Document:

Exhibit
4.2

 

THIRD AMENDED

 

CERTIFICATE OF DESIGNATION OF

 

SERIES B SENIOR CONVERTIBLE PREFERRED STOCK

 

OF

 

GEOKINETICS INC.

 

PURSUANT TO SECTION 151(g) OF THE

 

GENERAL CORPORATION LAW OF THE STATE OF DELAWARE

 

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

 

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

 

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

 

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

 

FOUR:   Pursuant to the authority
expressly granted to and vested in the Board of Directors of the Corporation by
Article FOURTH of the Corporation’s Certificate of Incorporation (the “Certificate
of Incorporation”), the Board of Directors for the Corporation, at a
meeting duly and properly called and held December 2, 2009, duly adopted a
resolution

 

 

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

 

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

 

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

 

(1)           Series B Preferred Stock.

 

(a)           Dividends.

 

(i)            The holders of Series B Preferred
Stock, prior and in preference to any declaration or payment of any dividend on
any class or series of capital stock of this Corporation, shall be entitled to
receive cumulative dividends at the applicable Dividend Rate (as defined
below).  For purposes of this Section 1(a)(i),
“Dividend Rate” shall mean 9.75% per annum, compounded quarterly, of the
Original Issue Price (defined in Section 1(b)(i) below) for each
share of Series B Preferred Stock. 
At the option of the Corporation, all or any portion of dividends
payable on shares of Series B Preferred Stock on any quarterly dividend
payment date through and including October 31, 2011 may be paid in
additional shares of Series B Stock, instead of cash.  The value of each share of Series B
Preferred Stock paid in lieu of cash shall be equal to the Original Issue
Price.  After October 31, 2011, all
dividends shall be paid in cash when, and if declared. All unpaid dividends on Series B
Preferred Stock shall be cumulative and shall accrue, compounding quarterly,
regardless of whether or not the Corporation shall have funds legally available
for the payment of such dividends.

 

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

 

(b)           Liquidation Preference.

 

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

 

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preferential amount to which each such share is
entitled. For purposes hereof, “Original Issue Price” shall mean $250.00
per share for each share of Series B Preferred Stock (as adjusted for any
stock splits, stock dividends, combinations, subdivisions, recapitalizations or
the like with respect to the Series B Preferred Stock).

 

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

 

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

 

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

 

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(c)           Redemption Rights.

 

(i)            If, at any time after March 31,
2014, the holders of not less than a majority of the shares of Series Preferred
Stock then outstanding deliver written notice to the Corporation of such
holders’ desire to have the Series B Preferred Stock redeemed, all
outstanding shares of Series B Preferred Stock, if not previously
converted pursuant to Section 1(d), shall be redeemed by the Corporation
on a date which is not more than 90 days after the date on which such written
notice was given to the Corporation by the holders of the Series B
Preferred Stock.  Each share of Series B
Preferred Stock to be redeemed hereunder shall be redeemed by payment by the
Corporation in cash of the Redemption Price (as defined below). For purposes
hereof, the term “Redemption Price” shall mean, with respect to each
share of Series B Preferred Stock, an amount equal to the Liquidation
Preference Amount.

 

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

 

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

 

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

 

(i)            Right to Convert. Each share of Series B Preferred
Stock shall be convertible, at the option of the holder thereof, at any time
after the date of issuance of such share, at the office of the Corporation or
any transfer agent for such stock, into such number of fully paid and
nonassessable shares of Common Stock as is determined by dividing the
Liquidation Preference Amount for the Series B Preferred Stock by the
applicable Conversion Price (as defined below) for the Series B Preferred
Stock (the conversion rate for Series B Preferred Stock into Common Stock
is referred to herein as the “Conversion Rate”), determined as hereafter
provided, in effect on the date the certificate is surrendered for conversion.
The “Conversion Price” per share for Series B Preferred Stock shall
be $17.44 (which amount takes into account the 1-for-10 stock split of the
Corporation effective as of November 3, 2006); provided, however, that the
Conversion Price for the Series B Preferred Stock shall be subject to
adjustment as set forth in subsection 1(e)(iv).

 

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

 

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

 

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

 

(A)          Conversion Price Adjustments.

 

1.     If the Corporation shall issue, on or
after the date upon which this Third Amended Certificate of Designation is
accepted for filing by the Secretary of State of the State of Delaware (the “Filing
Date”), any Additional Stock (as defined below) for a consideration per
share less than the Conversion Price applicable to the Series B Preferred
Stock in effect immediately prior to the issuance of such Additional Stock, and
if the aggregate dollar amount of (A) all previous issuances of Additional
Stock since the Filing Date and (B) all issuances of Additional Stock as
consideration in the Acquisition or pursuant to the Public Offering, as such
terms are defined in that certain Amended and Exchange Agreement dated December 2,
2009, by and among the Corporation, Avista Capital Partners, L.P., Avista
Capital Partners (Offshore), L.P. and Levant America S.A., is less than
$50,000,000 (determined by aggregating all issuances of Additional Stock made
after the Filing Date and as consideration in the Acquisition or pursuant to
the Public Offering) the Conversion Price for the Series B Preferred Stock
in effect immediately prior to each such issuance shall forthwith be adjusted
to a price equal to the per share consideration paid or given for such Additional
Stock; provided, however, if the Corporation shall issue, on or
after the Filing

 

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Date, any
Additional Stock after the aggregate amount of previous issuances made after
the Filing Date are in excess of $50,000,000 (determined by aggregating all
previous issuances of Additional Stock made after the Filing Date and as
consideration in the Acquisition or pursuant to the Public Offering) for a
consideration per share less than the Conversion Price applicable to the Series B
Preferred Stock in effect immediately prior to the issuance of such Additional
Stock, the Conversion Price for the Series B Preferred Stock in effect
immediately prior to each such issuance shall forthwith be adjusted to a price
determined by multiplying such Conversion Price by a fraction, the numerator of
which shall be the number of shares of Common Stock Outstanding (as defined
below) immediately prior to such issuance plus the number of shares of Common
Stock that the aggregate consideration received by the Corporation for such
issuance would purchase at such Conversion Price; and the denominator of which
shall be the number of shares of Common Stock Outstanding (as defined below)
immediately prior to such issuance plus the number of shares of such Additional
Stock.  For purposes of this Section 1(d)(iv)(A),
the term “Common Stock Outstanding” shall mean and include the
following: (1) outstanding Common Stock, (2) Common Stock issuable
upon exercise of outstanding stock options, (3) Common Stock issuable upon
exercise of outstanding warrants to purchase Common Stock, (4) Common
Stock issuable upon conversion of the Series B Preferred Stock, and (5) Common
Stock issuable upon the conversion of any other series or class of equity
securities issued after the date hereof which is convertible into shares of
Common Stock.  Shares described in (1) through
(3) above shall be included whether vested or unvested, whether contingent
or non-contingent and whether exercisable or not yet exercisable.

 

2.     Notwithstanding anything to the contrary
set forth in this Certificate of Designation, no adjustment of the Conversion
Price for the Series B Preferred Stock shall be made in respect of
issuances of Additional Stock as consideration in the Acquisition.

 

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

 

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

 

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

 

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

 

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

 

b.             The aggregate maximum number of shares of
Common Stock deliverable upon conversion or, or in exchange (assuming the
satisfaction of any conditions to convertibility or exchangeability, including,
without limitation, the passage of time, but without taking into account
potential antidilution adjustments) for, any such convertible or exchangeable
securities or upon the exercise of options to purchase or rights to subscribe
for such convertible or exchangeable securities and subsequent conversion or
exchange thereof shall be deemed to have been issued at the time such
securities were issued or such options or rights were issued and for a
consideration equal to the consideration, if any, received by the Corporation for
any such securities and related options or rights (excluding any cash received
on account of accrued interest or accrued dividends), plus the minimum
additional consideration, if any, to be received by the Corporation (without
taking into account potential antidilution adjustments) upon the conversion or
exchange of such securities or the exercise of any related options or rights
(the consideration in each case to be determined in the manner provided in
subsections 1(d)(iv)(A)(3) and 1(d)(iv)(A)(4).

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(v)           In the event the Corporation should at
any time or from time to time after the Filing Date fix a record date for the
effectuation of a split or subdivision of the outstanding shares of Common
Stock or the determination of holders of Common Stock entitled to receive a
dividend or other distribution payable in additional shares of Common Stock or
other securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly, additional shares of Common Stock (hereinafter
referred to as “Common Stock Equivalents”) without payment of any consideration
by such holder for the additional shares of Common Stock or the Common Stock
Equivalents (including the additional shares of Common Stock issuable upon
conversion or exercise thereof), then, as of such record date (or the date of
such dividend distribution, split or subdivision if no record date is fixed),
the Conversion Price of the Series B Preferred Stock shall be
appropriately decreased so that the number of shares of Common Stock issuable
on conversion of each share of such series shall be increased in proportion to
such increase of the aggregate of shares of Common Stock outstanding and those
issuable with respect to such Common Stock Equivalents.

 

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

 

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

 

(e)           Election and Removal of Directors by Series B
Preferred Stock.  Subject to Section 1(f)(ii), the holders
of record of the shares of Series B Preferred Stock, exclusively, shall be
entitled to nominate and elect one (1) director of the Corporation (the “Series B
Director”).  At each regularly
scheduled meeting of the Corporation’s stockholders which is 

 

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called for the purpose of electing members of the
Board of Directors, the presence in person or by proxy of the holders of a
majority of the shares of Series B Preferred Stock then outstanding shall
constitute a quorum of the Series B Preferred Stock for the purpose of
electing the director by holders of the Series B Preferred Stock.  A vacancy in said directorship filled by the
holders of Series B Preferred Stock shall be filled only by vote or written
consent in lieu of a meeting of the holders of the Series B Preferred
Stock.  The Series B Director may be
removed, with our without cause, by the holders of Series B Preferred
Stock in the same manner as such director may be elected hereunder.

 

(f)            Voting Rights.

 

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

 

(ii)           So long as at least 125,000 shares of Series B
Preferred Stock remain outstanding, the Corporation shall not, without first
obtaining the approval (by vote or written consent, as provided by law) of not
less than a majority of the then-outstanding shares of the Series B
Preferred Stock, as determined on a fully diluted and as-converted basis:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(i)            within 90 days after the end of each
fiscal year, its consolidated balance sheet and related statements of income,
stockholders’ equity and cash flows showing the financial condition of the
Corporation and its consolidated subsidiaries as of the close of such fiscal
year and the results of its operations and the operations of such persons
during such year, together with comparative figures for the immediately
preceding fiscal year, all in reasonable detail and prepared in accordance with
United States generally accepted accounting principles (“GAAP”), all
audited by UHY, LLP or other independent public accountants of recognized
national standing and accompanied by an opinion of such accountants (which
opinion shall be without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements fairly present
the financial condition and results of operations of the Corporation and its
consolidated subsidiaries on a consolidated basis in accordance with GAAP;

 

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

 

10

 

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

 

[SIGNATURES ON FOLLOWING PAGE]

 

11

 

IN WITNESS WHEREOF,
Geokinetics Inc. has caused this Third Amended Certificate of Designation to
its Certificate of Incorporation to be signed by Richard F. Miles, its
President and Chief Executive Officer, this 18th day of
December, 2009.

 

 

	
   

  	
  GEOKINETICS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard F. Miles

  
	
   

  	
   

  	
  Richard F. Miles,
  President and

  
	
   

  	
   

  	
  Chief Executive Officer

  

 

12Exhibit
10.1

 

EXECUTION
VERSION

 

Geokinetics
Holdings USA, Inc.

(f/k/a Geokinetics
Holdings, Inc.)

 

and

 

Geokinetics
Inc.

 

$300,000,000

 

9.75% Senior
Secured Notes due 2014

 

PURCHASE
AGREEMENT

 

dated December 18,
2009

 

RBC
Capital Markets Corporation

 

Banc of
America Securities LLC

 

PURCHASE AGREEMENT

 

December 18, 2009

 

RBC Capital Markets Corporation

One Liberty Plaza

New York, New York 10006

 

Banc of America Securities LLC

One Bryant Park

New York, New York 10036

 

As Representatives
of the several Initial

Purchasers
listed in Schedule A hereto

 

Ladies and Gentlemen:

 

Introductory. 
Geokinetics Holdings USA, Inc. (f/k/a Geokinetics Holdings, Inc.),
a Delaware corporation (the “Company”), on the terms and subject to the
condition set forth herein, proposes to issue and sell to the several initial
purchasers named in Schedule A hereto (the “Initial Purchasers”), acting
severally and not jointly, the respective amounts set forth in such Schedule A
of $300,000,000 aggregate principal amount of the Company’s 9.75% Senior
Secured Notes due 2014 (the “Notes”). 
RBC Capital Markets Corporation (“RBC”) and Banc of America
Securities LLC have agreed to act as representatives of the several Initial
Purchasers (in such capacity, the “Representatives”) in connection with
the offering and sale of the Notes.

 

The Securities (as
defined below) will be issued pursuant to an indenture, to be dated as of December 23,
2009 (the “Indenture”), among the Company, Geokinetics Inc. (the “Parent”)
and U.S. Bank National Association, as trustee (the “Trustee”).  Notes issued in book-entry form will be
issued in the name of Cede & Co., as nominee of The Depository Trust
Company (the “Depositary”).

 

As more fully described
in the Pricing Disclosure Package and the Final Offering Memorandum, on December 3,
2009, the Parent entered into a Purchase Agreement (the “PGS Onshore
Purchase Agreement”) with Petroleum Geo-Services ASA, a Norwegian company,
and certain affiliated entities (collectively, “PGS Onshore”), pursuant
to which the Parent has agreed, subject to the conditions contained therein, to
purchase the on-shore seismic data acquisition and multi-client data library
business of PGS Onshore (the “Acquisition”).

 

 

Concurrently with
the consummation of the Acquisition (such time, the “Acquisition Closing
Date”), each of the Parent’s domestic subsidiaries listed on Schedule B
hereto (the “Existing Subsidiary Guarantors”, and, together with any
other domestic subsidiary of the Parent formed or acquired on or after the
Closing Date (as defined below) that executes a supplemental indenture setting
forth an additional guarantee in accordance with the terms of the Indenture,
the “Subsidiary Guarantors”; the Subsidiary Guarantors, together with
the Parent, and their respective successors and assigns, the “Guarantors”)
will, (a) in the case of any Guarantor not already party hereto and to the
Registration Rights Agreement (as defined below), execute a joinder agreement
substantially in the form of Exhibit D hereto (the “Joinder Agreement”)
and become a party hereto and to the Registration Rights Agreement as provided
in Section 12 hereof and (b) enter into a supplemental indenture (the
“Supplemental Indenture”) among themselves and the Trustee, pursuant to
which the Guarantors will guarantee the Notes pursuant to the terms of the
Indenture.

 

The Company’s
payment of principal of, premium and interest and Additional Interest (as
defined in the Indenture), if any, under the Notes, the Exchange Notes (as
defined below) and the Indenture will, upon release of the Pledged Funds (as
defined below) in connection with the consummation of the Acquisition and the
authorization, execution and delivery of the Supplemental Indenture, be
unconditionally guaranteed (the “Guarantees,” and together with the
Notes, the “Securities”), jointly and severally, on a senior secured
basis, by the Guarantors.  The Exchange
Notes (as defined below) and the Guarantees thereof are herein collectively
referred to as the “Exchange Securities.”

 

The holders of the
Securities will be entitled to the benefits of a registration rights agreement,
to be dated as of December 23, 2009 (the “Registration Rights Agreement”),
among the Company, the Parent and the Initial Purchasers and, upon execution of
the Joinder Agreement, the Subsidiary Guarantors, pursuant to which the Company
and each of the Guarantors will agree to file with the Securities and Exchange
Commission (the “Commission”) a registration statement under the
Securities Act of 1933 (as amended, the “Securities Act,” which term, as
used herein, includes the rules and regulations of the Commission
promulgated thereunder), relating to an offer (the “Exchange Offer”) to
exchange another series of debt securities of the Company with terms
substantially identical to the Notes (the “Exchange Notes”) and to have
it declared effective by the Commission on or prior to 270 days after the
Closing Date, and, to the extent required by the Registration Rights Agreement,
a shelf registration statement pursuant to Rule 415 of the Securities Act
relating to the resale by certain holders of the Notes.

 

The Company
understands that the Initial Purchasers propose to make an offering of the
Securities on the terms and in the manner set forth herein and in the Pricing
Disclosure Package (as defined below) and the Final Offering Memorandum (as
defined below) and agrees that the Initial Purchasers may resell, subject to
the conditions set forth herein, all or a portion of the Securities to
purchasers (the “Subsequent Purchasers”) at any time after the date of
this Agreement.  The “Applicable Time”
means 12:00 p.m. (New York City time) on December 18, 2009, which is
the time of the first sale of the Notes by the Initial Purchasers to the
Subsequent Purchasers.  The Securities
are to be offered and sold to or through the Initial Purchasers without being
registered with the Commission under the Securities Act, in reliance upon
exemptions therefrom.  The terms of the
Securities and the Indenture will require that investors that acquire 

 

2

 

Securities expressly agree that Securities may only be resold or
otherwise transferred, after the date hereof, if such Securities are registered
for sale under the Securities Act or if an exemption from the registration requirements
of the Securities Act is available (including the exemptions afforded by Rule 144A
(“Rule 144A”) or Regulation S (“Regulation S”) thereunder).

 

Pursuant to the
Security Documents (as defined in the Indenture) to be entered into among the
Company, the Guarantors and the Trustee on the Acquisition Closing Date, the
obligations of the Company under the Securities and of each Guarantor under its
Guarantee will be secured by Priority Liens (as defined in the Indenture), on a
first priority basis, over substantially all assets of the Company and the
Guarantors, subject to certain exceptions (all assets subject to the Priority
Liens, hereinafter collectively referred to as the “Collateral”).  The Collateral will also be pledged to U.S.
Bank National Association, as agent (the “Collateral Agent”), for the
benefit of the lenders under the Revolving Credit Facility, to be dated as of
the Acquisition Closing Date, among the Collateral Agent, the Company, the
Parent and certain of its subsidiaries as borrowers, as holders of the senior
priority liens, and will be granted to the Trustee for the benefit of the
holders of the Securities as holders of Priority Liens.  On the Closing Date, the Trustee will enter
into a collateral trust and intercreditor agreement (the “Intercreditor
Agreement”) with the Company, the guarantors from time to time party
thereto, Royal Bank of Canada, as administrative agent, the other senior
representatives from time to time party thereto and the Collateral Agent with
respect to the Collateral.

 

On or prior to the
Closing Date, the Company will enter into the Collateral Pledge and Security
Agreement (the “Pledge Agreement”),
among the Company, the Trustee and U.S. Bank National Association, as
collateral agent (the “Escrow Agent”), pursuant to which $303,803,040,
representing an amount equal to 101% of the aggregate issue price of the Notes,
plus accrued and unpaid interest from and including the Closing Date to, but
excluding, March 15, 2010, will be deposited into an account (the “Collateral Account”) with the
Collateral Agent, such that the escrowed funds (the “Pledged Funds”) are in an amount sufficient to redeem the
Notes at a price equal to 101% of the aggregate issue price of the Notes, plus
accrued and unpaid interest from and including the Closing Date to, but
excluding, March 15, 2010, if the Pledged Funds are disbursed pursuant to Section 7(b) of
the Pledge Agreement.  The Pledge
Agreement shall provide that the Pledged Funds shall only be released pursuant
to the terms of the Pledge Agreement.

 

As used herein,
the term “Operative Documents” refers to this Agreement, the
Registration Rights Agreement, the Indenture, the Security Documents, the
Securities, the Exchange Securities, the Joinder Agreement, the Supplemental
Indenture, the Intercreditor Agreement and the Pledge Agreement.

 

The Company has
prepared and delivered to each Initial Purchaser copies of a preliminary
offering memorandum, dated December 7, 2009 (the “Preliminary Offering
Memorandum”), and has prepared and delivered to each Initial Purchaser
copies of a pricing supplement, dated December 18, 2009 (in the form
attached hereto as Exhibit A, the “Pricing Supplement”), describing
the terms of the Securities, each for use by such Initial Purchaser in
connection with its solicitation of offers to purchase the Securities.  The Preliminary Offering Memorandum and the
Pricing Supplement are herein referred to as the “Pricing Disclosure Package.”  Promptly after the Applicable Time, the
Company will prepare and deliver to each 

 

3

 

Initial Purchaser a final offering memorandum dated the date hereof
(the “Final Offering Memorandum”). All references herein to the terms “Pricing
Disclosure Package” and “Final Offering Memorandum” shall be deemed to mean and
include all information filed under the Securities Exchange Act of 1934 (as
amended, the “Exchange Act,” which term, as used herein, includes the rules and
regulations of the Commission promulgated thereunder) prior to the Applicable
Time and incorporated by reference in the Pricing Disclosure Package (including
the Preliminary Offering Memorandum) or the Final Offering Memorandum (as the
case may be), and all references herein to the terms “amend,” “amendment” or “supplement”
with respect to the Final Offering Memorandum shall be deemed to mean and
include all information filed under the Exchange Act after the Applicable Time
and incorporated by reference in the Final Offering Memorandum.

 

The Company, the
Parent and, upon execution of the Joinder Agreement, the Subsidiary Guarantors,
hereby confirm their agreements with the Initial Purchasers as follows:

 

SECTION 1.  Representations and Warranties.  Each of the Company, the Parent
and, upon execution of the Joinder Agreement, the Subsidiary Guarantors,
jointly and severally, hereby represents, warrants and covenants to each
Initial Purchaser as follows:

 

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

 

(b)  No Integration of
Offerings or General Solicitation. 
Neither the Company nor any of its affiliates (as such term is defined
in Rule 501 under the Securities Act (each, an “Affiliate”)) has,
directly or indirectly, solicited any offer to buy or offered to sell, and will
not, directly or indirectly, solicit any offer to buy or offer to sell, in the
United States or to any United States citizen or resident, any security which
is or would be integrated with the sale of the Securities in a manner that
would require the Securities to be registered under the Securities Act.  Neither the Company nor any of its
Affiliates, or any person acting on its or any of their behalf (other than the
Initial Purchasers, as to whom neither the Company nor any of its Affiliates
makes any representation or warranty) has engaged or will engage, in connection
with the offering of the Securities, in any form of general solicitation or
general advertising within the meaning of Rule 502 under the Securities
Act.  With respect to those Securities
sold in reliance upon Regulation S, (i) neither the Company nor any of its
Affiliates or any person acting on its or their behalf (other than the Initial
Purchasers, as to whom neither the Company nor any of its Affiliates makes any
representation or warranty) has engaged or will engage in any directed selling
efforts within the meaning of Regulation S and (ii) each of the Company
and its Affiliates and any person acting on its or their behalf (other than the
Initial Purchasers, as to whom neither the Company nor any of its Affiliates
makes any representation or warranty) has complied and will 

 

4

 

comply with the offering restrictions set forth in
Regulation S and, in connection therewith, the Pricing Disclosure Package and
the Final Offering Memorandum will contain the disclosure required by Rule 902
of the Securities Act, and (iii) the sale of the Securities pursuant to
Regulation S is not part of a plan or scheme to evade the registration
requirements of the Securities Act.

 

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

 

(d)  The Pricing Disclosure Package and the
Final Offering Memorandum. Neither the Pricing Disclosure Package
(as defined below), as of the Applicable Time, nor the Final Offering
Memorandum, as of its date or (as amended or supplemented in accordance with Section 3(a),
as applicable) as of the Closing Date, contains or will contain an untrue
statement of a material fact or omits or will omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that this
representation, warranty and agreement shall not apply to statements in or
omissions from the Pricing Disclosure Package, the Final Offering Memorandum or
any amendment or supplement thereto made in reliance upon and in conformity
with information furnished to the Company in writing by any Initial Purchaser
through the Representatives expressly for use in the Pricing Disclosure
Package, the Final Offering Memorandum or any amendment or supplement thereto,
as the case may be.  The Pricing
Disclosure Package contains, and the Final Offering Memorandum will contain,
all the information specified in, and meeting the information requirements of, Rule 144A(d)(4).  None of the Company or any of its Affiliates
has distributed or will distribute, prior to the later of the Closing Date and
the completion of the Initial Purchasers’ distribution of the Securities, any
offering material in connection with the offering and sale of the Securities
other than the Pricing Disclosure Package and the Final Offering Memorandum or
any amendment or supplement thereto in accordance with Section 3(a).

 

(e)  Company Additional Written
Communications. 
None of the Parent, the Company or any Existing Subsidiary Guarantor has
prepared, made, used, authorized, approved or distributed or will prepare,
make, use, authorize, approve or distribute any written communication that
constitutes an offer to sell or solicitation of an offer to buy the Securities
(each such communication by the Company, the Parent, an Existing Subsidiary
Guarantor or any of their respective agents and representatives (other than a
communication referred to in clauses (i) and (ii) below) a “Company
Additional Written Communication”) other than (i) the Pricing
Disclosure Package, (ii) the Final Offering Memorandum, and (iii) any
electronic road show or other written communications, in each case used in accordance
with Section 3(a).  Each such
Company Additional Written Communication, when taken together with the Pricing
Disclosure Package, did not, and at the Closing Date will not, contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that this representation,
warranty and agreement shall not apply to statements in or omissions from each
such Company Additional Written Communication made in reliance upon and in
conformity with information furnished to the Company in writing by any Initial
Purchaser through the Representatives expressly for use in any Company
Additional Written Communication.

 

5

 

(f)  Incorporated Documents. 
The documents incorporated by reference in each of the Pricing
Disclosure Package and the Offering Memorandum, when they were filed with the
Commission, conformed in all material respects to the requirements under the
Exchange Act.  Any further documents so
filed and incorporated by reference in either the Pricing Disclosure Package or
the Offering Memorandum or any further amendment or supplement thereto, when
such documents are filed with the Commission, will conform in all material
respects to the requirements under the Exchange Act.

 

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

 

(h)  The Registration Rights Agreement.  At the Closing Date, the
Registration Rights Agreement will be duly authorized, executed and delivered
by, and will be a valid and binding agreement of, the Company and the Parent,
enforceable in accordance with its terms, except as the enforcement thereof may
be limited by the Enforceability Exceptions and except as rights to
indemnification under the Registration Rights Agreement may be limited by
applicable law.

 

(i) 
The Intercreditor
Agreement.  At the Closing Date, the
Intercreditor Agreement will be duly authorized, executed and delivered by, and
will be a valid and binding agreement of, the Company and the Guarantors,
enforceable in accordance with its terms, except as the enforcement thereof may
be limited by the Enforceability Exceptions.

 

(j) 
The Pledge
Agreement.  At the Closing Date, the Pledge
Agreement will be duly authorized, executed and delivered by, and will (i) create
a valid, binding and enforceable security interest in the the deposit and
securities accounts created pursuant thereto  in favor of the Trustee for the benefit of the
holders of the Securities, and (ii) be a valid and binding obligation of
the Company enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by the Enforceability Exceptions.

 

(k) 
The Joinder
Agreement.  (i) At the Closing Date, the
Joinder Agreement, pursuant to which the Subsidiary Guarantors will become a
party to this Agreement and the Registration Rights Agreement, will have been
duly authorized by each Existing Subsidiary Guarantor, and (ii) at the
Acquisition Closing Date, will be duly authorized, executed and delivered by
each Subsidiary Guarantor, and this Agreement will be a valid and binding
agreement of each Subsidiary Guarantor, enforceable in accordance with its
terms, except as rights to indemnification hereunder may be limited by
applicable law and except as the enforcement hereof may be limited by the
Enforceability Exceptions and the Registration Rights Agreement will be a valid
and binding agreement of each Subsidiary Guarantor, enforceable in accordance
with its terms, except as the enforcement thereof may be limited by the
Enforceability Exceptions and except as rights to indemnification under the
Registration Rights Agreement may be limited by applicable law.

 

6

 

(l)  Authorization of the Securities and the
Exchange Securities.  The
Notes to be purchased by the Initial Purchasers from the Company are in the
form contemplated by the Indenture, have been duly authorized for issuance and
sale pursuant to this Agreement and the Indenture and, (x) at the Closing
Date, will have been duly executed by the Company and, when authenticated in
the manner provided for in the Indenture and delivered against payment of the
purchase price therefor, will constitute valid and binding agreements of the
Company, enforceable in accordance with their terms, except as the enforcement
thereof may be limited by the Enforceability Exceptions  and
will be entitled to the benefits of the Indenture, and (y) upon the
Acquisition Closing Date and the authorization, execution and delivery of the
Supplemental Indenture, will remain valid and binding agreements of the
Company, enforceable in accordance with their terms, except as the enforcement
thereof may be limited by the Enforceability Exceptions  and
will be entitled to the benefits of the Indenture.  The Exchange Notes have been duly and validly
authorized for issuance by the Company, and when issued and authenticated in
accordance with the terms of the Indenture, the Registration Rights Agreement
and the Exchange Offer, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, except
as the enforcement thereof may be limited by the Enforceability Exceptions and
will be entitled to the benefits of the Indenture. At the Closing Date, the
Guarantees of the Notes will be duly authorized for issuance and sale pursuant
to this Agreement, the Indenture and the Supplemental Indenture by each of the
Guarantors and, upon the Acquisition Closing Date and execution and delivery of
the Supplemental Indenture, will constitute valid and binding agreements of the
Guarantors, enforceable in accordance with their terms, except as the
enforcement thereof may be limited by the Enforceability Exceptions  and will be entitled to the benefits of the Indenture.  At the Closing Date, the Guarantees of the
Exchange Notes will be duly authorized for issuance and sale pursuant to this
Agreement, the Indenture and the Supplemental Indenture by each of the Guarantors
and, at the time the Exchange Notes are authenticated in the manner provided
for in the Indenture and delivered against payment of the purchase price
therefor, will constitute valid and binding agreements of the Guarantors,
enforceable in accordance with their terms, except as the enforcement thereof
may be limited by the Enforceability Exceptions and will be entitled to the
benefits of the Indenture.

 

(m)  Authorization of the Indenture.  The Indenture has been duly authorized by the
Company and the Parent and, (x) at the Closing Date, will have been duly
executed and delivered by the Company and the Parent and will constitute a
valid and binding agreement of the Company and the Parent, enforceable against
the Company and the Parent in accordance with its terms, except as the
enforcement thereof may be limited by the Enforceability Exceptions and (y) upon
the Acquisition Closing Date and the execution and delivery of the Supplemental
Indenture, will constitute a valid and binding agreement of the Guarantors,
enforceable against the Guarantors in accordance with its terms, except as the
enforcement thereof may be limited by the Enforceability Exceptions.

 

(n)  Authorization of the Supplemental Indenture.  (i) At the Closing
Date, the Supplemental Indenture will be duly authorized, and (ii) on or
prior to the Acquisition Closing Date, will be duly executed and delivered by
the Company and each Guarantor and will constitute a valid and binding
agreement of the Company and each Guarantor, enforceable against the Company
and each Guarantor in accordance with its terms, except as the enforcement
thereof may be limited by the Enforceability Exceptions, and the Indenture, as
supplemented by 

 

7

 

the
Supplemental Indenture, will constitute a valid and binding agreement of the
Company and each Guarantor, enforceable against the Company and each Guarantor
in accordance with its terms, except as the enforcement thereof may be limited
by the Enforceability Exceptions.

 

(p)  Authorization of the Security Documents. (i) At the Closing
Date, the Security Documents will be duly authorized, and (ii) on or prior
to the Acquisition Closing Date, will be duly executed and delivered by the
Company and each Guarantor.  When the
Security Documents have been duly executed and delivered by each of the parties
thereto, the Security Documents will (i) create a valid, binding and
enforceable security interest in the Collateral in favor of the Trustee for the
benefit of the holders of the Securities, and all material agreements which are
part of the Collateral and to which the Company or any Guarantor is a party or
by which it is bound will be valid, binding and enforceable against the Company
or such Guarantor and (ii) be valid and binding obligations of the Company
and each of the Guarantors, enforceable against the Company and each Guarantor
in accordance with their terms, subject to the Enforceability Exceptions  and except that any rights to
indemnity and contributions may be limited by applicable laws and public policy
considerations. On the Closing Date, the Security Documents and the Collateral
will conform in all material respects to the statements relating thereto
contained in the Pricing Disclosure Package and the Final Offering Memorandum.

 

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

 

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

 

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

 

(t)  No Material Adverse Change.  Except as otherwise disclosed in the Pricing
Disclosure Package and the Final Offering Memorandum, subsequent to the
respective dates as of which information is given in the Pricing Disclosure
Package: (i) there has been no material adverse change, or any development that
could reasonably be expected to result in a material adverse change, in the
condition, financial or otherwise, or in the earnings, business, operations or
prospects, whether or not arising from transactions in the ordinary course of
business, of the Parent and its subsidiaries, considered as one entity (any
such change is called a “Material Adverse Change”); (ii) the Parent
and its subsidiaries, considered as one entity, have not incurred

 

8

 

any material liability or obligation, indirect, direct or contingent,
nor entered into any material transaction or agreement; and (iii) there
has been no dividend or distribution of any kind declared, paid or made by the
Parent or, except for dividends paid to the Parent or other subsidiaries, any
of its subsidiaries on any class of capital stock or repurchase or redemption
by the Parent or any of its subsidiaries of any class of capital stock.

 

(u)  Independent Accountants.  UHY, LLP, which has expressed its opinion
with respect to the financial statements (which term as used in this Agreement
includes the related notes thereto) and supporting schedules filed with the
Commission included or incorporated by reference in the Pricing Disclosure
Package and the Final Offering Memorandum, is an independent registered public
accounting firm with respect to the Parent and independent public or certified
public accountants, within the meaning of Regulation S-X under the Securities
Act and the Exchange Act.  KPMG LLP,
which has certified certain financial statements of PGS Onshore and delivered
its report with respect to the audited financial statements included in the
Pricing Disclosure Package and the Final Offering Memorandum, is, to the
knowledge of the Parent and the Company, an independent registered public
accounting firm with respect to PGS Onshore within the meaning of the
Securities Act and the Exchange Act.

 

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

 

(w)  Incorporation and Good Standing of the
Parent and its Subsidiaries. 
Each of the Parent and its subsidiaries has been duly incorporated or
organized and is validly existing as a corporation, limited partnership or
limited liability company in good standing under 

 

9

 

the laws of the jurisdiction of its incorporation or organization and
has corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Pricing Disclosure Package and the
Final Offering Memorandum and, in the case of the Company and the Guarantors,
to enter into and perform its obligations under each of the Operative Documents.  Each of the Parent and its subsidiaries is
duly qualified as a foreign corporation, limited partnership or limited
liability company to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good standing would
not, individually or in the aggregate, result in a Material Adverse Change.  All of the issued and outstanding capital
stock or membership interests of each subsidiary of the Parent have been duly
authorized and validly issued, is fully paid and nonassessable and is owned by
the Parent, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or claim except liens under the
Second Amended and Restated Revolving Credit and Security Agreement, by and
among the Parent, the subsidiaries named therein and PNC Bank, National
Association (“Permitted Liens”). 
The Parent does not own or control, directly or indirectly, any
corporation, association or other entity other than the subsidiaries listed in
Schedule C hereto.

 

(x)  Capitalization and Other Capital Stock
Matters.  The authorized,
issued and outstanding capital stock of the Parent is as set forth in the
Pricing Disclosure Package and the Final Offering Memorandum under the caption “Capitalization”
(other than for subsequent issuances of capital stock, if any, pursuant to
employee benefit plans described in the Pricing Disclosure Package and the
Final Offering Memorandum or upon exercise of outstanding options or warrants
described in the Pricing Disclosure Package and the Final Offering
Memorandum).  All of the outstanding
shares of Common Stock have been duly authorized and validly issued, are fully
paid and nonassessable and have been issued in compliance with federal and
state securities laws.  None of the
outstanding shares of Common Stock were issued in violation of any preemptive
rights, rights of first refusal or other similar rights to subscribe for or
purchase securities of the Parent.  There
are no authorized or outstanding options, warrants, preemptive rights, rights
of first refusal or other rights to purchase, or equity or debt securities
convertible into or exchangeable or exercisable for, any capital stock of the
Parent or any of its subsidiaries other than those accurately described in the
Pricing Disclosure Package and the Final Offering Memorandum.  The description of the Parent’s stock option,
stock bonus and other stock plans or arrangements, and the options or other
rights granted thereunder, set forth or incorporated by reference in the
Pricing Disclosure Package and the Final Offering Memorandum accurately and
fairly describes such plans, arrangements, options and rights.

 

(y)  Non-Contravention of Existing Instruments;
No Further Authorizations or Approvals Required.  Neither the Parent nor any of its
subsidiaries is in violation of its charter or by-laws or organization documents
or in default (or, with the giving of notice or lapse of time, would be in
default) (“Default”) under any indenture, mortgage, loan or credit
agreement, note, contract, franchise, lease or other instrument to which the
Parent or any of its subsidiaries is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Parent or any of its
subsidiaries is subject (each, an “Existing Instrument”), except for
such Defaults as would not, individually or in the aggregate, result in a
Material Adverse Change.  The Company’s
and each Guarantor’s execution, delivery and performance of the Operative
Documents, and the issuance and delivery of the Securities or the Exchange
Securities, and 

 

10

 

consummation of the transactions contemplated hereby and thereby and by
the Pricing Disclosure Package and the Final Offering Memorandum (i) will
not result in any violation of the provisions of the charter or by-laws or
organization documents of the Parent or any subsidiary, (ii) will not
conflict with or constitute a breach of, or Default or a Debt Repayment
Triggering Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
the Parent or any of its subsidiaries pursuant to, or require the consent of
any other party to, any Existing Instrument, except for such conflicts,
breaches, Defaults, liens, charges or encumbrances as would not, individually
or in the aggregate, result in a Material Adverse Change or, in the case of the
Second Amended and Restated Revolving Credit and Security Agreement, by and
among the Parent, the subsidiaries named therein and PNC Bank, National
Association, have been waived, and (iii) will not result in any violation
of any law, administrative regulation or administrative or court decree
applicable to the Parent or any subsidiary, except for such violations as would
not, individually or in the aggregate, result in a Material Adverse
Change.  No consent, approval,
authorization or other order of, or registration or filing with, any court or
other governmental or regulatory authority or agency, is required for the
Company’s or each Guarantor’s execution, delivery and performance of the
Operative Documents, or the issuance and delivery of the Securities or the
Exchange Securities, or consummation of the transactions contemplated hereby
and thereby and by the Pricing Disclosure Package and the Final Offering
Memorandum, except (w) such as have been obtained or made by the Company
or the Guarantors and are in full force and effect under the Securities Act,
applicable state securities or blue sky laws, (x) such as may be required
by federal and state securities laws with respect to the Company’s and each
Guarantor’s obligations under the Registration Rights Agreement, (y) filings
necessary to perfect the secured interests in the Collateral and (z) as
disclosed in the Pricing Disclosure Package and the Final Offering Memorandum
relating to competition laws in the United States and Mexico in connection with
the Acquisition.  As used herein, a “Debt
Repayment Triggering Event” means any event or condition which gives, or with
the giving of notice or lapse of time would give, the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such
holder’s behalf) the right to require the repurchase, redemption or repayment
of all or a portion of such indebtedness by the Parent or any of its
subsidiaries.

 

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

 

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

 

11

 

infringement or conflict with asserted Intellectual Property Rights of
others, which infringement or conflict, if the subject of an unfavorable
decision, would result in a Material Adverse Change.

 

(bb)  All
Necessary Permits, etc.  The
Parent and each subsidiary possess such valid and current certificates,
authorizations or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct their respective businesses,
and neither the Parent nor any subsidiary has received any notice of
proceedings relating to the revocation or modification of, or non-compliance
with, any such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, could
result in a Material Adverse Change.

 

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

 

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

 

(ee)  Company and
Guarantors Each Not an “Investment Company”.  None of the Parent, the Company or any
Subsidiary Guarantor is, or after receipt of payment for the Securities and the
use of proceeds thereof as described in the Pricing Disclosure Package and the
Final Offering Memorandum each will be, an “investment company” within the
meaning of the Investment Company Act of 1940, as amended (the “Investment
Company Act”), and the Parent, the Company and each Subsidiary Guarantor intends
to conduct its business in a manner so that it will not become subject to the
Investment Company Act.

 

(ff)  Insurance.  Each of the Parent and its subsidiaries are
insured by recognized, financially sound institutions with policies in such
amounts and with such deductibles and covering such risks as management has
reasonably deemed adequate and customary for their businesses including, but
not limited to, policies covering real and personal property owned or leased by
the Parent and its subsidiaries against theft, damage, destruction, acts of
vandalism and earthquakes.  The Parent
has no knowledge that it or any subsidiary will not be able (i) to renew
its existing insurance coverage as and when such policies expire or (ii) to
obtain comparable coverage from similar institutions as may be necessary or
appropriate to 

 

12

 

conduct its business as now conducted and at a cost that would not
result in a Material Adverse Change. 
Neither of the Parent nor any subsidiary has been denied any insurance
coverage which it has sought or for which it has applied.

 

(gg)  No Price
Stabilization or Manipulation. 
None of the Parent, the Company or any of the Subsidiary Guarantors has
taken or will take, directly or indirectly, any action designed to or that
might be reasonably expected to cause or result in stabilization or
manipulation of the price of any security of the Company or the Parent to
facilitate the sale or resale of the Securities.

 

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

 

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

 

(jj)  Parent’s
Internal Control over Financial Reporting.  The Parent maintains a system of internal
controls over financial reporting sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with management’s general
or specific authorization; (ii) transactions are recorded as necessary to
permit preparation of reliable financial statements in conformity with
generally accepted accounting principles as applied in the United States and to
maintain accountability for assets; (iii) records are maintained in sufficient
detail to accurately and fairly reflect the transactions and dispositions of
the Parent’s assets (iv) access to assets is permitted only in accordance with
management’s general or specific authorization; and (v) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.  The Parent is not aware of (a) any
significant deficiency in the design or operation of internal control over
financial reporting which could adversely affect the Parent’s ability to
record, process, summarize and report financial data or any material weaknesses
in internal controls over financial reporting or (b) any fraud, whether or
not material, that involves management or other employees who have a
significant role in the Parent’s internal controls.  There have been no changes in internal
controls or in other factors that could significantly affect internal controls
since December 31, 2008.

 

13

 

(kk)  Compliance
with Environmental Laws. 
Except as would not, individually or in the aggregate, result in a
Material Adverse Change: (i) neither the Parent nor any of its
subsidiaries is in violation of any federal, state, local or foreign law or
regulation relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including without
limitation, laws and regulations relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum and petroleum products
(collectively, “Materials of Environmental Concern”), or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Materials of Environmental Concern
(collectively, “Environmental Laws”), which violation includes, but is
not limited to, noncompliance with any permits or other governmental
authorizations required for the operation of the business of the Parent or its
subsidiaries under applicable Environmental Laws, or noncompliance with the
terms and conditions thereof, nor has the Parent or any of its subsidiaries
received any written communication, whether from a governmental authority,
citizens group, employee or otherwise, that alleges that the Parent or any of
its subsidiaries is in violation of any Environmental Law; (ii) there is
no claim, action or cause of action filed with a court or governmental
authority, no investigation with respect to which the Parent has received
written notice, and no written notice by any person or entity alleging
potential liability for investigatory costs, cleanup costs, governmental
responses costs, natural resources damages, property damages, personal
injuries, attorneys’ fees or penalties arising out of, based on or resulting
from the presence, or release into the environment, of any Material of
Environmental Concern at any location owned, leased or operated by the Parent
or any of its subsidiaries, now or in the past (collectively, “Environmental
Claims”), pending or, to the best of the Parent’s knowledge, threatened
against the Parent or any of its subsidiaries or any person or entity whose
liability for any Environmental Claim the Parent or any of its subsidiaries has
retained or assumed either contractually or by operation of law; and (iii) to
the best of the Parent’s knowledge, there are no past or present actions,
activities, circumstances, conditions, events or incidents, including, without
limitation, the release, emission, discharge, presence or disposal of any
Material of Environmental Concern, that reasonably could result in a violation
of any Environmental Law or form the basis of a potential Environmental Claim
against the Parent or any of its subsidiaries or against any person or entity
whose liability for any Environmental Claim the Parent or any of its
subsidiaries has retained or assumed either contractually or by operation of
law.

 

(ll)  ERISA
Compliance. The Parent and its subsidiaries and any “employee
benefit plan” (as defined under the Employee Retirement Income Security Act of
1974, as amended, and the regulations and published interpretations thereunder
(collectively, “ERISA”)) established or maintained by the Parent, its
subsidiaries or their “ERISA Affiliates” (as defined below) are in compliance
in all material respects with ERISA.  “ERISA
Affiliate” means, with respect to the Parent or a subsidiary, any member of any
group of organizations described in Sections 414(b), (c), (m) or (o) of
the Internal Revenue Code of 1986, as amended, and the regulations and
published interpretations thereunder (the “Code”) of which the Parent or
such subsidiary is a member.  No “reportable
event” (as defined under ERISA) has occurred or is reasonably expected to occur
with respect to any “employee benefit plan” established or maintained by the
Parent, its subsidiaries or any of their ERISA Affiliates.  No “employee benefit plan” established or
maintained by the Parent, its subsidiaries or any of their ERISA Affiliates, if
such “employee benefit plan” were terminated, would have any “amount of 

 

14

 

unfunded benefit liabilities” (as defined under ERISA).  Neither the Parent, any of its subsidiaries
nor any of their ERISA Affiliates has incurred or reasonably expects to incur
any liability under (i) Title IV of ERISA with respect to termination of,
or withdrawal from, any “employee benefit plan” or (ii) Sections 412,
4971, 4975 or 4980B of the Code.  Each “employee
benefit plan” established or maintained by the Parent, its subsidiaries or any
of their ERISA Affiliates that is intended to be qualified under Section 401
of the Code is so qualified and nothing has occurred, whether by action or
failure to act, which would cause the loss of such qualification.

 

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

 

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

 

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

 

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

 

15

 

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

 

(rr)  Statistical and Market-Related Data.  Any statistical and market-related
data included in the Pricing Disclosure Package and the Final Offering
Memorandum are based on or derived from sources that the Parent and the Company
believe to be reliable and accurate, and the Parent and Company have obtained
the written consent to the use of such data from such sources to the extent
such written consent is required.

 

(ss)  Foreign Corrupt Practices Act.  None of the Parent, the Company or any
Subsidiary Guarantor, nor, to the knowledge of the Parent, the Company or such
Subsidiary Guarantor, any of their respective directors, officers, agents,
employees, affiliates or other persons acting on behalf of the Parent, the
Company or the Subsidiary Guarantors or their respective subsidiaries is aware
of or has taken any action, directly or indirectly, that would result in a
violation by such persons of the Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations thereunder (the “FCPA”),
including, without limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance of an offer,
payment, promise to pay or authorization of the payment of any money, or other
property, gift, promise to give, or authorization of the giving of anything of
value to any “foreign official” (as such term is defined in the FCPA) or any
foreign political party or official thereof or any candidate for foreign
political office, in contravention of the FCPA; and the Parent, the Company and
each Subsidiary Guarantor and, to the knowledge of the Parent, the Company and
each Subsidiary Guarantor, their respective affiliates have conducted their
businesses in compliance with the FCPA and have instituted and maintain
policies and procedures designed to ensure, and which are reasonably expected
to continue to ensure, continued compliance therewith.

 

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

 

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

 

16

 

(vv)  PGS Onshore Purchase Agreement.  The PGS Onshore Purchase Agreement
has been duly authorized, executed and delivered by the Parent and constitutes
the valid and binding agreement of the Parent. 
The Parent is not aware of any breach or violation by PGS Onshore of any
of its representations, warranties, covenants or agreements contained in the
PGS Onshore Purchase Agreement.

 

(ww)  OFAC. 
None of the Parent, the Company or any Subsidiary Guarantor, or, to the
knowledge of any of the Parent, the Company or any Subsidiary Guarantor, any
director, officer, agent, employee, affiliate or person acting on behalf of the
Parent, the Company or such Subsidiary Guarantor is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”); and the Company will not directly or
indirectly use the proceeds of the offering, or lend, contribute or otherwise
make available such proceeds to any subsidiary, joint venture partner or other
person or entity, for the purpose of financing the activities of any person
currently subject to any U.S. sanctions administered by OFAC.

 

(xx)  Accuracy of Statements in Final Offering
Memorandum.  The statements included or incorporated
by reference in each of the Pricing Disclosure Package and the Final Offering
Memorandum under the headings “Summary—Summary Historical and Pro Forma
Combined Financial Data,” “Selected Financial Information,” “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations—Liquidity and Capital Resources,” “Description of Other
Indebtedness,” and “Our Business—Legal Proceedings,”  insofar as such statements summarize legal
matters, agreements, documents or proceedings discussed therein, are accurate
and fair summaries of such legal matters, agreements, documents or proceedings.

 

Any certificate signed by
an officer of the Parent, the Company or any Subsidiary Guarantor and delivered
to the Initial Purchasers or to counsel for the Initial Purchasers shall be
deemed to be a representation and warranty by the Parent, the Company or such
Subsidiary Guarantor to each Initial Purchaser as to the matters set forth
therein.

 

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

 

(a)  The Securities.  The
Company agrees to issue and sell to the Initial Purchasers, severally and not
jointly, all of the Securities upon the terms herein set forth.  On the basis of the representations,
warranties and agreements herein contained, and upon the terms but subject to
the conditions herein set forth, the Initial Purchasers agree, severally and
not jointly, to purchase from the Company the aggregate principal amount of
Securities set forth on Schedule A, at a purchase price of 95.593% of the principal
amount thereof, payable on the Closing Date.

 

(b)  The Closing Date.  Delivery
of certificates for the Securities in definitive form to be purchased by the
Initial Purchasers and payment therefor shall be made at the offices of
Shearman & Sterling LLP, 599 Lexington Avenue, New York, New York
10022 (or such other place as may be agreed to by the Company and the
Representatives) at 9:30 a.m. New York City time, on December 23,
2009, or such other time and date as may be agreed to by the Representatives
and the Company (the time and date of such closing are called the “Closing
Date”).  The Company hereby
acknowledges that circumstances under which the Representatives may provide
notice to postpone the Closing Date as originally scheduled include, but are in
no 

 

17

 

way limited to, any determination by the Company or the Initial
Purchasers to recirculate to investors copies of an amended or supplemented
Final Offering Memorandum or a delay as contemplated by the provisions of Section 18.

 

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

 

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

 

(e)  Initial Purchasers as Qualified
Institutional Buyers.  Each
Initial Purchaser, severally and not jointly, represents and warrants to, and
agrees with, the Company that it is a “qualified institutional buyer” within
the meaning of Rule 144A under the Securities Act (a “Qualified
Institutional Buyer”).

 

SECTION 3.  Additional Covenants.  Each of the Company, and, as
applicable, the Parent and the Subsidiary Guarantors, jointly and severally,
further covenant and agree with each Initial Purchaser as follows:

 

(a) 
Initial Purchasers’ Review of Proposed Amendments
and Supplements and Company Additional Written Communications.  Until the later of (i) the
completion of the placement of the Securities by the Initial Purchasers with
the Subsequent Purchasers and (ii) the Closing Date, prior to amending or
supplementing the Pricing Disclosure Package or the Final Offering Memorandum,
the Company shall furnish to the Representatives for review a copy of each such
proposed amendment or supplement, and the Company shall not use any such
proposed amendment or supplement to which the Representatives reasonably
object.  Before making, preparing, using, authorizing, approving or distributing any
Company Additional Written Communication, the Company will furnish to the
Representatives a copy of such written communication for review and will not
make, prepare, use, authorize, approve or distribute any such written
communication to which the Representatives reasonably object.

 

(b) 
Amendments and Supplements to the Pricing
Disclosure Package and the Final Offering Memorandum and Other Securities Act
Matters.  If, prior to the
completion of the placement of the Securities by the Initial Purchasers with
the Subsequent Purchasers, any event shall occur or condition exist as a result
of which it is necessary to amend or supplement the Pricing Disclosure Package
or the Final Offering Memorandum in order to make the statements therein, in
the light of the circumstances under which they were made, as the case may be,
not

 

18

 

misleading, or if, in the opinion of the Representatives or counsel for
the Initial Purchasers, it is otherwise necessary to amend or supplement the
Pricing Disclosure Package or the Final Offering Memorandum to comply with law,
the Company and the Parent agree to promptly prepare (subject to Section 3
hereof), file with the Commission, if required, and furnish at their own
expense to the Initial Purchasers, amendments or supplements to the Pricing
Disclosure Package or the Final Offering Memorandum, as the case may be, so
that the statements in the Pricing Disclosure Package or the Final Offering
Memorandum, as the case may be, as so amended or supplemented will not be, in
the light of the circumstances under which they were made, misleading or so
that the Pricing Disclosure Package or the Final Offering Memorandum, as
amended or supplemented, will comply with law.

 

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

 

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

 

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

 

(d)  Blue Sky Compliance.  Each
of the Parent, the Company and the Subsidiary Guarantors shall cooperate with
the Representatives and counsel for the Initial Purchasers to qualify or
register the Securities for sale under (or obtain exemptions from the
application of) the state securities or blue sky laws or Canadian provincial
securities laws of those jurisdictions designated by the Representatives, shall
comply with such laws and shall continue such qualifications, registrations and
exemptions in effect so long as required for the distribution of the
Securities.  None of the Parent, the
Company or any Subsidiary Guarantor shall be required to qualify as a foreign
corporation or to take any action that would subject it to general service of
process in any such jurisdiction where it is not presently qualified or where
it would be subject to taxation as a foreign corporation.  The Company will advise the Representatives
promptly of the suspension of the qualification or registration of (or any such
exemption relating to) the

 

19

 

Securities for offering, sale or trading in any jurisdiction or any
initiation or threat of any proceeding for any such purpose, and in the event
of the issuance of any order suspending such qualification, registration or
exemption, each of the Parent, the Company and the Subsidiary Guarantors shall
use its best efforts to obtain the withdrawal thereof at the earliest possible
moment.

 

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

 

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

 

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

 

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

 

(i)  No Restricted Resales.  During the period of
one year after the Closing Date, none of the Parent, the Company or any
Subsidiary Guarantor will, or will permit any of their respective affiliates
(as defined in Rule 144 under the Securities Act) to resell any of the
Securities which constitute “restricted securities” under Rule 144 that
have been reacquired by any of them.

 

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

 

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

 

20

 

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

 

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

 

(m)  Joinder Agreement and Guarantee. 
On or prior to the Acquisition Closing Date, (x) the
Company shall cause each of the Guarantors to (i) become party to this
Agreement and the Registration Rights Agreement (to the extent they are not
already a party thereto) by executing the Joinder Agreement, and (ii) Guarantee
the Notes by executing and delivering the Supplemental Indenture, each as
provided in Section 12 hereof, and (y) the Parent and the Company
shall comply with the requirements of Section 13 hereof.

 

The
Representatives, on behalf of the several Initial Purchasers, may in their sole
discretion, waive in writing the performance by the Parent, the Company or any
Subsidiary Guarantor of any one or more of the foregoing covenants or extend
the time for their performance.

 

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

 

21

 

Documents, the Pledge Agreement and the Intercreditor Agreement, (vii) any
fees payable in connection with the rating of the Securities or the Exchange
Securities with the ratings agencies, (viii) any filing fees incident to,
and any reasonable fees and disbursements of counsel to the Initial Purchasers
in connection with the review by the Financial Industry Regulatory Authority, Inc.,
if any, of the terms of the sale of the Securities or the Exchange Securities, (ix) all
fees and expenses (including reasonable fees and expenses of counsel) of the
Parent and the Company in connection with approval of the Securities by the
Depository Trust Company for “book-entry” transfer, (x) all fees, costs
and expenses (including reasonable fees and expenses of counsel) incurred by
the Parent, the Company, the Subsidiary Guarantors or the Initial Purchasers in
connection with the preparation of any intercreditor agreement and any security
documents relating to the Collateral and any other documentation related to the
foregoing, the perfection of the security interests in such Collateral and any
and all title insurance premiums, recording costs, and local counsel’s fees
incurred in connection with such Collateral, (xi) all
transportation and other expenses of the Parent’s and the Company’s
representatives incurred in connection with presentations to prospective
purchasers of the Securities, including one-half the cost of any chartered
airplane, and (xii) all other costs and expenses incident to the
performance by the Parent, the Company and the Subsidiary Guarantors of their
respective other obligations under this Agreement.  Except as provided in this Section 4, Section 6,
Section 8 and Section 9 hereof, the Initial Purchasers shall pay
their own expenses, including the fees and disbursements of their counsel.

 

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

 

(a)  Accountants’ Comfort Letter.  On
the date hereof, the Initial Purchasers shall have received from each of (x) UHY, LLP, and (y) KPMG
LLP, independent registered public accounting firms for the Parent and PGS
Onshore, respectively, a letter dated the date hereof addressed to the Initial
Purchasers, in form and substance satisfactory to the Initial Purchasers,
containing statements and information of the type ordinarily included in
accountants’ “comfort letters” to initial purchasers, delivered according to
Statement of Auditing Standards Nos. 71, 72 and 76 (or any successor
bulletins), with respect to the audited and unaudited and pro forma financial
statements and certain financial information contained or incorporated by
reference in the Pricing Disclosure Package and the Final Offering Memorandum,
and the specified date referred to therein for the carrying out of procedures
shall be no more than three business days prior to the hereof.

 

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

 

(i)  in the judgment
of the Representatives, there shall not have occurred any Material Adverse
Change; and

 

22

 

(ii)  there shall
not have occurred any downgrading, nor shall any notice have been given of any
intended or potential downgrading or of any review for a possible change that
does not indicate the direction of the possible change, in the rating accorded
any securities of the Parent or any of its subsidiaries by any “nationally
recognized statistical rating organization” as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act.

 

(c)  Opinion of Counsel for the Company.  On the Closing Date the Initial
Purchasers shall have received the favorable opinion of Haynes and Boone LLP,
counsel for the Company, dated as of such Closing Date, the form of which is
attached as Exhibit B.

 

(d)  Opinion of the General Counsel.  On the Closing Date the Initial
Purchasers shall have received the favorable opinion of Diane Anderson, General
Counsel of the Company, dated as of such Closing Date, the form of which is
attached as Exhibit C.

 

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

 

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

 

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

 

(ii)  the Company
and the Parent have complied with all the agreements hereunder and satisfied
all the conditions hereunder on their part to be performed or satisfied at or
prior to the Closing Date.

 

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

 

(h)  Registration Rights Agreement.  The Company and the Parent shall have entered
into the Registration Rights Agreement and the Initial Purchasers shall have
received executed counterparts thereof.

 

23

 

(i)  PGS Onshore Purchase Agreement.  At the Closing Date, the PGS Onshore
Purchase Agreement shall not have been terminated, and the terms of the
Acquisition, as contained in the PGS Onshore Purchase Agreement, shall not have
been materially amended without the prior written consent of the
Representatives.

 

(j)  Pledge Agreement. 
On the Closing Date, the Pledge Agreement shall have been authorized,
executed and delivered by the parties thereto and all funds shall have been
irrevocably deposited into the Collateral Account as contemplated therein, and
the Trustee, for the benefit of the holders of the Securities, shall have a
valid and perfected security interest in respect of the deposit and securities
accounts created pursuant thereto  securing the obligations of the Company under the
Indenture and such security interest of the holders will not be subject to or
subordinated to any liens.

 

(k)  Intercreditor Agreement. 
On the Closing Date, the Company, the Parent and the other parties thereto
shall have executed and delivered the Intercreditor Agreement, and the
Intercreditor Agreement shall be in full force and effect.

 

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

 

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

 

SECTION 6.  Reimbursement of Initial Purchasers’ Expenses.  If this Agreement is terminated by the
Representatives pursuant to Section 5 or Section 10, or if the sale
to the Initial Purchasers of the Securities on the Closing Date is not
consummated because of any refusal, inability or failure on the part of the
Company or the Parent to perform any agreement herein or to comply with any
provision hereof, the Company and Parent, jointly and severally, agree to
reimburse the Initial Purchasers, severally, upon demand, for all out-of-pocket
expenses that shall have been reasonably incurred by the Initial Purchasers in
connection with the proposed purchase and the offering and sale of the
Securities, including but not limited to fees and disbursements of counsel,
printing expenses, travel expenses, postage, facsimile and telephone charges.

 

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

 

(A) 
Offers and sales of the Securities will be made only by the Initial Purchasers
or Affiliates thereof qualified to do so in the jurisdictions in which such
offers or sales are made.  

 

24

 

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

 

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

 

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

 

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

 

SECTION 8.  Indemnification.

 

(a)  Indemnification of the Initial Purchasers.  Each of the Company, the Parent
and, upon execution and delivery of the Joinder Agreement, the Subsidiary
Guarantors, jointly and severally, agrees to indemnify and hold harmless each
Initial Purchaser, its directors, officers, employees and agents and each
person, if any, who controls any Initial Purchaser within the meaning of the
Securities Act and the Exchange Act against any loss, claim, damage, liability
or expense, as incurred, to which such Initial Purchaser or such officer,
employee or controlling person may become subject, under the Securities Act,
the Exchange Act or other federal or state statutory law or regulation, or at
common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Parent, the Company
and/or the Subsidiary Guarantors), insofar as such loss, claim, damage,
liability or expense (or actions in respect thereof as contemplated below)
arises out of or is based: (i) upon any untrue statement or alleged untrue
statement of a material fact contained in the Pricing Disclosure Package, any
Company Additional Written Information or the Final Offering Memorandum (or any
amendment or supplement thereto), or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; or (ii) in
whole or in part upon any inaccuracy in the representations and warranties of
the Parent, the Company or any Subsidiary Guarantor contained herein; or (iii) in
whole or in part upon any failure of the Parent, the Company or any Subsidiary
Guarantor to perform its obligations hereunder or under law; or (iv) any
act or failure to act or any alleged act or failure to act by any Initial
Purchaser in connection with, or relating

 

25

 

in any manner to, the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage, liability or
action arising out of or based upon any matter covered by clause (i) above,
provided that none of the Parent, the Company or any Subsidiary Guarantor shall
not be liable under this clause (iv) to the extent that a court of
competent jurisdiction shall have determined by a final judgment that such
loss, claim, damage, liability or action resulted directly from any such acts
or failures to act undertaken or omitted to be taken by such Initial Purchaser
through its gross negligence or willful misconduct; and to reimburse each
Initial Purchaser, its officers, directors, employees, agents and each such
controlling person for any and all expenses (including the fees and
disbursements of counsel chosen by RBC) as such expenses are reasonably
incurred by such Initial Purchaser or its officers, directors, employees,
agents or such controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action; provided, however, that the foregoing indemnity agreement
shall not apply to any loss, claim, damage, liability or expense to the extent,
but only to the extent, arising out of or based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with written information furnished to the Company by the
Representatives expressly for use in the Pricing Disclosure Package, any
Company Additional Written Information or the Final Offering Memorandum (or any
amendment or supplement thereto).  The
Parent, the Company and each Subsidiary Guarantor hereby acknowledges that the
only information that the Initial Purchasers through the Representatives have
furnished to the Company expressly for use in the Pricing Disclosure Package,
any Company Additional Written Information or the Final Offering Memorandum (or
any amendment or supplement thereto) are the statements set forth in the
eleventh and twelfth paragraphs, concerning stabilization and penalty bids by
the Initial Purchasers, under the caption “Plan of Distribution” in the Pricing
Disclosure Package and the Final Offering Memorandum; and the Initial
Purchasers confirm that such statements are correct. The indemnity agreement
set forth in this Section 8(a) shall be in addition to any
liabilities that the Parent, the Company or the Subsidiary Guarantors may
otherwise have.

 

(b)  Indemnification of the Company, the Guarantors and their respective
Directors and Officers.  Each
Initial Purchaser agrees, severally and not jointly, to indemnify and hold
harmless the Company, the Parent, and, upon execution and delivery of the
Joinder Agreement, the Subsidiary Guarantors, and each of their respective
directors and each person, if any, who controls the Company, the Parent, or,
upon execution and delivery of the Joinder Agreement, any Subsidiary Guarantor
within the meaning of the Securities Act or the Exchange Act, against any loss,
claim, damage, liability or expense, as incurred, to which the Parent, the
Company or any Subsidiary Guarantor or any such director, or controlling person
may become subject, under the Securities Act, the Exchange Act, or other
federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of such Initial Purchaser), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based upon any untrue or alleged untrue statement of
a material fact contained in the Pricing Disclosure Package, any Company
Additional Written Information or the Final Offering Memorandum (or any amendment
or supplement thereto), or arises out of or is based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, in each case to the extent, and
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Pricing

 

26

 

Disclosure Package,
any Company Additional Written Information or the Final Offering Memorandum (or
any amendment or supplement thereto), in reliance upon and in conformity with
written information furnished to the Company by the Representatives expressly
for use therein; and to reimburse the Parent, the Company, the Subsidiary
Guarantors, or any such director or controlling person for any legal and other
expenses reasonably incurred by the Parent, the Company, the Subsidiary
Guarantors, or any such director or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action. 
The indemnity agreement set forth in this Section 8(b) shall
be in addition to any liabilities that each Initial Purchaser may otherwise
have.

 

(c)  Notifications and Other Indemnification Procedures.  Promptly after receipt by an
indemnified party under this Section 8 of notice of the commencement of
any action, such indemnified party will, if a claim in respect thereof is to be
made against an indemnifying party under this Section 8, notify the
indemnifying party in writing of the commencement thereof, but the failure to
so notify the indemnifying party (i) will not relieve it from liability
under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by
the indemnifying party of substantial rights and defenses and (ii) will not, in
any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above.  In case any such action is brought against any
indemnified party and such indemnified party seeks or intends to seek indemnity
from an indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it shall elect, jointly with all other
indemnifying parties similarly notified, by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party; provided, however, if the defendants in
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that a conflict may
arise between the positions of the indemnifying party and the indemnified party
in conducting the defense of any such action or that there may be legal
defenses available to it and/or other indemnified parties that are different
from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties.  Upon receipt of notice from the indemnifying
party to such indemnified party of such indemnifying party’s election so to
assume the defense of such action and approval by the indemnified party of
counsel, which such approval shall not be unreasonably withheld, the
indemnifying party will not be liable to such indemnified party under this Section 8
for any legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof unless (i) the indemnified party
shall have employed separate counsel in accordance with the proviso to the
preceding sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel (other
than local counsel), reasonably approved by the indemnifying party (or by RBC
in the case of Section 8(b)), representing the indemnified parties who are
parties to such action) or (ii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action, in each of which cases the fees and expenses of counsel shall be at the
expense of the indemnifying party.

 

27

 

(d)  Settlements.  The indemnifying party under this Section 8
shall not be liable for any settlement of any proceeding effected without its
written consent, which shall not be withheld unreasonably, but if settled with
such consent or if there is a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party against any loss,
claim, damage, liability or expense by reason of such settlement or
judgment.  Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by Section 8(a) and (b) hereof, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement.  No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement, compromise or consent to the entry of judgment in any pending
or threatened action, suit or proceeding in respect of which any indemnified
party is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or
consent (x) includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such action, suit
or proceeding and (y) does not include a statement as to or an admission
of fault, culpability or a failure to act, by or on behalf of any indemnified
party.

 

SECTION 9.  Contribution. 
If the indemnification provided for in Section 8 is for
any reason held to be unavailable to or otherwise insufficient to hold harmless
an indemnified party in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount paid or payable by such indemnified party, as incurred, as
a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Parent, the Company and the Subsidiary Guarantors, on
the one hand, and the Initial Purchasers, on the other hand, from the offering
of the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Parent, the
Company and the Subsidiary Guarantors, on the one hand, and the Initial
Purchasers, on the other hand, in connection with the statements or omissions
or inaccuracies in the representations and warranties herein which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations.  The
relative benefits received by the Parent, the Company and the Subsidiary
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, in
connection with the offering of the Securities pursuant to this Agreement shall
be deemed to be in the same respective proportions as the total net proceeds
from the offering of the Securities pursuant to this Agreement (before
deducting expenses) received by the Parent, the Company or the Subsidiary
Guarantors, and the total discount received by the Initial Purchasers bear to
the aggregate initial offering price of the Securities.  The relative fault of the Parent, the Company
and the Subsidiary Guarantors, on the one hand, and the Initial Purchasers, on
the other hand, shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact or any such inaccurate or alleged
inaccurate representation or warranty relates to information supplied by the
Parent, the Company or the Subsidiary Guarantors, on the one hand, or the
Initial Purchasers, on the other hand, and the

 

28

 

parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission or inaccuracy.

 

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

 

The Company, the
Parent and, upon execution and delivery of the Joinder Agreement, the
Subsidiary Guarantors, and the Initial Purchasers agree that it would not be
just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Initial purchasers 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 9.

 

Notwithstanding
the provisions of this Section 9, no Initial Purchaser shall be required
to contribute any amount in excess of the discount received by such Initial
Purchaser in connection with the Securities distributed by it.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11 of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.  The
Initial Purchasers’ obligations to contribute pursuant to this Section 9
are several, and not joint, in proportion to their respective commitments as
set forth opposite their names in Schedule A. 
For purposes of this Section 9, each director, officer and employee
of an Initial Purchaser and each person, if any, who controls an Initial
Purchaser within the meaning of the Securities Act and the Exchange Act shall
have the same rights to contribution as such Initial Purchaser, and each
director of the Parent, the Company or any Subsidiary Guarantor, and each person,
if any, who controls the Parent, the Company or any Subsidiary Guarantor within
the meaning of the Securities Act and the Exchange Act shall have the same
rights to contribution as the Parent, the Company or any Subsidiary Guarantor.

 

SECTION 10.  Termination of this Agreement.  Prior to the Closing Date, this Agreement may
be terminated by the Representatives by notice given to the Company if at any
time: (i) trading in securities generally on the Nasdaq Stock Market or
the New York Stock Exchange shall have been suspended or limited, or minimum or
maximum prices shall have been generally established on any of such stock
exchanges by the Commission or FINRA; (ii) a general banking moratorium
shall have been declared by any of federal, New York or California authorities;
(iii) there has been a material disruption in commercial banking or
securities settlement, payment or clearance services in the United States; (iv) there
shall have occurred any outbreak or escalation of national or international
hostilities or any crisis or calamity, or any change in the United States or
international financial markets, or any substantial change or development
involving a prospective substantial change in United States’ or international
political, financial or economic conditions, as in the reasonable judgment of
the Representatives is material and adverse and makes it impracticable to
market the Securities in the manner and on the terms described in the Pricing
Disclosure Package and the Final Offering Memorandum or to enforce contracts
for the

 

29

 

sale of securities; (v) in the judgment of the Representatives
there shall have occurred any Material Adverse Change; or (vi) the Parent,
the Company or any Subsidiary Guarantor shall have sustained a loss by strike,
fire, flood, earthquake, accident or other calamity of such character as in the
reasonable judgment of the Representatives may interfere materially with the
conduct of the business and operations of the Parent, the Company or such
Subsidiary Guarantor regardless of whether or not such loss shall have been
insured.  Any termination pursuant to
this Section 10 shall be without liability on the part of (i) the
Parent, the Company or any Subsidiary Guarantor to any Initial Purchaser,
except that the Parent, the Company and the Subsidiary Guarantors shall be
obligated to reimburse the expenses of the Representatives and the Initial
Purchasers pursuant to Sections 4 and 6 hereof, (ii) any Initial Purchaser
to the Parent, the Company or any Subsidiary Guarantor, or (iii) any party
hereto to any other party except that the provisions of Section 8 and Section 9
shall at all times be effective and shall survive such termination.

 

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

 

SECTION 12.  The Subsidiary Guarantors. On the Acquisition Closing Date, the
Company and the Parent will cause the Guarantors to (i) become a guarantor
under the Indenture and the Notes and Exchange Notes by executing the
Supplemental Indenture and the Security Documents and (ii) become party to
this Agreement and the Registration Rights Agreement (to the extent not already
a party hereto and thereto), in each case, by executing the Joinder
Agreement.  In the event of a breach of
this Section 12, each of the Company and the Parent agree that monetary
damages would not be adequate compensation for any loss or damage incurred by
such breach and hereby further agree that, in the event of an action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.

 

SECTION 13.  Conditions to Pledge
Agreement and Release of Funds. 
On the Acquisition Closing Date and upon execution of the Joinder
Agreement and the Security Documents, the Company and the Parent agree to, and
will cause the Subsidiary Guarantors to, provide the following documentation,
dated such date, as a condition to the disbursement of funds pursuant to Section 7(a) of
the Pledge Agreement: (i) officer’s certificates similar to the
certificate required by Section 5(b) hereof signed by the Chairman of
the Board, Chief Executive Officer or President  of each Guarantor, (ii) an opinion of each of
Haynes and Boone, LLP and Diane Anderson, General Counsel of the Company,
substantially in the forms attached as Exhibit B-2 and Exhibit C,
respectively, (iii) a Supplemental Indenture pursuant to the Indenture,
executed and delivered by the Parent and each Subsidiary Guarantor and (iv) evidence
of completion of all necessary regulatory approvals for the Acquisition.

 

30

 

SECTION 14.  Notices.  All communications hereunder shall be in
writing and shall be mailed, hand delivered or telecopied and confirmed to the
parties hereto as follows:

 

If to the Initial
Purchasers:

 

RBC Capital
Markets Corporation

1211 Avenue of the Americas, 32nd Floor

New York, NY 10036

Facsimile:  212-703-2295

Attention:  High Yield Capital Markets

 

with a copy to:

 

Shearman &
Sterling LLP

599 Lexington
Avenue

New York, NY 10022

Facsimile:  646-848-7711

Attention:  David Beveridge

 

If to the Company
or the Guarantors:

 

Geokinetics Inc.

1500 CityWest Blvd., Suite 800

Houston, Texas
77042

Facsimile:  (713) 850-7330

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

 

with a copy to:

 

Haynes
and Boone, LLP

1
Houston Center

1221
McKinney, Suite 2100

Houston,
Texas 77010

Facsimile:  (713) 547-2081

Attention:  George Young, III

 

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

 

SECTION 15.  Successors.  This Agreement will inure to the benefit of
and be binding upon the parties hereto, including any substitute Initial
Purchaser or Initial Purchasers pursuant to Section 18 hereof, and to the
benefit of the employees, officers and directors and controlling persons referred
to in Section 8 and Section 9, and in each case their respective
successors, and no other person will have any right or obligation
hereunder.  The term “successors” shall
not include any purchaser of the Securities as such from any of the Initial Purchasers
merely by reason of such purchase.

 

31

 

SECTION 16.  Partial Unenforceability.  The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision hereof.  If any Section, paragraph or provision of
this Agreement is for any reason determined to be invalid or unenforceable,
there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.

 

SECTION 17.  Governing Law Provisions.  THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.

 

(a)  Consent to Jurisdiction.  Any legal suit, action or proceeding arising
out of or based upon this Agreement or the transactions contemplated hereby (“Related
Proceedings”) may be instituted in the federal courts of the United States of
America located in the City and County of New York or the courts of the State
of New York in each case located in the City and County of New York
(collectively, the “Specified Courts”), and each party irrevocably submits to
the non-exclusive jurisdiction (except for proceedings instituted in regard to
the enforcement of a judgment of any such court (a “Related Judgment”), as to
which such jurisdiction is non-exclusive) of such courts in any such suit,
action or proceeding.  Service of any process,
summons, notice or document by mail to such party’s address set forth above
shall be effective service of process for any suit, action or other proceeding
brought in any such court.  The parties
irrevocably and unconditionally waive any objection to the laying of venue of
any suit, action or other proceeding in the Specified Courts and irrevocably
and unconditionally waive and agree not to plead or claim in any such court
that any such suit, action or other proceeding brought in any such court has been
brought in an inconvenient forum.

 

SECTION 18.  Default of One or More of the Several Initial
Purchasers. If any one or more of the several Initial Purchasers shall
fail or refuse to purchase Securities that it or they have agreed to purchase
hereunder on the Closing Date, and the aggregate number of Securities which
such defaulting Initial Purchaser or Initial Purchasers agreed but failed or
refused to purchase does not exceed 10% of the aggregate number of the
Securities to be purchased on such date, the other Initial Purchasers shall be
obligated, severally, in the proportions that the number of Securities set
forth opposite their respective names on Schedule A bears to the aggregate
number of Securities set forth opposite the names of all such non-defaulting
Initial Purchasers, or in such other proportions as may be specified by the
Initial Purchasers with the consent of the non-defaulting Initial Purchasers,
to purchase the Securities which such defaulting Initial Purchaser or Initial
Purchasers agreed but failed or refused to purchase on the Closing Date.  If any one or more of the Initial Purchasers
shall fail or refuse to purchase Securities and the aggregate number of Securities
with respect to which such default occurs exceeds 10% of the aggregate number
of Securities to be purchased on the Closing Date, and arrangements satisfactory
to the Initial Purchasers and the Company for the purchase of such Securities
are not made within 48 hours after such default, this Agreement shall terminate
without liability of any party to any other party except that the provisions of
Sections 4, 6, 8 and 9 hereof shall at all times be effective and shall
survive such termination.  In any such
case either the Initial Purchasers or the Company shall have the right to postpone
the Closing Date, as the case may be, 

 

32

 

but in
no event for longer than seven days in order that the required changes, if any,
to the Final Offering Memorandum or any other documents or arrangements may be
effected.

 

As used in this
Agreement, the term “Initial Purchaser” shall be deemed to include any person
substituted for a defaulting Initial Purchaser under this Section 18.  Any action taken under this Section 18
shall not relieve any defaulting Initial Purchaser from liability in respect of
any default of such Initial Purchaser under this Agreement.

 

SECTION 19.  No Fiduciary Duty.  The Parent, the Company and each Subsidiary
Guarantor hereby acknowledges that each Initial Purchaser is acting solely as
an initial purchaser in connection with the purchase and sale of the
Securities.  The Parent, the Company and
each Subsidiary Guarantor further acknowledges that each Initial Purchaser is
acting pursuant to a contractual relationship created solely by this Agreement
entered into on an arm’s length basis and in no event do the parties intend
that any Initial Purchaser act or be responsible as a fiduciary to the Parent,
the Company or any Subsidiary Guarantor, their management, stockholders,
creditors or any other person in connection with any activity that any Initial
Purchaser may undertake or has undertaken in furtherance of the purchase and
sale of the Securities, either before or after the date hereof.  Each Initial Purchaser hereby expressly disclaims
any fiduciary or similar obligations to the Parent, the Company or any
Subsidiary Guarantor, either in connection with the transactions contemplated
by this Agreement or any matters leading up to such transactions, and the
Parent, the Company and each Subsidiary Guarantor hereby confirms its
understanding and agreement to that effect. 
The Parent, the Company and each Subsidiary Guarantor and the Initial
Purchasers agree that they are each responsible for making their own
independent judgments with respect to any such transactions, and that any
opinions or views expressed by an Initial Purchaser to the Parent, the Company
or any Subsidiary Guarantor regarding such transactions, including but not
limited to any opinions or views with respect to the price or market for the
Securities, do not constitute advice or recommendations to the Parent, the
Company or any Subsidiary Guarantor.  The
Parent, the Company and each Subsidiary Guarantor hereby waives and releases,
to the fullest extent permitted by law, any claims that the Parent, the Company
or any Subsidiary Guarantor may have against each Initial Purchaser with
respect to any breach or alleged breach of any fiduciary or similar duty to the
Parent, the Company or any Subsidiary Guarantor in connection with the
transactions contemplated by this Agreement or any matters leading up to such
transactions.

 

SECTION 20.  General Provisions.  This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. 
This Agreement may be executed in two or more counterparts, each one of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. 
This Agreement may not be amended or modified unless in writing by all
of the parties hereto, and no condition herein (express or implied) may be
waived unless waived in writing by each party whom the condition is meant to
benefit.  The section headings herein are
for the convenience of the parties only and shall not affect the construction
or interpretation of this Agreement.

 

33

 

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

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  Geokinetics Holdings
  USA, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott A. McCurdy

  
	
   

  	
   

  	
  Scott A. McCurdy, Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Geokinetics Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott A. McCurdy

  
	
   

  	
   

  	
  Scott A. McCurdy, Vice
  President

  

 

 

Purchase Agreement

 

 

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

 

	
  RBC Capital Markets
  Corporation

  	
   

  
	
  Banc of America
  Securities LLC

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:  RBC Capital Markets Corporation

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ David Capaldi

  	
   

  
	
   

  	
  Name:

  	
  David Capaldi

  	
   

  
	
   

  	
  Title:

  	
  Managing Director

  	
   

  
	
   

  	
   

  
	
  Acting
  on behalf of themselves and on behalf of the  several Initial
  Purchasers named on Schedule A hereto

  	
   

  

 

 

Purchase Agreement

 

 

SCHEDULE A

 

	
  Initial
  Purchaser

  	
   

  	
  Aggregate

  Principal

  Amount of

  Securities to be

  Purchased

  	
   

  
	
  RBC
  Capital Markets Corporation

  	
   

  	
  $

  	
  217,500,000

  	
   

  
	
  Banc
  of America Securities LLC

  	
   

  	
  75,000,000

  	
   

  
	
  PNC
  Capital Markets LLC

  	
   

  	
  7,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  300,000,000

  	
   

  

 

A-1

 

SCHEDULE B

 

EXISTING SUBSIDIARY GUARANTORS

 

	
  Name

  	
   

  	
  State of Organization

  
	
  Advanced Seismic
  Technology, Inc.

  	
   

  	
  Texas

  
	
  Geokinetics
  Processing, Inc.

  	
   

  	
  Texas

  
	
  Geokinetics
  Management, Inc.

  	
   

  	
  Texas

  
	
  Geokinetics International
  Holdings, Inc.

  	
   

  	
  Delaware

  
	
  Geokinetics
  International, Inc.

  	
   

  	
  Texas

  
	
  Geokinetics
  USA, Inc.

  	
   

  	
  Texas

  
	
  Geokinetics Services
  Corp.

  	
   

  	
  Texas

  

 

B-1

 

SCHEDULE C

 

SUBSIDIARIES OF THE PARENT

 

	
  Name

  	
   

  	
  State of Organization

  
	
  Advanced Seismic
  Technology, Inc.

  	
   

  	
  Texas

  
	
  Geokinetics Processing,
  UK LTD

  	
   

  	
  United Kingdom

  
	
  Geokinetics Holdings
  USA, Inc.

  	
   

  	
  Delaware

  
	
  Geokinetics Exploration
  Inc.

  	
   

  	
  Alberta, Canada

  
	
  Geokinetics
  Processing, Inc.

  	
   

  	
  Texas

  
	
  Geokinetics Singapore
  PTE LTD

  	
   

  	
  Singapore

  
	
  Geokinetics
  (Australasia) Pty LTD

  	
   

  	
  Australia

  
	
  Geokinetics Geophysical
  do Brasil Ltda.

  	
   

  	
  Brazil

  
	
  Geokinetics
  Management, Inc.

  	
   

  	
  Texas

  
	
  Geokinetics Egypt, LLC

  	
   

  	
  Egypt

  
	
  Geokinetics
  International Holdings, Inc.

  	
   

  	
  Delaware

  
	
  Geokinetics
  International, Inc.

  	
   

  	
  Texas

  
	
  Geokinetics Saudi
  Arabia L.L.C.

  	
   

  	
  Saudi Arabia

  
	
  Geokinetics Geophysical
  Malaysia Sdn. Bhd.

  	
   

  	
  Malaysia

  
	
  P.T. Geokinetics
  Indonesia

  	
   

  	
  Indonesia

  
	
  Geokinetics
  USA, Inc.

  	
   

  	
  Texas

  
	
  Geokinetics FZE (Dubai)

  	
   

  	
  United Arab Emirates

  
	
  Geokinetics Services
  Corp.

  	
   

  	
  Texas

  
	
  Geokinetics
  International Services, Inc.

  	
   

  	
  Cayman

  
	
  Geokinetics Global
  Services, Inc.

  	
   

  	
  Cayman

  
	
  Geokinetics
  Enterprises, Inc.

  	
   

  	
  Cayman

  
	
  Foresight, Inc.

  	
   

  	
  Cayman

  
	
  Geofisica Geokinetics
  Bolivia, SRL

  	
   

  	
  Bolivia

  
	
  Geokinetics Exploration
  Oriente SAC

  	
   

  	
  Peru

  
	
  Geokinetics Exploration
  Peru SAC

  	
   

  	
  Peru

  

 

C-1

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