net of underwriting discounts and
commissions.

 

3.               No adjustment of the Conversion Price for
the Series B Preferred Stock shall be made in an amount less than one cent
per share, provided that any adjustments that are not required to be made by
reason of this sentence shall be carried forward and shall be either taken into
account in any subsequent adjustment made prior to three (3) years from
the date of the event giving rise to the adjustment being carried forward, or
shall be made at the end of three (3) years from the date of the event
giving rise to the adjustment being carried forward. Except to the limited
extent provided for in subsections 1(d)(iv)(A)(5)(c) and (5)(d), no
adjustment of such Conversion Price pursuant to this subsection 1(d)(iv) shall
have the effect of increasing the Conversion Price above the Conversion Price
in effect immediately prior to such adjustment.

 

4.               In the case of the issuance of Additional
Stock for cash, the consideration shall be deemed to be the amount of cash paid
therefore before deducting any reasonable discounts, commission or other
expenses allowed, paid or incurred by this corporation for any underwriting or
otherwise in connection with the issuance and sale thereof.

 

5.               In the case of the issuance of the
Additional Stock for a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair market thereof as
determined by the Board of Directors irrespective of any accounting treatment.

 

6.               In the case of the issuance of options to
purchase or rights to subscribe for Common Stock, securities by their terms
convertible into or exchangeable for Common Stock or options to purchase or
rights to subscribe for such convertible or exchangeable securities, the
following provisions shall apply for purposes of determining the number of
shares of Additional Stock issued and the consideration paid therefor:

 

a.                                       The aggregate maximum number of shares of
Common Stock deliverable upon exercise (assuming the satisfaction of any
conditions to exercisability, including without limitation, the passage of
time, but without taking into account potential antidilution adjustments) of
such options to purchase or rights to subscribe for Common Stock shall be
deemed to have been issued at the time such options or rights were issued and
for a consideration equal to the consideration (determined in the manner
provided in subsections 1(d)(iv)(A)(3) and (d)(iv)(A)(4)), if any,
received by the Corporation upon the issuance of such options or rights plus
the minimum exercise price provided in such options or rights (without taking
into account potential antidilution adjustments) for the Common Stock covered
thereby.

 

b.                                      The aggregate maximum number of shares of
Common Stock deliverable upon conversion or, or in exchange (assuming the
satisfaction of any conditions to convertibility or exchangeability, including,
without limitation, the passage of time, but without taking into account
potential antidilution adjustments) for, any such convertible or exchangeable
securities or upon the exercise of options to purchase or rights to subscribe
for such convertible or exchangeable securities and subsequent conversion or
exchange thereof shall be deemed to have been issued at the time such securities
were issued or such options or rights were issued and for a consideration equal
to the consideration, if any, received by the Corporation for any such 

 

 

securities and related options or rights (excluding
any cash received on account of accrued interest or accrued dividends), plus
the minimum additional consideration, if any, to be received by the Corporation
(without taking into account potential antidilution adjustments) upon the
conversion or exchange of such securities or the exercise of any related
options or rights (the consideration in each case to be determined in the
manner provided in subsections 1(d)(iv)(A)(3) and 1(d)(iv)(A)(4).

 

c.                                       In the event of any change in the number
of shares of Common Stock deliverable or in the consideration payable to the
Corporation upon exercise of such options or rights or upon conversion of or in
exchange for such convertible or exchangeable shares, the Conversion Price of
the Series B Preferred Stock, to the extent in any way affected by or
computed using such options, rights or securities, shall be recomputed to
reflect such change, but no further adjustment shall be made for the actual
issuance of Common Stock or any payment of such consideration upon the exercise
of any such options or rights or the conversion or exchange of such securities.

 

d.                                      The number of shares of Additional Stock
deemed issued and the consideration deemed paid therefor pursuant to
subsections 1(d)(iv)(A)(5)(a) and (b) shall be appropriately adjusted
to reflect any change, termination or expiration of the type described in
either subsection 1(d)(iv)(A)(5)(a) or (b).

 

(B)                                “Additional Stock” shall mean any
shares of Common Stock issued (or deemed to have been issued pursuant to
subsection 1(d)(iv)(A)(5)) by the Corporation on or after the Filing Date other
than:

 

1.               Shares of Common Stock issued to
employees, directors, officers, consultants and other service providers for the
primary purpose of soliciting or retaining their services pursuant to plans or
agreements approved by this corporation’s Board of Directors;

 

2.               Common Stock issued pursuant to the
conversion or exercise of convertible or exercisable securities outstanding on
the Filing Date;

 

3.               Common Stock or other securities
convertible into shares of Common Stock that are issued with the approval of
the holders of not less than a majority of the then-outstanding shares of Series B-1
Preferred Stock and a majority of the then-outstanding shares of Series B-2
Preferred Stock; and

 

4.               Common Stock issued pursuant to the
conversion of the Series B Preferred Stock.

 

(v)                                 In the event the Corporation should at
any time or from time to time after the Filing Date fix a record date for the
effectuation of a split or subdivision of the outstanding shares of Common
Stock or the determination of holders of Common Stock entitled to receive a
dividend or other distribution payable in additional shares of Common Stock or
other securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly, additional shares of Common Stock (hereinafter
referred to as “Common Stock Equivalents”) without payment of any
consideration by such holder for the additional shares of Common Stock or the
Common Stock Equivalents (including the additional shares of Common Stock
issuable upon conversion or exercise thereof), then, as of such record date (or
the date of 

 

 

such dividend distribution, split or subdivision if no
record date is fixed), the Conversion Price of the Series B Preferred
Stock shall be appropriately decreased so that the number of shares of Common
Stock issuable on conversion of each share of such series shall be increased in
proportion to such increase of the aggregate of shares of Common Stock
outstanding and those issuable with respect to such Common Stock Equivalents.

 

If the number of shares of
Common Stock outstanding at any time after the Filing Date is decreased by a
combination of the outstanding shares of Common Stock, then, following the
record date of such combination, the Conversion Price for the Series B
Preferred Stock shall be appropriately increased so that the number of shares
of Common Stock issuable on conversion of each share of such series shall be
decreased in proportion to such decrease in outstanding shares.

 

(vi)                              Reservation of Common Stock. The Corporation shall reserve and keep
available out of its authorized but unissued Common Stock that number of shares
of Common Stock as shall from time to time be sufficient to effect the full
conversion of all outstanding shares of Series B Preferred Stock.

 

(e)                                  Election and Removal of Directors by Series B
Preferred Stock.  Subject to Section 1(f)(ii), the holders
of record of the shares of Series B Preferred Stock, exclusively, shall be
entitled to nominate and elect one (1) director of the Corporation (the “Series B
Director”).  At each regularly
scheduled meeting of the Corporation’s stockholders which is called for the
purpose of electing members of the Board of Directors, the presence in person
or by proxy of the holders of a majority of the shares of Series B
Preferred Stock then outstanding shall constitute a quorum of the Series B
Preferred Stock for the purpose of electing the director by holders of the Series B
Preferred Stock.  A vacancy in said
directorship filled by the holders of Series B Preferred Stock shall be
filled only by vote or written consent in lieu of a meeting of the holders of
the Series B Preferred Stock.  The Series B
Director may be removed, with our without cause, by the holders of Series B
Preferred Stock in the same manner as such director may be elected hereunder.

 

(f)                                    Voting Rights.

 

(i)                                     Except as otherwise expressly provided
herein or as required by law, the holders of Series B Preferred Stock
shall be entitled to vote on all matters upon which holders of Common Stock have
the right to vote and, with respect to such right to vote, shall be entitled to
notice of any stockholders’ meeting in accordance with the Corporation’s
Bylaws, and shall be entitled to a number of votes equal to the number of
shares of Common Stock into which such shares of Series B Preferred Stock
could then be converted, at the record date for the determination of
stockholders entitled to vote on such matters or, if no such record date is
established, at the date such vote is taken or any written consent of
stockholders is solicited. Except as otherwise expressly provided herein, or to
the extent class or series voting is otherwise required by law or agreement,
the holders of Series B Preferred Stock or Common Stock shall vote
together as a single class and not as separate classes.

 

(ii)                                  So long as at least 125,000 shares of Series B
Preferred Stock remain outstanding, the Corporation shall not, without first
obtaining the approval (by vote or 

 

 

written consent, as provided by law) of not less than a
majority of the then-outstanding shares of the Series B Preferred Stock,
as determined on a fully diluted and as-converted basis:

 

(A)                              Amend the Corporation’s Certificate of
Incorporation or Bylaws in any material respect (other than an amendment to
change the name of the Corporation);

 

(B)                                Declare or pay any dividend or other
distribution upon the Corporation’s capital stock (except dividends payable
solely in shares of Common Stock or Series B or Series C Preferred
Stock in lieu of payment of cash dividends), or purchase, redeem, or otherwise
acquire any shares of the Corporation’s capital stock, except for repurchases,
at cost, of shares of the capital stock of the Corporation (pursuant to rights
held by the Corporation as of the Filing Date) held by the Corporation’s
consultants, directors, officers or employees;

 

(C)                                Sell, lease, assign, transfer or
otherwise convey or otherwise dispose of all or substantially all of the assets
of the Corporation or any of its subsidiaries, or effect any consolidation,
merger or reorganization involving the Corporation or any of its subsidiaries,
or effect any transaction or series of related transactions in which the
Corporation’s stockholders immediately prior to such transaction or
transactions own immediately after such transaction or transactions less than
50% of the voting securities of the surviving corporation or entity (or its
parent);

 

(D)                               Reclassify, reorganize or recapitalize
the Corporation’s outstanding capital stock;

 

(E)                                 Create or issue any class or series of
stock or other security of the Corporation on parity with or having preference
over the Series B Preferred Stock or increase the authorized number of
shares of the Series B Preferred Stock;

 

(F)                                 Effect any transaction with the
management, related parties or other affiliates of the Corporation, or extend
or waive the terms of any such existing transactions, other than (1) issuances
of options, warrants or Common Stock pursuant to an equity incentive plan or
similar arrangement approved by the Board of Directors or (2) any other
transaction with management, related parties or affiliates of the Corporation
on terms approved by a majority of the members of the Board of Directors who
are not, either directly or indirectly, a party to such transaction; and

 

(G)                                Increase or decrease the number of
directors on the Board of Directors of the Corporation.

 

(g)                                 Financial Statements, Reports, etc. 
The Corporation shall furnish to each to each holder of the Series B
Preferred Stock:

 

(i)                                     within 90 days after the end of each
fiscal year, its consolidated balance sheet and related statements of income,
stockholders’ equity and cash flows showing the financial condition of the
Corporation and its consolidated subsidiaries as of the close of such fiscal
year and the results of its operations and the operations of such persons
during such year, together with comparative figures for the immediately
preceding fiscal year, all in reasonable

 

 

detail and prepared in accordance with United States
generally accepted accounting principles (“GAAP”), all audited by UHY,
LLP or other independent public accountants of recognized national standing and
accompanied by an opinion of such accountants (which opinion shall be without
any qualification or exception as to the scope of such audit) to the effect
that such consolidated financial statements fairly present the financial
condition and results of operations of the Corporation and its consolidated subsidiaries
on a consolidated basis in accordance with GAAP;

 

(ii)           within
45 days after the end of each of the first three fiscal quarters of each
fiscal year, its consolidated balance sheet and related statements of income,
stockholders’ equity and cash flows showing the financial condition of the
Corporation and its consolidated subsidiaries as of the close of such fiscal
quarter and the results of its operations and the operations of such persons
during such fiscal quarter and the then elapsed portion of the fiscal year, and
comparative figures for the same periods in the immediately preceding fiscal
year, all certified by one of its chief executive officer, chief financial
officer, any vice president, principal accounting officer, treasurer, assistant
treasurer or controller of such person as fairly presenting in all material
respects the financial condition and results of operations of the Corporation
and its consolidated subsidiaries on a consolidated basis in accordance with
GAAP, subject to normal year-end audit adjustments and the absence of
footnotes.

 

(h)                                 Preemptive Rights. If the Corporation authorizes the
issuance and sale of Additional Stock (as defined in Section 1(d)(iv)(B))
other than pursuant to an underwritten public offering registered under the
Securities Act or for non-cash consideration pursuant to a merger or
consolidation approved by the Board of Directors of the Corporation, the
Corporation shall first offer in writing to sell to each holder of Series B
Preferred Stock a portion of the securities being issued equal to the quotient
obtained by dividing (A) the aggregate number of shares of Series B
Preferred Stock then owned by such holder by (B) the aggregate number of
shares of Series B Preferred Stock then outstanding. If all offered securities
are not subscribed to by such holder of Series B Preferred Stock in
writing delivered to the Corporation within twenty days after the date of
delivery of the Corporation’s original notice to such holder, then the
Corporation shall offer all of such securities for sale to those other holders
of Series B Preferred Stock that did elect to subscribe for such
securities.  If such offer is
oversubscribed by such Series B Preferred Stock holders then the
Corporation shall offer such securities to such Series B Preferred
Stockholders pro rata on the basis of the number of securities previously
subscribed to by such holders pursuant to the formula above.  If the holders of Series B Preferred
Stock do not elect to subscribe for all of such securities in writing delivered
to the Corporation within twenty days after the date of delivery of the
Corporation’s second notice then the Corporation shall be free to offer such
securities to any other person or persons at a price and on terms determined by
the Corporation, provided that such price and terms are no more favorable to
such person or persons than the price and terms on which such securities were
offered to the holders of Series B Preferred Stock. Any securities not
sold by the Corporation within 90 days after the date of the Corporation’s
initial notice to the holders of Series B Preferred Stock hereunder shall
then become subject again to the provisions of this Section 1(h).

 

[SIGNATURES ON FOLLOWING PAGE]

 

 

IN WITNESS WHEREOF,
Geokinetics Inc. has caused this Third Amended Certificate of Designation to
its Certificate of Incorporation to be signed by Richard F. Miles, its
President and Chief Executive Officer, this      day
of                ,
20      .

 

 

	
   

  	
  GEOKINETICS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Richard F. Miles, President
  and

  
	
   

  	
   

  	
  Chief Executive Officer

  

 

 

EXHIBIT 2

 

CERTIFICATE OF DESIGNATION OF

 

SERIES C SENIOR PREFERRED STOCK

 

OF

 

GEOKINETICS INC.

 

PURSUANT TO SECTION 151(g) OF THE

 

GENERAL CORPORATION LAW OF THE STATE OF DELAWARE

 

Geokinetics Inc. (the “Corporation”),
a corporation organized and existing under the laws of the State of Delaware,
hereby certifies that:

 

The undersigned, Richard F.
Miles, President and Chief Executive Officer of Geokinetics Inc., a Delaware
corporation (the “Corporation”), does hereby state and certify that the
Board of Directors for the Corporation, by duly and properly called and held on
                                        ,
duly adopted the following resolution providing for the issuance of a series of
the Corporation’s preferred stock, par value $10.00 per share (the “Preferred
Stock”), and further providing for the designation, powers, preferences and
relative, participating, optional and other rights, and the qualifications,
limitations and restrictions thereof, all in accordance with the provisions of Section 151(g) of
the General Corporation Law of the State of Delaware:

 

RESOLVED, that pursuant to
the authority expressly granted to and vested in the Board of Directors of the
Corporation by Article FOURTH of the Corporation’s Certificate of
Incorporation (the “Certificate of Incorporation”), a series of
Preferred Stock of the Corporation be, and hereby is, created out of the
authorized but unissued shares of capital stock of the Corporation and
authorized to be issued, such series to be designated Series C Senior
Preferred Stock (the “Series C Preferred Stock”), to consist of
450,000 shares, par value $10.00 per share, of which the powers, preferences
and relative, participating, optional and other rights, and the qualifications,
limitations, and restrictions thereof, shall be, in addition to those set forth
in the Corporation’s Certificate of Incorporation, as follows:

 

 

(1)                                  [NOTE:  Avista to elect between PIK and accrual of Series C
Dividend prior to the filing of this Certificate] Series C Preferred Stock.

 

(a)                                  Dividends.             The
holders of Series C Preferred Stock, prior and in preference to any
declaration or payment of any dividend on any class or series of capital stock
of this Corporation, shall be entitled to receive dividends, cumulative and
compounded, at the applicable Dividend Rate (as defined below).  [All dividends will accumulate until paid in
cash, whether or not declared, and whether or not there are any funds legally
available for the payment of such dividends] For purposes of this Section 1(a)(i),
“Dividend Rate” shall mean 12% per annum(1), compounded quarterly
effective as of the date of issuance of the Series C Preferred Stock, of
the Original Issue Price (defined in Section 1(b)(i) below) for each
share of Series C Preferred Stock. 
[At the option of the Corporation, dividends payable on shares of Series C
Preferred Stock on any quarterly dividend payment date through and including
                                      (2),
may be paid in additional shares of Series C Preferred Stock, instead of
cash.  The value of each share of Series C
Preferred Stock paid in lieu of cash shall be equal to the Original Issue
Price.]  After
                                      (2),
all dividends shall be paid in cash on each quarterly dividend payment date.
All unpaid dividends on Series C Preferred Stock shall be cumulative and
shall accrue, compounding quarterly, regardless of whether or not the
Corporation shall have funds legally available for the payment of such dividends.

 

(b)                                 Liquidation Preference.

 

(i)            The
holders of Series C Preferred Stock, in the event of any Liquidation Event
(as defined below), either voluntary or involuntary, shall be entitled to
receive, prior and in preference to the distribution of any proceeds of such
Liquidation Event (the “Proceeds”) to the holders of Common Stock and
other preferred securities (but pari passu to
the holders of Series B Preferred Stock), an amount per share (the “Liquidation
Preference Amount”) equal to (A) the sum of the Original Issue Price
(as defined below) for the Series C Preferred Stock, plus (B) any
accrued but unpaid dividends, which have been accrued to the date of payment.
In case the net assets of the Corporation legally available therefor are
insufficient to permit the payment upon all outstanding shares of Series C
Preferred Stock of the full preferential amount to which the holders of such
shares are entitled, then such net assets shall be distributed ratably upon
outstanding shares of Series C Preferred Stock in proportion to the full
preferential amount to which each such share is entitled. For purposes hereof,
“Original Issue Price” shall mean $250.00 per share for each share of Series C
Preferred Stock (as adjusted for 

 

(1) 12% except that if the  Acquisition is consummated simultaneously
with or prior to the Public Offering, the interest rate shall be the yield on
the high yield securities (the “HY Securities”) issued in connection with the
Acquisition, as of the date of the pricing of such securities, plus (1.5%) (the
“HY Rate”).  If the Public Offering is
consummated prior to the consummation of the Acquisition, then this Certificate
of Designation shall be amended to change the dividend, rate to the HY Rate, as
required under Section 5 of the Amendment and Exchange Agreement.

 

(2) Date to be October 31, 2011, unless the
Acquisition is consummated in which event the date shall be the earlier of (a) the
maturity date of the HY Securities plus one year and one day and (b) March 31,
2016.

 

2

 

any stock splits, stock dividends, combinations,
subdivisions, recapitalizations or the like with respect to the Series C
Preferred Stock).

 

(ii)                                  For purposes of this Section 1(b), a
“Liquidation Event” shall include (A) the sale, transfer or other
disposition of all or substantially all of the Corporation’s assets, (B) the
merger or consolidation of the Corporation with or into another entity (except
a merger or consolidation in which the holders of capital stock of the
Corporation immediately prior to such merger or consolidation continue to hold
at least 50% of the voting power of the capital stock of the Corporation or the
surviving or acquiring entity), (C) the transfer (whether by merger,
consolidation, exchange, reorganization or otherwise), in one transaction or a
series of related transactions, to a person or group of affiliated persons
(other than Avista Capital Partners, L.P. and its affiliates), of the
Corporation’s equity securities if, after such transfer, such person or group
of affiliated persons would hold 50% or more of the outstanding voting stock of
the Corporation (or the surviving or acquiring entity) or (D) a
liquidation, dissolution or winding up of the Corporation; provided, however,
that a transaction shall not constitute a Liquidation Event if its sole purpose
is to change the state of the Corporation’s incorporation or to create a
holding company that will be owned in substantially the same proportions by the
persons who held the Corporation’s securities immediately prior to such
transaction. The treatment of any particular transaction or series of related
transactions as a Liquidation Event hereunder may be waived by the vote or
written consent of the holders of a majority of the outstanding Series C
Preferred Stock (voting on an as converted basis).

 

(iii)                               In any Liquidation Event, if Proceeds
received by the Corporation or its stockholders are other than cash, their
value will be deemed their fair market value. The determination of such fair
market value shall be made by the Board of Directors of the Corporation or as
otherwise may be set forth in the definitive agreements governing such
Liquidation Event.

 

(c)                                  Redemption.

 

The Corporation shall redeem
all outstanding shares of Series C Preferred Stock on [                          ](3).  Each share of Series C Preferred Stock
to be redeemed hereunder shall be redeemed by payment by the Corporation in
cash of the Redemption Price (as defined below). For purposes hereof, the term
“Redemption Price” shall mean, with respect to each share of Series C
Preferred Stock, an amount equal to the Liquidation Preference Amount.

 

(d)                                 Approval Rights. 
So long as at least 100,000 shares of Series C Preferred Stock
remain outstanding, the Corporation shall not, without first obtaining the
approval (by vote or written consent, as provided by law) of not less than a
majority of the then-outstanding shares of the Series C Preferred Stock:

 

(3) The earlier of (a) the maturity date of
the HY Securities plus one year and one day and (b) March 31, 2016.

 

3

 

(A)          Amend
the Corporation’s Certificate of Incorporation or Bylaws in any material
respect (other than an amendment to change the name of the Corporation);

 

(B)           Declare
or pay any dividend or other distribution upon the Corporation’s capital stock
(except dividends payable solely in shares of Common Stock or Series B or Series C
Preferred Stock in lieu of payment of cash dividends), or purchase, redeem, or
otherwise acquire any shares of the Corporation’s capital stock, except for
repurchases, at cost, of shares of the capital stock of the Corporation
(pursuant to rights held by the Corporation as of the Filing Date) held by the
Corporation’s consultants, directors, officers or employees;

 

(C)           Sell,
lease, assign, transfer or otherwise convey or otherwise dispose of all or
substantially all of the assets of the Corporation or any of its subsidiaries,
or effect any consolidation, merger or reorganization involving the Corporation
or any of its subsidiaries, or effect any transaction or series of related
transactions in which the Corporation’s stockholders immediately prior to such
transaction or transactions own immediately after such transaction or
transactions less than 50% of the voting securities of the surviving
corporation or entity (or its parent);

 

(D)          Reclassify,
reorganize or recapitalize the Corporation’s outstanding capital stock;

 

(E)           Create
or issue any class or series of stock or other security of the Corporation on
parity with or having preference over the Series C Preferred Stock or
increase the authorized number of shares of the Series C Preferred Stock;

 

(F)           Effect
any transaction with the management, related parties or other affiliates of the
Corporation, or extend or waive the terms of any such existing transactions,
other than (1) issuances of options, warrants or Common Stock pursuant to
an equity incentive plan or similar arrangement approved by the Board of
Directors or (2) any other transaction with management, related parties or
affiliates of the Corporation on terms approved by a majority of the members of
the Board of Directors who are not, either directly or indirectly, a party to
such transaction; and

 

(G)           Increase
or decrease the number of directors on the Board of Directors of the
Corporation.

 

(e)                                  Financial Statements, Reports, etc. 
The Corporation shall furnish to each to each holder of the Series C
Preferred Stock:

 

(i)                                     within 90 days after the end of each
fiscal year, its consolidated balance sheet and related statements of income,
stockholders’ equity and cash flows showing the financial condition of the
Corporation and its consolidated subsidiaries as of the close of such fiscal
year and the results of its operations and the operations of such persons
during such year, together with comparative figures for the immediately
preceding fiscal year, all in reasonable detail and prepared in accordance with
United States generally accepted accounting principles (“GAAP”), all
audited by UHY, LLP or other independent public accountants of recognized
national standing and accompanied by an opinion of such accountants (which
opinion shall be 

 

4

 

without any qualification or exception as to the scope
of such audit) to the effect that such consolidated financial statements fairly
present the financial condition and results of operations of the Corporation
and its consolidated subsidiaries on a consolidated basis in accordance with
GAAP;

 

(ii)           within
45 days after the end of each of the first three fiscal quarters of each
fiscal year, its consolidated balance sheet and related statements of income,
stockholders’ equity and cash flows showing the financial condition of the
Corporation and its consolidated subsidiaries as of the close of such fiscal
quarter and the results of its operations and the operations of such persons
during such fiscal quarter and the then elapsed portion of the fiscal year, and
comparative figures for the same periods in the immediately preceding fiscal
year, all certified by one of its chief executive officer, chief financial
officer, any vice president, principal accounting officer, treasurer, assistant
treasurer or controller of such person as fairly presenting in all material
respects the financial condition and results of operations of the Corporation
and its consolidated subsidiaries on a consolidated basis in accordance with
GAAP, subject to normal year-end audit adjustments and the absence of
footnotes.

 

[SIGNATURES ON FOLLOWING PAGE]

 

5

 

IN WITNESS WHEREOF,
Geokinetics Inc. has caused this Certificate of Designation to its Certificate
of Incorporation to be signed by Richard F. Miles, its President and Chief
Executive Officer, this         day of
                ,
20        .

 

 

	
   

  	
  GEOKINETICS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Richard F. Miles,
  President and

  
	
   

  	
   

  	
  Chief Executive Officer

  

 

6

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