Document:

Exhibit 10.6

 

AmegyBank

ESCROW AGREEMENT

(ACQUISITIONS)

 

THIS ESCROW AGREEMENT (this “Escrow
Agreement”) is dated as of November 30, 2005 and is by and among SCF-III, L.P., a Delaware limited partnership, taxpayer
identification number                               
JAMES WHITE, individually, taxpayer
identification number                                   
(“Sellers”), GEOKINETICS INC.,
a Delaware corporation, taxpayer identification number (“Purchaser”), and
AMEGY BANK NATIONAL ASSOCIATION, a
national banking association (“Escrow Agent”), on terms and conditions
more particularly described herein.

 

RECITALS:

 

WHEREAS, Purchaser and Sellers
have entered into that certain Stock Purchase Agreement, dated July 29,
2005, by and among Purchaser and Sellers (the “Stock Purchase Agreement”)
pursuant to which Purchaser is purchasing all of the outstanding capital stock
of Trace Energy Services, Ltd. from Sellers as more particularly described
therein and Sellers are indemnifying Purchaser from certain liabilities as more
particularly described therein.

 

NOW, THEREFORE, in consideration
of the premises and other good and valuable consideration, the receipt of which
is hereby acknowledged, the undersigned hereby agree as follows:

 

ARTICLE I

TERMS
AND CONDITIONS – ESCROW FUND

 

1.1                               Establishment
of Fund. The Sellers have caused or will cause
to be deposited with the Escrow Agent the sum of CDN $2,000,000 (such sum, or
the balance thereof remaining from time to time being referred to herein as the
“Fund”).

 

1.2                               Treatment
of Fund.  The monies constituting the
Fund shall be deposited in a segregated account pursuant to the terms of this
Escrow Agreement.  Such account shall be
styled “Geokinetics/Trace Escrow Account”, with federal tax identification number
                            .

 

1.3                               Escrow
Procedure and Payment Instruction. The Fund, together with any investment
earnings thereon, which earnings shall become and remain a part of the Fund,
shall be held and disbursed in accordance with the terms of this Escrow
Agreement as follows:

A.                                    The
Purchaser shall submit written claims (each a “Claim,” and collectively, the “Claims”)
to Escrow Agent prior to 5:00 p.m. Houston, Texas time on the first
anniversary of the date of this Escrow Agreement (the “Claims Submission Deadline”)
containing the following information and/or statements:

 

(i)                                     that
Purchaser is entitled to indemnification pursuant to the Stock Purchase
Agreement described in the Escrow Agreement;

 

(ii)                                  the
circumstances giving rise to Purchaser’s Claim;

 

(iii)                               the
liquidated amount of Purchaser’s Claim, or if not liquidated, Purchaser’s good
faith estimate of the amount of Purchaser’s Claim; and

 

(iv)                              that
a copy of the Claim has been delivered by Purchaser to Sellers and the date of
such delivery.

 

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B.                                    Escrow
Agent shall notify Sellers of Escrow Agent’s receipt of such Claim and the date
of such receipt.

 

C.                                    Sellers
shall deliver to Escrow Agent a written objection notice (“Objection Notice”)
by 5:00 p.m. Houston, Texas time within thirty (30) days after Escrow
Agent’s receipt of such Claim (the “Objection Submission Deadline”) if Sellers
objects to all or any part of such Claim, containing the following information
and/or statements:

 

(i)                                     that
Sellers dispute or object to the Claim;

 

(ii)                                  the
circumstances giving rise to Sellers’ Objection Notice;

 

(iii)                               the
amount, if any, of such Claim which is not disputed by Sellers; and

 

(iv)                              that
a copy of the Objection Notice has been delivered by Sellers to Purchaser and
the date of such delivery.

 

D.                                    Escrow
Agent shall notify Purchaser of Escrow Agent’s receipt of such Objection Notice
and the date of such receipt.

 

E.                                      Sellers
shall deliver to Escrow Agent a written consent (a “Consent”) before the
Objection Submission Deadline if Sellers consent to the payment of the Claim.

 

F.                                      Escrow
Agent shall notify Purchaser of Escrow Agent’s receipt of a Consent and the
date of such receipt.

 

G.                                    If
Escrow Agent receives either an Objection Notice agreeing to a portion of a
Claim or a Consent with respect to a Claim, regardless of whether such
Objection Notice or Consent was received by Escrow Agent before the expiration
of the Objection Submission Deadline relating thereto, Escrow Agent shall
disburse the undisputed amount of the Claim to Purchaser to the extent of funds
then available in the Fund.

 

H.                                    If
no Claim is delivered to Escrow Agent prior to the Claims Submission Deadline,
or if a Claim or Claims have been delivered to Escrow Agent prior to the Claims
Submission Deadline and Sellers have given a Consent to the payment of each
such Claim and Escrow Agent has disbursed amounts from the Fund to Purchaser to
pay each such Claim, Escrow Agent shall disburse all remaining funds available
in the Fund to Sellers on the first Business Day after the Claims Submission
Deadline.  If a Claim or Claims have been
delivered to Escrow Agent prior to the Claims Submission Deadline and Sellers
have not given a Consent to the payment of one or more of such Claims, Escrow
Agent shall disburse any remaining funds available in the Fund to the extent
that such funds exceed the amount of the Claim or Claims pending as of the
Claims Submission Deadline.  Promptly
following the Claims Submission Deadline, Purchaser shall submit a written
instruction authorizing the Escrow Agent to make the disbursement contemplated
by the preceding sentence.

 

I.                                         In
the event Escrow Agent does not receive an Objection Notice for a Claim before
the expiration of the Objection Submission Deadline relating to such Claim,
unless and until a Consent for such Claim is received by Escrow Agent, whether
before or after the Objection Submission Deadline for such Claim, or an
Objection Notice partially consenting to such Claim is subsequently received
after the Objection Submission Deadline for such Claim, such Claim shall be
deemed rejected by Sellers.

 

J.                                      Notwithstanding
any provision hereof to the contrary, Escrow Agent shall not distribute all or
any portion of the Fund to Purchaser with respect to any Claim until Escrow
Agent receives one of the following for such Claim:

 

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(i)                                     a
written Objection Notice or other written notice from Sellers consenting to the
payment of a portion of such Claim, in which case Escrow Agent shall disburse
(to the extent of available funds in the Fund) to Purchaser such undisputed
portion of such Claim only; or

 

(ii)                                  a
written Consent or other written notice from Sellers consenting to the payment
of such Claim in full, in which case Escrow Agent shall disburse (to the extent
of available funds in the Fund) to Purchaser the amount of such Claim; or

 

(iii)                               a
copy of a final decision of a court or arbitrator (together with a written
opinion of legal counsel to Sellers that such decision is final and
non-appealable and was rendered by a court or arbitrator having competent
jurisdiction or authority, as applicable), in which case Escrow Agent shall
disburse the Fund (to the extent of available funds in the Fund) in accordance
with such final decision.

 

1.4                               Investment
of Fund. The Escrow Agent shall invest the Fund and keep the Fund invested
and reinvested as directed by Sellers in U.S. Treasury Securities with a
maturity date of 90 days or less or in such other investments directed in
writing by Sellers and Purchaser.  Any
income derived from such investments shall be paid to Sellers in connection
with any disbursement on the first Business Day after the Claims Submission
Deadline.  If any portion of the Fund is
not distributed on such date, the income derived from investments on such
portion shall be paid to Sellers on the date that such remaining portion is
distributed.  All income earned on the
Fund shall be for the account of Sellers pro rate
according to each Seller’s Escrow Percentage as set forth on Schedule I hereto
and shall be reported under applicable federal regulations using the tax
identification number(s) of the respective Sellers.  A transaction fee will be assessed in
connection with each transaction. Escrow Agent will provide periodic statements
to Sellers and Purchaser reflecting transactions executed on behalf of the
Fund. Escrow Agent shall have the right to liquidate any investments held in
order to make required disbursements under this Escrow Agreement. Escrow Agent
shall have no liability for any loss sustained as a result of any investment
made pursuant to the instructions of Purchaser or as a result of any
liquidation of any investment prior to its maturity or for the failure of Purchaser
to give investment instructions to Escrow Agent.  Investment orders may be executed through Escrow
Agent or one or more affiliates or agents of the Escrow Agent, and Escrow Agent
or such affiliates or agents may receive compensation in connection therewith
in addition to the compensation to Escrow Agent for its services hereunder.  A copy of Escrow Agent’s current fee schedule is
attached as Schedule 2.  Upon any
party’s request, Escrow Agent shall furnish such party with current fee
schedules.

 

ARTICLE II

TERMS AND CONDITIONS – ESCROWED ASSETS

 

2.1                               Establishment
of Fund. The Sellers have caused or will cause to be deposited with the
Escrow Agent certificates representing an aggregate of 1,000,000 shares of
Common Stock, $.01 par value per share, of Purchaser (the “Shares”) which
certificates are registered in the names of the Sellers (such shares and the
proceeds thereof, or the balance thereof remaining from time to time being
referred to herein as the “Escrowed Assets”).  Sellers shall be entitled to dispose of any
of the Shares in one or more transactions provided that the proceeds of such
transactions consist solely of cash which is remitted directly to the Escrow
Agent for deposit pursuant to the terms of this Escrow Agreement.

 

2.2                               Treatment
of Escrowed Assets.  The Shares constituting
the Escrowed Assets shall be deposited in a segregated account pursuant to the
terms of this Escrow Agreement.  Such
account shall be styled “Geokinetics/Trace Escrowed Assets Account”, with
federal tax identification number                           .

 

2.3                               Escrow
Procedure and Payment Instruction. The Escrowed Assets, together with any
investment earnings thereon, which earnings shall become and remain a part of
the Escrowed Assets, shall be held and disbursed in accordance with the terms
of this Escrow Agreement as follows:

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A.                                    The
Purchaser shall submit written claims (each a “Tax Claim,” and collectively,
the “Tax Claims”) to Escrow Agent after 5:00 p.m. Houston, Texas
time on the first anniversary of the date of this Escrow Agreement and prior to
5:00 p.m. Houston, Texas time on the third anniversary of the date of this
Escrow Agreement (the “Tax Claims Submission Deadline”) containing the
following information and/or statements:

 

(i)                                     that
Purchaser is entitled to indemnification pursuant to Section 4.17 of the
Stock Purchase Agreement;

 

(ii)                                  the
circumstances giving rise to Purchaser’s Tax Claim;

 

(iii)                               the
liquidated amount of Purchaser’s Tax Claim, or if not liquidated, Purchaser’s
good faith estimate of the amount of Purchaser’s Tax Claim; and

 

(iv)                              that
a copy of the Tax Claim has been delivered by Purchaser to Sellers and the date
of such delivery.

 

B.                                    Escrow
Agent shall notify Sellers of Escrow Agent’s receipt of such Tax Claim and the
date of such receipt.

 

C.                                    Sellers
shall deliver to Escrow Agent a written objection notice (“Tax Claim Objection
Notice”) by 5:00 p.m. Houston, Texas time within thirty (30) days
after Escrow Agent’s receipt of such Tax Claim (the “Tax Claim Objection
Submission Deadline”) if Sellers object to all or any part of such Tax Claim,
containing the following information and/or statements:

 

(i)                                     that
Sellers dispute or object to the Tax Claim;

 

(ii)                                  the
circumstances giving rise to Sellers’ Tax Claim Objection Notice;

 

(iii)                               the
amount, if any, of such Tax Claim which is not disputed by Sellers; and

 

(iv)                              that
a copy of the Tax Claim Objection Notice has been delivered by Sellers to
Purchaser and the date of such delivery.

 

D.                                    Escrow
Agent shall notify Purchaser of Escrow Agent’s receipt of such Tax Claim Objection
Notice and the date of such receipt.

 

E.                                      Sellers
shall deliver to Escrow Agent a written consent (a “Tax Claim Consent”) before
the Tax Claim Objection Submission Deadline if Sellers consent to the payment
of the Tax Claim.

 

F.                                      Escrow
Agent shall notify Purchaser of Escrow Agent’s receipt of the Tax Claim Consent
and the date of such receipt.

 

G.                                    If
Escrow Agent receives either a Tax Claim Objection Notice agreeing to a portion
of a Tax Claim or a Tax Claim Consent with respect to a Tax Claim, regardless
of whether such Tax Claim Objection Notice or Tax Claim Consent was received by
Escrow Agent before the expiration of the Tax Claim Objection Submission
Deadline relating thereto, Escrow Agent shall disburse the undisputed amount of
the Tax Claim to Purchaser to the extent of funds then available in the
Escrowed Assets.

 

H.                                    If
no Tax Claim is delivered to Escrow Agent prior to the Tax Claims Submission
Deadline, or if a Tax Claim or Tax Claims have been delivered to Escrow Agent
prior to the Tax Claims Submission Deadline and Sellers have given a Tax Claim Consent
to the payment of each such Tax Claim and Escrow Agent has disbursed amounts
from the Escrowed Assets to Purchaser to pay each such Tax Claim, Escrow Agent
shall disburse all remaining Escrowed Assets to Sellers on the first Business
Day after the Tax Claims Submission Deadline. 
If a Tax Claim or Tax Claims have been delivered to Escrow Agent prior
to the Tax Claims Submission Deadline and

 

4

 

Sellers have not given a Tax
Claim Consent to the payment of one or more of such Tax Claims, Escrow Agent
shall disburse any remaining Escrowed Assets to the extent that such Escrowed
Assets exceed the amount of the Tax Claim or Tax Claims pending as of the Tax Claims
Submission Deadline.  Promptly following
the Tax Claims Submission Deadline, Purchaser shall submit a written
instruction authorizing the Escrow Agent to make the disbursement contemplated
by the preceding sentence.

 

I.                                         In
the event Escrow Agent does not receive a Tax Claim Objection Notice for a Tax Claim
before the expiration of the Tax Claim Objection Submission Deadline relating
to such Tax Claim, unless and until a Tax Claim Consent for such Tax Claim is
received by Escrow Agent, whether before or after the Tax Claim Objection
Submission Deadline for such Tax Claim, or a Tax Claim Objection Notice
partially consenting to such Tax Claim is subsequently received after the Tax
Claim Objection Submission Deadline for such Tax Claim, such Tax Claim shall be
deemed rejected by Sellers.

 

J.                                      Notwithstanding
any provision hereof to the contrary, Escrow Agent shall not distribute all or
any portion of the Escrowed Assets to Purchaser with respect to any Tax Claim
until Escrow Agent receives one of the following for such Tax Claim:

 

(i)                                     a
written Tax Claim Objection Notice or other written notice from Sellers
consenting to the payment of a portion of such Tax Claim, in which case Escrow
Agent shall disburse (to the extent of available Escrowed Assets) to Purchaser
such undisputed portion of such Tax Claim only; or

 

(ii)                                  a
written Tax Claim Consent or other written notice from Sellers consenting to
the payment of such Tax Claim in full, in which case Escrow Agent shall
disburse (to the extent of available Escrowed Assets) to Purchaser the amount
of such Tax Claim; or

 

(iii)                               a
copy of a final decision of a court or arbitrator (together with a written
opinion of legal counsel to Sellers that such decision is final and
non-appealable and was rendered by a court or arbitrator having competent
jurisdiction or authority, as applicable), in which case Escrow Agent shall
disburse the Escrowed Assets (to the extent of Escrowed Assets) in accordance
with such final decision.

 

K.                                    On
the first business day after the second anniversary of the Closing Date, the
Escrow Agent shall disburse to the Sellers the lesser of (i) a portion of
the Escrowed Assets that represents 80% of the value of the Escrowed Assets at
that date, as determined in accordance with Paragraph M below and (ii) if one
or more Tax Claims have been delivered to Escrow Agent prior to the second
anniversary of the Closing Date and Sellers have not given a Tax Claim Consent
to the payment of one or more of such Tax Claims, 80% of the remaining Escrowed
Assets which exceed the amount of the Tax Claim or Tax Claims pending as of the
Tax Claims Submission Deadline.

 

L.                                     The
Sellers’ liability to the Purchaser in respect of a Tax Claim shall be limited
to an amount equal to the lesser of (i) the Fund and (ii) the value
of the Escrowed Assets as of the date such Tax Claim is satisfied less all
payments made to Purchaser from the Fund or from the Escrowed Assets in
accordance with the terms of this Escrow Agreement.  There shall be no claim against all or any portion
of the Escrowed Asset if at the time the Tax Claim is received by the Escrow
Agent any portion of the Fund remains in escrow under the Escrow Agreement.

 

M.                                  The
value of any Shares that form part of the Escrowed Assets at any time and from
time to time shall be equal to the number of such Shares multiplied by the
ten-day weighted average trading price of the Shares before such time
(converted to Canadian dollars using the Exchange Rate (as that term is defined
in the Stock Purchase Agreement)).

 

N.                                    If,
at any time after the date of this Escrow Agreement the Escrowed Assets include
cash at least equal to the amount of the Fund less all previous disbursements
to the Purchaser from either the Fund or the

 

5

 

Escrowed Assets, the
Escrow Agent, shall, upon written request from the Sellers, release to the
Sellers all Escrowed Assets other than cash equal to the Fund less all previous
disbursements to the Purchaser from either the Fund or the Escrowed Assets.

 

O.                                   The
provisions of this Article II shall terminate and all remaining Escrowed
Assets shall be delivered to the Sellers promptly after receipt by the Escrow
Agent of a written certificate from Purchaser and Sellers to the effect that
the Purchaser has undergone a merger (in which the Purchaser was not the
surviving entity), tender offer, reorganization, sale of all or substantially
all of its assets, disposition (in a single transactions or series of related
transactions) of at least 50% of its shares of common stock or a similar
transaction which has resulted in a change in control of the Purchaser.

 

2.4                               Investment
of Proceeds of Shares. The Escrow Agent shall invest the proceeds of the
Shares and keep the proceeds of the Shares invested and reinvested as directed
by Sellers in U.S. Treasury Securities with a maturity date of 90 days or less
or in such other investments directed in writing by Sellers and Purchaser.  Any income derived from such investments
shall be paid to Sellers in connection with any disbursement on the first
Business Day after the Tax Claims Submission Deadline.  If any portion of the Escrowed Assets is not
distributed on such date, the income derived from investments on such portion
shall be paid to Sellers on the date that such remaining portion is
distributed.  All income earned on the Escrowed
Assets shall be for the account of Sellers pro rata according
to each Seller’s Escrow Percentage as set forth on Schedule I hereto and
shall be reported under applicable federal regulations using the tax
identification number(s) of the respective Sellers.  A transaction fee will be assessed in
connection with each transaction. Escrow Agent will provide periodic statements
to Sellers and Purchaser reflecting transactions executed with respect to the
Escrowed Assets. Escrow Agent shall have the right to liquidate the Escrowed
Assets or any investments held in order to make required disbursements under
this Escrow Agreement. Escrow Agent shall have no liability for any loss
sustained as a result of any investment made pursuant to the instructions of
Purchaser or as a result of any liquidation of any Escrowed Assets or investment
prior to its maturity or for the failure of Purchaser to give investment
instructions to Escrow Agent.  Investment
orders may be executed through Escrow Agent or one or more affiliates or agents
of the Escrow Agent, and Escrow Agent or such affiliates or agents may receive
compensation in connection therewith in addition to the compensation to Escrow
Agent for its services hereunder.  A copy
of Escrow Agent’s current fee schedule is attached as Schedule 2.  Upon any party’s request, Escrow Agent shall
furnish such party with current fee schedules.

 

2.5                               Termination.                         .
This Escrow Agreement shall terminate upon the earlier of (i) the date the
Purchaser has received cumulative disbursements of CDN$2,000,000 from the Fund
and the Escrowed Assets or (ii) the disbursement of the balance of the Fund
and the Escrowed Assets in accordance with the provisions of Sections 1.3 and
2.3 hereof.

 

ARTICLE III

PROVISIONS AS TO ESCROW AGENT

 

3.1                               Limitation
of Escrow Agent’s Capacity.

 

A.                                    This
Escrow Agreement expressly and exclusively sets forth the duties of Escrow
Agent with respect to any and all matters pertinent hereto, and no implied
duties or obligations shall be read into this Escrow Agreement against Escrow
Agent.  This Escrow Agreement constitutes
the entire agreement between the Escrow Agent and the other parties hereto in
connection with the subject matter of this escrow, and no other agreement entered
into between the parties, or any of them, shall be considered as adopted or
binding, in whole or in part, upon the Escrow Agent notwithstanding that any
such other agreement may be referred to herein or deposited with Escrow Agent
or the Escrow Agent may have knowledge thereof, and Escrow Agent’s rights and
responsibilities shall be governed solely by this Escrow Agreement.

 

B.                                    Escrow
Agent acts hereunder as a depository only, and is not responsible or liable in
any manner whatsoever for the sufficiency, correctness, genuineness or validity
of the subject matter of this Escrow Agreement or any part thereof, or for the
form of execution thereof, or for the identity or authority of any person
executing or depositing such subject matter. Escrow Agent shall be under no
duty to investigate or inquire as to the

 

6

 

validity or accuracy of
any document, agreement, instruction or request furnished to it hereunder
believed by it to be genuine and Escrow Agent may rely and act upon, and shall
not be liable for acting or not acting upon, any such document, agreement,
instruction or request.  Except as
specifically provided herein, Escrow Agent shall in no way be responsible for
notifying, nor shall it be its duty to notify, any party hereto or any other
party interested in this Escrow Agreement of any payment required or maturity
occurring under this Escrow Agreement or under the terms of any instrument
deposited herewith.

 

3.2                               Authority
to Act.

 

A.                                    Escrow
Agent is hereby authorized and directed by the undersigned to deliver the
subject matter of this Escrow Agreement only in accordance with the provisions
of Articles I and II of this Escrow Agreement.

 

B.                                    Escrow
Agent shall be protected in acting upon any written notice, request, waiver,
consent, certificate, receipt, authorization, power of attorney or other paper
or document, including, without limitation, the authority or the identity of
any signor thereof, which Escrow Agent in good faith believes to be genuine and
what it purports to be, including, without limitation, items directing
investment or non-investment of funds, items requesting or authorizing release,
disbursement or retainage of the Fund of this Escrow Agreement and items
amending the terms of this Escrow Agreement.

 

C.                                    Escrow
Agent may consult with legal counsel at the equal cost and expense of Sellers,
collectively, and Purchaser (other than Escrow Agent) in the event of any
dispute or question as to the construction of any of the provisions hereof or
its duties hereunder, and it shall incur no liability and shall be fully
protected in acting in accordance with the advice of such counsel.

 

D.                                    In
the event of any disagreement between any of the parties to this Escrow
Agreement, or between any of them and any other person, resulting in adverse
claims or demands being made in connection with the matters covered by this
Escrow Agreement, or in the event that Escrow Agent, in good faith, be in doubt
as to what action it should take hereunder, Escrow Agent may, at its option,
refuse to comply with any claims or demands on it, or refuse to take any other
action hereunder, so long as such disagreement continues or such doubt exists,
and in any such event, Escrow Agent shall not be or become liable in any way or
to any person for its failure or refusal to act, and Escrow Agent shall be
entitled to continue so to refrain from acting until (i) the rights of all
interested parties shall have been fully and finally adjudicated by a court of
competent jurisdiction or arbitrator, or (ii) all differences shall have
been adjudged and all doubt resolved by agreement among all of the interested
persons, and Escrow Agent shall have been notified thereof in writing signed by
all such persons.   Notwithstanding the
foregoing, Escrow Agent may in its discretion obey the order, judgment, decree
or levy of any court, whether with or without jurisdiction, or of any agency of
the United States or any political subdivision thereof, or of any agency of the
State of Texas or of any political subdivision thereof, and Escrow Agent is
hereby authorized in its sole discretion, to comply with and obey any such
orders, judgments, decrees or levies. The right of Escrow Agent under this
sub-paragraph are cumulative of all other rights which it may have by law or
otherwise.

 

E.                                      In
the event that any controversy should arise among the parties with respect to
the Escrow Agreement, or should the Escrow Agent resign and the parties fail to
select another Escrow Agent to act in its stead, the Escrow Agent shall have
the right to institute a bill of interpleader in any court of competent
jurisdiction to determine the rights of the parties.

 

3.3                               Compensation/Indemnification.

 

A.                                    Escrow
Agent shall be entitled to reasonable compensation as well as reimbursement for
its reasonable costs and expenses incurred in connection with the performance
by it of service under this Escrow Agreement (including reasonable fees and
expenses of Escrow Agent’s counsel) and the undersigned (other than Escrow
Agent) agree to so pay Escrow Agent reasonable compensation and reimburse
Escrow Agent for reasonable costs and expenses. The parties hereto agree that
escrow fees shall be due and payable in the amount of $3,000.00

 

7

 

each year, and such fees
will be deducted from the Fund upon the commencement of the escrow and on each
anniversary, if any, of the date hereof.

 

B.                                    The
parties to this Escrow Agreement (other than Escrow Agent) hereby severally
agree to indemnify and hold Escrow Agent, its affiliates and their officers,
employees, successors, assigns, attorneys and agents (each an “Indemnified
Party”) harmless from all losses, costs, claims, demands, expenses, damages,
penalties and attorney’s fees suffered or incurred by any Indemnified Party as
a result of anything which it may do or refrain from doing in connection with
this Escrow Agreement or any litigation or cause of action arising from or in conjunction
with this Escrow Agreement or involving the subject matter hereof, the Fund,
the Escrowed Assets or monies deposited hereunder or for any interest upon any
such monies, including, without limitation, arising out of the negligence of Escrow
Agent; provided that the foregoing indemnification shall not extend to the gross
negligence or willful misconduct of Escrow Agent. This indemnity shall include,
but not be limited to, all costs incurred in conjunction with any interpleader
which the Escrow Agent may enter into regarding this Escrow Agreement.

 

3.4                               Miscellaneous.

 

A.                                    Escrow
Agent shall make no disbursement, investment or other use of funds until and
unless it has collected funds. Escrow Agent shall not be liable for collection
items until the proceeds of the same in actual cash have been received or the
Federal Reserve has given Escrow Agent credit for the funds.

 

B.                                    Escrow
Agent may resign at any time by giving written notice to the parties hereto,
whereupon the parties hereto will immediately appoint a successor Escrow Agent.
Until a successor Escrow Agent has been named and accepts its appointment or
until another disposition of the subject matter of this Escrow Agreement has
been agreed upon by all parties hereto, Escrow Agent shall be discharged of all
of its duties hereunder save to keep the Fund whole.

 

C.                                    All
representations, covenants, and indemnifications contained in this Article III
shall survive the termination of this Escrow Agreement.

 

ARTICLE IV

GENERAL PROVISIONS

 

4.1                               Appointment/Acceptance.  Purchaser and Sellers hereby appoint AMEGY
BANK NATIONAL ASSOCIATION as Escrow Agent under this Escrow Agreement and AMEGY
BANK NATIONAL ASSOCIATION hereby agrees to act as Escrow Agent under the terms
of this Escrow Agreement.  James White
hereby authorizes SCF-III to act on Mr. White’s behalf for all purposes
under this Escrow Agreement.

 

4.2                               Discharge
of Escrow Agent.  Upon the delivery
of all of the Fund pursuant to the terms of this Escrow Agreement, the duties
of Escrow Agent shall terminate and Escrow Agent shall be discharged from any
further obligation hereunder.

 

4.3                               Escrow
Instructions. Where directions or instructions from more than one of the
undersigned are required, such directions or instructions may be given by
separate instruments of similar tenor. 
Attached hereto as Schedule 1 (the “Security Schedule”) is a list
of authorized signatories (with signature identification) and authorized
call-back persons for each of the parties to this Escrow Agreement (other than
the Escrow Agent). In the event funds transfer instructions or other
instructions or directions are given, whether in writing, by telecopier or
otherwise, the Escrow Agent is authorized, but is not required or obligated, to
seek confirmation of such instructions or directions by telephone call-back to
the person or persons designated on the Security Schedule, and the Escrow Agent
may rely upon the confirmation of anyone purporting to be the person or persons
so designated.  The authorized signatures
and the persons and telephone numbers for call-backs may be changed only in a writing
actually received and acknowledged by the Escrow Agent, and in the case of an
addition of an authorized signatory, accompanied by an incumbency certificate
with signature identification certified by an existing authorized signatory. If
the Escrow Agent is unable to contract any of the authorized representatives
identified in the Security Schedule for call-back

 

8

 

confirmation, the Escrow Agent is hereby authorized to seek
confirmation of such instructions by telephone call-back to any one or more of
your officers. Such officer shall deliver to the Escrow Agent a fully executed
incumbency certificate certified by an existing authorized signatory, and the
Escrow Agent may rely upon the confirmation of anyone purporting to be any such
officer.

 

4.4                               Notice.
Any payment, notice, request for consent, report, or any other communication
required or permitted in this Escrow Agreement shall be in writing and shall be
deemed to have been given when personally delivered to the party hereunder
specified or when placed in the United States mail, registered or certified,
with return receipt requested, postage prepaid and addressed as follows:

 

If to Escrow Agent:

 

AMEGY
BANK NATIONAL ASSOCIATION

4400
Post Oak Parkway

Five
Post Oak Park

Houston,
Texas 77027

Attn:
Riley Salyer, Vice President

 

If to Sellers:

 

SCF-III,
L.P.

600
Travis Street, Suite 6600

Houston,
Texas 77002

Attn:  Adam Zylman

 

and

 

JAMES
WHITE

302
Cove Creek Lane

Houston,
Texas 770    

 

with
a copy to:

 

Bennett
Jones LLP

4500,
855 2nd Street SW

Calgary,
AB T2P 4K7

Attn:  Chip Johnston

 

and

 

Vinson &
Elkins L.L.P.

First
City Tower, 1001 Fannin Street

Suite 2300

Houston,
Texas 77002

Attn:  Scott N. Wulfe

 

If to Purchaser:

 

GEOKINETICS
INC.

One
Riverway, Suite 2100

Houston,
Texas 77056

Attn:  David A. Johnson

 

9

 

with
a copy to:

 

Chamberlain,
Hrdlicka, White, Williams & Martin

1200
Smith Street, Suite 1400

Houston,
Texas 77002

Attn:  James J. Spring, III

 

Any party may unilaterally designate a different
address by giving notice of each such change in the manner specified above to
each other party. Notwithstanding the foregoing, no notice to the Escrow Agent
shall be deemed given to or received by the Escrow Agent unless actually delivered
to an officer of the Escrow Agent having responsibility under this Escrow
Agreement.

 

4.5                               Governing
Law. This Escrow Agreement is being made in and is intended to be construed
according to the laws of the State of Texas, without giving effect to the principles
of conflict of laws. It shall inure to and be binding upon the parties hereto
and their respective successors, heirs and assigns.

 

4.6                               Construction.
Words used in the singular number may include the plural and the plural may
include the singular. The section headings appearing in this Escrow
Agreement have been inserted for convenience only and shall be given no substantive
meaning or significance whatsoever in construing the terms and conditions of
this Escrow Agreement.

 

4.7                               Amendment.
The terms of this Escrow Agreement may be altered, amended, modified or revoked
only by an instrument in writing signed by all parties hereto.

 

4.8                               Force
Majeure. Escrow Agent shall not be liable to the undersigned for any loss
or damage arising out of any acts of God, strikes, equipment or transmission
failure, war, terrorism, or any other act or circumstance beyond the reasonable
control of Escrow Agent.

 

4.9                               Written
Agreement.  This Escrow Agreement
represents the final agreement between the parties, and may not be contradicted
by evidence of prior, contemporaneous or subsequent oral agreements of the
parties.   There are no unwritten oral
agreements between the parties.

 

4.10                        Counterparts.
This Escrow Agreement may be executed in counterparts, each of which shall be
deemed one original, but all of which shall constitute one and the same
instrument.

 

4.11                        Procedures.  The parties to this Escrow Agreement
acknowledge and agree that the terms, conditions and procedures set forth
herein are commercially reasonable.

 

IN WITNESS WHEREOF, the parties hereto have executed
this Escrow Agreement effective as of the day and year first above written.

 

	
   

  	
  SELLERS:

  
	
   

  	
   

  
	
   

  	
  SCF-III, L.P.

  
	
   

  	
  By:

  	
  L.E. Simmons and
  Associates, Incorporated,

  Its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

10

 

	
   

  	
  and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  James White,
  individually

  
	
   

  	
   

  	
   

  
	
   

  	
  PURCHASER:

  
	
   

  	
   

  	
   

  
	
   

  	
  GEOKINETICS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ESCROW
  AGENT:

  
	
   

  	
   

  	
   

  
	
   

  	
  AMEGY BANK
  NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Riley Salyer

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
									

 

11

 

ACKNOWLEDGMENT OF RECEIPT

 

The undersigned hereby acknowledge receipt from and/or
disbursement by AMEGY BANK NATIONAL ASSOCIATION, Escrow Agent under the
foregoing Escrow Agreement, of the subject matter of the Escrow Agreement as
described in such Escrow Agreement; the undersigned acknowledge a faithful and
proper performance by said Escrow Agent of its duties under said Escrow
Agreement, and in consideration of such disbursement hereby release and
discharge Escrow Agent from all further responsibility or liability as Escrow
Agent under said Escrow Agreement.

 

Executed this                 
day of                                      ,
20    

 

 

	
   

  	
  SELLERS:

  
	
   

  	
   

  
	
   

  	
  SCF-III, L.P.

  
	
   

  	
  By:

  	
   L.E. Simmons & Associates,
  Incorporated,
 Its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  and 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  James White,
  individually

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PURCHASER:

  
	
   

  	
   

  	
   

  
	
   

  	
  GEOKINETICS INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
									

 

 

Schedule 1

 

SECURITY SCHEDULE

 

Telephone Number(s) for
Call-Backs and

Person(s) Designated to
Confirm Funds Transfer Instructions and

Execute Instructions, and
Other Documents in Connection with this

Escrow Agreement
(Acquisitions)

 

	
  If to Sellers:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
  Telephone Number

  	
   

  	
  Signature Identification

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.   Anthony
  DeLuca

  	
   

  	
  (713) 227-7888

  	
   

  	
   

  	
   

  
	
  Or

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.   Adam Zylman

  	
   

  	
  (713) 227-7888

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  If to Purchaser:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
  Telephone Number

  	
   

  	
  Signature Identification

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.  David A.
  Johnson

  	
   

  	
  (713) 850-7600

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.  Thomas J.
  Concannon

  	
   

  	
  (713) 850-7600

  	
   

  	
   

  	
   

  

 

Telephone call-backs shall be made to Sellers and
Purchaser if joint instructions are required pursuant to this Escrow Agreement.

 

ESCROW PERCENTAGE

 

	
  Name

  	
   

  	
  Percentage Interest

  
	
  SCF-III, L.P.

  	
   

  	
   

  
	
  James WhiteExhibit
10.8

 

GeoLease
Partners, L.P.

c/o CSFB
Private Equity, Inc

Eleven
Madison Avenue

New York,
New York 10010

 

Geokinetics Inc.

One Riverway, Suite 2100

Houston, Texas 77056

 

November 30, 2005

 

Attention: Mr. Thomas J. Concannon

 

Re:    Payoff
Letter

 

Ladies and Gentlemen:

 

Reference is made to that certain Lease
Agreement dated as of October 1, 1999, as Amended and Restated as of May 2,
2003 (as amended through the date hereof, the “Lease Agreement”) among
GeoLease Partners, L.P. (“Lessor”), Geokinetics Inc. (“Lessee”)
and the subsidiary guarantors listed on the signature pages thereto.  Capitalized terms used herein and not defined
herein shall have the meanings given thereto in the Lease Agreement.

 

The Lessee has advised the Lessor that they
intend to purchase all of the Units at the Fair Market Sales Value and to
prepay all amounts outstanding under the Lease Agreement, terminate its
Obligations under the Lease Agreement and the Other Collateral Agreements, and
obtain the release of the Liens granted to the Lessor on behalf of the Obligors
on the Collateral.

 

1.             Payment
to Lessor.  Lessee has requested to
purchase all of the Units at the Fair Market Sales Value and to prepay all
amounts outstanding under the Lease Agreement on November 30, 2005.  The total amount of unpaid Obligations and all
fees and expenses (other than the fees and expenses of the Lessor’s counsel set
forth below) and other obligations owing under the Lease Agreement, if paid and
received at the Lessor’s Account (as defined herein) prior to 5:00 p.m.
New York City time on November 30, 2005 (the “Payoff Date”), is
US$2,567,558.58 (the “Lease Amount”).  In addition, Lessee shall pay the fees and
expenses of the Lessor’s counsel in the amount of US$15,000 (such amount,
together with the Lease Amount, the “Payoff Amount”).

 

This letter (the “Agreement”) confirms
that upon, and effective as of, the time of payment by wire transfer of
immediately available funds in the amount of the Payoff Amount in the amounts
specified below to the following accounts specified below (together, the “Lessor’s
Accounts”) (the “Payoff Conditions”) (i) all liabilities,
obligations and indebtedness owing by Lessee to the Lessor under the Lease
Agreement shall be released, discharged and satisfied in full, (ii) all of
the Liens and security interests held by the Lessor in any and all of the
property of Lessee pursuant to the Lease Agreement shall be released and
terminated and all rights to any Collateral upon which we had a Lien under the
Lease Agreement or any Other Collateral Agreements shall automatically revert
to Lessee, each without the delivery of any investment or performance of any
act by any party, (iii) the Lease Agreement (and all Obligations
terminated), the Other Collateral Agreements and all related instruments,
agreements and other documents

 

 

shall be terminated and have no further force or effect, except for
such provisions that expressly survive the Lease Agreement and (iv) Lessee
shall be released and forever discharged by us from any cause of action or
claim, known or unknown, that we may have against Lessee and its successors or
assigns arising out of or in connection with the Lease Agreement or any Other
Collateral Agreements:

 

For payment of $2,567,558.58:

 

Citibank

New York, New York

ABA No.: 021-000-089

Acct No.: 3054-0112

Acct Name: Geolease Partners, L.P.

Reference: Geolease proceeds

Attn: Ruchi Pinniger, Vice President

 

For payments of fees and expenses of Lessor’s
counsel of $15,000:

 

HSBC Bank USA

100 Maiden Lane

New York, New York 10038

ABA No.: 021-001-088

Acct No.: 015-70-965-5

Account Name: Cahill Gordon &
Reindel LLP

 

2.             Further
Assurances. On and after the satisfaction of the Payoff Conditions, the
Lessor shall, at the expense of Lessee (i) execute and deliver such
documents, instruments and agreements, including, without limitation, the
execution and delivery of UCC-3 termination statements, the execution and
delivery of one or more notices to Frost National Bank concerning the
termination of the deposit account Control Agreements pertaining to Lessee and
the subsidiary guarantors and other releases and fixture filing termination
statements and (ii) take such other actions, including, without
limitation, filings and recordings of terminations and releases, as counsel to
Lessee consider necessary to effect or evidence such termination and release or
to effect the purposes of this Agreement, in each case, in form and substance
reasonably satisfactory to Lessee. In addition, following the satisfaction of
the Payoff Conditions, the Lessor authorizes Lessee to file any UCC-3
termination statements and fixture filing termination statements pertaining to
UCC financing statements filed by the Lessor in respect of the Collateral so
long as such termination statements are in form and substance reasonably
satisfactory to the Lessor.

 

3.             Headings.
The headings contained in this Agreement are for reference purposes only and
shall not constitute a part hereof.

 

4.             Governing
Law. This Agreement and the rights and obligations of the parties hereto and
thereto shall be governed by, and construed and interpreted in accordance with
the laws of the State of New York without regard to conflicts of laws
principles.

 

5.             Counterparts.
This Agreement may be executed in one or more counterparts and, if executed in
more than one counterpart, the executed counterparts shall each be deemed to be
an original but all such counterparts shall together constitute one and the
same instrument.

 

2

 

Kindly acknowledge your acceptance of and
agreement to the foregoing by executing a counterpart of this Agreement. This
Agreement may be executed in any number of counterparts, including facsimile
counterparts, but all of such counterparts shall, together, constitute but one
of the same agreement.

 

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  CEOLEASE GP, INC.

  
	
   

  	
  as general
  partner of

  
	
   

  	
  GEOLEASE
  PARTNERS, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Douglas M. Ladden

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Douglas M. Ladden

  
	
   

  	
   

  	
  Title:

  	
  President

  
					

 

3

 

	
  Accepted and Agreed:

  
	
   

  
	
  GEOKINETICS INC.

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Thomas J. Concannon

  	
   

  
	
   

  	
  Name:

  	
  Thomas J. Concannon

  
	
   

  	
  Title:

  	
  VP & CFO

  
				

 

4

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