Document:

Exhibit 4.1

 

CERTIFICATE OF DESIGNATION OF

SERIES A SENIOR CONVERTIBLE PREFERRED STOCK

OF

GEOKINETICS INC.

PURSUANT TO SECTION 151(g) OF THE

GENERAL
CORPORATION LAW OF THE STATE OF DELAWARE

 

The undersigned, Thomas J. Concannon, Vice President and
Chief Financial Officer of Geokinetics Inc, a Delaware corporation (the “Corporation”),
does hereby state and certify that the Board of Directors for the Corporation,
by unanimous written consent dated as of                     
    , 2004, duly adopted the following resolution providing
for the issuance of a series of the Corporation’s preferred stock, par value
$10.00 per share (the “Preferred Stock”), and further providing for the
designation, powers, preferences and relative, participating, optional and
other rights, and the qualifications, limitations and restrictions thereof, all
in accordance with the provisions of Section 151(g) of the General Corporation
Law of the State of Delaware:

 

RESOLVED, that pursuant to the authority expressly
granted to and vested in the Board of Directors of the Corporation by Article
FOURTH of the Corporation’s Certificate of Incorporation (the “Certificate of
Incorporation”), a series of Preferred Stock of the Corporation be, and hereby
is, created out of the authorized but unissued shares of capital stock of the
Corporation and authorized to be issued, such series to be designated Series A Senior
Convertible Preferred Stock (the “Series A Preferred Stock”), to consist of 8,333
shares, par value $10.00 per share, of which the powers, preferences and
relative, participating, optional and other rights, and the qualifications,
limitations, and restrictions thereof, shall be, in addition to those set forth
in the Corporation’s Certificate of Incorporation, as follows:

 

(1)                                  Series
A Preferred Stock.

 

(a)                                  Dividends.

 

(i)                                     The
holders of Series A Preferred Stock, prior and in preference to any declaration
or payment of any dividend on the Common Stock of this Corporation, shall be
entitled to receive cumulative dividends at the

 

1

 

applicable Dividend Rate (as defined below).  For purposes of this Section 1(a)(i), “Dividend
Rate” shall mean 6.0% per annum, compounded annually, of the Original Issue
Price (defined in Section 1(b)(i) below) for each share of Series A Preferred
Stock.  Dividends shall be paid in cash
when, and if declared.  All unpaid
dividends on Series A Preferred Stock shall be cumulative and shall accrue, compounding
annually, regardless of whether or not the Corporation shall have funds legally
available for the payment of such dividends.

 

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

 

(b)                                 Liquidation
Preference.

 

(i)                                     The
holders of Series A 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, an amount per share (the “Liquidation
Preference Amount”) equal to (i) the sum of the Original Issue Price (as
defined below) for Series A Preferred Stock, plus (ii) 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 A 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 A Preferred Stock in proportion to the full preferential
amount to which each such share is entitled. 
For purposes hereof, “Original Issue Price” shall mean $300.00 per share
for each share of Series A Preferred Stock (as adjusted for any stock splits,
stock dividends, combinations, subdivisions, recapitalizations or the like with
respect to the Series A Preferred Stock).

 

(ii)                                  Upon
completion of the distribution required by subsection (i) of this Section 1(b),
the remaining assets of the Corporation shall be distributed among all holders
of Common Stock and Series A Preferred Stock pro rata based on the number of
shares of Common Stock held or that would be held by each holder of Series A
Preferred Stock if all shares of Series A Preferred Stock were converted to Common
Stock at the then effective conversion rate.

 

(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

 

2

 

stock of the Corporation or the surviving or
acquiring entity), 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, 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 A Preferred Stock (voting on an as converted basis).

 

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

 

(c)                                  Redemption
Rights.

 

(i)                                     If,
at any time after October 31, 2009, the holders of not less than fifty-one
percent (51%) of the shares of Series A Preferred Stock then outstanding
deliver written notice to the Corporation of such holders’ desire to have the Series
A Preferred Stock redeemed, all outstanding shares of Series A 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 A
Preferred Stock.  Each share of Series A
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 A Preferred Stock, an
amount equal to the Liquidation Preference Amount.

 

(ii)                                  At
any time after October 31, 2011, the Corporation shall be entitled to redeem
all outstanding shares of Series A Preferred Stock, if not previously converted
pursuant to Section 1(b), on a date which is not less than 60 days nor more
than 90 days after the date on which written notice was delivered to the
holders of the Series A Preferred Stock. 
Each share of Series A Preferred Stock to be redeemed hereunder shall be
redeemed by payment by the Corporation in cash of the Redemption Price.

 

(iii)                               Any
redemption pursuant to Sections 1(c)(i) or (ii) above shall be preceded by
written notice to each holder of Series A Preferred Stock

 

3

 

stating the date fixed for redemption, the
Redemption Price and the place at which holders of Series A Preferred Stock may
obtain payment of the Redemption Price upon surrender of their respective stock
certificates.

 

(iv)                              All
shares of Series A 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 A Preferred Stock
shall have conversion rights as follows (the “Conversion Rights”):

 

(i)                                     Right
to Convert.  Each share of Series A 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 A Preferred Stock by the applicable Conversion
Price (as defined below) for the Series A Preferred Stock (the conversion rate
for Series A 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 A Preferred Stock shall initially be $.30;
provided, however, that the Conversion Price for the Series A Preferred Stock
shall be subject to adjustment as set forth in subsection 1(e)(iv).

 

(ii)                                  Automatic
Conversion.  Each share of Series A Preferred
Stock shall automatically be converted into shares of Common Stock at the
Conversion Rate at the time in effect for Series A 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, covering the offer and sale of Common Stock (A) at a
price per share yielding net proceeds to the Corporation of not less than $1.20
(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 $20,000,000, and (C) after which
the Common Stock is listed on the NYSE, AMEX or the NASDAQ National Market (a “Qualified
Public Offering”).

 

(iii)                               Mechanics
of Conversion.  Before any holder of Series
A 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 A 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 A Preferred
Stock, or to the nominee or nominees of such holder, a certificate or
certificates

 

4

 

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 A 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 A 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 A Preferred
Stock shall not be deemed to have converted such Series A 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 A Preferred Stock for Certain Dilutive Issuances,
Splits and Combinations.  The
Conversion Price of the Series A Preferred Stock shall be subject to adjustment
from time to time as follows:

 

(A)                              1.                                       If
the Corporation shall issue, on or after the date upon which this 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
A Preferred Stock in effect immediately prior to the issuance of such
Additional Stock, but greater than one-half of such Conversion Price, the
Conversion Price for the Series A Preferred Stock in effect immediately prior
to each such issuance shall forthwith (except as otherwise provided in this subsection
1(d)(iv)(A)(1) 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. 
If the Corporation shall issue, on or after the Filing Date, any
Additional Stock without consideration or for a consideration per share less
than one-half of the Conversion Price applicable to the Series A Preferred
Stock in effect immediately prior to the issuance of such Additional Stock, the
Conversion Price for the Series A Preferred Stock in effect immediately prior
to each such issuance shall forthwith

 

5

 

(except as otherwise
provided in this subsection 1(d)(iv)(A)(1) be adjusted to a price equal to the
consideration paid or given for 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, and (3) Common Stock issuable upon exercise of outstanding
warrants to purchase Common Stock. 
Shares described in (1) through (3) above shall be included whether
vested or invested, whether contingent or non-contingent and whether
exercisable or not yet exercisable.

 

2.                                       No
adjustment of the Conversion Price for the Series A 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.

 

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

 

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

 

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

 

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

 

6

 

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 A 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.                                      Upon
the expiration of any such options or rights, the termination of any such
rights to convert or exchange or the expiration of any options or rights
related to such convertible or exchangeable securities, the Conversion Price of
the Series A Preferred Stock, to the extent in any way affected by or computed
using such options, rights or securities or options or rights related to such
securities, shall be recomputed to reflect the issuance of only the number of
shares of Common Stock (and convertible or exchangeable securities that remain
in effect) actually issued upon the exercise of such options or rights, upon
the conversion or exchange of such securities or upon the exercise of the
options or rights related to such securities.

 

e.                                       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

 

7

 

change, termination or expiration of the type
described in either subsection 1(d)(iv)(A)(5)(a) or (b).

 

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

 

1.                                       Common
Stock issued pursuant to a transaction described in subsection 1(d)(iv)(A)(2)
hereof;

 

2.                                       Shares
of Common Stock issued to employees, directors, 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;

 

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

 

4.                                       Common
Stock issued in connection with a bona fide business acquisition of or by the Corporation,
whether by merger, consolidation, sale of assets, sale or exchange of stock or
otherwise approved by this corporation’s Board of Directors; and

 

5.                                       Common
Stock that is issued with the approval of the holders of not less than
fifty-one percent (51%) of the then-outstanding shares of Series A 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 A 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

 

8

 

Common Stock, then, following the record date of such
combination, the Conversion Price for the Series A 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 A Preferred
Stock.

 

(e)                                  Voting
Rights.

 

(i)                                     Except
as otherwise expressly provided herein or as required by law, the holders of Series
A 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 A 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 A Preferred Stock
or Common Stock shall vote together as a single class and not as separate
classes.

 

(ii)                                  So
long as any shares of Series A 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 fifty-one percent (51%) of the
then-outstanding shares of the Series A Preferred Stock, 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 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

 

9

 

of its
subsidiaries, or effect any consolidation, merger or reorganization involving
the Corporation or any of its subsidiaries, or effect any transaction or series
of related transactions in which the Corporation’s stockholders immediately
prior to such transaction or transactions own immediately after such
transaction or transactions less than 50% of the voting securities of the
surviving corporation or entity (or its parent).

 

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

 

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

 

(G)                                Create
a new plan or arrangement for the grant of stock options or the issuance of
restricted stock or increase the number of shares available under such a plan
or arrangement.

 

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

 

(iii)                               So
long as at least 4,167 shares of Series A Preferred Stock remain outstanding,
the holders of the Series A Preferred Stock shall be entitled to nominate and
elect one (1) member of the Corporation’s Board of Directors at each regularly
scheduled meeting of the Corporation’s stockholders which is called for the
purpose of electing members of the Board of Directors.

 

(f)                                    Preemptive
Rights.  If the Corporation
authorizes the issuance and sale of Additional Stock (as defined in Section
1(d)(iv)(B)), the Corporation shall first offer in writing to sell to each
holder of Series A Preferred Stock a portion of the securities being issued
equal to the quotient obtained by dividing (A) the aggregate number of shares
of Common Stock then owned by such holder on an as-converted basis by (B) the
aggregate number of shares of Common Stock then outstanding (assuming
conversion of all of the Corporation’s securities convertible into Common
Stock).  If all offered securities are
not subscribed to by such holder of Series A Preferred Stock in writing
delivered to the Corporation within ten days after the date of delivery of the
Corporation’s original notice to

 

10

 

such holder, then
the Corporation shall be entitled to offer such securities for sale 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 A 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 A Preferred Stock
hereunder shall then become subject again to the provisions of this Section 1(f).

 

[SIGNATURES ON FOLLOWING PAGE]

 

11

 

IN WITNESS WHEREOF, Geokinetics Inc. has caused this Certificate of Designation
to its Certificate of Incorporation to be signed by Thomas J. Concannon, its
Vice President and Chief Financial Officer, this           
day of                           ,
2004.

 

 

	
   

  	
  GEOKINETICS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Thomas J.
  Concannon

  
	
   

  	
  Title:

  	
  Vice President
  and Chief Financial Officer

  
				

 

12Exhibit 4.2

 

REGISTRATION RIGHTS AGREEMENT

 

THIS
REGISTRATION RIGHTS AGREEMENT (the “Registration Rights
Agreement” or this “Agreement”)
dated as of                               
        , 2004 between Geokinetics
Inc., a Delaware corporation (the “Company”), and
the Investors (together with their respective successors and assigns, the “Holders”).

 

Terms defined
in that certain Securities Purchase Agreement (the “Purchase
Agreement”) dated as of                                   
      , 2004 between the Company and the Investors
named therein, unless defined herein, are used as therein defined.

 

WHEREAS,
pursuant to the Purchase Agreement, the Company proposes to issue an aggregate
of 8,333 shares (the “Shares”) of its
Series A Senior Convertible Preferred Stock, $10.00 par value per share (the “Series A Preferred Stock”) to the Investors;

 

WHEREAS,
certain obligations of the Company and the Investors are conditioned upon the
execution and delivery of this Agreement;

 

NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein
set forth, the parties hereto agree as follows:

 

SECTION 1.         Registration Rights.

 

(a)           Demand Registration.

 

(1)           Request for
Registration.  At any time on
or after the first anniversary of the Date of Closing, (i) the Investors
constituting a Holder or Holders of in excess of 25% of the Registrable
Securities held by all of the Investors may make a written request for
registration under the Securities Act (“Demand Registration”)
of all or part of its or their Registrable Securities; provided that the
Company shall not be obligated to effect more than two Demand Registrations under
this Section 1(a)(1) in respect of the Registrable Securities held by the Investors.  Such request will specify the number of
Registrable Securities proposed to be sold and will also specify the intended
method of disposition thereof. 
Within  10 Business Days after
receipt of such request, the Company will give written notice of such
registration request to all other Holders, use all commercially reasonable
efforts to effect, as soon as practicable, the registration under the
Securities Act, and include in such registration all Registrable Securities
with respect to which the Company has received written requests for inclusion
therein from the Holders thereof within 15 Business Days after receipt by the
applicable Holder of the Company’s notice. 
Each such request will also specify the aggregate number of Registrable
Securities to be registered and the intended method of disposition thereof.

 

(2)           Effective Registration
and Expenses.  A registration
will not count as a Demand Registration until it has become effective (unless
the Holders demanding such registration withdraw the Registrable Securities, in
which case such demand will count as

 

1

 

a Demand Registration unless the Holders of
such Registrable Securities agree to pay all Registration Expenses (as
hereinafter defined) relating to such registration).  Except as provided above, the Company will
pay all Registration Expenses in connection with any registration initiated as
a Demand Registration, whether or not it becomes effective.

 

(3)           Priority on Demand
Registrations.  If the Holders
of a majority of the Registrable Securities to be registered in a Demand
Registration so elect, the offering of such Registrable Securities pursuant to
such Demand Registration shall be in the form of an underwritten offering.  In such event, if the managing underwriter or
underwriters (the “Underwriters”)
of such offering advise the Company and the Holders in writing that in their
opinion the Registrable Securities requested to be included in such offering is
sufficiently large to materially and adversely affect the success of such
offering, then (i) the Holders of Registrable Securities held by the Investors
shall be entitled to participate in such Demand Registration (pro rata on the
basis of the amount of Registrable Securities requested to be included in such
registration by each such Investor) first; and (ii) the Company and other
equity security holders of the Company entitled to participate will be entitled
to participate in such registration (with the holders of such securities being
entitled to participate in accordance with the relative priorities, if any, as
shall exist among them), in each case with further pro rata allocations to the
extent any such person has requested registration of fewer securities than such
person is entitled to have registered so that the number of securities to be
included in such registration will not exceed that amount that can, in the
opinion of such Underwriters, be sold without any such material adverse
effect.  To the extent Registrable
Securities so requested to be registered are excluded from the offering, the Investors
who shall have initiated the Demand Registration, as a group, shall have the
right to one additional Demand Registration under this section with respect to
Registrable Securities for the number of securities so excluded (but in no
event shall such additional Demand Registration relate to less than a majority
of the shares in the aggregate of Registrable Securities held by such
initiating Holders and so excluded).

 

(4)           Selection of
Underwriters.  If any Demand
Registration is in the form of an underwritten offering, the Holders of a
majority of the aggregate number of the outstanding Registrable Securities
shall designate the Underwriter or a group of Underwriters to be utilized in
connection with the public offering of such Registrable Securities, which selection
shall be reasonably acceptable to the Company. 
The Company shall enter into an underwriting agreement in customary form
with such Underwriter or Underwriters, which shall include, among other
provisions, indemnities to the effect and to the extent provided in Section 1(e)
hereof.  The holders of Registrable
Securities to be distributed by such Underwriters shall be parties to such
underwriting agreement and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such Underwriters also be made to and for
their benefit and that any and all of the conditions precedent to the
obligations of such Underwriters under such underwriting agreement also be
conditions precedent to their obligations. 
No holder of Registrable Securities shall be required to make any
representations or warranties to or agreements with the Company or the
Underwriters other than representations, warranties or agreements regarding
such holder and its ownership of the Registrable Securities being

 

2

 

registered on its behalf and such holder’s
intended method of distribution and any other representation required by law.

 

(5)           Deferral.  Notwithstanding anything to the contrary
contained herein, the Company shall not be obligated to prepare and file, or
cause to become effective, any registration statement pursuant to this Section
1(a) hereof at any time when, in the good faith judgment of its Board of
Directors, the filing thereof at the time requested or the effectiveness
thereof after filing should be delayed to permit the Company to include in the
registration statement the Company’s financial statements (and any required
audit opinion thereon) for the then immediately preceding fiscal year or fiscal
quarter, as the case may be.  The filing
of a registration statement by the Company cannot be deferred pursuant to the
provisions of the immediately preceding sentence beyond the time that such
financial statements (or any required audit opinion thereon) would be required
to be filed with the Commission as part of the Company’s Annual Report on Form
10-KSB or Quarterly Report on Form 10-QSB, as the case may be, if the Company
were then obligated to file such reports. 
Notwithstanding anything to the contrary contained herein, the Company
shall not be obligated to cause a registration statement previously filed
pursuant to this Section 1(a) to become effective, and may suspend sales by the
Holders of Registrable Securities under any registration that has previously
become effective, at any time when, in the good faith judgment of its Board of
Directors, it reasonably believes that the effectiveness of such registration
statement or the offering of securities pursuant thereto would materially
adversely affect a pending or proposed acquisition, merger, recapitalization,
consolidation, reorganization or similar transaction or negotiations,
discussions or pending proposals with respect thereto; provided that deferrals
pursuant to this sentence shall not exceed, in the aggregate, 90 days in any
calendar year.  The filing of a
registration statement, or any amendment or supplement thereto, by the Company
cannot be deferred, and the rights of Holders of Registrable Securities to make
sales pursuant to an effective registration statement cannot be suspended,
pursuant to the provisions of the immediately preceding sentence for more than 15
days after the abandonment or 30 days after the consummation of any of the
foregoing proposals or transactions or, in any event, for more than 30 days
after the date of the Board’s determination pursuant to the immediately
preceding sentence of this Section 1(a)(5).

 

(6)           No Additional Grants.  The Company agrees that after the Closing, it
shall not grant any person registration rights of the type set forth in Section
1(a) hereof with respect to any class of equity or debt security of the Company
without the consent of the Investors holding a majority of the Registrable Securities
held by all of the Investors, which consent shall not be unreasonably
withheld.  The Company and each of the Investors
agree that the Investors shall be entitled to the consent right set forth in
the immediately preceding sentence so long as the Investors continue to hold
25% of the Registrable Securities acquired by them on the Date of Closing.

 

(b)                                 S-3 Registrations.

 

(1)           Request for
Registration.  At any time on or after
the first anniversary of the Date of Closing, (i) the Investors
constituting a Holder or Holders of in excess of 25%

 

3

 

of the Registrable Securities held by all of
the Investors may make a written request for registration under Form S-3 of the
Securities Act (an “S-3 Registration”)
of all or part of its or their Registrable Securities.  Such request will specify the number of
Registrable Securities proposed to be sold and will also specify the intended
method of disposition thereof.  Within 10
Business Days after receipt of such request, the Company will give written
notice of the proposed registration and any related qualification or compliance
to all other Holders of Series A Preferred Shares, use all commercially
reasonable efforts to effect, as soon as practicable, the registration under
the Securities Act, and include in such registration all Registrable Securities
with respect to which the Company has received written requests for inclusion
therein from the Holders thereof within 15 Business Days after receipt by the
applicable Holder of the Company’s notice. 
Each such request will also specify the aggregate number of Registrable
Securities to be registered and the intended method of disposition
thereof.  Subject to Section 1(b)(3), the
Company shall file a registration statement covering the Series A Preferred
Shares and other securities so requested to be registered as soon as
practicable after receipt of the request or requests of the Holders.

 

(2)           Expenses.  The Company will pay all Registration
Expenses in connection with any registration initiated as an S-3 Registration,
whether or not it becomes effective.  Registrations
affected pursuant to Section 1(b) shall not be counted as demands for
registration or registrations affected pursuant to Section 1(a).

 

(3)           Deferral.  Notwithstanding anything to the contrary
contained herein, the Company shall not be obligated to prepare and file, or
cause to become effective, any registration statement pursuant to this Section
1(b) hereof at any time when, (i) Form S-3 is not available for such offering;
or (ii) the Holders, together with the stockholders of any other securities of
the Company entitled to inclusion in such registration, propose to sell Registrable
Securities at an aggregate price to the public of less than $250,000.00; or
(iii) at any time when, in the good faith judgment of its Board of Directors,
it reasonably believes that the effectiveness of such registration statement or
the offering of securities pursuant thereto would materially adversely affect a
pending or proposed acquisition, merger, recapitalization, consolidation,
reorganization or similar transaction or negotiations, discussions or pending
proposals with respect thereto; provided that deferrals pursuant to this
sentence shall not exceed, in the aggregate, ninety days in any calendar
year.  The filing of a registration
statement, or any amendment or supplement thereto, by the Company cannot be
deferred, and the rights of Holders of Registrable Securities to make sales pursuant
to an effective registration statement cannot be suspended, pursuant to the
provisions of the immediately preceding sentence for more than fifteen days
after the abandonment or thirty days after the consummation of any of the
foregoing proposals or transactions or, in any event, for more than thirty days
after the date of the Board’s determination pursuant to the immediately
preceding sentence of this Section 1(b)(3).

 

(c)           Piggy-Back
Registration.

 

(1)           If the Company proposes to file a
registration statement under the Securities Act with respect to an offering by
the Company for its own account or for the

 

4

 

account of any of its security holders of any
class of equity security, excluding registration statements relating to any
registration (i) on Form S-4 or S-8 or any successor or similar form, (ii)
filed pursuant to Rule 145 under the Securities Act or any successor or similar
form, (iii) related solely to any employee benefit plan or interests therein,
(iv) related solely to debt securities of the Company, then the Company shall
give written notice of such proposed filing to the Holders of Registrable
Securities as soon as practicable (but in no event less than 20 business days
before the anticipated filing date), and such notice shall offer such Holders
the opportunity to register such number of Registrable Securities as each such
Holder may request (a “Piggy-Back Registration”).

 

(2)           The Company shall use its best efforts
to cause the managing Underwriter or Underwriters of a proposed underwritten
offering to permit the Registrable Securities requested to be included in the
registration statement for such offering to be included on the same terms and
conditions as any similar securities of the Company or of such other security
holders included therein. 
Notwithstanding the foregoing, if the Underwriters of such offering
deliver a written opinion to the Company that either because of (i) the kind or
combination of securities which the Holders, the Company and any other persons
or entities intend to include in such offering or (ii) the size of the offering
which the Holders, the Company and such other persons intend to make, are such
that the success of the offering would be materially and adversely affected by
inclusion of the Registrable Securities requested to be included, then (a) in
the event that the size of the offering is the basis of such Underwriter’s
opinion, the amount of securities to be offered for the accounts of the Holders
shall be reduced pro rata (according to the Registrable Securities and other
securities proposed for registration by Holders) to the extent necessary to
reduce the total amount of securities to be included in such offering to the
amount recommended by such Underwriters; and (b) in the event that the kind (or
combination) of securities to be offered is the basis of such Underwriter’s
opinion, (x) the Registrable Securities to be included in such offering shall
be reduced as described in clause (a) above or (y) if the actions described in
clause (x) would, in the judgment of the 
Underwriter, be insufficient to substantially eliminate the adverse
effect that inclusion of the Registrable Securities requested to be included
would have on such offering, such Registrable Securities will be excluded from
such offering.

 

The Company
will pay all Registration Expenses (as defined herein) in connection with each
registration of Registrable Securities.

 

(d)           Registration
Procedures.

 

If and
whenever the Company is required to use its reasonable commercial efforts to effect
the registration of any Registrable Securities under the Securities Act, the
Company will promptly:

 

(1)           prepare and file with the Securities
and Exchange Commission a registration statement with respect to such
securities, make all required filings with the NASD and use commercially
reasonable efforts to cause such registration statement to become effective;

 

5

 

(2)           prepare and file with the Securities
and Exchange Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary
to keep such registration statement effective and to comply with the provisions
of the Securities Act with respect to the disposition of all securities covered
by such registration statement until such time as all of such securities have
been disposed of in accordance with the intended methods of disposition by the
seller or sellers thereof set forth in such registration statement, but in no
event for a period of more than one year after such registration statement
becomes effective;

 

(3)           furnish to counsel (if any) elected
by holders of a majority (by aggregate principal amount) of the Registrable
Securities covered by such registration statement copies of all documents
proposed to be filed with the Securities and Exchange Commission in connection
with such registration, which documents will be subject to the review of such
counsel;

 

(4)           furnish to each seller of such
securities such number of conformed copies of such registration statement and
of each such amendment and supplement thereto (in each case including all
exhibits, except that the Company shall not be obligated to furnish any seller
of securities with more than two copies of such exhibits), such number of
copies of the prospectus included in such registration statement (including
such preliminary prospectus and any summary prospectus), in conformity with the
requirements of the Securities Act, and such other documents, as such seller
may reasonably request in order to facilitate the disposition of the securities
owned by such seller;

 

(5)           use its commercially reasonable
efforts to register or qualify such securities covered by such registration
statement under such other securities or blue sky laws of such jurisdictions as
each seller shall request, and do any and all other acts and things which may
be necessary or advisable to enable such seller to consummate the disposition
in such jurisdictions of the securities owned by such seller, except that the
Company shall not for any such purpose be required to qualify generally to do
business as a foreign corporation in any jurisdiction wherein it is not so
qualified, or to consent to general service of process in any such
jurisdiction;

 

(6)           furnish to each seller a signed
counterpart, addressed to the sellers, of

 

(i)            an opinion of counsel for the
Company, dated the effective date of the registration statement, reasonably
satisfactory in form and substance to such holders’ counsel referred to in
Section 1(d)(3), and

 

(ii)           subject to the accountants obtaining
the necessary representations as specified in Statement on Auditing Standards
No. 72, a “comfort” letter signed by the independent public accountants who
have certified the Company’s financial statements included in the registration
statement,

 

covering
substantially the same matters with respect to the registration statement (and
the prospectus included therein) and, in the case of such accountants’ letter,
with respect to

 

6

 

changes
subsequent to the date of such financial statements, as are customarily covered
in opinions of issuer’s counsel and in accountants’ letters delivered to the
Underwriters in underwritten public offerings of securities;

 

(7)           notify each seller of any securities
covered by such registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the happening
of any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact
or omits to state any material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the circumstances
then existing, and at the request of any such seller prepare and furnish to
such seller a reasonable number of copies of a supplement to or an amendment of
such prospectus as may be necessary so that, as thereafter delivered to the purchaser
of such securities, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing;

 

(8)           otherwise use its commercially
reasonable efforts to comply with all applicable rules and regulations of the
Securities and Exchange Commission, and make available to its security holders,
as soon as reasonably practicable, an earnings statement covering the period of
at least twelve months, but not more than eighteen months, beginning with the
first month after the effective date of the registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act;

 

(9)           use its best efforts to list such
securities on any securities exchange on which the Common Stock is then listed,
if such securities are not already so listed and if such listing is then
permitted under the rules of such exchange, and to provide a trustee, transfer
agent and registrar and paying agent for such Registrable Securities not later
than the effective date of such registration statement;

 

(10)         in any underwritten offering, use its
best efforts to cause the indemnity and contribution terms between the sellers
and the Underwriters to be no more burdensome to the sellers than the indemnity
and contribution terms between the sellers and the Company set forth in Section
1(e) hereof; and

 

(11)         promptly notify each Holder and the
Underwriter or Underwriters, if any:

 

(i)            when such registration statement or
any prospectus used in connection therewith, or any amendment or supplement
thereto, has been filed and, with respect to such registration statement or any
post-effective amendment thereto, when the same has become effective;

 

(ii)           of any written comments from the
Securities and Exchange Commission with respect to any filing referred to in
clause (i) and of any written request by the Securities and Exchange Commission
for amendments or supplements to such registration statement or prospectus;

 

7

 

(iii)          of the notification to the Company by
the Securities and Exchange Commission of its initiation of any proceeding with
respect to the issuance by the Securities and Exchange Commission of any stop
order suspending the effectiveness of such registration statement; and

 

(iv)          of the receipt by the Company of any
notification with respect to the suspension of the qualification of any
Registrable Securities for sale under the applicable securities or blue sky
laws of any jurisdiction.

 

The Company
may require each seller of any securities as to which any registration is being
effected to furnish to the Company such information regarding such seller and
the distribution of such securities as the Company may from time to time
reasonably request in writing and as shall be required by law in connection
therewith.  Each such holder agrees to
furnish promptly to the Company all information required to be disclosed in
order to make the information previously furnished to the Company by such
holder not materially misleading.

 

By acquisition
of Registrable Securities, each holder of such Registrable Securities shall be
deemed to have agreed that upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 1(d)(7) hereof, such
holder will promptly discontinue such holder’s disposition of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until such holder’s receipt of the copies of the supplemented or
amended prospectus contemplated by Section 1(d)(7) hereof.  If so directed by the Company, each holder of
Registrable Securities will deliver to the Company (at the Company’s expense)
all copies, other than permanent file copies, then in such holder’s possession
of the prospectus covering such Registrable Securities current at the time of
receipt of such notice.  In the event the
Company shall give any such notice, the period mentioned in Section 1(d)(2) hereof
shall be extended by the number of days during the period from and including
the date of the giving of such notice to and including the date when each
seller of any Registrable Securities covered by such registration statement
shall have received the copies of the supplemented or amended prospectus
contemplated by Section 1(d)(7) hereof.

 

In connection
with any underwritten offering, all Registrable Securities to be included in
such registration shall be subject to the related underwriting agreement and no
person may participate in such registration unless such person agrees to sell
such person’s securities on the basis provided in the underwriting arrangement
approved by the persons for whose account such underwritten registration is
initially filed and completes and executes all customary questionnaires,
indemnities, underwriting agreements and other reasonable documents which must
be executed under the terms of such underwriting arrangements.

 

(e)           Indemnification
and Contribution.

 

(1)           Indemnification by
Company.  The Company agrees
to indemnify and hold harmless each Holder of Registrable Securities, its
officers, directors, employees and agents and each person who controls such
Holder within the meaning of either Section 15 of the Securities Act or Section
20(a) of the Exchange Act, from and against all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation and legal
expenses) arising out of or based upon any untrue statement or alleged untrue

 

8

 

statement of a material fact contained in any
registration statement or prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or based upon any 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, except insofar as
such losses, claims, damages, liabilities or expenses arise out of or are based
upon any such untrue statement or omission or allegation thereof based upon
information relating to such indemnified Holder and furnished in writing to the
Company by such indemnified Holder expressly for use therein.  This indemnity will be in addition to any
liability which the Company may otherwise have.

 

(2)           Indemnification by Selling Holders.  Each selling Holder will severally, not
jointly and severally, indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed the registration statement,
each person, if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20(a) of the Exchange Act, any
underwriter and any other Holder selling securities under such registration
statement or any of such other Holder’s officers directors, employees or agents
or any person who controls such Holder within the meaning of either Section 15
of the Securities Act or Section 20(a) of the Exchange Act, from and against
all losses, claims, liabilities and expenses (including reasonable costs of
investigation and legal expenses), arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement or prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or based upon any 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 omission or
allegation thereof is made in reliance on and in conformity with the information
relating to such Holder and furnished in writing to the Company by such Holder
expressly for use in connection with such registration; provided, however, that the total amounts payable in indemnity by a
Holder under this Section 1(e) shall not exceed the net proceeds received
by such Holder in the registered offering out of which such event giving rise
to the indemnity arises.

 

(3)           Notice. If any action or
proceeding (including any governmental investigation or inquiry) shall be
brought or asserted against an indemnified party in respect of which indemnity
may be sought from the indemnifying party, such indemnified party shall
promptly notify the indemnifying party in writing, and the indemnifying party
shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to such indemnified party and the payment of all
expenses.  Such indemnified party shall
have the right to employ separate counsel in any such action and to participate
in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of such indemnified party except that the indemnifying party shall
be responsible for the reasonable fees and expenses of such counsel if (but
only if) (a) the indemnifying party has agreed to pay such fees and expenses or
(b) the indemnifying party shall have failed to assume the defense of such
action or proceeding and has failed to employ counsel reasonably satisfactory
to such indemnified party in any

 

9

 

such action or proceeding or (c) the named
parties to any such action or proceeding (including any impleaded parties)
include both such indemnified party and the indemnifying party, and there are
one or more legal defenses available to such indemnified party which are
different from or additional to those available to the indemnifying party (in
which case, if such indemnified party notifies the indemnifying party in
writing that it elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such action or proceeding on behalf of such indemnified party, it being
understood, however, that the indemnifying party shall not, in connection with
any one such action or proceeding or separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys at any time for such indemnified party
and any other indemnified parties, which firm shall be designated in writing by
such indemnified parties).  The indemnifying
party shall not be liable for any settlement of any such action or proceeding
effected without its written consent, but if settled with its written consent,
or if there be a final judgment for the plaintiff in any such action or
proceeding, the indemnifying party agrees to indemnify and hold harmless such indemnified
parties from and against any loss or liability by reason of such settlement or
judgment.

 

(4)           Contribution.  If (a) the indemnification provided for in
Section 1(e)(1) is unavailable to an indemnified Holder in respect of any
losses, claims, damages, liabilities or expenses referred to therein or (b) contribution
under the Securities Act may be required on the part of such indemnified Holder,
then the Company, in lieu of indemnifying such Holder, shall contribute to the
amount paid or payable by such Holder as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the Company on the one hand and of the Holder on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations.  The relative
fault of the Company on the one hand and of the Holder on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company or by the
Holder and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.  The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in
Sections 1(e)(2) and 1(e)(3), any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim.

 

The company
and each Holder of Registrable Securities agree that it would not be just and
equitable if contribution pursuant to this Section 1(e)(4) were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph.  Notwithstanding the
provisions of this Section 1(e)(4), a Holder shall not be required to
contribute any amount in excess of the amount by which the total net proceeds
received by such Holder or its affiliated Holders from the sale to the public
of Registrable

 

10

 

Securities exceeds the amount of any damages
which such Holder, or its affiliated Holders, has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

 

(5)           Transfer of Registration Rights.  The rights to cause the Company to register
Registrable Securities pursuant to this Section 1 may be transferred by a
Holder to a transferee, provided that: (i) the Company is, within a reasonable
time after such transfer, furnished with written notice of the name and address
of such transferee and the securities with respect to which such registration
rights are being assigned; (ii) such transferee acquires at least 25% of a
Holder’s Registrable Securities; and (iii) such transferee agrees in writing to
be bound by and subject to the terms and conditions of this Agreement.  Notwithstanding the foregoing, a transfer of
registration rights by a Holder to a partner, shareholder or affiliate of the
Holder shall not be subject to the minimum shareholding requirement in the
preceding sentence.

 

(6)           Certain
Definitions.

 

(i)            “Registrable Securities”
means shares of the Company’s Common Stock, $.01 par value (“Common Stock”), issued or issuable upon conversion of any
shares of Series A Preferred Stock, issued pursuant to the Purchase
Agreement.  As to any particular
Registrable Securities, once issued such securities shall cease to be
Registrable Securities when (A) a registration statement with respect to the
sale of such securities shall have become effective under the Securities Act
and such securities shall have been disposed of in accordance with such
registration statement, (B) they shall have been distributed to the public
pursuant to Rule 144 (or any successor provision) under the Securities Act, (C)
they shall have been otherwise transferred, new certificates for them not
bearing a legend restricting further transfer shall have been delivered by the
Company and subsequent disposition of them shall not require registration or
qualification of them under the Securities Act or any similar state law then in
force, or (D) they shall have ceased to be outstanding.

 

(ii)           “Registration Expenses”
means all expenses incident to the Company’s performance of or compliance with
Section 1 hereof, including, without limitation, all registration and filing fees,
all fees and expenses of complying with securities or blue sky laws, fees and
other expenses associated with filings with the National Association of
Securities Dealers, Inc. (including, if required, the reasonable fees and
expenses of any “qualified independent underwriter” and its counsel), all
printing expenses, the fees and disbursements of counsel for the Company and of
its independent public accountants, the fees and disbursements of one counsel
retained by the holders of Registrable Securities, the expenses of any special
audits made by such accountants required by or incident to such performance and
compliance, but not including (a) fees and disbursements

 

11

 

of more than one counsel retained by the
holders of Registrable Securities, or (b) such holders’ proportionate share of
underwriting discounts and commissions.

 

SECTION 2.         Notices to Company and Holders.  Any notice or
demand authorized by this Agreement to be given or made by the Holders to or on
the Company shall be sufficiently given or made when and if deposited in the
mail, first class or registered, postage prepaid, addressed to the office of
the Company expressly designated by the Company at its office for purposes of
this Agreement (until the Holders are otherwise notified in accordance with
this Section by the Company), as follows:

 

Geokinetics
Inc.

One Riverway,
Suite 2100

Houston,
Texas  77056

Attention:
President

 

Any notice
pursuant to this Agreement to be given by the Company to any Holder shall be
sufficiently given when and if deposited in the mail, first class or
registered, postage prepaid, addressed (until the Company is otherwise notified
in accordance with this Section by such Holder) to such Holder at the address
appearing in the stock records of the Company.

 

SECTION 3.         Supplements and Amendments.  This Agreement may
not be amended without the consent of the Company and the Holders of a majority
of the Registrable Securities then outstanding and entitled to the registration
rights set forth herein.

 

SECTION 4.         Successors.  All the covenants
and provisions of this Agreement by or for the benefit of the Company shall
bind and inure to the benefit of its respective successors and assigns
hereunder.

 

SECTION 5.         Termination.  This Agreement
(except for Section 1(e)) shall terminate at 5:00 p.m., New York City time, on October
31, 2010.

 

SECTION 6.         Governing Law.  THIS AGREEMENT SHALL
BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR
ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF SAID
STATE.

 

SECTION 7.         Benefits of This Agreement.  Nothing in this
Agreement shall be construed to give to any person or corporation other than
the Company and the registered holders of the Series A Preferred Stock any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company and the
registered holders of the Series A Preferred Stock.  Nothing herein shall prohibit or limit the
Company from entering into an agreement providing holders of securities which
may hereafter be issued by the Company with such registration rights
exercisable at such time or times and in such manner as the Board of Directors
shall deem in the best interests of the Company so long as the performance by
the Company of its obligations under such other agreement will not cause the
Company to breach its obligations hereunder to the Holders.

 

12

 

SECTION 8.         Counterparts.  This Agreement may
be executed in any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.

 

[Signature Page Follows]

 

13

 

[Signature Page of Registration Rights
Agreement]

 

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed, as
of the day and year first above written.

 

	
   

  	
  COMPANY

  
	
   

  	
   

  
	
   

  	
  GEOKINETICS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HOLDERS

  
	
   

  	
   

  
	
   

  	
  All those Holders whose signature pages,

  substantially in the form of page 15 hereto,

  are attached hereto

  
					

 

14

 

FORM OF HOLDER SIGNATURE PAGE

 

 

	
   

  	
  NAME OF HOLDER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Street Address)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (City, State and Zip Code)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Facsimile Number)

  
					

 

15

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00075-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00075-of-00352.parquet"}]]