Document:

ex10-3.htm

    
       

      
 

      

      

      

      SERIES
B-2

      AND

      WARRANT
PURCHASE AGREEMENT

      

       

      among

       

      Geokinetics
Inc.,

       

      Avista
Capital Partners, L.P.

       

      and

       

      Avista
Capital Partners (Offshore), L.P.

       

      Dated as
of July 28, 2008,

       

      

       

      

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      
        	
                TABLE OF CONTENTS

              
	 
      	 
      	 
      
	
                SECTION
      1 DEFINITIONS AND ACCOUNTING TERMS

              	
                1

              
	
                1.1

              	
                Definitions

              	
                1

              
	
                1.2

              	
                Computation
      of Time Periods

              	
                6

              
	
                1.3

              	
                Terms
      Generally

              	
                6

              
	
                1.4

              	
                Accounting
      Terms

              	
                6

              
	
                SECTION
      2. AUTHORIZATION AND ISSUANCE OF PREFERRED STOCK

              	
                6

              
	
                2.1

              	
                Authorization
      of Issue

              	
                6

              
	
                2.2

              	
                Sale
      and Purchase of the Preferred Stock and Warrants

              	
                6

              
	
                2.3

              	
                Closing

              	
                7

              
	
                2.4

              	
                Stock
      Certificates

              	
                7

              
	
                SECTION
      3. CONDITIONS TO CLOSING

              	
                7

              
	
                3.1

              	
                Representations
      and Warranties

              	
                7

              
	
                3.2

              	
                Performance;
      No Default under Other Agreements

              	
                7

              
	
                3.3

              	
                Officer
      Certificate

              	
                7

              
	
                3.4

              	
                Material
      Adverse Effect

              	
                7

              
	
                3.5

              	
                Consents,
      Authorizations and Filings, Etc.

              	
                8

              
	
                3.6

              	
                Payment
      of Expenses

              	
                8

              
	
                3.7

              	
                Legal
      Opinion

              	
                8

              
	
                3.8

              	
                Management
      Rights Agreement

              	
                8

              
	
                SECTION
      4. REPRESENTATIONS AND WARRANTIES

              	
                8

              
	
                4.1

              	
                Due
      Organization; Power and Authority

              	
                8

              
	
                4.2

              	
                Capitalization

              	
                9

              
	
                4.3

              	
                Subsidiaries

              	
                9

              
	
                4.4

              	
                Due
      Authorization, Execution and Delivery

              	
                9

              
	
                4.5

              	
                Non-Contravention;
      Authorizations and Approvals

              	
                10

              
	
                4.6

              	
                Financial
      Statements; Securities Filings

              	
                11

              
	
                4.7

              	
                Absence
      of Undisclosed Liabilities or Events

              	
                12

              
	
                4.8

              	
                No
      Actions or Proceedings

              	
                12

              
	
                4.9

              	
                Title
      to Properties

              	
                13

              
	
                4.10

              	
                Intellectual
      Property Rights

              	
                13

              
	
                4.11

              	
                Taxes

              	
                14

              
	
                4.12

              	
                Employee
      Benefit Plans

              	
                15

              
	
                4.13

              	
                Investment
      Company Act

              	
                16

              
	
                4.14

              	
                Insurance

              	
                16

              
	
                4.15

              	
                Compliance
      with Laws; Permits; Environmental Liabilities

              	
                16

              
	
                4.16

              	
                Labor
      and Employment Matters

              	
                17

              
	
                4.17

              	
                Brokerage
      Fees

              	
                17

              
	
                SECTION
      5. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE
      PURCHASERS

              	
                18

              
	
                5.1

              	
                Purchase
      for Investment

              	
                18

              
	
                5.2

              	
                Access
      to Information

              	
                18

              
	
                5.3

              	
                Corporate
      Power; Authorization; Enforceability

              	
                19

              
	
                5.4

              	
                No
      Actions or Proceedings

              	
                19

              
	
                SECTION
      6. OTHER AFFIRMATIVE COVENANTS

              	
                19

              
	
                6.1

              	
                Director
      Representation

              	
                19

              
	
                6.2

              	
                Allocation
      of Purchase Price

              	
                19

              
	
                SECTION
      7. EXPENSES, INDEMNIFICATION AND CONTRIBUTION; TERMINATION

              	
                19

              
	
                7.1

              	
                Expenses

              	
                19

              
	
                7.2

              	
                Indemnification

              	
                20

              
	
                7.3

              	
                Survival

              	
                20

              
	
                7.4

              	
                Tax
      Treatment of Indemnification Payments

              	
                20

              
	
                SECTION
      8. MISCELLANEOUS

              	
                20

              
	
                8.1

              	
                Notices

              	
                20

              
	
                8.2

              	
                Benefit
      of Agreement and Assignments

              	
                21

              
	
                8.3

              	
                No
      Waiver; Remedies Cumulative

              	
                21

              
	
                8.4

              	
                Amendments,
      Waivers and Consents

              	
                21

              
	
                8.5

              	
                Counterparts

              	
                21

              
	
                8.6

              	
                Headings

              	
                22

              
	
                8.7

              	
                Survival
      of Covenants and Indemnities

              	
                22

              
	
                8.8

              	
                Governing
      Law; Submission to Jurisdiction; Venue

              	
                22

              
	
                8.9

              	
                Severability

              	
                23

              
	
                8.10

              	
                Entirety

              	
                23

              
	
                8.11

              	
                Survival
      of Representations and Warranties

              	
                23

              
	
                8.12

              	
                Construction

              	
                23

              
	
                8.13

              	
                Incorporation

              	
                23

              
	
                8.14

              	
                Non-Recourse

              	
                23

              
	
                8.15

              	
                Further
      Assurances

              	
                23

              

      

      

      
        	
                EXHIBITS:

              	 
      
	
                Exhibit
      A

              	
                Form
      of Certificate of Designation

              
	
                Exhibit
      B

              	
                Form
      of 2008 Warrants

              
	
                Exhibit
      C

              	
                Form
      of Registration Rights Agreement

              
	
                Exhibit
      D

              	
                Form
      of Opinion

              
	
                Exhibit
      E

              	
                Form
      of Management Rights Agreement

              
	 
      	 
      
	
                SCHEDULES:

              	 
      
	
                Schedule
      2.2

              	
                Information
      relating to the Purchasers

              
	
                Schedule
      4.2

              	
                Primary
      and fully diluted ownership of Capital Stock

              
	
                Schedule
      4.3

              	
                Company
      and Subsidiaries

              
	
                Schedule
      4.8

              	
                Actions
      or Proceedings

              
	
                Schedule
      4.10

              	
                Intellectual
      Property

              
	
                Schedule
      4.12(a)

              	
                Employee
      Benefit Plans

              
	
                Schedule
      4.12(b)

              	
                Multi
      Employer Plans

              
	
                Schedule
      4.12(c)

              	
                Retiree
      Health and Life Benefits

              
	
                Schedule
      4.16

              	
                Labor
      Matters

              

      

      

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      SERIES
B-2 AND WARRANT PURCHASE AGREEMENT

       

      This
SERIES B-2 AND WARRANT PURCHASE AGREEMENT (this “Agreement”),
dated as of July 28, 2008, among Geokinetics Inc., a Delaware corporation (the
“Company”),
Avista Capital Partners, L.P., a Delaware limited partnership (“Avista”),
and Avista Capital Partners (Offshore), L.P., a Bermuda limited partnership
(“Avista
Offshore” and together with Avista the “Purchasers”).

       

      WHEREAS,
the Company desires to increase its capital for the purpose of providing funds
for additional equipment purchases and other general corporate
purposes;

       

      WHEREAS,
in connection with the transactions contemplated hereby, the Company desires to
amend its Certificate of Incorporation, dated January 31, 1980, as amended (the
“Charter”),
in accordance with the General Corporation Law of the State of Delaware (the
“DGCL”), by
filing an Amended Certificate of Designation (the “Certificate of
Designation”), on the date hereof and in the form attached hereto as
Exhibit A, with the office of the Secretary of State of the State of Delaware,
to create a new series of preferred stock of the Company designated as
Series B-2 Senior Convertible Preferred Stock, par value $10.00 per share,
having a liquidation preference of $250.00 per share (the “Series B-2
Preferred Stock”), and to redesignate the
Company’s existing Series B Senior Convertible Preferred Stock, par value $10.00
per share, as “Series B-1
Preferred Stock” (together with the Series B-2 Preferred Stock, the “Series B Preferred
Stock”);

       

      WHEREAS,
on the terms and subject to the conditions hereinafter set forth, the Company
desires to issue and sell (i) 120,000 shares of Series B-2 Preferred Stock and
(ii) warrants (the “2008 Warrants”) to purchase up to
an aggregate of 240,000 shares of the Company's Common Stock, par value $0.01
per share (the “Common
Stock”), to Purchasers, and Purchasers desire to purchase and acquire the
Series B-2 Preferred Stock and the 2008 Warrants from the Company;
and

       

      WHEREAS,
the Purchasers and the Company intend to enter into that certain Amended and
Restated Registration Rights Agreement (as defined herein) which will set forth
certain registration rights with respect to the Series B-2 Preferred
Stock.

       

      NOW,
THEREFORE, the parties hereto agree as follows:

       

      SECTION
1.  DEFINITIONS AND ACCOUNTING
TERMS

       

      1.1 Definitions.  As
used herein, defined terms used herein shall have the meanings specified herein
unless the context otherwise requires:

       

      “Accredited
Investor” means any Person that is an “accredited investor” within the
meaning of Rule 501(a) under the Securities Act.

       

      “Applicable
Law” means all laws, statutes, treaties, rules, codes (including building
codes), ordinances, regulations, certificates, orders and licenses of, and
interpretations by, any
Governmental Authority and judgments, decrees, injunctions, writs, permits,
orders or like governmental action of any Governmental Authority (including
environmental laws and those pertaining to health or safety) applicable to the
Company or any of its Subsidiaries or any of their property or
operations.

       

      “Audit
Date” is defined in Section
4.6(a).

       

      “Capital
Stock” means (i) in the case of a corporation, corporate or capital
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate or capital stock, (iii) in the case of a limited
liability company, membership units (whether common or preferred), (iv) in the
case of a partnership, partnership interests (whether general or limited) and
(v) any other equivalent ownership interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.

       

      “Certificate of
Designation” is defined in the recitals.

       

      “Charter”
is defined in the recitals.

       

      “Closing”
is defined in Section
2.3.

       

      “Closing
Date” is defined in Section
2.3.

       

      “Closing
Payment” shall mean 2% of the Purchase Price.

       

      “Code”
means the Internal Revenue Code of 1986, as amended, and the Treasury
Regulations promulgated thereunder.

       

      “Common
Stock” is defined in the recitals.

       

      “Convert
Shares” means the shares of the Company’s Common Stock issuable upon
conversion of the Preferred Stock.

       

      “DGCL” is
defined in the recitals.

       

      “Enforceability
Exceptions” means, with respect to any specified obligation, any
limitations on the enforceability of such obligation due to applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance, fraudulent
transfer, moratorium, and other similar laws of general applicability relating
to or affecting creditors’ rights or general equity principles (including public
policies) or except as rights to indemnification or contribution may be limited
by Federal, state, provincial or territorial securities laws.

       

      “Environmental
Permits” is defined in Section 4.15(b)
(i).

       

      “Exchange
Act” is defined in Section
4.6(b).

       

      “ERISA
Affiliate” is defined in Section
4.12(b).

       

      “Financial
Statements” is defined in Section
4.6(a).

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      “Financing
Documents” means collectively, this Agreement, the Certificate of
Designation, the Registration Rights Agreement, the 2008 Warrants, and all
certificates, instruments and other documents made or delivered in connection
herewith and therewith.

       

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

       

      “HSR Act”
is defined in Section
3.5.

       

      “Indemnitees”
is defined in Section
7.2.

       

      “Intellectual
Property” means (a) all inventions and discoveries (whether patentable or
unpatentable and whether or not reduced to practice), and all patents, patent
applications and patent disclosures, together with all reissuances,
continuations, continuations-in-part, revisions, extensions and reexaminations
thereof, (b) all trademarks, service marks, trade dress, logos, trade names,
corporate names and domain names, together with all translations, adaptations
and combinations thereof and including all goodwill associated therewith, (c)
all copyrights and all applications, registrations and renewals in connection
therewith, (d) all mask works and all applications, registrations and renewals
in connection therewith, (e) all know-how, trade secrets and confidential
business information, whether patentable or unpatentable and whether or not
reduced to practice (including ideas, research and development, know-how,
formulas, compositions and manufacturing and production process and techniques,
technical data, designs, drawings, specifications, customer and supplier lists,
pricing and cost information and business and marketing plans and proposals),
(f) all computer software (including data and related documentation), (g) all
other proprietary rights, (h) all copies and tangible embodiments thereof (in
whatever form or medium) and (i) all licenses and agreements in connection
therewith.

       

      “IRS” means
the Internal Revenue Service.

       

      “Legal
Proceeding” means any judicial, administrative or arbitral actions,
suits, mediation, investigation, inquiry, proceedings or claims (including
counterclaims) by or before a Governmental Authority.

       

      “Material”
means material in relation to the business, condition (financial or otherwise),
properties or results of operation of the Company and its Subsidiaries taken as
a whole.

       

      “Material Adverse
Effect” shall mean (a) a material adverse effect on the business,
assets, liabilities, operations, prospects or condition (financial or otherwise)
or operating results of the Company and the Subsidiaries, taken as a whole,
(b) a material impairment of the ability of any party to perform any of its
obligations under any Financing Document to which it is or will be a party or
(c) a material impairment of any rights of or benefits available to the
Purchasers under any Financing Document.

       

      “Order”
means any order, injunction, judgment, doctrine, decree, ruling, writ,
assessment or arbitration award of a Governmental Authority.

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      “Ordinary Course
of Business” means the ordinary and usual course of day-to-day operations
of the business of the Company and the Subsidiaries through the date hereof
consistent with past practice.

       

      “Permits”
means any approvals, authorizations, consents, licenses, permits or certificates
of a Governmental Authority.

       

      “Permitted
Exceptions” means (i) all defects, exceptions, restrictions, easements,
rights of way and encumbrances disclosed in policies of title insurance which
have been delivered to the Purchasers; (ii) statutory liens for current Taxes,
assessments or other governmental charges not yet delinquent or the amount or
validity of which is being diligently contested in good faith by appropriate
proceedings, provided an appropriate reserve has been established therefor in
the Financial Statements in accordance with GAAP; (iii) mechanics’, carriers’,
workers’, and repairers’ Liens arising or incurred in the Ordinary Course of
Business that are not material to the business, operations and financial
condition of the Company Property so encumbered and that are not resulting from
a breach, default or violation by the Company or any of the Subsidiaries of any
contract or law; (iv) zoning, entitlement and other land use and environmental
regulations by any Governmental Authority, provided that such regulations have
not been violated; and (v) liens and security interests created or permitted by
the senior most indebtedness of the Company or the Subsidiaries in existence as
of the Closing Date.

       

      “Plan” is
defined in Section
4.12(a).

       

      “Property”
is defined in Section
4.15(b)(iii).

       

      “Purchase
Price” is defined in Section
2.2.

       

      “Purchasers”
is defined in the preamble to this Agreement.

       

      “Registration
Rights Agreement” means the Amended and Restated Registration Rights
Agreement, dated as of the date hereof, among Company and the Purchasers, in the
form attached hereto as Exhibit B as amended,
supplemented, restated or otherwise modified from time to time.

       

      “Responsible
Officer” means (i) with respect to the Company, the chairman, the chief
executive officer, the president, the chief financial officer thereof, and (ii)
with respect to the Company or any Subsidiary (other than the Company), any duly
authorized officer thereof.

       

      “Rule 144”
means Rule 144 under the Securities Act (or any successor provision), as it may
be amended from time to time.

       

      “SEC” is
defined in Section
4.6(b).

       

      “SEC
Documents” is defined in Section
4.6(b).

       

      “Securities
Act” means the Securities Act of 1933, as amended.

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      “Software”
means any and all computer programs, whether in source code or object code;
databases and compilations, whether machine readable or otherwise; descriptions,
flow-charts and other work product used to design, plan, organize and develop
any of the foregoing; and all documentation including user manuals and other
training documentation related to any of the foregoing.

       

      “Solvent”
means, with respect to any Person as of the date of any determination, that on
such date (a) such Person as of such date generally is able to pay its debts and
other liabilities, contingent obligations and other commitments as they become
absolute and mature in the normal course of business, (b) such Person does not
intend to, and does not believe that it will, incur debts or liabilities beyond
such Person’s ability to pay as such debts and liabilities mature and (c) such
Person is not engaged in a business or a transaction, and is not about to engage
in a business or a transaction, for which such Person’s property would
constitute unreasonably small capital with which to conduct the business in
which it is engaged as such business is now conducted and is proposed to be
conducted following the Closing Date.  In computing the amount of
contingent liabilities at any time, such liabilities shall be computed as the
amount that, in light of the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.

       

      “Series B
Preferred Stock” is defined in the recitals.

       

      “Series B-1
Preferred Stock” is defined in the recitals.

       

      “Series B-2
Preferred Stock” is defined in the recitals.

       

      “Subsidiary”
means any Person of which (i) a majority of the outstanding share capital,
voting securities or other equity interests are owned, directly or indirectly,
by the Company or (ii) the Company is entitled, directly or indirectly, to
appoint a majority of the board of directors, board of managers or comparable
body of such Person.

       

      “Tax” or
“Taxes”
shall mean (i) any and all federal, state, local or foreign taxes, charges,
fees, imposts, levies or other assessments, including all net income, gross
receipts, capital, sales, use, ad valorem, value added, transfer, franchise,
profits, inventory, capital stock, license, withholding, payroll, employment,
social security, unemployment, excise, severance, stamp, occupation, property
and estimated taxes, customs duties, fees, assessments and charges of any kind
whatsoever; (ii) all interest, penalties, fines, additions to tax or
additional amounts imposed by any Taxing Authority in connection with any item
described in clause (i); and (iii) any liability in respect of any
items described in clauses (i) and/or (ii) payable by reason of Contract,
assumption, transferee liability, operation of law, Treasury Regulation section
1.1502-6(a) (or any predecessor or successor thereof or any analogous or similar
provision under law) or otherwise.

       

      “Tax
Return” means any return, report or statement (whether federal, state,
local or foreign) required to be filed with respect to any Tax (including any
elections, declarations, schedules or attachments thereto, and any amendment
thereof) including any information return, claim for refund, amended return or
declaration of estimated Tax, and including, where permitted

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      or
required, combined, consolidated or unitary returns for any group of entities
that includes the Company, any of the Subsidiaries, or any of their
Affiliates.

       

      “Taxing
Authority” means the IRS and any other governmental authority responsible
for the administration of any Tax.

       

      “Technology”
means, collectively, designs, formulae, algorithms, procedures, methods,
techniques, ideas, know-how, results of research and development, Software,
tools, data, inventions, apparatus, creations, improvements, works of authorship
and other similar materials, and all recordings, graphs, drawings, reports,
analyses, and other writings, and any other embodiments of the above, in any
form whether or not specifically listed herein, and all related technology, that
are used, incorporated, or embodied in or displayed by any of the foregoing or
used in the design, development, reproduction, sale, marketing, maintenance or
modification of any of the foregoing

       

      “2008
Warrants” is defined in the recitals.

       

      1.2 Computation of Time
Periods.  For purposes of computation of periods of time
hereunder, the word “from” means “from and including” and the words “to” and
“until” each mean “to but excluding.”

       

      1.3 Terms
Generally.  Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person’s successors and assigns, and (c) the word “including” shall mean
“including without limitation.”

       

      1.4 Accounting
Terms.  Accounting terms used but not otherwise defined herein
shall have the meanings provided, and be construed in accordance with,
GAAP.

       

      SECTION
2.  AUTHORIZATION AND ISSUANCE
OF PREFERRED STOCK

       

      2.1 Authorization of
Issue.  On or prior to the execution and delivery of this
Agreement: (i) the Company will authorize the issue and sale of the Series B-2
Preferred Stock and the 2008 Warrants; and (ii) adopt and file the Certificate
of Designation with the Secretary of State of Delaware.

       

      2.2 Sale and Purchase of the
Preferred Stock and Warrants.  Subject to the terms and
conditions of this Agreement, the Company will issue and sell to each of the
Purchasers, and each of the Purchasers will purchase from the Company, at the
Closing provided for in Section 2.3, the
Series B-2 Preferred Stock and 2008 Warrants, for an aggregate purchase price
equal to $30,000,000 (the “Purchase
Price”), in such proportions as set forth on Schedule
2.2.  The Purchase Price shall be paid by the Purchasers by
wire transfer of immediately available funds to an account designated by the
Company.  At the Closing the Company shall pay each
Purchaser

      2.3 its
proportionate share of the Closing Payment as set forth on Schedule 2.2, via
wire transfer of immediately available funds pursuant to the instructions set
forth on Schedule
2.2.

       

      2.4 Closing.  The
sale and purchase of the Preferred Stock shall occur at the offices of
Chamberlain, Hrdlicka, White, Williams & Martin, 1200 Smith Street, 14th
Floor,  Houston, Texas 77002, at 10:00 a.m. local time, at a closing
(the “Closing”)
on July ____, 2008.  The date upon which the Closing occurs shall be
referred to herein as the “Closing
Date”.

       

      2.5 Stock
Certificates.  At the Closing, the Company shall deliver to the
Purchasers duly endorsed certificates representing the Series B-2 Preferred
Stock with such number of shares allocated to each Purchaser as set forth on
Schedule 2.2.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          Exhibit
10.3

        

      

      SECTION
3.  CONDITIONS TO
CLOSING

       

      Each Purchaser’s obligation to purchase
and pay for the Series B-2 Preferred Stock and 2008 Warrants to be purchased by
it at the Closing is subject to the reasonable satisfaction or waiver by it
prior to or at the Closing of each of the conditions specified below in this
Section
3:

      

      3.1 Representations and
Warranties.  Each of the representations and warranties of the
Company in this Agreement that are qualified as to materiality or Material
Adverse Effect shall be true and correct and each of the representations and
warranties of the Company in this Agreement that are not so qualified shall be
true and correct in all material respects on or as of the Closing Date as if
made on and as of the Closing Date (unless stated to relate to a specific
earlier date, in which case such representations and warranties qualified as to
materiality or Material Adverse Effect shall be true and correct and those not
qualified shall be true and correct in all material respects as of such earlier
date).

       

      3.2 Performance; No Default
under Other Agreements.  The Company shall have performed and
complied in all material respects with all agreements and covenants contained
herein required to be performed or complied with by it prior to or at the
Closing (or such compliance shall have been waived on terms and conditions
reasonably satisfactory to each Purchaser).

       

      3.3 Officer
Certificate.  The Company shall have delivered to each
Purchaser an Officers’ Certificate, dated as of the Closing Date, in a form
reasonably satisfactory to Avista, certifying as to Company’s certificate of
incorporation and bylaws, the incumbency and signatures of certain officers of
the Company and other corporate proceedings of the Company relating to the
authorization, execution, delivery and performance of this Agreement and the
other Financing Documents to which the Company is a party and that the
conditions specified in Section 3 (other than
Section 3.3)
have been fulfilled, except as to matters which require the approval or
satisfaction of the Purchasers.

       

      3.4 Material Adverse
Effect.  There shall not have occurred or become known to the
Purchasers any event, development or circumstance with respect to the Company or
its

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      3.5 Subsidiaries
since March 31, 2008 that has caused or could reasonably be expected to cause a
Material Adverse Effect.

       

      3.6 Consents, Authorizations and
Filings, Etc.  All material governmental and third party
approvals necessary in connection with the Financing Documents, and the
continuing operations of the Company and its Subsidiaries shall have been
obtained and be in full force and effect (including any required filings
pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”)
made with the Federal Trade Commission and the United States Department of
Justice), and all applicable waiting periods shall have expired without any
action being taken or threatened by any competent authority that would restrain,
prevent or otherwise impose material adverse conditions on the Series B-2
Preferred Stock.

       

      (a) There
shall be no inquiry, injunction, restraining order, action, suit or proceeding
instituted or entered or any statute or rule proposed, enacted or promulgated by
any Governmental Authority or any other Person which, in the reasonable opinion
of the Purchasers, individually or in the aggregate, has or would reasonably be
expected to have a Material Adverse Effect or which seeks to enjoin or seek
substantial damages against the Company or its Subsidiaries or any of the
Purchasers as a result of the issuance and sale of the Preferred
Stock.

       

      (b) The Board
of Directors of the Company shall have granted all necessary approvals to the
transactions contemplated by this Agreement and the conversion of the Series B-2
Preferred Stock into Convert Shares in order to satisfy DGCL Section 203 with
respect to such transactions.

       

      3.7 Payment of
Expenses.  At the Closing, each Purchaser and one counsel
for  the Purchasers shall have received from the Company all other
fees required to be paid, and, in accordance with Section 7, all
reasonable costs and expenses for which invoices have been
presented.

       

      3.8 Legal
Opinion.  At the Closing, Chamberlain, Hrdlicka, White,
Williams & Martin shall have delivered to the Purchasers an opinion, dated
as of the Closing Date, in the form of Exhibit
3.7.

       

      3.9 Management Rights
Agreement.  At the Closing, the Company shall have delivered to
Avista a Management Rights Agreement dated as of the Closing Date, in the form
of Exhibit 3.8.

       

      SECTION
4.  REPRESENTATIONS AND
WARRANTIES

       

      The
Company represents and warrants to the Purchasers that:

       

      4.1 Due Organization; Power and
Authority.  The Company and each domestic Subsidiary of the
Company (a) is a corporation or a 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

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      4.2 is in
good standing in each jurisdiction in which such qualification is required, (c)
has full corporate or partnership, as the 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 each of
the Financing Documents to which it is a party.

       

      4.3 Capitalization.  After
giving effect to the sale of the Series B-2 Preferred Stock and the 2008
Warrants to the Purchasers, at the Closing, (i) the authorized number of shares
of Capital Stock of the Company will consist only of 100,000,000 common shares
(the “Common
Stock”), of which 10,396,018 shares have been issued and are outstanding,
(ii) 2,500,000 preferred shares, of which only (x) 257,526 shares of Series B-1
Preferred Stock and (y) the Series B-2 Preferred Stock sold to the Purchasers
pursuant to this Agreement will have been issued and outstanding as of the
Closing Date, and (iii) no shares of any class of the Capital Stock of the
Company will be held by the Company in its treasury or by the Company’s
Subsidiaries.  Upon consummation of the sale of the Series B-2
Preferred Stock and the 2008 Warrants to the Purchasers, all of the issued and
outstanding shares of Capital Stock of the Company 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 consummation of the sale of the Series B-2
Preferred Stock and the 2008 Warrants to the Purchasers, except as set forth on
Schedule 4.2
and other than the Series B Preferred Stock, the 2008 Warrants and employee
stock options under the 2002 Stock Awards Plan and the 2007 Stock Awards Plan of
the Company, there shall be no securities of the Company or any of its
Subsidiaries that will be convertible into or exchangeable for shares of any
Capital Stock of the Company or any of its Subsidiaries, and no options, calls,
subscriptions, convertible securities, or other rights, agreements or
commitments which will obligate the Company or any of its Subsidiaries to issue,
transfer or sell any shares of Capital Stock of, or other interests in, the
Company or any of its Subsidiaries.  Except as set forth on Schedule 4.2, upon
consummation of the sale of the Series B-2 Preferred Stock and the 2008 Warrants
to the Purchasers, there shall be no outstanding obligations of the Company or
any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of
Capital Stock of the Company or any of its Subsidiaries and none of the Company
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 4.2 and
other than the Series B Preferred Stock, none of the Company or any of its
Subsidiaries will have any obligation to issue, transfer or sell any shares of
Capital Stock of the Company or its Subsidiaries.  Except as set forth
on Schedule 4.2, there are no voting trusts or other agreements or
understandings to which the Company or any of its Subsidiaries is a party with
respect to the holding, voting or disposing of Capital Stock of the Company or
any of its Subsidiaries.  Except as set forth on Schedule 4.2, none of
the Company or any of its Subsidiaries has any outstanding bonds, debentures,
notes or other obligations or other securities that entitle the holders thereof
to vote with the shareholders of the Company or any of its Subsidiaries on any
matter or which are convertible into or exercisable for securities having such a
right to vote.

       

      4.4 Subsidiaries.  Schedule 4.3
correctly states (a) the name of each of the Company’s direct and indirect
Subsidiaries, and (b) the name of each registered holder of each class of
outstanding Capital Stock or other securities of each of the Company’s
respective direct and indirect Subsidiaries and the nature and number of such
securities held by such holder.  Each

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      4.5 issued
and outstanding share of Capital Stock of each direct and indirect Subsidiary of
the Company (a) has been duly authorized and validly issued and is fully paid
and nonassessable and free of preemptive rights and (b) except for any Equity
Interests not owned directly or indirectly by the Company as shown on Schedule 4.3 is
owned by the Company, directly or through its direct and indirect Subsidiaries,
free and clear of any Lien other than the liens established under the Financing
Documents and other Permitted Exceptions.

       

      4.6 Due Authorization, Execution
and Delivery.

       

      (a) Agreement.  This
Agreement has been duly authorized, executed and delivered by the Company and,
when duly executed and delivered by the Purchasers in accordance with its terms,
will constitute a valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to the
Enforceability Exceptions.

       

      (b) Series B-2 Preferred Stock
and the Convert Shares.  The Series B-2 Preferred Stock has
been duly authorized and, when issued as provided herein, will be validly
issued, free of preemptive rights and free from all taxes, liens, charges and
security interests known to or created by the Company and no personal liability
will attach to the ownership thereof.  When the Convert Shares are
issued pursuant to a conversion of the Series B-2 Preferred Stock, the Convert
Shares will be validly issued, fully paid and nonassessable, free of preemptive
rights and free from all taxes, liens, charges and security interests known to
or created by the Company and no personal liability will attach to the ownership
thereof.

       

      (c) Financing
Documents.  Each of the Financing Documents has been duly
authorized, executed and delivered by the Company and, when duly executed and
delivered by the other parties thereto in accordance with their terms, will
constitute a valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, subject to the Enforceability
Exceptions.

       

      4.7 Non-Contravention;
Authorizations and Approvals.  None of (a) the execution and
delivery by the Company or any Subsidiary of the Company of any of the Financing
Documents to which it is a party, (b) the performance by any of them of their
respective obligations thereunder, (c) the consummation of the transactions
contemplated thereby or (d) the issuance and delivery of the Series B-2
Preferred Stock and the 2008 Warrants under the Financing Documents will: (i)
violate, conflict with or result in a breach of any provisions of the articles
of incorporation or any amendment thereto or bylaws (or comparable constituent
or governing documents) of the Company or any Subsidiary of the Company; (ii)
violate, conflict with, result in a breach of any provision of, constitute a
default (or an event which, with notice, lapse of time or both, would constitute
a default) under, result in the termination or in a right of termination of,
accelerate the performance required by or benefit obtainable under, result in
the triggering of any payment or other obligations (including any repurchase or
repayment obligations) pursuant to, result in the creation of any Lien upon any
of the properties of the Company or any Subsidiary of the Company under, or
result in there being declared void, voidable, subject to withdrawal, or without
further binding effect, any of the terms, conditions or provisions of any
contract, except for any such violations, conflicts, breaches, defaults,
accelerations, terminations or other matters which, in the aggregate, could not
reasonably be

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      4.8 expected
to be Material to the Company; (iii) require any consent, approval or
authorization of, or declaration, filing or registration with, any Governmental
Authority, except for those consents, approvals, authorizations, declarations,
filings or registrations which have been obtained or made, or the failure of
which to obtain or make, in the aggregate, could not be reasonably expected to
have a Material Adverse Effect; or (iv) violate any Applicable Laws, except for
violations which, in the aggregate, could not reasonably be expected to be
Material to the Company.

       

      4.9 Financial Statements;
Securities Filings.

       

      (a) The
Company has heretofore furnished to the Purchasers its consolidated balance
sheets and related statements of income, stockholder’s equity and cash flows
(the “Financial
Statements”) (i) as of and for the fiscal year ended December 31, 2007
(the “Audit
Date”), audited by and accompanied by the report of UHY, LLP, independent
public accountants, and (ii) as of and for the fiscal quarter ended March 31,
2008, and each month ended after March 31, 2008 and at least 30 days before the
Closing Date, each certified by its chief financial officer.  Such
Financial Statements present fairly in all material respects the financial
condition and results of operations and cash flows of the Company and its
Subsidiaries as of such dates and for such periods.  Such balance
sheets and the notes thereto disclose all material liabilities, direct or
contingent, of the Company and its Subsidiaries as of the dates
thereof.  Such Financial Statements were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise noted therein and, subject, in the case of unaudited financial
statements, to year-end audit adjustments and the absence of
footnotes.

       

      (b) The
Company has filed with the Securities and Exchange Commission (the “SEC”) all
forms, reports, schedules, statements, exhibits and other documents required to
be filed under the Exchange Act of 1934, as amended (the “Exchange
Act”), or the Securities Act, (collectively, the “SEC
Documents”).  As of its filing date or, if amended, as of the
date of the last such amendment, each SEC Document fully complied with the
applicable requirements of the Exchange Act and the Securities Act, as the case
may be, and the applicable rules and regulations of the SEC
thereunder.  As of its filing date, or, if amended, as of the date of
the last such amendment, each SEC Document filed pursuant to the Exchange Act
did not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading.  Each
SEC Document 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 the Subsidiaries is or has been required to file
any forms, reports or other documents with the SEC.  All of the
audited consolidated financial statements and unaudited consolidated interim
financial statements included in the SEC Documents (i) have been prepared from,
are in accordance with and accurately reflect the books and records of the
Company and its consolidated Subsidiaries, (ii) fully comply with the applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto (including Regulation S-X), (iii) were prepared in
accordance with GAAP applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto and

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      (c) except,
in the case of the unaudited interim statements, as may be permitted under the
Exchange Act with respect to Quarterly Reports on Form 10-Q and (iv) fairly
present, in all material respects, the consolidated financial position and the
consolidated results of operations and cash flows (subject, in the case of
unaudited interim financial statements, to normal year end adjustments) of the
Company and its consolidated Subsidiaries as of the dates and for the periods
referred to therein.  The reports of the Company’s independent
auditors regarding the Company’s consolidated financial statements in the SEC
filings have not been withdrawn, supplemented or modified, and none of the
Company or any of the Subsidiaries has received any communication from its
independent auditors concerning any such withdrawal, supplement or
modification.

       

      (d) The
Company’s principal executive officer and its principal financial officer have
disclosed, based on their most recent evaluation, to the Company’s auditors and
the audit committee of the Board of Directors of the Company (i) all significant
deficiencies in the design or operation of internal controls which could
adversely affect the Company’s ability to record, process, summarize and report
financial data and have identified for the Company’s auditors any material
weaknesses in internal controls and (ii) any fraud, whether or not material,
that involves management or other employees who have a significant role in the
Company’s internal controls.

       

      (e) The
Company has established and maintains disclosure controls and procedures (as
such term is defined in Rule 13a-15 under the Exchange Act); such disclosure
controls and procedures are designed to ensure that material information
relating to the Company, including the Subsidiaries, is made known to the
Company’s principal executive officer and its principal financial officer by
others within those entities, and, to the knowledge of the Company, such
disclosure controls and procedures are effective in timely alerting the
Company’s principal executive officer and its principal financial officer to
material information.

       

      4.10 Absence of Undisclosed
Liabilities or Events.

       

      (a) Neither
the Company nor any Subsidiary has any Indebtedness or liabilities (whether or
not required under GAAP to be reflected on a balance sheet or the notes thereto)
other than those (i) specifically reflected on and fully reserved against in the
Financial Statements, (ii) incurred in the Ordinary Course of Business since the
Audit Date or (iii) that are immaterial to the Company or any
Subsidiary.

       

      (b) The
Financing Documents, taken as a whole, do not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made as
of the date the same were made, not materially misleading.  Since the
Audit Date, there has been no event, development or circumstance that has caused
or could reasonably be expected to cause a Material Adverse Effect.

       

      4.11 No Actions or
Proceedings.  Except as set forth on Schedule 4.8, there are no
legal or governmental actions, suits or proceedings pending or, to the Company’s
knowledge, threatened against or affecting the Company or any Subsidiary of the
Company, or any of their respective properties or assets which, if adversely
determined, in the aggregate, could reasonably

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      4.12 be
expected to be Material to the Company.  No Governmental Authority has
notified the Company or any Subsidiary of the Company in writing of an intention
to conduct any audit, investigation or other review with respect to the Company
or any Subsidiary of the Company.

       

      4.13 Title to
Properties.  Each of the Company and each Subsidiary of the
Company has (a) good title to, or a valid and subsisting leasehold interest in,
all of its material real property and (b) good title to, or a valid and
subsisting leasehold interest in, all of its material equipment and other
personal property, in each case free and clear of all Liens, except Permitted
Exceptions.

       

      4.14 Intellectual Property
Rights.

       

      (a) Except as
set forth on Schedule
4.10, the Company and its Subsidiaries own all right, title and interest
in and to, or have valid and continuing rights to use, sell and license, all
Intellectual Property, Software and other Technology used in the conduct of the
business and operations of the Company and its Subsidiaries as presently
conducted and as currently proposed to be conducted, free and clear of all Liens
or obligations to others.  All such owned Intellectual Property is
subsisting, and all necessary registration, maintenance, renewal, and other
relevant filing fees due through the date hereof in 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.  The business and operations of the Company and
its Subsidiaries, their Technology, 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 currently contemplated to be performed does not infringe upon,
misappropriate or otherwise violate any Intellectual Property of any third
party.  All of the material Intellectual Property owned by the Company
or any of its Subsidiaries is valid and enforceable.

       

      (b) Except as
set forth in Schedule
4.10, there is no action, suit, proceeding, hearing, investigation,
notice or complaint pending or, to the Company’s knowledge, threatened, by any
third party before any court or tribunal (including, without limitation, the
United States Patent and Trademark Office or equivalent authority anywhere in
the world) relating to any of Company’s or any of its Subsidiaries’ Intellectual
Property or Technology, nor has any claim or demand been made by any third party
that (i) challenges the validity, enforceability, use or exclusive ownership of
any Intellectual Property or Technology owned by the Company or any of its
Subsidiaries or (ii) alleges any infringement, misappropriation, violation, or
unfair competition or trade practices by the Company or any of its Subsidiaries
of any Intellectual Property or Technology of any third party, nor is the
Company aware of any basis for any such claim or demand.

       

      (c) There are
no agreements between the Company or any of its Subsidiaries and any third party
relating to any Intellectual Property of the Company or any of its Subsidiaries
or any third party under which there is, as of the date of this Agreement, or,
to the Company’s

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      (d) knowledge,
is expected, as of the date of this Agreement, to be, any Material dispute
regarding the scope or performance of such agreement.

       

      (e) None of
the Company’s or any of its Subsidiaries’ Technology or Intellectual Property
are subject to any outstanding injunction, decree, order, judgment, agreement or
stipulation that restricts in any manner the use, transfer or licensing thereof
by the Company or any of its Subsidiaries or affects the validity, use or
enforceability of any such Technology or Intellectual Property.

       

      (f) The
Company and the Subsidiaries have taken reasonable measures to protect the
confidentiality of all Material trade secrets owned by the Company or any of its
Subsidiaries that are material to their businesses as currently conducted and as
proposed to be conducted.  The Company and its Subsidiaries have
executed valid written agreements with certain of their past and present
employees who have contributed to the development of Material Technology and
Intellectual Property pursuant to which such employees have assigned to the
Company or its Subsidiaries all their rights in and to all Material Technology
and Intellectual Property they may develop in the course of their employment and
agreed to hold all trade secrets and confidential information of the Company and
its Subsidiaries in confidence both during and after their
employment.  The Company and its Subsidiaries have executed valid
written agreements with certain past and present consultants and independent
contractors who have been retained in connection with the development of
Material Technology and Intellectual Property by which the consultants and
independent contractors have  assigned to the Company or its
Subsidiaries all their rights in and to such Material Technology and
Intellectual Property and agreed to hold all trade secrets and confidential
information of the Company and its Subsidiaries in confidence both during and
after the term of their engagements.  No Material trade secrets or
other Material confidential information owned by the Company or any of its
Subsidiaries that is material to their businesses as currently conducted and as
proposed to be conducted have been disclosed or authorized to be disclosed by
the Company or any of its Subsidiaries to any of their employees or any third
party other than pursuant to a written non-disclosure or confidentiality
agreement.  To the knowledge of the Company and its Subsidiaries, no
employee, consultant or independent contractor of the Company or any Subsidiary
is, as a result of or in the course of such employee’s, consultant’s or
independent contractor’s engagement by the Company or any Subsidiary, in default
or breach of any Material term of any employment agreement, non-disclosure
agreement, assignment of invention agreement or similar agreement.

       

      4.15 Taxes.

       

      (a) (i) All
Tax Returns required to be filed by or on behalf of each of the Company, any
Subsidiary and any affiliated group of which the Company or any Subsidiary is or
was a member have been duly and timely filed with the appropriate Taxing
Authority in all jurisdictions in which such Tax Returns are required to be
filed (after giving effect to any valid extensions of time in which to make such
filings), and all such Tax Returns are true, complete and correct in all
material respects; and (ii) all Taxes payable by or on behalf of each of the
Company, any Subsidiary and any affiliated group of which the Company or any
Subsidiary is or was a member have been fully and timely paid.  With
respect to any period for which Tax Returns have not yet been filed or for which
Taxes are not yet due or owing, the Company has made due and sufficient accruals
for such Taxes in the Financial Statements and its books and

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      (b) records.  All
required estimated Tax payments sufficient to avoid any underpayment penalties
or interest have been made by or on behalf of the Company and each
Subsidiary.

       

      (c) The
Company and each Subsidiary has complied in all material respects with all
applicable Laws relating to the payment and withholding of Taxes and has duly
and timely withheld and paid over to the appropriate Taxing Authority all
amounts required to be so withheld and paid under all applicable
Laws.

       

      (d) All
deficiencies asserted or assessments made as a result of any examinations by any
Taxing Authority of the Tax Returns of, or including, the Company or any
Subsidiary have been fully paid, and there are no other audits or investigations
by any Taxing Authority in progress, nor has the Company or any of the
Subsidiaries received any written notice from any Taxing Authority that it
intends to conduct such an audit or investigation.  No issue has been
raised by a Taxing Authority in any prior examination of the Company or any
Subsidiary which, by application of the same or similar principles, could
reasonably be expected to result in a proposed deficiency for any subsequent
taxable period.

       

      (e) There are
no Liens for Taxes on any of the assets of the Company or any of its
Subsidiaries other than Liens for Taxes not yet due and payable or which are
being contested in good faith by appropriate proceedings and for which adequate
reserves have been provided to the extent required by GAAP.

       

      (f) The
Company is not a “United States Real Property Holding Corporation” within the
meaning of Section 897 of the Code.

       

      (g) The
Company and the Subsidiaries have disclosed on their federal income Tax Returns
all positions taken therein that could give rise to substantial understatement
of federal income tax within the meaning of Section 6662 of the
Code.

       

      4.16 Employee Benefit
Plans.

       

      (a) Schedule 4.12(a)
lists all “employee benefit plans”, within the meaning of Section 3(3) of ERISA,
and all other material employee benefit plans, arrangements and policies with
respect to employees or former employees maintained by or contributed to by the
Company or any of its Subsidiaries (each, a “Plan”).  There
has been no failure by any Plan to comply with the applicable requirements of
ERISA and the Code.  There is no pending or, to the knowledge of the
Company, threatened, litigation relating to the Plans.  None of the
Company or any of its Subsidiaries has engaged in a transaction with respect to
any Plan that could subject the Company or any of its Subsidiaries to a tax or
penalty imposed by either Section 4975 of the Code or Section 502(i) of
ERISA.  The Company is not aware, after due inquiry, of any item of
non-compliance which could reasonably be expected to result in the loss of Plan
qualification or tax-exempt status.  To the knowledge of the Company,
all required contributions have been made in accordance with the provisions of
each Plan.

       

      (b) Within
the past six years, no liability under Title IV of ERISA has been incurred by
the Company or any of its Subsidiaries with respect to any ongoing, frozen or
terminated “single-employer plan,” within the meaning of Section 4001(a)(15) of
ERISA, or

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      (c) “multi
employer plan,” within the meaning of Section 3(37) of ERISA, currently or
formerly maintained by any of them, or the single-employer plan or
multi-employer plan of any entity which is considered to be a single employer
with the Company or any of its Subsidiaries under Section 4001(b)(1) of ERISA or
Section 414(b) or (c) of the Code (an “ERISA
Affiliate”).  Except as set forth on Schedule 4.12(b),
none of the Company or any of its Subsidiaries has contributed to a “multi
employer plan,” within the meaning of Section 3(37) of ERISA, at any time after
June 30, 1997.

       

      (d) Except as
set forth on Schedule
4.12(c), neither the Company nor any of its Subsidiaries has any material
obligations for retiree health and life benefits under any Plan, except as
required by Applicable Law.

       

      4.17 Investment Company
Act.  Neither the Company nor any of its Subsidiaries is or,
immediately after receipt of payment for the Series B-2 Preferred Stock and the
2008 Warrants and the consummation of the other Transactions, will be (a) an
“investment company” registered or required to be registered under the
Investment Company Act of 1940, as amended.

       

      4.18 Insurance.  The
Company and the Subsidiaries of the Company are insured with policies in such
amounts and with such deductibles and covering such risks as are generally
deemed adequate for their businesses including, but not limited to, policies
covering real and personal property owned or leased by the Company and the
Subsidiaries of the Company against theft, damage, destruction and acts of
vandalism.

       

      4.19 Compliance with Laws;
Permits; Environmental Liabilities.

       

      (a) Each of
the Company and the Subsidiaries of the Company is in compliance, in all
Material respects with all Applicable Laws and has all Permits Material to and
necessary in, the conduct of its business as currently conducted and all such
Permits are in full force and effect.  No violations have been
recorded in respect of any such Permits, and no proceeding is pending or, to the
knowledge of the Company, threatened to revoke or limit any
Permit.  Neither the Company nor any Subsidiary is subject to any
Order, and neither the Company nor any Subsidiary is in breach or violation of
any Order.  Neither the Company nor any Subsidiary is engaged in any
legal action to recover monies due it or for damages sustained by
it.  There are no Legal Proceedings pending or, to the knowledge of
the Company or the Subsidiaries, threatened against the Company or to which the
Company is otherwise a party relating to this Agreement or, any Financing
Document or the transactions contemplated hereby or thereby.

       

      (b) With
regard to each of the following, except any matters that in the aggregate, could
not reasonably be expected to be Material to the Company:

       

      (i) Each of
the Company and each Subsidiary of the Company is currently in Material
compliance with all Environmental Laws, has obtained and is currently in
Material compliance with all permits, licenses, registrations and consents which
are required with respect to any of its facilities or operations under any
applicable Environmental Laws (the “Environmental
Permits”), and all such Environmental Permits are in full force and
effect;

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      (ii) None of
the Company or any Subsidiaries of the Company has received any written notice
of any claims, civil, criminal or administrative actions, suits, hearings,
investigations, or proceedings which are pending or, to its knowledge,
threatened against it, in each case, on the basis of, any Environmental
Liability, or indicating that such Person is or may be a potentially responsible
party or otherwise liable under Environmental Laws in connection with any
location which has experienced the release or threatened release of any
Hazardous Materials;

       

      (iii) To the
knowledge of the Company, Hazardous Materials have not been transported or
disposed of from any real property owned, leased or operated by the Company or
any Subsidiary of the Company (“Property”)
in violation of, or in a manner or to a location which could give rise to
liability under any Environmental Law, nor have any Hazardous Materials been
generated, treated, stored or disposed of at, on or under any Property in
violation of, or in a manner that could give rise to liability under, any
applicable Environmental Laws;

       

      (iv) No
judicial proceeding or governmental or administrative action is pending or, to
the knowledge of the Company, threatened, under any Environmental Laws to which
the Company or any Subsidiary of the Company is or will be named as a party, nor
are there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial requirements
outstanding under any Environmental Laws with respect to the Company and any
Subsidiary of the Company; and

       

      (v) To the
knowledge of the Company, there has been no release or threat of release of
Hazardous Materials at or from the Properties, or arising from or related to the
operations of the Company or any Subsidiary of the Company, in violation of or
in amounts or in a manner that could give rise to liability under Environmental
Laws.

       

      4.20 Labor and Employment
Matters.  Except as set forth on Schedule 4.16, (i)
none of the Company or any of its Subsidiaries is a party to, or bound by, any
collective bargaining agreement or other contracts with a labor union or labor
organization; and (ii) there is no (A) Material unfair labor practice, labor
dispute (other than routine individual grievances) or labor arbitration
proceeding pending or, to the knowledge of the Company, threatened against the
Company or its Subsidiaries, (B) to the knowledge of the Company or its
Subsidiaries, activity or proceeding by a labor union or representative thereof
to organize any employees of the Company or any of its Subsidiaries, or (C)
lockout, strike, slowdown, work stoppage or, to the knowledge of the Company or
its Subsidiaries, written threat thereof by or with respect to any such
employees.

       

      4.21 Brokerage
Fees.  None of the Company or any Subsidiary of the Company has
paid, or is obligated to pay, to any Person any brokerage or finder’s fees in
connection with the transactions contemplated hereby or by any other Transaction
Documents.

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      4.22 
REPRESENTATIONS,
WARRANTIES AND AGREEMENTS OF THE PURCHASERS

       

      Each
Purchaser, severally and not jointly, represents and warrants to the Company as
of the date hereof as follows:

       

      4.23 Purchase for
Investment.

       

      (a) Such
Purchaser is acquiring the Series B-2 Preferred Stock and the 2008 Warrants for
its own account, for investment purposes only and not with a view to any
distribution thereof within the meaning of the Securities Act.

       

      (b) Such
Purchaser understands that the Series B-2 Preferred Stock and the 2008 Warrants
have not been and, except as provided in the Registration Rights Agreement with
respect to the Convert Shares, will not be registered under the Securities Act
or any state or other securities law, that the Series B-2 Preferred Stock and
the 2008 Warrants are being issued by the Company in transactions exempt from
the registration requirements of the Securities Act, that it must hold the
Series B-2 Preferred Stock indefinitely and not offer or sell the Series B-2
Preferred Stock or the 2008 Warrants 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
laws.

       

      (c) Such
Purchaser further understands that the exemption from registration afforded by
Rule 144 (the provisions of which are known to such Purchaser) 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) Such
Purchaser did not employ any broker or finder in connection with the
transactions contemplated in this Agreement and no fees or commissions are
payable to the Purchasers except as otherwise provided for in this
Agreement.

       

      (e) Such
Purchaser is an Accredited Investor.

       

      (f) The
source of funds to be used by such Purchaser to pay the purchase price of the
Series B-2 Preferred Stock and the 2008 Warrants purchased by such Purchaser
hereunder does not include assets of any employee benefit plan (other than a
plan exempt from the coverage of ERISA) or plan or any other entity the assets
of which consist of “plan assets” of employee benefit plans or plans as defined
in Department of Labor regulation Section 2510.3-101.  As used in this
Section 5.1(f),
the term “employee benefit plan” shall have the meaning assigned to such term in
Section 3 of ERISA, and the term “plan” shall have the meaning assigned thereto
in Section 4975(e)(1) of the Code.

       

      4.24 Access to
Information.  Such Purchaser has been furnished with or has had
access to the information it has requested from the Company and its Subsidiaries
and has had an opportunity to discuss with the management of the Company and its
Subsidiaries the business and financial affairs of the Company and its
Subsidiaries, and has generally such knowledge and experience in business and
financial matters and with respect to investments in securities of

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      4.25 privately
held companies so as to enable it to understand and evaluate the risks of such
investment and form an investment decision with respect thereto, and is capable
of bearing the economic risks of such investment.

       

      4.26 Corporate Power;
Authorization; Enforceability.  The execution, delivery and
performance of this Agreement and the other Financing Documents to which such
Purchaser is a party are 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 Purchaser, do not conflict with or result in a breach of or
violate any of such Purchaser’s governing documents or any contract to which
such Purchaser is a party or by which its assets are bound or any Applicable
Laws and constitute legal, valid and binding agreements of such Purchaser
enforceable against it in accordance with their respective terms, subject to the
Enforceability Exceptions.

       

      4.27 No Actions or
Proceedings.  There are no legal or governmental actions, suits
or proceedings pending or, to any Purchaser’s knowledge, threatened against or
affecting such Purchaser, or any of their respective properties or assets which,
if adversely determined, in the aggregate, could reasonably be expected to
materially and adversely affect the ability of such Purchaser to consummate any
of the transactions contemplated by the Financing Documents.

       

      SECTION
5.  OTHER AFFIRMATIVE
COVENANTS

       

      5.1 Director
Representation.  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
the Avista Purchasers hold 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.  

       

      5.2 Allocation of Purchase
Price.  On or before December 31, 2008, the Company and the
Purchasers will mutually agree on an allocation of the purchase price between
the Series B-2 Preferred Stock and the 2008 Warrants issued to the Purchasers
pursuant to the terms of this Agreement.

       

      SECTION
6.  EXPENSES, INDEMNIFICATION
AND CONTRIBUTION; TERMINATION

       

      6.1 Expenses.  The
Company will, upon Closing, after presentation of a reasonable summary invoice
therefore, reimburse the Purchasers for all reasonable expense (including
reasonable and documented attorney’s and accountant’s fees and disbursements)
incurred by the

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      6.2 Purchasers
in connection with the transactions contemplated by this Agreement and the other
Financing Documents and in connection with any amendments, waivers or consents
under or in respect of this Agreement or the other Financing Documents (whether
or not such amendment, waiver or consent becomes effective), including, without
limitation: (a) the Purchaser’s reasonable and documented out-of-pocket expenses
in connection with the Purchaser’s examinations and appraisals of the Company’s
properties, books and records; (b) the reasonable and documented out-of-pocket
costs and expenses incurred in enforcing, defending or declaring (or determining
whether or how to enforce, defend or declare) any rights or remedies under this
Agreement or the other Financing Documents or in responding to any subpoena or
other legal process or informal investigative demand issued in connection with
this Agreement or the other Financing Documents; and any fees incurred by the
Purchasers in connection with any governmental consents or
filings  (including any fees incurred in connection with any HSR Act
filing).  The Company will pay, and will hold the Purchasers harmless
from, all claims in respect of any fees, costs or expenses if any, of brokers
and finders in relation to the Transactions.

       

      6.3 Indemnification.  The
Company shall indemnify and hold harmless the Purchasers and each of their
respective Affiliates, partners, stockholders, members, directors, agents,
employees and controlling persons (collectively, the “Indemnitees”)
from and against any and all actual losses, claims, damages or liabilities to
any such Indemnitee in connection with or as a result of any misrepresentation
or breach of warranty, covenant or agreement made or to be performed by the
Company pursuant to this Agreement.

       

      6.4 Survival.  The
obligations of the Company under this Section 7 will
survive the payment or transfer of any Series B-2 Preferred Stock or 2008
Warrants, the enforcement, amendment or waiver of any provision of this
Agreement and the termination of this Agreement.

       

      6.5 Tax Treatment of
Indemnification Payments.  Any indemnification payment pursuant
to this Agreement shall be treated for federal, state, local and foreign Tax
purposes as an adjustment to the Purchase Price.

       

      SECTION
7.  MISCELLANEOUS

       

      7.1 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 below, or at such other address as
such party may specify by written notice to the other party hereto:

       

      (a) if to a
Purchaser or its nominee, to the Purchaser or its nominee at the address
specified for such communications in Schedule 2.2, with a
copy to King & Spalding

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      (b) LLP, 1100
Louisiana, Suite 4000, Houston, Texas 77002, Attention:  Steve Rubin,
Esq., or at such other address as the Purchaser or its nominee shall have
specified to the Company in writing;

       

      (c) if to the
Company, to Geokinetics Inc., 1500 City West Blvd., Suite 800, Houston, Texas
77042, Attention: Richard F. Miles, with a copy to Chamberlain, Hrdlicka, White,
Williams & Martin, 1200 Smith Street, 14th Floor,  Houston, Texas
77002 Attention: James J. Spring, III, Esq.

       

      7.2 Benefit of Agreement and
Assignments.

       

      (a) Nothing
in this Agreement or any other Financing Document, express or implied, shall
give to any Person other than the parties hereto or thereto (not including
successors or assigns) any benefit or any legal or equitable right, remedy or
claim under this Agreement.

       

      (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;
provided, however, that the Purchasers may assign the rights to purchase all or
any portion of the Series B-2 Preferred Stock or the 2008 Warrants allocated to
such Purchaser pursuant to Schedule 2.2 to any,
direct or indirect, wholly owned subsidiary of such Purchaser, subject to the
ability of such subsidiary to make the representations and warranties set forth
in Section 5,
and each such Person shall be entitled to the full benefit of this Agreement as
if such Person were a Purchaser hereunder.

       

      7.3 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 Company and any other party shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under the Certificate of Designation 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 and in the Certificate of Designation are cumulative and not exclusive of
any rights or remedies that the parties would otherwise have.  No
notice to or demand on the Company in any case shall entitle the Company 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.

       

      7.4 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 Company and the other parties hereto.  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.

       

      7.5 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

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      7.6 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.  For the
purposes of the Closing, signatures transmitted via telecopy (or other facsimile
device) will be accepted as original signatures if the sender on the same day
sends a manually executed signature page by a recognized overnight delivery
service (charges prepaid).

       

      7.7 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.

       

      7.8 Survival of Covenants and
Indemnities.  All covenants and indemnities set forth herein
shall survive the execution and delivery of this Agreement, the issuance of the
Series B-2 Preferred Stock, the 2008 Warrants and the Convert Shares and, except
as otherwise expressly provided herein with respect to covenants and any other
obligations hereunder.

       

      7.9 Governing Law; Submission to
Jurisdiction; Venue.

       

      (a) THIS
AGREEMENT AND THE SECURITIES 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 Purchaser in order to
enforce any right or remedy under this Agreement, the Series B-2 Preferred Stock
or the 2008 Warrants, the Company hereby consents and will submit, and will
cause its Subsidiaries to submit, to the jurisdiction of any state or federal
court of competent jurisdiction sitting within the area comprising the Southern
District of New York on the date of this Agreement.  The Company
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 Company
further agrees that it shall not, and shall cause its Subsidiaries not to, bring
any action, proceeding or litigation arising out of this Agreement, the Series
B-2 Preferred Stock or the 2008 Warrants in any state or federal court other
than any state or federal court of competent jurisdiction sitting within the
area comprising the Southern District of New York on the date of this
Agreement.

       

      (c) The
Company 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 Company at its address set forth in Section 8.1, such
service to become effective thirty (30) days after such mailing.

       

      (d) Nothing
herein shall affect the right of any Purchaser to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against the Company in any other jurisdiction.  If service of process
is made on a designated

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      (e) 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.

       

      (f) THE
COMPANY AND EACH PURCHASER 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, THE
SERIES B-2 PREFERRED STOCK OR THE 2008 WARRANTS.

       

      7.10 Severability.  If
any provision of this Agreement is determined to be illegal, invalid or
unenforceable, such provision shall be fully severable to the extent of such
illegality, invalidity or unenforceability and the remaining provisions shall
remain in full force and effect and shall be construed without giving effect to
the illegal, invalid or unenforceable provisions.

       

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

       

      7.12 Survival of Representations
and Warranties.  All representations and warranties made by the
Company herein shall survive the execution and delivery of this Agreement, the
issuance and transfer of all or any portion of the Series B-2 Preferred Stock
and the issuance of the Convert Shares in accordance with the Certificate of
Designation, and any other obligations hereunder, regardless of any
investigation made at any time by or on behalf of the Purchasers.

       

      7.13 Construction.  Each
covenant contained herein shall be construed (absent express provision to the
contrary) as being independent of each other covenant contained herein, so that
compliance with any one covenant shall not (absent such an express contrary
provision) be deemed to excuse compliance with any other
covenant.  Where any provision herein refers to action to be taken by
any Person, or which such Person is prohibited from taking, such provision shall
be applicable whether such action is taken directly or indirectly by such
Person, whether or not expressly specified in such provision.

       

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

       

      7.15 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 Company or the Purchasers shall in such
capacity have any liability for any obligations or liabilities of the Company or
any Purchaser, 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.

       

      7.16 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.

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      7.17 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/ Richard F.
Miles

       

      Name: 
Richard F. Miles

       

      Title:
President

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      AVISTA
CAPITAL PARTNERS, L.P.

       

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

       

      By:           /s/ Jeff
Gunst

       

      Jeff Gunst,

       

      Authorized Signatory

       

      

       

      AVISTA
CAPITAL PARTNERS (OFFSHORE), L.P.

       

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

       

      By:           /s/ Jeff
Gunst

       

      Jeff Gunst,

       

      Authorized Signatory

       

      

      

      0590068.5

      940480-000000

      

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      EXHIBIT
A

      FORM OF
CERTIFICATE OF DESIGNATION

       

      

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      EXHIBIT
B

      FORM OF
2008 WARRANT

      

      

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      EXHIBIT
C

      FORM OF
REGISTRATION RIGHTS AGREEMENT

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      EXHIBIT
D

      FORM OF
OPINION

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.3

        

      

      EXHIBIT
E

      FORM OF
MANAGEMENT RIGHTS AGREEMENT

       

      

      Geokinetics
Inc., a Delaware corporation (the “Portfolio Company”),
hereby agrees that as of the date hereof, Avista Capital Partners, L.P., a
Delaware limited partnership (the “Partnership”), shall
have the following rights so long as it owns any equity interests in the
Portfolio Company:

      

      (i) the
right to receive prior notice of all material corporate actions of the Portfolio
Company and its subsidiaries and the right to consult with the Portfolio Company
and its subsidiaries with respect to such actions;

      

      (ii) the
right to visit and inspect any of the offices and properties of the Portfolio
Company and its subsidiaries and inspect and copy the books and records of the
Portfolio Company and its subsidiaries, at such times as the Partnership or its
designated representatives shall reasonably request;

      

      (iii) the
right to consult with appropriate officers and directors of the Portfolio
Company and each of its subsidiaries routinely and at such times as reasonably
requested by the Partnership with respect to matters relating to the business,
finances, accounts and affairs of the Portfolio Company and its subsidiaries;
and

      

      (iv) such
information and consultation rights or other assistance as the Partnership may
require to preserve its qualification as a venture capital operating company (as
defined in the U.S. Department of Labor Plan Asset Regulation, 29 C.F.R. §
2510.3-101) including, but not limited to, by reason of the Partnership’s
interest in the Portfolio Company qualifying as a venture capital investment (as
defined in the U.S. Department of Labor Plan Asset Regulation, 29 C.F.R. §
2510.3-101).

      

      The
Portfolio Company acknowledges and agrees that the Partnership may exercise its
rights under this agreement through its general partner or such other person
designated by the Partnership, in each case acting on behalf of the
Partnership.

      

      Dated:  July
____, 2008

      

      

      

      Geokinetics Inc.

      By:  Richard F. Miles,
President

      Agreed
and Accepted:

      

      Avista
Capital Partners, L.P.

      By:  Avista
Capital Partners GP, LLC,

      its general partner

      

      By:                                                      

            Jeff
Gunst, Authorized Signatoryex10-4.htm

     

    

      AMENDED
AND RESTATED

      REGISTRATION
RIGHTS AGREEMENT

      

      This
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT (this “Agreement”)
dated July 28, 2008, is among Geokinetics Inc., a Delaware corporation
(including its successors, the “Company”),
Avista Capital Partners, L.P., a Delaware limited partnership, Avista Capital
Partners (Offshore), L.P., a Bermuda limited partnership (together with Avista
Capital Partners, L.P., the “Avista
Holders”) and Levant America S.A., a Liberian corporation (collectively,
with the Avista Holders, the “Security
Holders”).  This Agreement supersedes the Registration Rights
Agreement dated as of September 8, 2006 between the Company and certain of the
Security Holders, as amended by that certain Amendment Number 1 dated as of May
15, 2007.

       

      
        	
                 
      

              	
                RECITALS

              

      

      

      WHEREAS, the Company and
certain of the Security Holders are parties to that certain Registration Rights
Agreement dated as of September 8, 2006 (the “Registration
Rights Agreement”);

       

      WHEREAS, the Company and
certain of the Security Holders are parties to the Series B-2 and Warrant
Purchase Agreement of even date herewith (the “Purchase
Agreement”);

       

      WHEREAS, under the Purchase
Agreement, certain of the Security Holders will purchase shares of Series B-2
Senior Convertible Preferred Stock, par value $10.00 per share (the “Series B-2
Preferred Stock”), warrants (the “2008
Warrants“) to
purchase shares of Common Stock, par value $0.01 per share (“Common
Stock“) of the
Company; and

       

      WHEREAS, the Series B-2
Preferred Stock and the Company’s Series B-1 Senior Convertible Preferred Stock,
par value $10.00 per share (the “Series B-1
Preferred Stock”),
are convertible into shares of the Company’s Common Stock.

       

      WHEREAS, in order to induce
certain of the Security Holders to enter into the Purchase Agreement, and to
purchase the Series B-2 Preferred Stock and the 2008 Warrants, the parties have
agreed to amend and restate the Registration Rights Agreement and enter into
this Agreement to provide the purchasers of Series B-2 Preferred Stock with
certain registration rights with respect to the shares of Common Stock into
which the Series B-2 Preferred Stock is convertible and which may be purchased
upon exercise of the 2008 Warrants.

       

      NOW, THEREFORE, in
consideration of the premises, mutual covenants and agreements hereinafter
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.4

        

      

      DEFINITIONS

       

      1.1 Definitions.

       

      (a) For
purposes of this Agreement, defined terms used herein which are not otherwise
defined herein shall have the same respective meanings as such terms have in the
Purchase Agreement, and in addition, the following terms shall have the meanings
specified in this Section
1.1.

       

      “Affiliate”
means, with respect to any Person, any Person who, directly or indirectly
through one or more intermediaries, controls, is controlled by or is under
common control with any Person.

       

      “Business
Day” means a day other than a Saturday, Sunday or other day on which
commercial banks are authorized or required to close under the laws of the
United States or the State of New York.

       

      “Common Stock
Equivalents” means, without duplication with any other Common Stock or
Common Stock Equivalents, any rights, warrants, options, convertible securities
or indebtedness, exchangeable securities or indebtedness, or other rights,
exercisable for or convertible or exchangeable into, directly or indirectly,
Common Stock of the Company and securities convertible or exchangeable into
Common Stock of the Company, whether at the time of issuance or upon the passage
of time or the occurrence of any future event.

       

      “Exchange
Act” means the Securities Exchange Act of 1934, as amended, or any
similar federal statute, and the rules and regulations promulgated by the SEC
thereunder.

       

      “Excluded
Registration” means a registration under the Securities Act of (i)
securities registered on Form S-8 or any similar successor form and (ii)
securities registered to effect the acquisition of or combination with another
Person.

       

      “Holder”
means (i) a Security Holder listed on the signature page hereof and (ii) any
direct or indirect transferee of any such Security Holder, including any
Security Holder that receives shares of Common Stock upon a distribution or
liquidation of a Holder, who has been assigned the rights of the transferor
Holder under this Agreement in accordance with Section
2.3.

       

      “Person” or
“person”
means any individual, corporation, partnership, limited liability company, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or other agency or political subdivision thereof.

       

      “Preferred Stock”
means the Company’s Series B-1 Preferred Stock and Series B-2 Preferred
Stock.

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.4

        

      

      “register,”
“registered”
and “registration”
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act, and the declaration or ordering
of the effectiveness of such registration statement.

       

      “Registrable
Shares” means, at any time, the Common Stock (including, but not limited
to, the Common Stock acquired upon conversion of Preferred Stock of the Company
or exercise of the Company's 2008 Warrants) and Preferred Stock of the Company
owned by the Holders, whether owned on the date hereof or acquired hereafter;
provided, however, to the
extent any determination of the number or percentage of Registrable Shares is
made under the terms of this Agreement, all Preferred Stock shall be included
with all Common Stock on as converted basis for the purpose of any such
determination; provided, further, that
Registrable Shares shall not include any shares (i) the sale of which has been
registered pursuant to the Securities Act and which shares have been sold
pursuant to such registration or (ii) which have been sold pursuant to Rule
144 under the Securities Act.

       

      “Required
Holders” means Holders who then own beneficially more than 50% of the
aggregate number of shares of Registrable Shares subject to this
Agreement.

       

      “SEC” means
the Securities and Exchange Commission or any other federal agency at the time
administering the Securities Act.

       

      “Securities
Act” means the Securities Act of 1933, as amended, or any similar Federal
statute, and the rules and regulations promulgated by the SEC
thereunder.

       

      “Subsidiary”
means any entity with respect to which a specified Person (or a Subsidiary
thereof) owns or has the power to vote 50% or more of the equity interests in
such entity, having general voting power to participate in the election of the
governing body of such entity.

       

      (a) “2008
Warrants” means the Warrants to purchase shares of the Company's Common
Stock which have been issued to certain Security Holders simultaneously with
their purchase of shares of Series B-2 Preferred Stock.

       

      (b) For
purposes of this Agreement, the following terms have the meanings set forth in
the sections indicated:

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.4

        

      

      (c) Term                                                                                     Section

       

      
        	
                Advice

              	
                2.6

              
	
                Agreement

              	
                Introductory
      Paragraph

              
	
                Avista
      Holders

              	
                Recitals

              
	
                Common
      Stock

              	
                Recitals

              
	
                Company

              	
                Introductory
      Paragraph

              
	
                Company
      Shelf

              	
                2.1(i)

              
	
                Company
      Shelf Shares

              	
                2.1(i)

              
	
                Demand
      Registration

              	
                2.1(a)

              
	
                Demand
      Request

              	
                2.1(a)

              
	
                Inspectors

              	
                2.5(j)

              
	
                Material
      Adverse Effect

              	
                2.1(e)

              
	
                NASD

              	
                2.5(l)

              
	
                Preferred
      Stock

              	
                1.1(a)

              
	
                Purchase
      Agreement

              	
                Recitals

              
	
                Records

              	
                2.5(j)

              
	
                Registration
      Expenses

              	
                2.7

              
	
                Requesting
      Holders

              	
                2.1(a)

              
	
                Required
      Filing Date

              	
                2.1(b)

              
	
                Security
      Holders

              	
                Introductory
      Paragraph

              
	
                Seller
      Affiliates

              	
                2.8(a)

              
	
                Series
      B-1 Preferred Stock

              	
                Recitals

              
	
                Series
      B-2 Preferred Stock

              	
                Recitals

              
	
                Shelf
      Offering

              	
                2.1(f)

              
	
                Suspension
      Notice

              	
                2.6

              
	
                Underwritten
      Offering

              	
                2.1(d)

              

      

      

      

      1.2 Other
Definitional and Interpretive Matters.  Unless otherwise
expressly provided or the context otherwise requires, for purposes of this
Agreement the following rules of interpretation apply.

       

      (a) When
calculating the period of time before which, within which or following which any
act is to be done or step taken pursuant to this Agreement, the date that is the
reference date in calculating such period is excluded.  If the last
day of such period is a non-Business Day, the period in question ends on the
next succeeding Business Day.

       

      (b) Any
reference in this Agreement to $ means U.S. dollars.

       

      (c) The
Schedules to this Agreement are hereby incorporated and made a part hereof as if
set forth in full in this Agreement and are an integral part of this
Agreement.  Any capitalized terms used in any Schedule but not
otherwise defined therein are defined as set forth in this
Agreement.

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.4

        

      

      (d) Any
reference in this Agreement to gender includes all genders, and words imparting
the singular number also include the plural and vice versa.

       

      (e) The
provision of a Table of Contents, the division of this Agreement into Articles,
Sections and other subdivisions and the insertion of headings are for
convenience of reference only and do not affect, and should not be utilized in,
the construction or interpretation of this Agreement.

       

      (f) All
references in this Agreement to any “Article,”
“Section,”
or “Schedule”
are to the corresponding Article, Section, Schedule or Exhibit of this
Agreement.

       

      (g) The words
“herein,”
“hereinafter,”
“hereof,”
and “hereunder”
refer to this Agreement as a whole and not merely to a subdivision in which such
words appear unless the context otherwise requires.

       

      (h) The word
“including”
or any variation thereof means “including, but
not limited to,” and does not limit any general statement that it follows
to the specific or similar items or matters immediately following
it.

       

      ARTICLE
II  - REGISTRATION RIGHTS

       

      2.1 Demand
Registration.

       

      (a) At any
time after the Closing Date, any Avista Holder may request, in writing (a “Demand
Request”), that the Company effect the registration under the Securities
Act of all or part of its or their Registrable Shares (a “Demand
Registration”).  Notwithstanding the foregoing, no Demand
Request will be effective hereunder unless the Registrable Shares proposed to be
sold by the Avista Holders requesting the Demand Registration (the “Requesting
Holders,” which term shall include parties deemed “Requesting Holders”
pursuant to Section 2.1(f)
hereof) represent, in the aggregate, more than 25% of the total number of
Registrable Shares held by all Avista Holders.

       

      (b) Each
Demand Request shall specify the number of Registrable Shares proposed to be
sold and the intended method of disposition of the Registrable Shares (including
an Underwritten Offering pursuant to Section 2.1(d) or a
Shelf Registration pursuant to Section
2.1(f)).  Subject to Section 2.1(h), the
Company shall file the Demand Registration within 90 days after receiving a
Demand Request (the “Required Filing
Date”) and shall use all commercially reasonable efforts to cause the
same to be declared effective by the SEC as promptly as practicable after such
filing; provided, however, that the
Company need effect only three (3) Demand Registrations
pursuant to Demand Requests made by Holders of Registrable Shares pursuant to
Section 2.1(a);
provided, further, that if any
Registrable Shares requested to be registered pursuant to a Demand Request are
excluded from the applicable Demand

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.4

        

      

      (c) Registration
pursuant to Section
2.1(e) below, the Holders shall have the right, with respect to each such
exclusion, to request one additional Demand Registration.

       

      (d) A
registration will not count as a Demand Registration until it has become
effective (unless the Requesting Holders withdraw all their Registrable Shares
and the Company has performed its obligations hereunder in all material
respects, in which case such demand will count as a Demand Registration unless
the Requesting Holders pay all Registration Expenses, as hereinafter defined, in
connection with such withdrawn registration); provided, however, that if,
after it has become effective, an offering of Registrable Shares pursuant to a
registration is interfered with by any stop order, injunction or other order or
requirement of the SEC or other governmental agency or court, such registration
will be deemed not to have been effected and will not count as a Demand
Registration.

       

      (e) The Requesting Holders may
provide in the Demand Request that the offering of Registrable Shares pursuant
to a Demand Registration shall be in the form of a “firm commitment”
underwritten offering (an “Underwritten
Offering”).  The
Requesting Holders of a majority of the Registrable Shares to be registered in a
Demand Registration shall select the investment banking firm or firms to manage
the Underwritten Offering, provided that such selection shall
be subject to the consent of the Company, which consent shall not be
unreasonably withheld.  No Person may participate in any
registration pursuant to Section 2.1(a) unless
such Person (i) agrees to sell such Person’s Registrable Shares on the basis
provided in any underwriting arrangements described above and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements; provided, however, that no such
Person shall be required to make any representations or warranties in connection
with any such registration other than representations and warranties as to (A)
such Person’s ownership of his or its Registrable Shares to be transferred free
and clear of all liens, claims and encumbrances, (B) such Person’s power and
authority to effect such transfer and (C) such matters pertaining to compliance
with securities laws as may be reasonably requested; provided, further, however, that the
obligation of such Person to indemnify pursuant to any such underwriting
arrangements shall be several, not joint and several, among such Persons selling
Registrable Shares, and the liability of each such Person will be in proportion
thereto, and provided, further, that such
liability will be limited to the net amount received by such Person from the
sale of his or its Registrable Shares pursuant to such
registration.

       

      (f) No
securities to be sold for the account of any Person (including the Company)
other than a Requesting Holder shall be included in a Demand Registration for an
Underwritten Offering unless the managing underwriter or underwriters shall
advise the Company or the Requesting Holders

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.4

        

      

      (g) in
writing that the inclusion of such securities will not materially and adversely
affect the price or success of the Underwritten Offering (a “Material Adverse
Effect”).  Furthermore, in the event the managing underwriter
or underwriters shall advise the Company or the Requesting Holders that even
after exclusion of all securities of other Persons pursuant to the immediately
preceding sentence, the amount of Registrable Shares proposed to be included in
such Demand Registration by Requesting Holders is sufficiently large to cause a
Material Adverse Effect, the Registrable Shares of the Requesting Holders to be
included in such Demand Registration shall equal the number of shares which the
Company is so advised can be sold in such offering without a Material Adverse
Effect and such shares shall be allocated pro rata among the Requesting Holders
on the basis of the number of Registrable Shares requested to be included in
such registration by each such Requesting Holder.

       

      (h) The
Requesting Holders may provide in the Demand Request that the offering of
Registrable Shares pursuant to a Demand Registration shall be in the form of a
“shelf offering” under the Securities Act to be made on a continuous basis
pursuant to Rule 415 (a “Shelf
Offering”).  The Shelf Offering shall be on Form S-1 (or on
Form S-3, if the Company is eligible to utilize such Form to register its
shares).  Subject to the terms of this Agreement, the Company shall
use its best efforts to cause the Shelf Offering to be declared effective under
the Securities Act as promptly as possible after the filing thereof and shall
use its best efforts to keep such Shelf Offering continuously effective under
the Securities Act until all Registrable Securities covered by such Shelf
Offering have been sold or may be sold without volume restrictions pursuant to
Rule 144(k) as determined by the counsel to the Company pursuant to a
written opinion letter to such effect, addressed and acceptable to the Company’s
transfer agent and the affected Avista Holders. 

       

      (i) Upon
receipt of any Demand Request, the Company shall promptly (but in any event
within 10 days) give written notice of such proposed Demand Registration to all
other Holders, who shall have the right, exercisable by written notice to the
Company within 20 days of their receipt of the Company’s notice, to elect to
include in such Demand Registration such portion of their Registrable Shares as
they may request.  All Holders requesting to have their Registrable
Shares included in a Demand Registration in accordance with the preceding
sentence shall be deemed to be “Requesting
Holders” for purposes of this Section
2.1(g).

       

      (j) The
Company may defer the filing (but not the preparation) of a registration
statement required by Section 2.1(a) until
a date not later than 90 days after the Required Filing Date (or, if longer, 90
days after the effective date of the registration statement contemplated by
clause (ii) below) if (i) at the time the Company receives the Demand Request,
the Company or any of its Subsidiaries are engaged in confidential negotiations
or other confidential business activities, disclosure of which would be required
in such registration

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.4

        

      

      (k) statement
(but would not be required if such registration statement were not filed), and
the Board of Directors of the Company determines in good faith that such
disclosure would be materially detrimental to the Company and its stockholders
or (ii) prior to receiving the Demand Request, the Board of Directors had
determined to effect a registered underwritten public offering of the Company’s
securities for the Company’s account and the Company had taken substantial steps
(including, but not limited to, selecting a managing underwriter for such
offering) and is proceeding with reasonable diligence to effect such
offering.  A deferral of the filing of a registration statement
pursuant to this Section 2.1(h) shall
be lifted, and the requested registration statement shall be filed forthwith,
if, in the case of a deferral pursuant to clause (i) of the preceding sentence,
the negotiations or other activities are disclosed or terminated, or, in the
case of a deferral pursuant to clause (ii) of the preceding sentence, the
proposed registration for the Company’s account is abandoned.  In
order to defer the filing of a registration statement pursuant to this Section 2.1(h), the
Company shall promptly (but in any event within ten days), upon determining to
seek such deferral, deliver to each Requesting Holder a certificate signed by an
executive officer of the Company stating that the Company is deferring such
filing pursuant to this Section 2.1(h) and a
general statement of the reason for such deferral and an approximation of the
anticipated delay.  Within 20 days after receiving such certificate,
the holders of a majority of the Registrable Shares held by the Requesting
Holders and for which registration was previously requested may withdraw such
Demand Request by giving notice to the Company; if withdrawn, the Demand Request
shall be deemed not to have been made for all purposes of this
Agreement.  The Company may defer the filing of a particular
registration statement pursuant to this Section 2.1(h) only
once.

       

      (l) In lieu
of any of the three Demand Registrations and if the Company has established a
“shelf offering” of newly issued shares of Common Stock (the “Company Shelf
Shares”) under the Securities Act to be made on a continuous basis
pursuant to Rule 415 on Form S-3 (the “Company
Shelf”), the Avista Holders may issue a Demand Request for the Company to
sell Company Shelf Shares and use the proceeds from such sales to purchase the
Registrable Shares held by the Requesting Holders (the “Shelf Funded
Repurchase”) at a price equal to the price at which the Company Shelf
Shares were sold less any underwriting discounts and
commissions.  Subject to the terms of this Agreement, the Company
shall use its best efforts to keep such Company Shelf continuously effective
under the Securities Act until all Registrable Securities included in the
applicable Demand Request have been purchased by the Company or may be sold
without volume restrictions pursuant to Rule 144(k) as determined by the
counsel to the Company pursuant to a written opinion letter to such effect,
addressed and acceptable to the Company’s transfer agent and the affected Avista
Holders.   The Company will not be responsible for any fees or
expenses incurred by the Avista Holders in connection with the Shelf Funded
Repurchase other than as provided in Section 2.7
hereto.

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.4

        

      

      (m) Piggyback
Registrations.

       

      (n) Each time
the Company proposes to register any of its equity securities (other than
pursuant to an Excluded Registration) under the Securities Act for sale to the
public (whether for the account of the Company or the account of any Security
Holders of the Company) and the form of registration statement to be used
permits the registration of Registrable Shares, the Company shall give prompt
written notice to each Holder of Registrable Shares (which notice shall be given
not less than 30 days prior to the effective date of the Company’s registration
statement), which notice shall offer each such Holder the opportunity to include
any or all of its or his Registrable Shares in such registration statement,
subject to the limitations contained in Section 2.2(b)
hereof.  Each Holder who desires to have its or his Registrable Shares
included in such registration statement shall so advise the Company in writing
(stating the number of shares desired to be registered) within 20 days after the
date of such notice from the Company.  Any Holder shall have the right
to withdraw such Holder’s request for inclusion of such Holder’s Registrable
Shares in any registration statement pursuant to this Section 2.2(a) by
giving written notice to the Company of such withdrawal.  Subject to
Section 2.2(b)
below, the Company shall include in such registration statement all such
Registrable Shares so requested to be included therein; provided, however, that the
Company may at any time withdraw or cease proceeding with any such registration
if it shall at the same time withdraw or cease proceeding with the registration
of all other equity securities originally proposed to be
registered.

       

      (o) If the
managing underwriter advises the Company that the inclusion of Registrable
Shares requested to be included in the registration statement would cause a
Material Adverse Effect, the Company will be obligated to include in the
registration statement, as to each Requesting Holder, only a portion of the
shares such Holder has requested be registered equal to the product of: (i) the
ratio which such Holder’s requested shares bears to the total number of shares
requested to be included in such registration statement by all Persons
(including Requesting Holders) who have requested (pursuant to contractual
registration rights) that their shares be included in such registration
statement; and (ii) the maximum number of shares that the managing underwriter
advises may be sold in an offering covered by the registration statement without
a Material Adverse Effect.  If as a result of the provisions of this
Section 2.2(b)
any Holder shall not be entitled to include all Registrable Shares in a
registration that such Holder has requested to be so included, such Holder may
withdraw such Holder’s request to include Registrable Shares in such
registration statement.  No Person may participate in any registration
statement hereunder unless such Person (i) agrees to sell such person’s
Registrable Shares on the basis provided in any underwriting arrangements
approved by the Company and (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents,
each in customary form, reasonably required under the terms of such underwriting
arrangements; provided, however, that
no

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.4

        

      

      (p) such
Person shall be required to make any representations or warranties in connection
with any such registration other than representations and warranties as to (A)
such Person’s ownership of his or its Registrable Shares to be sold or
transferred free and clear of all liens, claims and encumbrances, (B) such
Person’s power and authority to effect such transfer and (C) such matters
pertaining to compliance with securities laws as may be reasonably requested;
provided, further, however,
that the obligation of such Person to indemnify pursuant to any such
underwriting arrangements shall be several, not joint and several, among such
Persons selling Registrable Shares, and the liability of each such Person will
be in proportion to, and provided, further, that such
liability will be limited, to the net amount received by such Person from the
sale of his or its Registrable Shares pursuant to such
registration.

       

      2.2 Transfer of Registration
Rights.  The rights of each Holder under this Agreement may be
assigned to a transferee or assignee of at least 50,000 shares (on a fully basis
as adjusted for stock splits, stock dividends, recapitalizations and the like)
of a Holder’s Registrable Shares not sold to the public; provided, however, that the
Company is given: (a) written notice by such Holder at or within a reasonable
time after said transfer, stating the name and address of such transferee or
assignee and identifying the securities with respect to which such registration
rights are being transferred or assigned; and (b) a joinder agreement, in a form
reasonably satisfactory to the Company, executed by such assignee pursuant to
which such assignee agrees to be bound by the terms of this
Agreement.  Notwithstanding the foregoing, any Holder may transfer
rights to a transferee of fewer than 50,000 shares (on a fully basis as adjusted
for stock splits, stock dividends, recapitalizations and the like) of a Holder’s
Registrable Shares if such transferee is (a) any affiliate, control person,
controlled person, partner or retired partner of any Holder or (b) any family
member or trust for the benefit of any individual Holder.

       

      2.3 Holdback
Agreement.  Unless the managing underwriter otherwise agrees,
each of the Company and the Holders agrees (and the Company agrees, in
connection with any underwritten registration, to use its commercially
reasonable efforts to cause its Affiliates to agree) not to effect any public
sale or private offer or distribution of any Common Stock or Common Stock
Equivalents during the ten Business Days prior to the effectiveness under the
Securities Act of any underwritten registration and during such time period
after the effectiveness under the Securities Act of any underwritten
registration (not to exceed 90 days) as the Company and the managing underwriter
may agree.  Notwithstanding the foregoing, this Section 2.4 shall not
apply unless all then officers and directors of the Company and each holder of
securities representing 1% or more of the outstanding securities of the Company
enter into similar agreements.  Any discretionary waiver or
termination of the requirements under the foregoing provisions made by the
managing underwriter shall apply to each seller of Registrable Shares on a pro
rata basis in accordance with the number of Registrable Shares held by each
seller.

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.4

        

      

      2.4 Registration
Procedures.  Whenever any Holder has requested that any
Registrable Shares be registered pursuant to this Agreement, the Company will
use its commercially reasonable efforts to effect the registration and the sale
of such Registrable Shares in accordance with the intended method of disposition
thereof, and pursuant thereto the Company will as expeditiously as
possible:

       

      (a) prepare
and file with the SEC a registration statement on any appropriate form under the
Securities Act with respect to such Registrable Shares and use its commercially
reasonable efforts to cause such registration statement to become
effective;

       

      (b) prepare
and file with the SEC such amendments, post-effective amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective until all of
the shares subject to such offering have been sold (or such lesser period as is
necessary for the underwriters in an Underwritten Offering to sell unsold
allotments) and comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such registration statement during
such period in accordance with the intended methods of disposition by the
sellers thereof set forth in such registration statement;

       

      (c) furnish
to each seller of Registrable Shares and the underwriters of the securities
being registered such number of copies of such registration statement, each
amendment and supplement thereto, the prospectus included in such registration
statement (including each preliminary prospectus), any documents incorporated by
reference therein and such other documents as such seller or underwriters may
reasonably request in order to facilitate the disposition of the Registrable
Shares owned by such seller or the sale of such securities by such underwriters
(it being understood that, subject to Section 2.6 and the
requirements of the Securities Act and applicable state securities laws, the
Company consents to the use of the prospectus and any amendment or supplement
thereto by each seller and the underwriters in connection with the offering and
sale of the Registrable Shares covered by the registration statement of which
such prospectus, amendment or supplement is a part);

       

      (d) use its
commercially reasonable efforts to register or qualify the Registrable Shares
under the other securities or blue sky laws of the jurisdictions as the managing
underwriter reasonably requests (or, in the event the registration statement
does not relate to an Underwritten Offering, as the holders of a majority of the
Registrable Shares may reasonably request); use its commercially reasonable
efforts to keep each such registration or qualification (or exemption therefrom)
effective during the period in which the registration statement is required to
be kept effective; and do any and all other acts and things which may be
reasonably necessary or advisable to enable each seller to consummate the
disposition of the Registrable Shares owned by such seller in

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.4

        

      

      (e) such
jurisdictions (provided, however, that the
Company will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
subparagraph or (ii) consent to general service of process in any such
jurisdiction);

       

      (f) promptly
notify each seller and each underwriter and if requested by any such Person,
confirm such notice in writing (i) when a prospectus or any prospectus
supplement or post-effective amendment has been filed and, with respect to a
registration statement or any post-effective amendment, when the same has become
effective, (ii) of the issuance by any state securities or other regulatory
authority of any order suspending the qualification or exemption from
qualification of any of the Registrable Shares under state securities or “blue
sky” laws or the initiation of any proceedings for that purpose and (iii) of the
happening of any event which makes any statement made in a registration
statement or related prospectus untrue or which requires the making of any
changes in such registration statement, prospectus or documents so that they
will 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, and, as promptly as practicable thereafter, prepare and
file with the SEC and furnish a supplement or amendment to such prospectus so
that, as thereafter deliverable to the purchasers of such Registrable Shares,
such prospectus will not contain any untrue statement of a material fact or omit
a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;

       

      (g) make
generally available to the Company’s Security Holders an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act no later than
30 days after the end of the 12 month period beginning with the first day of the
Company’s first fiscal quarter commencing after the effective date of a
registration statement, which earnings statement shall cover said 12 month
period, and which requirement will be deemed to be satisfied if the Company
timely files complete and accurate information on Forms 10-Q, 10-K and 8-K under
the Exchange Act and otherwise complies with Rule 158 under the Securities
Act;

       

      (h) if
requested by the managing underwriter or any seller promptly incorporate in a
prospectus supplement or post-effective amendment such information as the
managing underwriter or any seller reasonably requests to be included therein,
including, without limitation, with respect to the Registrable Shares being sold
by such seller, the purchase price being paid therefor by the underwriters and
with respect to any other terms of the Underwritten Offering of the Registrable
Shares to be sold in such offering, and promptly make all required filings of
such prospectus supplement or post-effective amendment;

       

      (i) as
promptly as practicable after filing with the SEC of any document which is
incorporated by reference into a registration statement (in the

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.4

        

      

      (j) form in
which it was incorporated), deliver a copy of each such document to each
seller;

       

      (k) cooperate
with the sellers and the managing underwriter to facilitate the timely
preparation and delivery of certificates (which shall not bear any restrictive
legends unless required under applicable law) representing securities sold under
any registration statement, and enable such securities to be in such
denominations and registered in such names as the managing underwriter or such
sellers may request and keep available and make available to the Company’s
transfer agent prior to the effectiveness of such registration statement a
supply of such certificates;

       

      (l) promptly
make available for inspection by any seller, any underwriter participating in
any disposition pursuant to any registration statement, and any attorney,
accountant or other agent or representative retained by any such seller or
underwriter (collectively, the “Inspectors”),
all financial and other records, pertinent corporate documents and properties of
the Company (collectively, the “Records”),
as shall be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company’s officers, directors and employees to
supply all information requested by any such Inspector in connection with such
registration statement; provided, however, that, unless
the disclosure of such Records is necessary to avoid or correct a misstatement
or omission in the registration statement or the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction, the Company shall not be required to provide any information under
this subparagraph (j) if (i) the Company believes, after consultation with
counsel for the Company, that to do so would cause the Company to forfeit an
attorney-client privilege that was applicable to such information or (ii) if
either (A) the Company has requested and been granted from the SEC confidential
treatment of such information contained in any filing with the SEC or documents
provided supplementally or otherwise or (B) the Company reasonably determines in
good faith that such Records are confidential and so notifies the Inspectors in
writing unless prior to furnishing any such information with respect to (i) or
(ii) such Holder of Registrable Shares requesting such information agrees to
enter into a confidentiality agreement in customary form and subject to
customary exceptions; and provided, further, that each
Holder of Registrable Shares agrees that it will, upon learning that disclosure
of such Records is sought in a court of competent jurisdiction, give notice to
the Company and allow the Company, at its expense, to undertake appropriate
action and to prevent disclosure of the Records deemed
confidential;

       

      (m) furnish
to each seller and underwriter a signed counterpart of (i) an opinion or
opinions of counsel to the Company and (ii) a comfort letter or comfort letters
from the Company’s independent public accountants, each in customary form and
covering such matters of the type customarily covered by

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.4

        

      

      (n) opinions
or comfort letters, as the case may be, as the sellers or managing underwriter
reasonably requests;

       

      (o) cause the
Registrable Shares included in any registration statement to be (i) listed on
each securities exchange, if any, on which similar securities issued by the
Company are then listed or (ii) authorized to be quoted and/or listed (to the
extent applicable) on the National Association of Securities Dealers, Inc.
(“NASD”).  Automated
Quotation System or the Nasdaq National Market if the Registrable Shares so
qualify;

       

      (p) provide a
transfer agent and registrar for all Registrable Shares registered hereunder and
provide a CUSIP number for the Registrable Shares included in any registration
statement not later than the effective date of such registration
statement;

       

      (q) cooperate
with each seller and each underwriter participating in the disposition of such
Registrable Shares and their respective counsel in connection with any filings
required to be made with the NASD;

       

      (r) during
the period when the prospectus is required to be delivered under the Securities
Act, promptly file all documents required to be filed with the SEC pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act;

       

      (s) notify
each seller of Registrable Shares promptly of any request by the SEC for the
amending or supplementing of such registration statement or prospectus or for
additional information;

       

      (t) prepare
and file with the SEC promptly any amendments or supplements to such
registration statement or prospectus which, in the opinion of counsel for the
Company or the managing underwriter, is required in connection with the
distribution of the Registrable Shares;

       

      (u) enter
into such agreements (including underwriting agreements in the managing
underwriter’s customary form) as are customary in connection with an
underwritten registration; and

       

      (v) advise
each seller of such Registrable Shares, promptly after it shall receive notice
or obtain knowledge thereof, of the issuance of any stop order by the SEC
suspending the effectiveness of such registration statement or the initiation or
threatening of any proceeding for such purpose and promptly use its best efforts
to prevent the issuance of any stop order or to obtain its withdrawal at the
earliest possible moment if such stop order should be issued.

       

      2.5 Suspension of
Dispositions.  Each Holder agrees by acquisition of any
Registrable Shares that, upon receipt of any notice (a “Suspension
Notice”) from the Company of the happening of any event of the kind
described in Section

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.4

        

      

      2.6 2.5(e)(iii) such
Holder will forthwith discontinue disposition of Registrable Shares until such
Holder’s receipt of the copies of the supplemented or amended prospectus, or
until it is advised in writing (the “Advice”)
by the Company that the use of the prospectus may be resumed, and has received
copies of any additional or supplemental filings which are incorporated by
reference in the prospectus, and, if so directed by the Company, such Holder
will deliver to the Company all copies, other than permanent file copies then in
such Holder’s possession, of the prospectus covering such Registrable Shares
current at the time of receipt of such notice.  In the event the
Company shall give any such notice, the time period regarding the effectiveness
of registration statements set forth in Section 2.5(b) hereof
shall be extended by the number of days during the period from and including the
date of the giving of the Suspension Notice to and including the date when each
seller of Registrable Shares covered by such registration statement shall have
received the copies of the supplemented or amended prospectus or the
Advice.  The Company shall use its commercially reasonable efforts and
take such actions as are reasonably necessary to render the Advice as promptly
as practicable.

       

      2.7 Registration
Expenses.  All expenses incident to the Company’s performance
of or compliance with this Article II including,
without limitation, all registration and filing fees, all fees and expenses
associated with filings required to be made with the NASD (including, if
applicable, the fees and expenses of any “qualified independent underwriter” as
such term is defined in Schedule E of the By-Laws of the NASD, and of its
counsel), as may be required by the rules and regulations of the NASD, fees and
expenses of compliance with securities or “blue sky” laws (including reasonable
fees and disbursements of counsel in connection with “blue sky” qualifications
of the Registrable Shares), rating agency fees, printing expenses (including
expenses of printing certificates for the Registrable Shares in a form eligible
for deposit with Depository Trust Company and of printing prospectuses if the
printing of prospectuses is requested by a holder of Registrable Shares),
messenger and delivery expenses, the Company’s internal expenses (including
without limitation all salaries and expenses of its officers and employees
performing legal or accounting duties), the fees and expenses incurred in
connection with any listing of the Registrable Shares, fees and expenses of
counsel for the Company and its independent certified public accountants
(including the expenses of any special audit or “cold comfort” letters required
by or incident to such performance), securities acts liability insurance (if the
Company elects to obtain such insurance), the fees and expenses of any special
experts retained by the Company in connection with such registration, and the
fees and expenses of other persons retained by the Company and reasonable fees
and expenses of one firm of counsel for the sellers (which shall be selected by
the holders of a majority of the Registrable Shares being included in any
particular registration statement) (all such expenses being herein called “Registration Expenses”)
will be borne by the Company whether or not any registration statement becomes
effective; provided, however, that in no
event shall Registration Expenses include any underwriting discounts,
commissions or fees

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.4

        

      

      2.8 attributable
to the sale of the Registrable Shares or any counsel (except as provided above),
accountants or other persons retained or employed by the Holders.

       

      2.9 Indemnification.

       

      (a) The
Company agrees to indemnify and reimburse, to the fullest extent permitted by
law, each seller of Registrable Shares, and each of its employees, advisors,
agents, representatives, partners, officers, and directors and each Person who
controls such seller (within the meaning of the Securities Act or the Exchange
Act) and any agent or investment advisor thereof (collectively, the “Seller
Affiliates”) (i) against any and all losses, claims, damages, liabilities
and expenses, joint or several (including, without limitation, attorneys’ fees
and disbursements except as limited by Section 2.8(c))
based upon, arising out of, related to or resulting from any untrue or alleged
untrue statement of a material fact contained in any registration statement,
prospectus or preliminary prospectus or any amendment thereof or supplement
thereto, or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii)
against any and all losses, liabilities, claims, damages and expenses
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation or investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim whatsoever based upon,
arising out of, related to or resulting from any such untrue statement or
omission or alleged untrue statement or omission, and (iii) against any and all
costs and expenses (including reasonable fees and disbursements of counsel) as
may be reasonably incurred in investigating, preparing or defending against any
litigation, investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon, arising out of,
related to or resulting from any such untrue statement or omission or alleged
untrue statement or omission, or such violation of the Securities Act or
Exchange Act, to the extent that any such expense or cost is not paid under
subparagraph (i) or (ii) above; except insofar as any such statements are made
in reliance upon and in strict conformity with information furnished in writing
to the Company by such seller or any Seller Affiliate for use therein or arise
from such seller’s or any Seller Affiliate’s failure to deliver a copy of the
registration statement or prospectus or any amendments or supplements thereto
after the Company has furnished such seller or Seller Affiliate with a
sufficient number of copies of the same.  The reimbursements required
by this Section
2.8(a) will be made by periodic payments during the course of the
investigation or defense, as and when bills are received or expenses
incurred.

       

      (b) In
connection with any registration statement in which a seller of Registrable
Shares is participating, each such seller will furnish to the Company in writing
such information and affidavits as the Company reasonably requests for use in
connection with any such registration statement or prospectus

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.4

        

      

      (c) and, to
the fullest extent permitted by law, each such seller will indemnify the Company
and its directors and officers and each Person who controls the Company (within
the meaning of the Securities Act or the Exchange Act) against any and all
losses, claims, damages, liabilities and expenses (including, without
limitation, reasonable attorneys’ fees and disbursements except as limited by
Section 2.8(c))
resulting from any untrue statement or alleged untrue statement of a material
fact contained in the registration statement, prospectus or any preliminary
prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but only to the extent that such
untrue statement or alleged untrue statement or omission or alleged omission is
contained in any information or affidavit so furnished in writing by such seller
or any of its Seller Affiliates specifically for inclusion in the registration
statement; provided that the
obligation to indemnify will be several, not joint and several, among such
sellers of Registrable Shares, and the liability of each such seller of
Registrable Shares will be in proportion to, and, provided, further, that such
liability will be limited to, the net amount received by such seller from the
sale of Registrable Shares pursuant to such registration statement; provided, however, that such
seller of Registrable Shares shall not be liable in any such case to the extent
that prior to the filing of any such registration statement or prospectus or
amendment thereof or supplement thereto, such seller has furnished in writing to
the Company information expressly for use in such registration statement or
prospectus or any amendment thereof or supplement thereto which corrected or
made not misleading information previously furnished to the
Company.

       

      (d) Any
Person entitled to indemnification hereunder will (i) give prompt written notice
to the indemnifying party of any claim with respect to which it seeks
indemnification (provided that the
failure to give such notice shall not limit the rights of such Person) and (ii)
unless in such indemnified party’s reasonable judgment a conflict of interest
between such indemnified and indemnifying parties may exist with respect to such
claim, permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party; provided, however, that any
person entitled to indemnification hereunder shall have the right to employ
separate counsel and to participate in the defense of such claim, but the fees
and expenses of such counsel shall be at the expense of such person unless (A)
the indemnifying party has agreed to pay such fees or expenses or (B) the
indemnifying party shall have failed to assume the defense of such claim and
employ counsel reasonably satisfactory to such person.  If such
defense is not assumed by the indemnifying party as permitted hereunder, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent will not be
unreasonably withheld).  If such defense is assumed by the
indemnifying party pursuant to the provisions hereof, such indemnifying party
shall not settle or otherwise compromise the applicable claim unless (i) such
settlement or compromise contains a full and unconditional release of
the

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.4

        

      

      (e) indemnified
party or (ii) the indemnified party otherwise consents in writing.  An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claim, unless in the reasonable judgment of any indemnified party, a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the reasonable fees and
disbursements of such additional counsel or counsels.

       

      (f) Each
party hereto agrees that, if for any reason the indemnification provisions
contemplated by Section 2.8(a) or
Section 2.8(b)
are unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, claims, damages, liabilities or expenses (or actions in
respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, liabilities or expenses (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party and the indemnified party in connection with the actions
which resulted in the losses, claims, damages, liabilities or expenses as well
as any other relevant equitable considerations.  The relative fault of
such indemnifying party and indemnified party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by such indemnifying party or indemnified party, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.  The parties hereto
agree that it would not be just and equitable if contribution pursuant to this
Section 2.8(d)
were determined by pro rata allocation (even if the Holders or any underwriters
or all of them were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to in this Section 2.8(d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or expenses (or actions in respect thereof)
referred to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such indemnified party in connection with investigating
or, except as provided in Section 2.8(c),
defending any such action or claim.  Notwithstanding the provisions of
this Section
2.8(d), no Holder shall be required to contribute an amount greater than
the dollar amount by which the net proceeds received by such Holder with respect
to the sale of any Registrable Shares exceeds the amount of damages which such
Holder has otherwise been required to pay by reason of any and all untrue or
alleged untrue statements of material fact or omissions or alleged omissions of
material fact made in any registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto related to such sale
of Registrable Shares.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.4

        

      

      (g) misrepresentation.  The
Holders’ obligations in this Section 2.8(d) to
contribute shall be several in proportion to the amount of Registrable Shares
registered by them and not joint.

       

      If
indemnification is available under this Section 2.8, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in Section
2.8(a) and Section 2.8(b)
without regard to the relative fault of said indemnifying party or indemnified
party or any other equitable consideration provided for in this Section 2.8(d)
subject, in the case of the Holders, to the limited dollar amounts set forth in
Section 2.8(b).

       

      (h) The
indemnification and contribution provided for under this Agreement will remain
in full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling Person of such
indemnified party and will survive the transfer of securities.

       

      2.10 Current Public
Information.  With a view to making available to the Holders
the benefits of certain rules and regulations of the SEC that may at any time
permit the sale of securities to the public without registration, the Company
agrees to use its best efforts to:

       

      (a) make and
keep public information available, as those terms are defined in Rule 144 under
the Securities Act, at all times after the effective date that the Company
becomes subject to the reporting requirements of the Securities Act or the
Exchange Act;

       

      (b) file with
the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act (at any time after it has
become subject to such reporting requirements); and

       

      (c) furnish
to any Holder, so long as such Holder owns any Registrable Shares, upon request
by such Holder, (i) a written statement by the Company that it has complied with
the reporting requirements of Rule 144 (at any time after 90 days after the
effective date of the first registration statement filed by the Company for an
offering of its securities to the general public), and of the Securities Act and
the Exchange Act (at any time after it has become subject to such reporting
requirements), (ii) a copy of the most recent annual or quarterly report of the
Company and (iii) such other reports and documents of the Company and other
information in the possession of or reasonably obtainable by the Company as a
Holder may reasonably request in availing itself of any rule or regulation of
the SEC allowing a Holder to sell any such securities without
registration.

       

      2.11 No Inconsistent
Agreements.  Neither the Company nor any of its Subsidiaries
has entered, as of the date hereof, nor shall the Company or any of its
Subsidiaries, on of after the date of this Agreement, enter into any agreement
with

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.4

        

      

      2.12 respect
to its securities, that would have the effect of impairing the rights granted to
the Holders under this Agreement or otherwise conflicts with provisions
thereof.  Except as set forth on Schedule 2.10,
neither the Company nor any of its Subsidiaries has previously entered into any
agreement granting any registration rights with respect to any of its securities
to any Person that have not been satisfied in full.  

       

      ARTICLE
III  - TERMINATION

       

      3.1 Termination.  The
provisions of this Agreement shall terminate on the seventh anniversary
hereof.

       

      ARTICLE IV  -  MISCELLANEOUS

       

      4.1 Notices.  Any
notices or other communications required or permitted hereunder shall be in
writing, and shall be sufficiently given if made by hand delivery, by telex, by
telecopier or registered or certified mail, postage prepaid, return receipt
requested, addressed as follows (or at such other address as may be substituted
by notice given as herein provided):

       

      If to the
Company:

       

      Geokinetics
Inc.

      1500 City West Blvd., Suite
800

      Houston, TX 77042

      Telecopy
#: (713) 850-7330

      Attention:  Richard
F. Miles

      

      With
copies to (which shall not constitute notice):

      

      

      Chamberlain,
Hrdlicka, White, Williams & Martin

      1200
Smith Street, Suite 1400

      Houston,
Texas 77002

      Telecopy
#:  (713) 658-2553

      Attention:  James
J. Spring, III

      

      

      If to any
Holder, at its address listed on the signature pages hereof.

       

      Any
notice or communication hereunder shall be deemed to have been given or made as
of the date so delivered if personally delivered; when answered back, if
telexed; when receipt is acknowledged, if telecopied; and five calendar days
after mailing if sent by registered or certified mail (except that a notice of
change of address shall not be deemed to have been given until actually received
by the addressee).

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.4

        

      

      Failure
to transmit a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.  If a notice or
communication is given or made in the manner provided above, it is duly given,
whether or not the addressee receives it.

       

      4.2 Governing
Law.  THIS AGREEMENT, THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AGREEMENT, AND ANY CLAIM OR CONTROVERSY DIRECTLY OR INDIRECTLY BASED
UPON OR ARISING OUT OF THIS AGREEMENT (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE,
SHALL IN ALL RESPECTS BE GOVERNED BY AND INTERPRETED, CONSTRUED AND DETERMINED
EXCLUSIVELY IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW THAT WOULD REQUIRE THE
APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.

       

      4.3 Jurisdiction.  EACH
PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO SUBMIT TO THE EXCLUSIVE
JURISDICTION OF FEDERAL OR STATE COURT OF COMPETENT JURISDICTION IN THE SOUTHERN
DISTRICT OF NEW YORK AND ANY APPELLATE COURT THEREFROM, FOR THE RESOLUTION OF
ANY AND ALL DISPUTES, CONTROVERSIES, CONFLICTS, LITIGATION OR ACTIONS ARISING
OUT OF OR RELATING TO THIS AGREEMENT AND THE SUBJECT MATTER HEREOF AND AGREES
NOT TO COMMENCE ANY LITIGATION OR ACTIONS ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND THE SUBJECT MATTER HEREOF IN ANY OTHER COURT.

       

      4.4 Successors and
Assigns.  Except as otherwise expressly provided herein, this
Agreement shall be binding upon and benefit the Company, each Holder and their
respective successors and assigns.

       

      4.5 Duplicate
Originals.  All parties may sign any number of copies of this
Agreement.  Each signed copy shall be an original, but all of them
together shall represent the same agreement.

       

      4.6 Severability.  In
case any provision in this Agreement shall be held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and the remaining
provisions shall not in any way be affected or impaired thereby.

       

      4.7 No Waivers;
Amendments.

       

      (a) No
failure or delay on the part of the Company or any Holder in exercising any
right, power or remedy hereunder shall operate as a

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.4

        

      

      (b) waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy.  The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to the
Company or any Holder at law or in equity or otherwise.

       

      (c) Any
provision of this Agreement may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Company and the Required
Holders.

       

      4.8 Negotiated
Agreement. This Agreement was negotiated by the parties with the
benefit of legal representation, and any rule of construction or interpretation
otherwise requiring this Agreement to be construed or interpreted against any
party shall not apply to the construction or interpretation hereof.

       

      4.9 Prior Registration
Rights.  In consideration of the inclusion of shares of Common
Stock owned by the Avista Holders within the definition of Registrable
Securities herein, the Avista Holders hereby waive their right to have any of
their shares of Common stock included within the definition of Registrable
Securities under the Registration Rights Agreement dated as of May 2, 2003 (the
“2003
Registration Rights Agreement”), among the Company and the parties named
therein and acknowledge that they shall not be entitled to any rights under the
2003 Registration Rights Agreement.

       

       [THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

       

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.4

        

      

      IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the date first written
above.

       

      GEOKINETICS INC.

      

      

      

      By:  /s/ Richard F.
Miles

                      Name:  Richard
F. Miles

      Title:    President

      

      
        
          
            

            

            DA1:\453472\09\9PWG09!.DOC\18866.0004
                                                             

          

           

        

        
           

          
            

          

        

        
           

          Exhibit
10.4

        

      

      AVISTA
CAPITAL PARTNERS, L.P.

       

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

       

      By:           /s/ Jeff
Gunst                                                      

       

      Jeff
Gunst,

       

      Authorized
Signatory

       

      Address:

      1000
Louisiana Street, Suite 1200

      Houston,
Texas 77002

      Telecopy:
(713) 328-1097

      Attention:
Steve Webster

       

      AVISTA
CAPITAL PARTNERS (OFFSHORE), L.P.

       

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

       

      By:           /s/ Jeff
Gunst                                                      

       

      Jeff
Gunst,

       

      Authorized
Signatory

       

      Address:

      1000
Louisiana Street, Suite 1200

      Houston,
Texas 77002

      Telecopy:
(713) 328-1097

      Attention:
Steve Webster

       

      Copy
to:

       

      King
& Spalding LLP

      1100
Louisiana, Suite 4000

      Houston,
TX  77002

      Telephone:
(713) 751-3240

      Facsimile:  (713)
751-3290

      Attention:  Steve
Rubin, Esq.,

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.4

        

      

      LEVANT
AMERICA S.A.

       

      By:           /s/ K.H. Hannan,
Jr.                                                      

       

      K. H.
Hannan, Jr.

       

      Attorney
in Fact

       

      Colonial
Navigation Company, Inc.

      750
Lexington Ave. 26th Floor

      New York,
New York, 10022

      Telecopy:
(212) 319-2826

      Attention:
K. H. Hannan, Jr.

      

      0686343.04

      940480-000000:7/23/2008

      
        
           

        

        
           

          
            

          

        

        
           

          Exhibit
10.4

        

      

      

      

       

      

       

      

       

      AMENDED
AND RESTATED

      REGISTRATION
RIGHTS AGREEMENT

       

      

       

      GEOKINETICS
INC.

       

      

       

      Dated as
of July 28, 2008

      

      

      

        
          
             

          

          
             

            
              

            

          

          
             

            Exhibit
10.4

          

        

        
          	
                  TABLE
      OF CONTENTS

                	
                  Page

                
	
                  ARTICLE I
    -  DEFINITIONS

                	
                  2

                
	
                  1.1  Definitions

                	
                  2

                
	
                  1.2  Other
      Definitional and Interpretive Matters

                	
                  4

                
	
                  ARTICLE
      II -  REGISTRATION RIGHTS

                	
                  4

                
	
                  2.1  Demand
      Registration

                	
                  5

                
	
                  2.2  Piggyback
      Registrations

                	
                  9

                
	
                  2.3  Transfer
      of Registration Rights

                	
                  10

                
	
                  2.4  Holdback
      Agreement

                	
                  10

                
	
                  2.5  Registration
      Procedures

                	
                  11

                
	
                  2.6  Suspension
      of Dispositions

                	
                  14

                
	
                  2.7  Registration
      Expenses

                	
                  15

                
	
                  2.8  Indemnification

                	
                  16

                
	
                  2.9  Current
      Public Information

                	
                  19

                
	
                  2.10  No
      Inconsistent Agreements

                	
                  19

                
	
                  ARTICLE
      III -  TERMINATION

                	
                  20

                
	
                  3.1  Termination

                	
                  20

                
	
                  ARTICLE
      IV -  MISCELLANEOUS

                	
                  20

                
	
                  4.1  Notices

                	
                  20

                
	
                  4.2  Governing
      Law

                	
                  21

                
	
                  4.3  Jurisdiction

                	
                  21

                
	
                  4.4  Successors
      and Assigns

                	
                  21

                
	
                  4.5  Duplicate
      Originals

                	
                  21

                
	
                  4.6  Severability

                	
                  21

                
	
                  4.7  No
      Waivers; Amendments

                	
                  21

                
	
                  4.8  Negotiated
      Agreement

                	
                  22

                
	
                  4.9  Prior
      Registration Rights

                	
                  22

                
	
                  End of TOC - Do not
      delete this paragraph!

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