Document:

Exhibit 4.3

 

THE SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, (II) SUCH SECURITIES ARE SOLD PURSUANT TO RULE 144 UNDER THE SECURITIES ACT OF 1993, AS AMENDED, OR ANY RULE PROMULGATED UNDER SUCH ACT WHICH IS A SUCCESSOR TO RULE 144, OR (III) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY THE SECURITIES.

 

SUBJECT TO THE PROVISIONS OF SECTION 10 HEREOF, THIS WARRANT SHALL BE VOID AFTER 5:00 P.M. EASTERN TIME ON DECEMBER 15, 2016 (THE “EXPIRATION DATE”).

 

No.

 

GEOKINETICS INC.

 

WARRANT TO PURCHASE                    SHARES OF

COMMON STOCK, PAR VALUE $0.01 PER SHARE

 

For VALUE RECEIVED,                                    (“Warrantholder”), is entitled to purchase, subject to the provisions of this Warrant, from Geokinetics Inc., a Delaware corporation (“Company”), at any time from and after the Initial Exercise Date (as defined below) and not later than 5:00 P.M., Eastern time, on the Expiration Date (as defined above), at an exercise price per share equal to $9.64 (the exercise price in effect being herein called the “Warrant Price”),                    shares (“Warrant Shares”) of the Company’s Common Stock, par value $0.01 per share (“Common Stock”).  The number of Warrant Shares purchasable upon exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time as described herein.

 

This Warrant is one of a series of Warrants of like tenor issued by the Company pursuant to that certain Series D and Warrant Purchase Agreement dated December 14, 2010, among the Company and the Investors named therein (the “Purchase Agreement”), and initially covering an aggregate of up to 3,495,000 shares of Common Stock (collectively, the “2010 Warrants”).

 

As used herein, “Initial Exercise Date” shall mean December 14, 2010.

 

Section 1.               Registration.  The Company shall maintain books for the transfer and registration of the Warrant. Upon the initial issuance of this Warrant, the Company shall issue and register the Warrant in the name of the Warrantholder.

 

1

 

Section 2.               Transfers.  As provided herein, this Warrant may be transferred only pursuant to a registration statement filed under the Securities Act of 1933, as amended (the “Securities Act”), or an exemption from such registration.  Subject to such restrictions, the Company shall transfer this Warrant from time to time upon the books to be maintained by the Company for that purpose, upon surrender hereof for transfer, properly endorsed or accompanied by appropriate instructions for transfer and such other documents as may be reasonably required by the Company, including, if required by the Company, an opinion of its counsel to the effect that such transfer is exempt from the registration requirements of the Securities Act, to establish that such transfer is being made in accordance with the terms hereof, and a new Warrant shall be issued to the transferee and the surrendered Warrant shall be canceled by the Company.

 

Section 3.               Exercise of Warrant.  (a) Subject to the provisions hereof, the Warrantholder may exercise this Warrant, in whole or in part, at any time after the Initial Exercise Date and prior to its expiration upon surrender of the Warrant, together with delivery of a duly executed Warrant exercise form, in the form attached hereto as Appendix A (the “Exercise Agreement”) and payment of the aggregate Warrant Price in the manner set forth in Section 3(b) for that number of Warrant Shares then being purchased, to the Company during normal business hours on any business day at the Company’s principal executive offices (or such other office or agency of the Company as it may designate by notice to the Warrantholder).  The Warrant Shares so purchased shall be deemed to be issued to the Warrantholder or the Warrantholder’s designee, as the record owner of such shares, as of the close of business on the date on which this Warrant shall have been surrendered (or the date evidence of loss, theft or destruction thereof and security or indemnity satisfactory to the Company has been provided to the Company), the Warrant Price shall have been paid and the completed Exercise Agreement shall have been delivered. Certificates for the Warrant Shares so purchased shall be delivered to the Warrantholder within a reasonable time, not exceeding three (3) business days, after this Warrant shall have been so exercised.  The certificates so delivered shall be in such denominations as may be requested by the Warrantholder and shall be registered in the name of the Warrantholder or such other name as shall be designated by the Warrantholder, as specified in the Exercise Agreement.  If this Warrant shall have been exercised only in part, then, unless this Warrant has expired, the Company shall, at its expense, at the time of delivery of such certificates, deliver to the Warrantholder a new Warrant representing the right to purchase the number of shares with respect to which this Warrant shall not then have been exercised.  As used herein, “business day” means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction of business.  Each exercise hereof shall constitute the re-affirmation by the Warrantholder that the representations and warranties contained in Section 4 of the Purchase Agreement are true and correct in all material respects with respect to the Warrantholder as of the time of such exercise.  Notwithstanding the foregoing, to effect the exercise of the Warrant hereunder, the Warrantholder shall not be required to physically surrender this Warrant to the Company unless the entire Warrant is exercised.  The Warrantholder and the Company shall maintain records showing the amount exercised and the dates of such exercise.  The Warrantholder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provision of the paragraph, following exercise of a portion of the Warrant, the number of Warrant Shares of this Warrant may be less than the amount stated on the face hereof.

 

 

(b)           Payment of the Warrant Price may be made, in whole or in part and in any combination of the following at the discretion of the holder: (i) by cash, certified check or wire transfer of funds, (ii) delivery of a number of shares of Series C Preferred Stock of the Company owned by the Warrantholder, with signed stock powers attached endorsed in blank, having a value equal to the Liquidation Preference Amount (as defined in the Certificate of Designations filed by the Company with respect to such preferred stock), plus accrued but unpaid dividends thereon, equal to the applicable Warrant Price, (iii) delivery of a number of shares of Series D Preferred Stock of the Company owned by the Warrantholder, with signed stock powers attached endorsed in blank, having a value equal to the Liquidation Preference Amount (as defined in the Certificate of Designations filed by the Company with respect to such preferred stock), plus accrued but unpaid dividends thereon, equal to the applicable Warrant Price or (iv) by cashless exercise as provided in Section 18 below.

 

Section 4.               Compliance with the Securities Act of 1933.  Except as provided in the Purchase Agreement, the Company may cause the legend set forth on the first page of this Warrant to be set forth on each Warrant, and a similar legend on any security issued or issuable upon exercise of this Warrant, unless counsel for the Company is of the opinion as to any such security that such legend is unnecessary.

 

Section 5.               Payment of Taxes.  The Company will pay any documentary stamp taxes attributable to the initial issuance of Warrant Shares issuable upon the exercise of the Warrant; provided, however, that the Company shall not be required to pay any tax or taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificates for Warrant Shares in a name other than that of the Warrantholder in respect of which such shares are issued, and in such case, the Company shall not be required to issue or deliver any certificate for Warrant Shares or any Warrant until the person requesting the same has paid to the Company the amount of such tax or has established to the Company’s reasonable satisfaction that such tax has been paid.  The Warrantholder shall be responsible for income taxes due under federal, state or other law, if any such tax is due.

 

Section 6.               Mutilated or Missing Warrants.  In case this Warrant shall be mutilated, lost, stolen, or destroyed, the Company shall issue in exchange and substitution of and upon surrender and cancellation of the mutilated Warrant, or in lieu of and substitution for the Warrant lost, stolen or destroyed, a new Warrant of like tenor and for the purchase of a like number of Warrant Shares, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction of the Warrant, and with respect to a lost, stolen or destroyed Warrant, reasonable indemnity or bond with respect thereto, if requested by the Company.

 

Section 7.               Reservation of Common Stock.  At any time when this Warrant is exercisable, the Company shall at all applicable times keep reserved until issued (if necessary) as contemplated by this Section 7, out of the authorized and unissued shares of Common Stock, sufficient shares to provide for the exercise of the rights of purchase represented by this Warrant.  The Company agrees that all Warrant Shares issued upon due exercise of the Warrant shall be, at the time of delivery of the certificates for such Warrant Shares, duly authorized, validly issued, fully paid and non-assessable shares of Common Stock of the Company.

 

 

Section 8.               Adjustments.  Subject and pursuant to the provisions of this Section 8, the Warrant Price and number of Warrant Shares subject to this Warrant shall be subject to adjustment from time to time as set forth hereinafter.

 

A.            Warrant Price Adjustment.

 

1.           If the Company shall issue, on or after the Initial Exercise Date and on or prior to the second anniversary of the Initial Exercise Date, any Additional Stock (as defined below) for a consideration per share less than the Warrant Price in effect immediately prior to the issuance of such Additional Stock, the Warrant Price shall forthwith be adjusted to a price equal to the per share consideration paid or given for such Additional Stock.  If the Company shall issue, after the second anniversary of the Initial Exercise Date, any Additional Stock for a consideration per share less than the Warrant Price in effect immediately prior to the issuance of such Additional Stock, the Warrant Price in effect immediately prior to each such issuance shall forthwith be adjusted to a price determined by multiplying such Warrant Price by a fraction, the numerator of which shall be the number of shares of Common Stock Outstanding (as defined below) immediately prior to such issuance plus the number of shares of Common Stock that the aggregate consideration received by the Company for such issuance would purchase at such Warrant Price; and the denominator of which shall be the number of shares of Common Stock Outstanding (as defined below) immediately prior to such issuance plus the number of shares of such Additional Stock. For purposes of this Section 8(A), the term “Common Stock Outstanding” shall mean and include the following: (1) outstanding Common Stock, (2) Common Stock issuable upon exercise of outstanding stock options, (3) Common Stock issuable upon exercise of outstanding warrants to purchase Common Stock, (4) Common Stock issuable upon conversion of the Series B Preferred Stock, and (5) Common Stock issuable upon the conversion of any other series or class of equity securities issued after the date hereof which is convertible into shares of Common Stock. Shares described in (1) through (3) above shall be included whether vested or unvested, whether contingent or non-contingent and whether exercisable or not yet exercisable.

 

2.             No adjustment of the Warrant Price shall be made in an amount less than one cent per share, provided that any adjustments that are not required to be made by reason of this sentence shall be carried forward and shall be either taken into account in any subsequent adjustment made prior to three (3) years from the date of the event giving rise to the adjustment being carried forward, or shall be made at the end of three (3) years from the date of the event giving rise to the adjustment being carried forward.  Except to the limited extent provided for in subsections 8(A)(5)(c) and (5)(d), no adjustment of such Warrant Price pursuant to this subsection 8(A)(2) shall have the effect of increasing the Warrant Price above the Warrant Price in effect immediately prior to such adjustment.

 

3.             In the case of the issuance of Additional Stock for cash, the consideration shall be deemed to be the amount of cash paid therefore before deducting any reasonable discounts, commission or other expenses allowed, paid or incurred by the 

 

 

Company for any underwriting or otherwise in connection with the issuance and sale thereof.

 

4.             In the case of the issuance of the Additional Stock for a consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the fair market value thereof as determined by the Board of Directors irrespective of any accounting treatment. In the event that the Warrantholder disagrees with the determination of the fair market value of any consideration and the Board of Directors of the Company and the Warrantholder are unable to agree upon such fair market value, the Company and the Warrantholder shall jointly select an appraiser, who is experienced in such matters.  The decision of such appraiser shall be final and conclusive, and the cost of such appraiser shall be borne equally by the Company and the Warrantholder.

 

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

 

a.             The aggregate maximum number of shares of Common Stock deliverable upon exercise (assuming the satisfaction of any conditions to exercisability, including without limitation, the passage of time, but without taking into account potential antidilution adjustments) of such options to purchase or rights to subscribe for Common Stock shall be deemed to have been issued at the time such options or rights were issued and for a consideration equal to the consideration (determined in the manner provided in subsections 8(A)(3) and 8(A)(4)), if any, received by the Company upon the issuance of such options or rights plus the minimum exercise price provided in such options or rights (without taking into account potential antidilution adjustments) for the Common Stock covered thereby.

 

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

 

 

adjustments) upon the conversion or exchange of such securities or the exercise of any related options or rights (the consideration in each case to be determined in the manner provided in subsections 8(A)(3) and 8(A)(4).

 

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

 

d.      The number of shares of Additional Stock deemed issued and the consideration deemed paid therefor pursuant to subsections 8(A)(5)(a) and (b) shall be appropriately adjusted to reflect any change, termination or expiration of the type described in either subsection 8(A)(5)(a) or (b).

 

B.            Additional Stock shall mean any shares of Common Stock issued (or deemed to have been issued pursuant to subsection 8(A)(5)) by the Company on or after the Initial Exercise Date other than:

 

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

 

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

 

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

 

a.             In the event the Company should at any time or from time to time after the Initial Exercise Date fix a record date for the effectuation of a split or subdivision of the outstanding shares of Common Stock or the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in additional shares of Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Common Stock (hereinafter referred to as “Common Stock Equivalents”) without payment of any consideration by such holder for the additional shares of Common Stock or the Common Stock Equivalents (including the additional shares of Common Stock issuable upon conversion or exercise thereof), then, as of such record date (or the date of such dividend distribution, split or subdivision if no record date is fixed), the Warrant Price shall be appropriately decreased so that the number of shares of Common 

 

 

Stock issuable on conversion of each share of such series shall be increased in proportion to such increase of the aggregate of shares of Common Stock outstanding and those issuable with respect to such Common Stock Equivalents.

 

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

 

C.            Warrant Share Adjustment.  If any capital reorganization, reclassification of the capital stock of the Company, consolidation or merger of the Company with another corporation in which the Company is not the survivor, or sale, transfer or other disposition of all or substantially all of the Company’s assets to another corporation shall be effected, then, as a condition of such reorganization, reclassification, consolidation, merger, sale, transfer or other disposition, lawful and adequate provision shall be made whereby each Warrantholder shall thereafter have the right to purchase and receive upon the basis and upon the terms and conditions herein specified and in lieu of the Warrant Shares immediately theretofore issuable upon exercise of the Warrant, such shares of stock, securities or assets as would have been issuable or payable with respect to or in exchange for a number of Warrant Shares equal to the number of Warrant Shares immediately theretofore issuable upon exercise of the Warrant, had such reorganization, reclassification, consolidation, merger, sale, transfer or other disposition not taken place, and in any such case appropriate provision shall be made with respect to the rights and interests of each Warrantholder to the end that the provisions hereof (including, without limitation, provision for adjustment of the Warrant Price) shall thereafter be applicable, as nearly equivalent as may be practicable in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise hereof. The Company shall not effect any such consolidation, merger, sale, transfer or other disposition unless prior to or simultaneously with the consummation thereof the successor corporation (if other than the Company) resulting from such consolidation or merger, or the corporation purchasing or otherwise acquiring such assets or other appropriate corporation or entity shall assume the obligation to deliver to the Warrantholder, at the last address of the Warrantholder appearing on the books of the Company, such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Warrantholder may be entitled to purchase, and the other obligations under this Warrant.  The provisions of this Section 8(C) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales, transfers or other dispositions.

 

Section 9.               Fractional Interest.  The Company shall not be required to issue fractions of Warrant Shares upon the exercise of this Warrant.  If any fractional share of Common Stock would, except for the provisions of the first sentence of this Section 9, be deliverable upon such exercise, the Company, in lieu of delivering such fractional share, shall pay to the exercising Warrantholder an amount in cash equal to the Market Price of such fractional share of Common Stock on the date of exercise.  “Market Price” as of a particular date (the “Valuation Date”) shall mean the following: (a) if the Common Stock is then listed on a national stock exchange, the closing sale price of one share of Common Stock on such exchange on the last trading day prior 

 

 

to the Valuation Date; (b) if the Common Stock is then quoted on The Nasdaq Stock Market, Inc. (“Nasdaq”), the National Association of Securities Dealers, Inc. OTC Bulletin Board (the “Bulletin Board”) or such similar quotation system or association, the closing sale price of one share of Common Stock on Nasdaq, the Bulletin Board or such other quotation system or association on the last trading day prior to the Valuation Date or, if no such closing sale price is available, the average of the high bid and the low asked price quoted thereon on the last trading day prior to the Valuation Date; or (c) if the Common Stock is not then listed on a national stock exchange or quoted on Nasdaq, the Bulletin Board or such other quotation system or association, the fair market value of one share of Common Stock as of the Valuation Date, as determined in good faith by the Board of Directors of the Company and the Warrantholder.  In the event that the Board of Directors of the Company and the Warrantholder are unable to agree upon the fair market value, the Company and the Warrantholder shall jointly select an appraiser, who is experienced in such matters.  The decision of such appraiser shall be final and conclusive, and the cost of such appraiser shall be borne equally by the Company and the Warrantholder.

 

Section 10.             Extension of Expiration Date.  If the Company defers the filing of any Registration Statement covering Registrable Securities (unless otherwise defined herein, capitalized terms are as defined in the Second Amended and Restated Registration Rights Agreement dated February 12, 2010, as amended (the “Registration Rights Agreement”)) pursuant to Section 2.1(h) of the Registration Rights Agreement occurs, and the deferral (whether alone, or in combination with any other deferral) continues for more than 90 days in any twelve-month period, or for more than a total of 90 days, then the Expiration Date of this Warrant shall be extended one day for each day beyond the 90-day limits, as the case may be, that the deferral continues.

 

Section 11.             Benefits.  Nothing in this Warrant shall be construed to give any person, firm or corporation (other than the Company and the Warrantholder) any legal or equitable right, remedy or claim, it being agreed that this Warrant shall be for the sole and exclusive benefit of the Company and the Warrantholder.

 

Section 12.             Notices to Warrantholder.  Upon the happening of any event requiring an adjustment of the Warrant Price, the Company shall promptly give written notice thereof to the Warrantholder at the address appearing in the records of the Company, stating the adjusted Warrant Price and the adjusted number of Warrant Shares resulting from such event and setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Failure to give such notice to the Warrantholder or any defect therein shall not affect the legality or validity of the subject adjustment.

 

Section 13.             Identity of Transfer Agent.  The Transfer Agent for the Common Stock is BNY/Mellon Shareholder Services LLC. Upon the appointment of any subsequent transfer agent for the Common Stock or other shares of the Company’s capital stock issuable upon the exercise of the rights of purchase represented by the Warrant, the Company will mail to the Warrantholder a statement setting forth the name and address of such transfer agent.

 

Section 14.             Notices.  Unless otherwise provided, any notice required or permitted under this Warrant shall be given in writing and shall be deemed effectively given and received 

 

 

as hereinafter described (i) if given by personal delivery, then such notice shall be deemed received upon such delivery, (ii) if given by telex or facsimile, then such notice shall be deemed received upon receipt of confirmation of complete transmittal, (iii) if given by certified mail return receipt requested, then such notice shall be deemed received upon the day such return receipt is signed, and (iv) if given by an internationally recognized overnight air courier, then such notice shall be deemed given one business day after delivery to such carrier. Copies of such notices shall also be transmitted by email to the email address provided for on the signature page of the Purchase Agreement.  All notices shall be addressed as follows: if to the Warrantholder, at its address as set forth in the Company’s books and records and, if to the Company, at the address as follows, or at such other address as the Warrantholder or the Company may designate by ten days’ advance written notice to the other:

 

If to the Company:

 

Geokinetics Inc.

1500 City West Blvd.

Suite 800

Houston, Texas 77042

Attention: Richard F. Miles

Fax: (281) 848-6824

 

With a copy to:

 

Haynes and Boone, LLP

1 Houston Center

1221 McKinney Street

Suite 2100

Houston, Texas 77010

Attention: George G. Young, III

Fax: (713) 547-2600

 

Section 15.             Registration Rights.  The Warrantholder is entitled to the benefit of certain registration rights with respect to the shares of Common Stock issuable upon the exercise of this Warrant as provided in the Registration Rights Agreement, and any subsequent Warrantholder shall be entitled to such rights.

 

Section 16.             Successors.  All the covenants and provisions hereof by or for the benefit of the Warrantholder shall bind and inure to the benefit of its respective successors and assigns hereunder.

 

Section 17.             Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.  This Warrant shall be governed by, and construed in accordance with, the internal laws of the State of New York, without reference to the choice of law provisions thereof.  The Company and, by accepting this Warrant, the Warrantholder, each irrevocably submits to the exclusive jurisdiction of the courts of the State of New York located in New York County and the United States District Court for the Southern District of New York for the purpose of any suit, action, 

 

 

proceeding or judgment relating to or arising out of this Warrant and the transactions contemplated hereby.  Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Warrant.  The Company and, by accepting this Warrant, the Warrantholder, each irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court.  The Company and, by accepting this Warrant, the Warrantholder, each irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  EACH OF THE COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE WARRANTHOLDER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS WARRANT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

 

Section 18.             Cashless Exercise.  The Warrantholder may elect to receive, without other payment by the Warrantholder of the aggregate Warrant Price in respect of the shares of Common Stock to be acquired, shares of Common Stock of equal value to the value of this Warrant, or any specified portion hereof, by the surrender of this Warrant (or such portion of this Warrant being so exercised) together with a Net Issue Election Notice, in the form annexed hereto as Appendix B, duly executed, to the Company. The Company shall use reasonable commercial efforts to permit the exercise of this Warrant by the Warrantholder on a tax-free basis pursuant to this Section 18.  Thereupon, the Company shall issue to the Warrantholder such number of fully paid, validly issued and nonassessable shares of Common Stock as is computed using the following formula:

 

	
X = 
  	
Y (A - B)
  	
 
  
	
 
  	
A
  	
 
  

 

where

 

X =          the number of shares of Common Stock to which the Warrantholder is entitled upon such cashless exercise;

 

Y =          the total number of shares of Common Stock covered by this Warrant for which the Warrantholder has surrendered purchase rights at such time for cashless exercise (including both shares to be issued to the Warrantholder and shares as to which the purchase rights are to be canceled as payment therefor);

 

A =         the Market Price of one share of Common Stock as of the date the net issue election is made; and

 

B =          the Warrant Price in effect under this Warrant at the time the net issue election is made.

 

 

Section 19.             No Rights as Stockholder.  Prior to the exercise of this Warrant, the Warrantholder shall not have or exercise any rights as a stockholder of the Company by virtue of its ownership of this Warrant.

 

Section 20.             Amendment; Waiver.  Any term of this Warrant may be amended or waived (including the adjustment provisions included in Section 8 of this Warrant) upon the written consent of the Company and the holders of 2010 Warrants representing at least 75% of the number of shares of Common Stock then subject to all outstanding 2010 Warrants; provided, that (x) any such amendment or waiver must apply to all Company Warrants; and (y) the number of Warrant Shares subject to this Warrant, the Warrant Price and the Expiration Date may not be amended, and the right to exercise this Warrant may not be altered or waived, without the written consent of the Warrantholder.

 

Section 21.             Section Headings.  The section headings in this Warrant are for the convenience of the Company and the Warrantholder and in no way alter, modify, amend, limit or restrict the provisions hereof.

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed, as on the 14th day of December, 2010.

 

	
 
  	
GEOKINETICS INC.
  
	
 
  	
 
  
	
 
  	
 
  	
 
  
	
 
  	
By:
  	
 
  
	
 
  	
Name: Richard F. Miles
  
	
 
  	
Title: President
  

 

 

APPENDIX A

 

GEOKINETICS INC.

 

WARRANT EXERCISE FORM

 

To Geokinetics Inc.:

 

The undersigned hereby irrevocably elects to exercise the right of purchase represented by the within Warrant (“Warrant”) for, and to purchase thereunder by the payment of the Warrant Price and surrender of the Warrant,                            shares of Common Stock (“Warrant Shares”) provided for therein, and requests that certificates for the Warrant Shares be issued as follows:

 

	
 
  	
 
  	
 
  
	
 
  	
Name
  	
 
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
 
  
	
 
  	
Address
  	
 
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
 
  
	
 
  	
Federal Tax ID or Social Security No.
  	
 
  

 

and delivered by (certified mail to the above address, or (electronically (provide DWAC Instructions:                                         , or (other (specify):                                                ).

 

and, if the number of Warrant Shares shall not be all the Warrant Shares purchasable upon exercise of the Warrant, that a new Warrant for the balance of the Warrant Shares purchasable upon exercise of this Warrant be registered in the name of the undersigned Warrantholder or the undersigned’s Assignee as below indicated and delivered to the address stated below.

 

Dated:

 

	
Note: The signature must correspond with
  
	
Signature:
  	
 
  	
 
  

 

	
the name of the Warrantholder as written on the first page of the Warrant in every particular, without alteration or enlargement or any change whatever, unless the Warrant has been assigned.
  	
 
  	
 
  
	
 
  
	
Name (please print)
  
	
 
  
	
 
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
Address
  

 

 

	
 
  	
 
  
	
 
  	
Federal Identification or
  
	
 
  	
Social Security No.
  
	
 
  	
 
  
	
 
  	
Assignee:
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
 
  

 

 

APPENDIX B

GEOKINETICS INC.

NET ISSUE ELECTION NOTICE

 

To: Geokinetics Inc.:

 

Date: [                                        ]

 

The undersigned hereby elects under Section 18 of this Warrant to surrender the right to purchase [                      ] shares of Common Stock pursuant to this Warrant and hereby requests the issuance of [                          ] shares of Common Stock.  The certificate(s) for the shares issuable upon such net issue election shall be issued in the name of the undersigned or as otherwise indicated below.

 

	
 
  	
 
  
	
Signature
  	
 
  
	
 
  	
 
  
	
 
  	
 
  
	
Name for Registration
  	
 
  
	
 
  	
 
  
	
 
  	
 
  
	
Mailing AddressExhibit 4.4

 

FIRST AMENDMENT TO

SECOND AND RESTATED

REGISTRATION RIGHTS AGREEMENT

 

FIRST AMENDMENT (the “Amendment”) to that certain Second Amended and Restated Registration Rights Agreement (the “Registration Rights Agreement”) dated February 12, 2010, 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”), Levant America S.A., a Liberian corporation (“Levant”), and Petroleum Geo-Services ASA, a Norwegian corporation (“PGS,” and collectively with the Avista Holders and Levant, the “Security Holders”).

 

Capitalized terms not otherwise defined herein shall have the meanings specified for such terms in the Registration Rights Agreement.

 

WHEREAS, the Avista Holders, PGS and Levant collectively constitute Requesting Holders;

 

NOW THEREFORE, the undersigned hereby agree as follows:

 

1.             The first sentence of Section 2.1(i) of the Registration Rights Agreement is hereby amended and restated to read in its entirety as follows:

 

(i)                                     In lieu of any of the Demand Registration 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”), each of the Avista Holders and PGS may issue a Demand Request for the Company to sell Company Shelf Shares and use the proceeds from such sale to purchase all or any portion of (i) the Registrable Shares held by such Requesting Holder (the “Shelf Funded Repurchase”) at a price equal to the price at which the Company Shelf Shares were sold less any underwriting discounts and commission (the “Net Price”) or (ii) to purchase all or any portion of any warrants to purchase Registrable Shares held by such Requesting Holder at a price per Registrable Share underlying the warrant (“Warrant Share”) equal to the Net Price less the applicable exercise price per Warrant Share.

 

 

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

 

	
 
  	
GEOKINETICS INC.
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By: 
  	
/s/ Richard F. Miles
  
	
 
  	
Name: 
  	
Richard F. Miles
  
	
 
  	
Title:
  	
President
  

 

2

 

	
 
  	
 
  	
PETROLEUM GEO-SERVICES ASA
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
By:
  	
/s/ Gottfred Langseth
  
	
 
  	
 
  	
Name: 
  	
Gottfred Langseth
  
	
 
  	
 
  	
Title: 
  	
Chief Financial Officer
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
Address:
  
	
 
  	
 
  	
Strandveien 4
  
	
 
  	
 
  	
P.O. Box 89
  
	
 
  	
 
  	
N-1325 Lysaker
  
	
 
  	
 
  	
Norway
  
	
 
  	
 
  	
Attention: General Counsel
  
	
 
  	
 
  	
Facsimile: +47 67 53 68 83
  
	
 
  	
 
  	
 
  
	
 
  	
Copy to:
  	
 
  
	
 
  	
 
  	
 
  	
 
  
	
 
  	
 
  	
Baker Botts L.L.P.
  	
 
  
	
 
  	
 
  	
One Shell Plaza
  	
 
  
	
 
  	
 
  	
910 Louisiana
  	
 
  
	
 
  	
 
  	
Houston, Texas 77002
  	
 
  
	
 
  	
 
  	
Attention: Joe S. Poff
  	
 
  
	
 
  	
 
  	
Facsimile: (713) 229-7710
  	
 
  
					

 

3

 

	
 
  	
 
  	
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: Jeff Gunst
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
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: Jeff Gunst
  
	
 
  	
 
  	
 
  
	
 
  	
Copy to:
  	
 
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
Gardere Wynne Swell LLP
  
	
 
  	
 
  	
1000 Louisiana Street, Suite 3400
  
	
 
  	
 
  	
Houston, Texas 77002
  
	
 
  	
 
  	
Facsimile: (713) 276-6202
  
	
 
  	
 
  	
Attention: Steven D. Rubin
  

 

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.
  

 

5

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