Document:

Exhibit 10.3

 

 

 

 

STOCK PURCHASE AGREEMENT

 

By and Among

 

GEOKINETICS INC.

a Delaware corporation,

 

ELLIOTT ASSOCIATES, L.P.

a Delaware limited
partnership,

 

AND

 

ELLIOTT INTERNATIONAL, L.P.

a Cayman Islands limited
partnership

 

 

Dated as of September 8, 2006

 

 

 

 

TABLE OF CONTENTS

	
  ARTICLE I. DEFINITIONS

  	
   

  	
  1

  
	
  Section 1.1

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
  Section 1.2

  	
   

  	
  Definitions Appearing Elsewhere in this Agreement

  	
   

  	
  11

  
	
  Section 1.3

  	
   

  	
  Accounting Principles and Terms

  	
   

  	
  11

  
	
  Section 1.4

  	
   

  	
  Determination of Net Working Capital

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II. PURCHASE AND SALE OF COMPANY SHARES

  	
   

  	
  11

  
	
  Section 2.1

  	
   

  	
  Purchase and Sale

  	
   

  	
  11

  
	
  Section 2.2

  	
   

  	
  Payment of the Purchase Price

  	
   

  	
  11

  
	
  Section 2.3

  	
   

  	
  Adjusted Purchase Price

  	
   

  	
  12

  
	
  Section 2.4

  	
   

  	
  Post-Closing Adjustment

  	
   

  	
  13

  
	
  Section 2.5

  	
   

  	
  Treatment of Grant Phantom Stock

  	
   

  	
  14

  
	
  Section 2.6

  	
   

  	
  Closing

  	
   

  	
  15

  
	
  Section 2.7

  	
   

  	
  Deliveries at the Closing

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III. REPRESENTATIONS AND WARRANTIES
  CONCERNING THE TRANSACTION

  	
   

  	
  16

  
	
  Section 3.1

  	
   

  	
  Representations and Warranties of the Sellers

  	
   

  	
  16

  
	
  Section 3.2

  	
   

  	
  Representations and Warranties of the Buyer

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV. REPRESENTATIONS AND WARRANTIES
  CONCERNING THE ACQUIRED ENTITIES

  	
   

  	
  18

  
	
  Section 4.1

  	
   

  	
  Corporate Organization;
  Etc.

  	
   

  	
  18

  
	
  Section 4.2

  	
   

  	
  Authorization, Etc.

  	
   

  	
  18

  
	
  Section 4.3

  	
   

  	
  No Violation

  	
   

  	
  18

  
	
  Section 4.4

  	
   

  	
  Consents

  	
   

  	
  19

  
	
  Section 4.5

  	
   

  	
  Accounts Receivable

  	
   

  	
  19

  
	
  Section 4.6

  	
   

  	
  Financial Statements

  	
   

  	
  19

  
	
  Section 4.7

  	
   

  	
  Inventories

  	
   

  	
  20

  
	
  Section 4.8

  	
   

  	
  Real Property

  	
   

  	
  20

  
	
  Section 4.9

  	
   

  	
  Absence of Certain
  Changes

  	
   

  	
  21

  
	
  Section 4.10

  	
   

  	
  No Material Adverse Change

  	
   

  	
  22

  
	
  Section 4.11

  	
   

  	
  Litigation

  	
   

  	
  22

  
	
  Section 4.12

  	
   

  	
  Intellectual Property

  	
   

  	
  23

  
	
  Section 4.13

  	
   

  	
  Contracts

  	
   

  	
  23

  
	
  Section 4.14

  	
   

  	
  Customers and Suppliers

  	
   

  	
  26

  
	
  Section 4.15

  	
   

  	
  Employee Benefit Plans

  	
   

  	
  26

  
	
  Section 4.16

  	
   

  	
  Compliance with Law

  	
   

  	
  29

  
	
  Section 4.17

  	
   

  	
  Taxes

  	
   

  	
  30

  
	
  Section 4.18

  	
   

  	
  Insurance

  	
   

  	
  32

  
	
  Section 4.19

  	
   

  	
  Environmental Laws and
  Regulations

  	
   

  	
  34

  
	
  Section 4.20

  	
   

  	
  Products and Services

  	
   

  	
  34

  
	
  Section 4.21

  	
   

  	
  [Intentionally left
  blank.]

  	
   

  	
  35

  
	
  Section 4.22

  	
   

  	
  Capitalization; Acquired Subsidiaries

  	
   

  	
  35

  

 

 i
 

 

 

	
  Section 4.23

  	
   

  	
  Brokers and Finders

  	
   

  	
  35

  
	
  Section 4.24

  	
   

  	
  Disclosure

  	
   

  	
  36

  
	
  Section 4.25

  	
   

  	
  Books and Records

  	
   

  	
  36

  
	
  Section 4.26

  	
   

  	
  Condition of Facilities

  	
   

  	
  36

  
	
  Section 4.27

  	
   

  	
  No Undisclosed
  Liabilities

  	
   

  	
  36

  
	
  Section 4.28

  	
   

  	
  Employees

  	
   

  	
  36

  
	
  Section 4.29

  	
   

  	
  Compliance with the
  Foreign Corrupt Practices Act and Export Control and Antiboycott Laws

  	
   

  	
  39

  
	
  Section 4.30

  	
   

  	
  Relationships with
  Related Persons

  	
   

  	
  39

  
	
  Section 4.31

  	
   

  	
  Title to Assets

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V. PRE-CLOSING COVENANTS

  	
   

  	
  40

  
	
  Section 5.1

  	
   

  	
  General

  	
   

  	
  40

  
	
  Section 5.2

  	
   

  	
  Notices and Consents

  	
   

  	
  41

  
	
  Section 5.3

  	
   

  	
  Operation of Business

  	
   

  	
  41

  
	
  Section 5.4

  	
   

  	
  Preservation of Business

  	
   

  	
  41

  
	
  Section 5.5

  	
   

  	
  Full Access

  	
   

  	
  42

  
	
  Section 5.6

  	
   

  	
  Notice of Developments; Supplements to Schedules

  	
   

  	
  42

  
	
  Section 5.7

  	
   

  	
  Exclusivity

  	
   

  	
  42

  
	
  Section 5.8

  	
   

  	
  Access and Investigation

  	
   

  	
  43

  
	
  Section 5.9

  	
   

  	
  Confidential Information

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI. POST-CLOSING COVENANTS

  	
   

  	
  43

  
	
  Section 6.1

  	
   

  	
  General

  	
   

  	
  43

  
	
  Section 6.2

  	
   

  	
  Litigation Support

  	
   

  	
  44

  
	
  Section 6.3

  	
   

  	
  Transition

  	
   

  	
  44

  
	
  Section 6.4

  	
   

  	
  Confidentiality

  	
   

  	
  44

  
	
  Section 6.5

  	
   

  	
  Withholding Tax

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII. CONDITIONS TO OBLIGATIONS TO CLOSE

  	
   

  	
  45

  
	
  Section 7.1

  	
   

  	
  Conditions to Obligations of the Buyer

  	
   

  	
  45

  
	
  Section 7.2

  	
   

  	
  Conditions to Obligation of the Sellers

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII. REMEDIES FOR BREACHES OF THIS
  AGREEMENT

  	
   

  	
  47

  
	
  Section 8.1

  	
   

  	
  Survival of Representations, Warranties, Covenants
  and Agreements

  	
   

  	
  47

  
	
  Section 8.2

  	
   

  	
  Indemnification Provisions for Benefit of the Buyer

  	
   

  	
  47

  
	
  Section 8.3

  	
   

  	
  Indemnification Provisions for Benefit of the
  Sellers

  	
   

  	
  48

  
	
  Section 8.4

  	
   

  	
  Limitation of Indemnities

  	
   

  	
  48

  
	
  Section 8.5

  	
   

  	
  Indemnification Procedures

  	
   

  	
  49

  
	
  Section 8.6

  	
   

  	
  Determination of Adverse Consequences

  	
   

  	
  51

  
	
  Section 8.7

  	
   

  	
  Excluded Damages

  	
   

  	
  51

  
	
  Section 8.8

  	
   

  	
  Scope of Representations and Warranties of Sellers

  	
   

  	
  51

  
	
  Section 8.9

  	
   

  	
  Exclusive Remedy

  	
   

  	
  52

  
	
  Section 8.10

  	
   

  	
  Mitigation of Damages and Minimization of Claims

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX. TERMINATION

  	
   

  	
  52

  
	
  Section 9.1

  	
   

  	
  Termination of Agreement

  	
   

  	
  52

  

 

 ii
 

 

 

	
  Section 9.2

  	
   

  	
  Effect of Termination

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X. MISCELLANEOUS

  	
   

  	
  53

  
	
  Section 10.1

  	
   

  	
  Press Releases and Public Announcements

  	
   

  	
  53

  
	
  Section 10.2

  	
   

  	
  No Third-Party Beneficiaries

  	
   

  	
  53

  
	
  Section 10.3

  	
   

  	
  Entire Agreement

  	
   

  	
  53

  
	
  Section 10.4

  	
   

  	
  Succession and Assignment

  	
   

  	
  53

  
	
  Section 10.5

  	
   

  	
  Counterparts

  	
   

  	
  53

  
	
  Section 10.6

  	
   

  	
  Headings

  	
   

  	
  54

  
	
  Section 10.7

  	
   

  	
  Notices

  	
   

  	
  54

  
	
  Section 10.8

  	
   

  	
  Governing Law

  	
   

  	
  55

  
	
  Section 10.9

  	
   

  	
  Amendments and Waivers

  	
   

  	
  55

  
	
  Section 10.10

  	
   

  	
  Severability

  	
   

  	
  55

  
	
  Section 10.11

  	
   

  	
  Expenses

  	
   

  	
  55

  
	
  Section 10.12

  	
   

  	
  Construction

  	
   

  	
  55

  
	
  Section 10.13

  	
   

  	
  Incorporation of Exhibits and Schedules

  	
   

  	
  56

  
	
  Section 10.14

  	
   

  	
  Specific Performance

  	
   

  	
  56

  
	
  Section 10.15

  	
   

  	
  Submission to Jurisdiction

  	
   

  	
  56

  

 

 iii
 

 

EXHIBITS

	
  Exhibit

  	
   

  	
  Title

  	
   

  	
  Section

  Reference

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A

  	
   

  	
  Escrow Agreement

  	
   

  	
  1.1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B

  	
   

  	
  Adjusted Purchase Price Notice

  	
   

  	
  2.2

  

 

 iv
 

 

SCHEDULES

	
  Schedule

  	
   

  	
  Title

  	
   

  	
  Section

  References

  
	
  3.1

  	
   

  	
  Representations and Warranties of Sellers

  	
   

  	
  3.1

  
	
  3.2

  	
   

  	
  Representations and Warranties of Buyer

  	
   

  	
  3.2

  
	
  4.1

  	
   

  	
  Corporation Organization

  	
   

  	
  4.1

  
	
  4.3

  	
   

  	
  No Violation

  	
   

  	
  4.3

  
	
  4.4

  	
   

  	
  Consents

  	
   

  	
  4.4

  
	
  4.5

  	
   

  	
  Accounts Receivable

  	
   

  	
  4.5

  
	
  4.6

  	
   

  	
  Financial Statements

  	
   

  	
  4.6

  
	
  4.7

  	
   

  	
  Inventories

  	
   

  	
  4.7

  
	
  4.8

  	
   

  	
  Real Property

  	
   

  	
  4.8

  
	
  4.9

  	
   

  	
  Absence of Certain Changes

  	
   

  	
  4.9

  
	
  4.10

  	
   

  	
  Material Changes

  	
   

  	
  4.10

  
	
  4.11

  	
   

  	
  Litigation

  	
   

  	
  4.11, 4.20

  
	
  4.12(a)

  	
   

  	
  Intellectual Property

  	
   

  	
  4.12(a)

  
	
  4.12(b)

  	
   

  	
  Intellectual Property Licenses Granted

  	
   

  	
  4.12(b)

  
	
  4.12(c)

  	
   

  	
  Intellectual Property Licenses Required

  	
   

  	
  4.12(c)

  
	
  4.12(e)

  	
   

  	
  Intellectual Property Infringement

  	
   

  	
  4.12(e)

  
	
  4.13(a)

  	
   

  	
  Corporation Contracts

  	
   

  	
  4.13(a), 4.13(c)

  
	
  4.13(b)

  	
   

  	
  Sellers’ Rights under Corporation Contracts

  	
   

  	
  4.13(b)

  
	
  4.13(c)

  	
   

  	
  Corporation Contracts Enforceability and Termination

  	
   

  	
  4.13(c)

  
	
  4.13(d)

  	
   

  	
  Corporation Contracts Compliance

  	
   

  	
  4.13(d)

  
	
  4.14

  	
   

  	
  Customers and Suppliers

  	
   

  	
  4.14

  
	
  4.15(a)

  	
   

  	
  Employee Benefit Plans

  	
   

  	
  4.15(a)

  
	
  4.15(c)

  	
   

  	
  Payment under Employee Plans

  	
   

  	
  4.15(c)

  
	
  4.15(i)

  	
   

  	
  Worker’s Compensation Coverage

  	
   

  	
  4.15(i)

  
	
  4.15(j)

  	
   

  	
  Acceleration of Compensation

  	
   

  	
  4.15(j)

  
	
  4.15(l

  	
   

  	
  Amendments of Employee Plans

  	
   

  	
  4.15(l)

  
	
  4.16(a)

  	
   

  	
  Compliance with Law

  	
   

  	
  4.16(a)

  
	
  4.16(b)

  	
   

  	
  Governmental Authorization

  	
   

  	
  4.16(b), 4.16(c)

  
	
  4.17(a)

  	
   

  	
  Tax Returns Filed and Taxes Paid

  	
   

  	
  4.17(a), 4.17(b)

  
	
  4.17(b)

  	
   

  	
  Delivery of Tax Returns

  	
   

  	
  4.17(b)

  
	
  4.17(c)

  	
   

  	
  Post-Closing Tax Liabilities

  	
   

  	
  4.17(c)

  
	
  4.17(f)(vii)

  	
   

  	
  Tax Attributes

  	
   

  	
  4.17(f)(vii)

  
	
  4.18(a)

  	
   

  	
  Insurance

  	
   

  	
  4.18(a)

  
	
  4.18(b)

  	
   

  	
  Self Insurance Arrangements or Obligations

  	
   

  	
  4.18(b)

  
	
  4.18(c)

  	
   

  	
  Status of Insurance

  	
   

  	
  4.18(c)

  
	
  4.19

  	
   

  	
  Environmental Laws and Regulations

  	
   

  	
  4.19

  
	
  4.20

  	
   

  	
  Products and Services

  	
   

  	
  4.20

  
	
  4.22(a)

  	
   

  	
  Grant Capitalization

  	
   

  	
  3.1(d), 4.22(a)

  
	
  4.22(b)

  	
   

  	
  Acquired Subsidiaries

  	
   

  	
  4.22(b)

  
	
  4.26(b)

  	
   

  	
  Tangible Personal Property

  	
   

  	
  4.26(b)

  
	
  4.27

  	
   

  	
  Undisclosed Liabilities

  	
   

  	
  4.27

  

 

 v
 

 

 

	
  4.28(a)

  	
   

  	
  Employee List

  	
   

  	
  4.28(a)

  
	
  4.28(b)

  	
   

  	
  Retired Employees

  	
   

  	
  4.28(b)

  
	
  4.28(c)

  	
   

  	
  Terminated Employees

  	
   

  	
  4.28(c)

  
	
  4.28(g)

  	
   

  	
  Increase in Compensation or Benefits

  	
   

  	
  4.28(g)

  
	
  4.28(h)

  	
   

  	
  Employee Contracts

  	
   

  	
  4.28(h)

  
	
  4.28(j)

  	
   

  	
  Employees on Leave

  	
   

  	
  4.28(k)

  
	
  4.28(k)

  	
   

  	
  Obligations to Former Employees

  	
   

  	
  4.28(l)

  
	
  4.28(l)

  	
   

  	
  Independent Contractors

  	
   

  	
  4.28(m)

  
	
  4.29(a)

  	
   

  	
  Compliance with FCPA

  	
   

  	
  4.29(a)

  
	
  4.29(b)

  	
   

  	
  Payments to Third Parties

  	
   

  	
  4.29(b)

  
	
  4.29(e)

  	
   

  	
  Antiboycott Prohibitions

  	
   

  	
  4.29(e)

  
	
  4.30

  	
   

  	
  Relationships with Related Persons

  	
   

  	
  4.30

  
	
  4.31

  	
   

  	
  Title to Assets

  	
   

  	
  4.31

  

 

 vi

 

STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (“Agreement”) is entered
into on September 8, 2006, by and among Geokinetics Inc., a Delaware
corporation (“Buyer”), Elliott Associates, L.P., a Delaware limited
partnership, and Elliott International, L.P., a Cayman Islands limited
partnership (each individually a “Seller,” and collectively the “Sellers”).  The Buyer and the Sellers are referred to
collectively herein as the “Parties.”

Background

The Sellers in the aggregate own all of the
outstanding capital stock of Grant Geophysical, Inc., a corporation organized under the laws of Delaware (the “Corporation”).

This Agreement contemplates a transaction in which the
Buyer will purchase from the Sellers, and the Sellers will sell to the Buyer,
all outstanding shares of the Grant Common Stock (as defined below) in return
for immediately available funds.

Now, therefore, in consideration of the premises and
the mutual promises herein made, and in consideration of the representations,
warranties, and covenants herein contained, the Parties agree as follows.

ARTICLE I.

DEFINITIONS

Section 1.1            Definitions.  Where used in this Agreement, the following
words and terms shall have the respective definitions (and such definitions
shall be equally applicable to the singular and plural forms, and all
grammatical variations, of such terms):

“Accounts Receivable”
means (a) all trade accounts receivable and other rights to payment from
customers of the Acquired Entities and the full benefit of all security for
such accounts or rights to payment, including all trade accounts receivable
representing amounts receivable in respect of goods shipped or products sold or
services rendered to customers of the Acquired Entities, (b) all other accounts
or notes receivable of the Acquired Entities and the full benefit of all
security for such accounts or notes and (c) any claim, remedy or other right
related to any of the foregoing, all of the foregoing calculated in accordance
with GAAP.

“Acquired Entities”
means the Corporation and the Acquired Subsidiaries.

“Acquired Subsidiaries”
has the meaning set forth in Section 4.22(b) below.

“Acquiror” has the
meaning set forth in Section 8.2(a) below.

“Acquiror Parties”
has the meaning set forth in Section 8.2(a) below.

“Adjusted Purchase Price” has
the meaning set forth in Section 2.3 below.

“Adjusted Purchase Price Notice” has
the meaning set forth in Section 2.3 below.

 1
 

 

“Adjustment Amount” has
the meaning set forth in Section 2.4(a) below.

“Adjustment Statement” has
the meaning set forth in Section 2.4(a) below.

“Adverse Consequences” means
all actions, suits, proceedings, claims, injunctions, judgments, Orders, court
ordered damages, penalties, fines, costs, reasonable amounts paid in
settlement, liabilities, obligations, Taxes, liens, losses, expenses, and
reasonable fees, including court costs and attorneys’ fees and expenses, but
expressly excluding Excluded Damages or any claim for loss of profit or
economic loss.

“Affiliate” has
the meaning set forth in Rule 12b-2 of the regulations promulgated under the
Exchange Act.

“Affiliated Group” means
any affiliated group within the meaning of Code § 1504 or any similar group
defined under a similar provision of state, local or foreign law.

“Agreement” has
the meaning set forth in the preface above.

“Breach” means any
breach of, or any inaccuracy in, any representation or warranty or any breach
of, or failure to perform or comply with, any covenant, agreement or
obligation, in or of this Agreement, or any event which with the passing of
time or the giving of notice, or both, would constitute such a breach,
inaccuracy or failure.

“Buyer” has the
meaning set forth in the preface above.

“Buyer Consents and Approvals”
means all of the consents and approvals required to be obtained by the Buyer in
connection with the execution and delivery of this Agreement and the completion
of the transactions contemplated hereby.

“Buyer Group” has
the meaning set forth in Section 5.8 below.

“Cash” means cash
(including restricted cash) and cash equivalents (including marketable
securities and short term investments) calculated in accordance with GAAP,
applied on a basis consistent with the preparation of the Financial Statements.

“Closing” has the
meaning set forth in Section 2.6 below.

“Closing Date” has
the meaning set forth in Section 2.6 below.

“Closing Time”
means the time of Closing.

“Code” means the
Internal Revenue Code of 1986, as amended.

“Competing Business”
has the meaning set forth in Section 4.30 below.

“Confidential Information”
has the meaning set forth in Section 6.4 below.

“Contract” means
any legally binding agreement, contract, lease or consensual obligation.

 2
 

 

“Corporation” has
the meaning set forth in the preface above.

“Debt” means, for
any Person, at a particular time, all items that, in accordance with GAAP,
would be classified as liabilities on a balance sheet of such Person at such
time and that constitute, without duplication, indebtedness of such Person for
borrowed money or for the deferred purchase price of Property or services for
which such Person is liable, contingently or otherwise, as obligor, guarantor
or otherwise, or in respect of which such Person otherwise assures a creditor
against loss, including, but not limited to, any lease that, in accordance with
GAAP, is required to be capitalized on a balance sheet at such particular
time.  For purposes hereof, Debt shall
not include (a) trade accounts payable to third parties for the purchase of
goods or services, which are incurred in the Ordinary Course of Business and
are by their terms, payable within 60 days, (b) accrued liabilities and (c)
current income taxes payable.

“Defined Benefit Plan”
has the meaning set forth in Section 4.15(a) below.

“Dispute Notice”
has the meaning set forth in Section 2.4(b) below.

“Employee Benefit Plan”
means any (a) nonqualified deferred compensation or retirement plan or
arrangement which is an Employee Pension Benefit Plan, (b) qualified defined
contribution retirement plan or arrangement which is an Employee Pension
Benefit Plan, (c) qualified defined benefit retirement plan or arrangement
which an Employee Pension Benefit Plan (including any Multiemployer Plan), (d)
Employee Welfare Benefit Plan or material fringe benefit plan or program, or
(e) any similar plans or arrangements applicable under the laws of any
jurisdiction outside the Unites States, statutory or otherwise.

“Employee Plans” has
the meaning set forth in Section 4.15(a).

“Employee Pension Benefit Plan”
has the meaning set forth in ERISA § 3(2).

“Employee Welfare Benefit Plan”
has the meaning set forth in ERISA § 3(1).

“Encumbrance”
means any charge, claim, condition, equitable interest, lien, option, pledge,
Security Interest, mortgage, right of way, easement, encroachment, servitude,
right of first option, right of first refusal or similar restriction, including
any restriction on use, voting (in the case of any security or equity
interest), transfer (other than restrictions under the Securities Act and state
or foreign securities laws), receipt of income or exercise of any other
attribute of ownership, but excluding (a) mechanic’s, materialmen’s, and
similar liens, (b) liens or assessments for Taxes not yet due and payable or
for Taxes that the taxpayer is contesting in good faith through appropriate
proceedings, (c) purchase money liens and liens securing rental payments under
capital lease arrangements, and (d) liens incurred or deposits made in the
Ordinary Course of Business in connection with workers’ compensation,
unemployment insurance and other similar types of social security.

“Environment”
means soil, land surface or subsurface strata, surface waters (including
navigable waters, ocean waters, streams, ponds, drainage basins, and wetlands),
groundwaters, drinking water supply, stream sediments, ambient air (including
indoor air), plant and animal life, and any other environmental medium or
natural resource.

 3
 

 

“Environmental Liabilities”
means any cost, damages, expense, liability, obligation or other responsibility
arising from or under any Environmental Law, including those consisting of or
relating to:

(a)           any
environmental matter or condition (including on-site or off-site
contamination);

(b)           any fine,
penalty, judgment, award, settlement, legal or administrative proceeding,
damages, loss, claim or demand, remedial or inspection cost or expense arising
under any Environmental Law;

(c)           a
Liability arising under any Environmental Law for cleanup costs or corrective
action, including any cleanup, removal, containment or other remediation or
response actions (“Cleanup”) required by any Environmental Law (whether or not
such Cleanup has been required or requested by any Governmental Body or any
other Person) and for any natural resource damages; or

(d)           any other
compliance, corrective or remedial measure required under any Environmental
Law.

The terms “release,” “removal,” “remedial” and “response
action” include the types of activities covered by the United States
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”).

“Environmental Law”
means any Legal Requirement that requires or relates to:

(a)           the
reporting of releases of pollutants or hazardous substances or materials,
violations of discharge limits or other prohibitions and the commencement of
activities, such as resource extraction or construction, that could have
significant impact on the Environment;

(b)           preventing
or reducing to acceptable levels the release of pollutants or hazardous
substances or materials into the Environment;

(c)           reducing
the quantities, preventing the release or minimizing the hazardous
characteristics of wastes that are generated;

(d)           protecting
endangered or threatened species;

(e)           reducing
to acceptable levels the risks inherent in the transportation of hazardous
substances, pollutants, oil or other potentially harmful substances;

(f)            cleaning
up pollutants that have been released, preventing the threat of release or
paying the costs of such clean up or prevention; or

(g)           making
responsible parties pay private parties, or groups of them, for damages done to
their health or the Environment.

“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended.

 4
 

 

“ERISA Affiliate”
has the meaning set forth in Section 4.15(a) below.

“Escrow Agent”
means an institution in Houston, Texas nominated by the Sellers and approved by
the Buyer.

“Escrow Agreement”
means a document in the form of Exhibit A.

“Escrow Amount”
has the meaning set forth in Section 2.2(b) below.

“Escrow Fund” has
the meaning set forth in Section 2.2(b) below.

“Estimated Adjusted Purchase Price”
has the meaning set forth in Section 2.3 below.

“Estimated Initial Phantom Stock
Costs” has the meaning set forth in Section 2.5(a) below.

“Exchange Act” means
the Securities Exchange Act of 1934, as amended.

“Exchange Rate” means
for a particular day, the average Federal Reserve Bank of New York’s Noon Day
Rate, expressed in non-US dollar/US dollar or US dollar/non-US dollar, as the
case may be, for the previous ten days, as published by the Federal Reserve
Bank of New York.

“Excluded Damages” has
the meaning set forth in Section 8.7 below.

“Facility” means
any real property, leasehold or other interest in real property currently or,
with respect to Section 4.19, formerly owned or operated by an Acquired Entity,
including the Tangible Personal Property used or operated by an Acquired Entity
at the respective locations of the real property specified in Schedule 4.8.

“Fiduciary” has
the meaning set forth in ERISA § 3(21).

“Final Adjusted Purchase Price” has
the meaning set forth in Section 2.4(b) below.

“Final Initial Phantom Stock Costs”
has the meaning set forth in Section 2.5(b) below.

“Financial Statement” has
the meaning set forth in Section 4.6 below.

“GAAP” means
United States’ generally accepted accounting principles as in effect on the
date of this Agreement and on the Closing Date.

“Governing Documents”
means with respect to any particular entity, (a) if a corporation, the articles
or certificate of incorporation and the bylaws; (b) if a general partnership,
the partnership agreement and any statement of partnership; (c) if a limited
partnership, the limited partnership agreement and the certificate of limited
partnership; (d) if a limited liability company, the articles of organization
and operating agreement; (e) if another type of Person, any other charter or similar
document adopted or filed in connection with the creation, formation or
organization of the Person; (f) all equity holders’ agreements, voting
agreements, voting trust agreements, joint venture agreements or other
agreements or documents relating to the organization, management or operation
of any Person or relating to the rights, duties and

 5
 

 

obligations
of the equity holders of any Person; and (g) any amendment or supplement to any
of the foregoing.

“Governmental Authorization”
means any consent, license, registration or permit issued, granted, given or
otherwise made available by or under the authority of any Governmental Body or
pursuant to any Legal Requirement.

“Governmental Body”
means any:

(a)           nation,
state, county, city, town, borough, village, district or other governmental
jurisdiction;

(b)           federal,
state, provincial, territorial, local, municipal, foreign or other government;

(c)           governmental
authority of any nature (including any agency, branch, department, board,
commission, court, tribunal or other entity exercising governmental powers); or

(d)           body
exercising, or entitled to exercise, any administrative, executive, judicial,
legislative, police, regulatory or taxing authority or power.

“Grant Common Stock” has
the meaning set forth in Section 4.22(a) below.

“Grant Phantom Stock”
means, collectively, the 180 phantom shares of Grant Common Stock awarded to
certain of the Corporation’s employees pursuant to the Phantom Stock
Agreements.

“Hazardous Activity”
means the generation, handling, management, manufacturing, processing,
production, refinement, release, storage, transportation, treatment or use of
Hazardous Material in, on, under or from any of the Facilities or any part
thereof into the Environment.

“Hazardous Materials”
means any substance, material or waste which is defined as a “hazardous waste,”
“hazardous material,” “hazardous substance,” “extremely hazardous waste,” “restricted
hazardous waste,” “contaminant,” “toxic waste” or “toxic substance” under any
provision of Environmental Law, which includes petroleum, petroleum products,
asbestos or asbestos-containing material, urea formaldehyde and polychlorinated
biphenyls.

“Indemnified Party” has
the meaning set forth in Section 8.4(a) below.

“Indemnifying Party” has
the meaning set forth in Section 8.4(a) below.

“Initial Phantom Stock Costs”
means an amount equal to the Adjusted Purchase Price (calculated without
reduction for the Initial Phantom Stock Costs) divided by 2,948.7424 and
multiplied by 180.

“Intellectual Property” means
(a) all inventions (whether patentable or unpatentable and whether or not
reduced to practice), all improvements thereto, and all patents, patent
applications, and patent disclosures, together with all reissuances,
continuations, continuations-in-part, revisions, extensions, and reexaminations
thereof, (b) all trademarks, service marks,

 6
 

 

trade
dress, logos, trade names, and corporate names, together with all translations,
adaptations, derivations, and combinations thereof and including all goodwill
associated therewith, and all applications, registrations, and renewals in
connection therewith, (c) all copyrightable works, all copyrights, and all
applications, registrations, and renewals in connection therewith, (d) all mask
works and all applications, registrations, and renewals in connection
therewith, (e) all trade secrets and confidential business information
(including ideas, research and development, know-how, formulas, compositions,
manufacturing and production processes and tech­niques, technical data, designs,
drawings, specifications, customer and supplier lists, pricing and cost
information, and business and marketing plans and proposals), (f) all computer
software (including data and related documentation), (g) all other proprietary
rights, and (h) all copies and tangible embodiments thereof (in whatever form
or medium).

“Interim Balance Sheet”
has the meaning set forth in Section 4.6(a) below.

“IRS” has the
meaning set forth in Section 4.15(b) below.

“Inventory” means
all inventories of the Acquired Entities, wherever located, including all
finished goods, work in process, raw materials, spare parts and all other
materials and supplies to be used or consumed by the Acquired Entities in the
production of finished goods or provision of services.

“Knowledge” means
with respect to a particular
Person in this Agreement:

(a)           all facts
that such Person (other than an entity) actually knows on the date hereof; or

(b)           all facts
that a prudent Person (other than an entity) by reason of his or her position
should have known on the date hereof with respect to the matter at hand if such
Person had conducted a reasonable investigation regarding the accuracy of any
representation or warranty contained in this Agreement.

A Person (other than an individual) will be deemed to
have Knowledge with respect to the matter at hand if any individual who is
serving as a director, officer, partner, executor or trustee of that Person (or
in any similar capacity) on the date hereof has, or at any time had, Knowledge
with respect to the matter at hand (as set forth in (a) and (b) above), and any
such individual (and any individual party to this Agreement) will be deemed to
have conducted a reasonable investigation regarding the accuracy of the
representations and warranties made herein by that Person or individual.

“Legal Requirement”
means any federal, state, provincial, territorial, local, municipal, foreign,
international, multinational or other constitution, law, ordinance, code,
regulation, statute or treaty.

“Liability” means
any liability (whether known or unknown, whether asserted or unasserted,
whether absolute or contingent, whether accrued or unaccrued, whether
liquidated or unliquidated, and whether due or to become due), including any
liability for Taxes.

“Multiemployer Plan” has
the meaning set forth in ERISA § 3(37).

 7
 

 

“Net Working Capital” means,
as of a given date:

the sum of the
following (each as determined in accordance with GAAP):

accounts receivable (trade, net of allowance for
doubtful accounts),

accounts receivable (other),

inventories,

prepaid
and other current assets, and

work in process,

minus, the sum of the
following (each as determined in accordance with GAAP):

accounts
payable,

accrued
expenses,

accrued
interest,

unearned
revenue – current, and

foreign income taxes
payable.

“Order” means any
order, injunction, judgment, decree, ruling, assessment or arbitration award of
any Governmental Body or arbitrator.

“Ordinary Course of Business” means
the ordinary course of business consistent with past custom and practice
(including with respect to quantity and frequency).

“Original Value”
has the meaning set forth in Section 2.4(b) below.

“Party” has the
meaning set forth in the preface above.

“PBGC” means the
Pension Benefit Guaranty Corporation.

“Permitted Encumbrance”
has the meaning set forth in Section 4.31 below.

“Person” means an
individual, a partnership, a corporation, an association, a joint stock
company, a trust, a joint venture, an unincorporated organization, or a
governmental entity (or any department, agency, or political subdivision
thereof).

“Phantom Stock Adjustment”
has the meaning set forth in Section 2.5(b) below.

“Phantom Stock Agreements”
means those certain agreements, dated as of January 1, 2004, as amended
effective as of the Closing Date, by and between the Corporation and certain of
its key employees, in which such employees were awarded phantom stock units
intended to have the same economic value as a share of Grant Common Stock,
although no actual shares were issued.

“Phantom Stockholders”
mean the individuals who have entered into Phantom Stock Agreements with the
Corporation, as identified in Section 2.5(c).

“Pre-Closing Tax Period”
has the meaning set forth in Section 6.6(a) below.

 8
 

 

“Proceeding” means
any action, arbitration, audit, hearing, investigation, litigation or suit
(whether civil, criminal, administrative, judicial or investigative, whether
formal or informal, whether public or private) commenced, brought, conducted or
heard by or before, or otherwise involving, any Governmental Body or
arbitrator.

“Property” means
any interest in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible.

“Purchase Price”
has the meaning set forth in Section 2.1 below.

“Related Person”
means:

With respect to a particular individual:

(a)           each
other member of such individual’s Family;

(b)           any
business entity that is directly or indirectly controlled by any one or more
members of such individual’s Family;

(c)           any
business entity in which members of such individual’s Family hold (individually
or in the aggregate) a Material Interest; and

(d)           any
business entity with respect to which one or more members of such individual’s
Family serves as a director, officer, partner, executor or trustee (or in a
similar capacity).

With respect to a specified Person other than an
individual:

(e)           any
Person that directly or indirectly controls, is directly or indirectly
controlled by or is directly or indirectly under common control with such
specified Person;

(f)            any
Person that holds a Material Interest in such specified Person;

(g)           each
Person that serves as a director, officer, partner, executor or trustee of such
specified Person (or in a similar capacity);

(h)           any
Person in which such specified Person holds a Material Interest; and

(i)            any
Person with respect to which such specified Person serves as a general partner
or a trustee (or in a similar capacity).

For purposes of this definition, (a) “control”
(including “controlling,” “controlled by,” and “under common control with”)
means the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise, and shall be
construed as such term is used in the rules promulgated under the Securities
Act; (b) the “Family” of an individual includes (i) the individual, (ii) the
individual’s spouse, (iii) any other natural person who is related to the
individual or the individual’s spouse within the second degree and (iv) any
other natural person

 9
 

 

who
resides with such individual; and (c) “Material Interest” means direct or
indirect beneficial ownership (as defined in Rule 13d-3 under the Exchange Act)
of voting securities or other voting interests representing at least ten
percent (10%) of the outstanding voting power of a Person or equity securities
or other equity interests representing at least ten percent (10%) of the
outstanding equity securities or equity interests in a Person.

“Reportable Event” has
the meaning set forth in ERISA § 4043.

“Representative”
means, with respect to a particular Person, any director, officer, manager,
employee, agent, accountant, financial advisor or legal counsel.

“Revised Adjusted Purchase Price” has
the meaning set forth in Section 2.4(a) below.

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

“Security Interest” means
any mortgage, pledge, lien, encumbrance, charge, or other security interest,
other than (a) mechanic’s,
materialmen’s, and similar liens, (b) liens or assessments for Taxes not yet
due and payable or for Taxes that the taxpayer is contesting in good faith
through appropriate proceedings, (c) purchase money liens and liens securing
rental payments under capital lease arrangements, and (d) other liens arising in
the Ordinary Course of Business.

“Seller” and “Sellers” have
the meanings set forth in the preface above.

“Seller Consents and Approvals”
means all consents and approvals required to be obtained by each of the Sellers
in connection with the execution and delivery of this Agreement and the
completion of the transactions contemplated hereby.

“Subsidiary” with
respect to any Person (the “Owner”), any corporation or other Person of which
securities or other interests having the power to elect a majority of that
corporation’s or other Person’s board of directors or similar governing body,
or otherwise having the power to direct the business and policies of that
corporation or other Person (other than securities or other interests having
such power only upon the happening of a contingency that has not occurred) are
held by the Owner or one or more of its Subsidiaries.

“Tangible Personal Property” means
all machinery, equipment, tools, furniture, office equipment, computer
hardware, supplies, materials, vehicles and other items of tangible personal
property of every kind owned or leased by the Acquired Entities (wherever
located), together with any express or implied warranty by the manufacturers or
sellers or lessors of any item or component part thereof and all maintenance
records and other documents relating thereto.

“Tax” means any
federal, state, provincial, territorial, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code § 59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property,
sales, goods and services use, transfer, registration, value added, alternative
or add-on minimum, estimated, or other tax of any kind whatsoever, including
any interest, penalty, or addition thereto that arises under applicable Legal
Requirements.

 10
 

 

“Tax Return” means
any return, declaration, report, claim for refund, or information return or
statement relating to Taxes, including any schedule or attachment thereto, and
including any amendment thereof.

“Third Party Claim” has
the meaning set forth in Section 8.4(a) below.

“Transaction Costs”
means, as of the Closing Time, (i) all amounts payable to the financial
advisor(s) to the Sellers or the Corporation, including, but not limited to The
Evolution Group, PLC or Energy Capital Solutions, L.P., (ii) the fees and
expenses of Sellers’ and the Corporation’s legal counsel and other advisors for
services rendered in connection with the transaction described in this
Agreement, (iii) all amounts payable to the Corporation’s independent auditors
after the date of this Agreement to satisfy any of the conditions that may be set
forth in this Agreement, and (iv) certain additional amounts payable by the
Sellers or the Corporation as a result of the occurrence of the Closing in the
case of clauses (i), (ii), (iii) and (iv), that have not been paid prior to the
Closing Time.

“WARN Act” has the
meaning set forth in Section 4.28(d) below.

“Withheld Amount” has
the meaning set forth in Section 6.6(a) below.

Section 1.2            Definitions Appearing
Elsewhere in this Agreement.  The
terms used in this Agreement which are defined in (a) the preface of this
Agreement, (b) the recitals of this Agreement and (c) the further Sections of
this Agreement shall have the respective definitions therein ascribed to them.

Section 1.3            Accounting Principles
and Terms.  The reference to “GAAP”
or generally accepted accounting principles in this Agreement, and any other
accounting terms not specifically defined herein, shall, to the extent not
inconsistent with specific definitions herein, be construed in accordance with
generally accepted accounting principles in the United States, consistently
applied, as such principles are in effect as of the date of this Agreement.

Section 1.4            Determination of Net
Working Capital.  For the
purposes of the definition of Net Working Capital, all such amounts included in
the definition shall be calculated in accordance with GAAP (except as
specifically otherwise provided in this Agreement).  Any amounts included in Final Net Working
Capital that are denominated in non-US dollars will be converted to US dollars
using the Exchange Rate on the Closing Date.

ARTICLE II.

PURCHASE AND SALE OF COMPANY SHARES

Section 2.1            Purchase and Sale.  Subject to the terms and conditions hereof,
the Sellers covenant and agree to sell, assign and transfer to the Buyer and
the Buyer covenants and agrees to purchase from the Sellers all outstanding
shares of the Grant Common Stock for the Adjusted Purchase Price and the Seller
Escrow Amount (collectively, the “Purchase Price”).

 11
 

 

Section 2.2            Payment
of the Purchase Price.  The
Purchase Price is to be paid by the Buyer as follows:

(a)           the
delivery at Closing, by wire transfers of immediately available funds to the
Sellers, of the Estimated Adjusted Purchase Price (subject to post-Closing
adjustment pursuant to Section 2.4 below) which shall be paid as directed by
the Sellers; and

(b)           the
delivery at Closing, by wire transfer to the Escrow Agent, of the amount of
$5,000,000.00 (the “Escrow Amount”) to be held in an escrow account maintained
by the Escrow Agent in accordance with the terms of the Escrow Agreement (the “Escrow
Fund”).

Section 2.3            Adjusted Purchase
Price.  The Adjusted Purchase
Price shall be equal to:

(a)           $120,000,000.00;

less

(b)           the sum of the
following amounts:

(i)            the amount by which
$2,000,000.00 exceeds the Net Working Capital as of the Closing Date, if any;

(ii)           the amount of the Debt
as of the Closing Date (excluding any Debt included in the Net Working Capital
for the purpose of determining the amount described in 2.3(b)(i) above);

(iii)          the
amount of the Transaction Costs; and

(iv)          the
amount of the Initial Phantom Stock
Costs;

plus

(c)          the amount by which Net
Working Capital as of the Closing Date exceeds $2,000,000.00, if any; and

(d)         an amount equal to all of
the Acquired Entities’ Cash on hand or on deposit with banks or other depositories
as of the Closing Date.

Attached hereto as Exhibit B is a statement setting
out an estimate of the above calculation (the “Adjusted Purchase Price Notice”),
specifying, and detailing in supporting schedules, an estimate of the Adjusted
Purchase Price (the “Estimated Adjusted Purchase Price”) based on the estimated
Net Working Capital as of September 8, 2006, an estimate of the Debt and the
Transaction Costs as of the Closing Date, and an estimate of the Initial
Phantom Stock Costs based on the Estimated Adjusted Purchase Price.  The Estimated Adjusted Purchase Price shall
be subject to adjustment on the basis described in Section 2.4 below.  At the Closing Time, the Buyer (or the
Corporation, upon payment of the required funds to the Corporation by the
Buyer) shall pay the full amount of the Transaction Costs (except with respect
to the portion of the Transaction Costs payable upon the disbursement of the
escrowed funds to the Sellers), the Estimated Initial Phantom Stock Costs and
the Debt (excluding the Venezuela factoring arrangement, the Colombian
overdraft facility and the Citicorp Vendor Finance, Inc. office copier lease
arrangements).

 12
 

 

Section 2.4            Post-Closing
Adjustment.

(a)           Within 45
days after the Closing Date, the Buyer and each of the Sellers shall have the
right to (i) review the books and records of the Acquired Entities and any
other relevant books and records maintained by the Acquired Entities and (ii)
determine whether the Estimated Adjusted Purchase Price is correct based on the
Buyer’s or the Sellers’ determination, as applicable, per good faith
calculations, that the value of the amounts included in the Adjusted Purchase
Price Notice are accurate as of the Closing Date.  In the event any of the Parties determines
that the Adjusted Purchase Price is not accurate, it shall prepare and deliver
to the other Parties within 45 days after the Closing Date a written statement
(an “Adjustment Statement”) setting forth, in reasonable detail, a calculation
of a proposed revised Adjusted Purchase Price (a “Revised Adjusted Purchase
Price”) and the amount of the difference between the Estimated Adjusted
Purchase Price and such Revised Adjusted Purchase Price (the “Adjustment Amount”)
and shall assist the other Parties in verifying the amounts set forth in such
Adjustment Statement.

(b)           The Buyer
or the Sellers may dispute all or any portion of the calculation of such
Revised Adjusted Purchase Price and the related Adjustment Amount by written
notice (the “Dispute Notice”) to the other Party within 30 days of the date of
receipt of the related Adjustment Statement provided to such Party pursuant to
Section 2.4(a) setting forth, in reasonable detail, the basis for the
dispute.  If the Parties do not agree on
the calculation of such Adjustment Amount within 30 days of any related Dispute
Notice, the Buyer and the Sellers will select (within 10 days of the expiration
of that 30-day period) an accounting firm mutually acceptable to them to
resolve any remaining objections.  If the
Buyer and the Sellers are unable to agree on the choice of an accounting firm
within such 10-day period, they will select, within an additional 10 days, a
nationally-recognized accounting firm by lot (after excluding their respective
regular outside accounting firms) that is a member of the Securities and
Exchange Commission’s Practice Division of the American Institute of Certified
Public Accountants.  The determination of
the Revised Adjusted Purchase Price by the accounting firm so selected will be
set forth in writing and will be conclusive and binding upon the Buyer and the
Sellers for purposes of determining adjustments to the Purchase Price pursuant
to this Section 2.4.  The cost and
expense of such accounting firm shall be borne equally by and between the Buyer
and the Sellers.  The Revised Adjusted
Purchase Price shall be as agreed to by the Parties or determined by an
appointed accounting firm in accordance with this Section 2.4, as the case may
be.  Such Revised Adjusted Purchase Price
as so agreed or determined or, in the event no Adjustment Statement is
delivered in accordance with Section 2.4(a), the Estimated Adjusted Purchase
Price shall be deemed and referred to herein as the “Final Adjusted Purchase
Price.”  If the amount of the Final
Adjusted Purchase Price is less in value than the amount of Estimated Adjusted
Purchase Price, then the Sellers shall pay to the Buyer the amount of the
difference between the Estimated Adjusted Purchase Price and the Final Adjusted
Purchase Price within two (2) business days by wire transfer of immediately
available funds.  If the amount of the
Final Adjusted Purchase Price is greater in value than the amount of Estimated
Adjusted Purchase Price, then the Buyer shall pay to the Sellers the amount of
the difference between the Final Adjusted Purchase Price and the Estimated
Adjusted Purchase Price within two (2) business days by wire transfer of
immediately available funds.

 13
 

 

(c)           The
Revised Adjusted Purchase Price and any adjustments in respect thereof
determined in accordance with Section 2.4 shall be made in accordance with GAAP
and no adjustments shall be made for changes in any Exchange Rates in effect
after the Closing Date.

Section 2.5            Treatment of Grant
Phantom Stock.

(a)           Pursuant
to the Phantom Stock Agreements, at the Closing Time and upon receipt of an
executed termination agreement and amendment in a form reasonably acceptable to
the Buyer that will cancel all the Grant Phantom Stock and terminate all
obligations of the Corporation under the Phantom Stock Agreements in exchange for
the making of the payments set forth in this Section 2.5, the Buyer (or the
Corporation, upon payment of the required funds to the Corporation by the
Buyer) will pay to the Phantom Stockholders an amount for each unit of Grant
Phantom Stock equal to the Estimated Adjusted Purchase Price (calculated
without reduction for the Estimated Initial Phantom Stock Costs) divided by
2,948.7424 (and the Buyer or the Corporation, as applicable, shall be entitled
to make any withholdings required by applicable law).  The total amount of the payments made under
this Section 2.5(a) shall be referred to herein as the “Estimated Initial
Phantom Stock Costs.”

(b)           If the
amount of the Final Initial Phantom Stock Costs (as defined below) is greater
in value than the amount of Estimated Initial Phantom Stock Costs, then within
two (2) business days of the determination of the Final Adjusted Purchase Price
the Buyer (or the Corporation, upon payment of the required funds to the
Corporation by the Buyer) will pay to the Phantom Stockholders an amount for
each unit of Grant Phantom Stock equal to the amount of the difference between
Final Initial Phantom Stock Costs and the Estimated Initial Phantom Stock Costs
divided by 2,948.7424 (and the Buyer or the Corporation, as applicable, shall
be entitled to make any withholdings required by applicable law).  If the amount of the Final Initial Phantom
Stock Costs is less in value than the amount of Estimated Initial Phantom Stock
Costs, then the Buyer will be paid by the Sellers (on behalf of the Phantom
Stockholders) an amount equal to (i) the amount of the difference between
Estimated Initial Phantom Stock Costs and the Final Initial Phantom Stock Costs
(the “Phantom Stock Adjustment”) (ii) divided by 2,948.7424 and (iii)
multiplied by 180.  The “Final Initial
Phantom Stock Costs” shall be equal to the Final Adjusted Purchase Price
(calculated without reduction for the Final Initial Phantom Stock Costs)
divided by 2,948.7424 multiplied by 180.

(c)           On the
date of the termination of the Escrow Agreement, the Buyer (or the Corporation,
upon payment of the required funds to the Corporation by the Buyer) will pay to
the Phantom Stockholders an amount, if any, for each unit of Grant Phantom
Stock equal to (i) the total amount, if any, of the escrowed funds remaining in
the Escrow Fund less the Transaction Costs to be paid by the Buyer or the
Corporation that have not been paid prior to the date of the termination of the
Escrow Agreement and less the Phantom Stock Adjustment, if any, (ii) divided by
2,948.7424 (and the Buyer or the Corporation, as applicable, shall be entitled
to make any withholdings required by applicable law).  Any payment made to the Phantom Stockholders
by the Buyer or the Corporation pursuant to this Section 2.5(c) shall be reimbursed
to the Buyer or the Corporation from the escrowed funds to be disbursed to the
Sellers upon the termination of the Escrow Agreement.  Additionally, any Transaction Costs to be
paid by the Buyer or the Corporation that have not been paid prior to the date
of the termination of the Escrow Agreement shall be reimbursed to the Buyer or
the Corporation from the escrowed funds to be disbursed to the Sellers upon the
termination of the Escrow Agreement.

 14
 

 

(d)           The units
of Grant Phantom Stock have been awarded as follows: 

	
  Phantom Stockholder

  	
   

  	
  Number of Units of Grant

  Phantom Stock

  	
   

  
	
  Richard Miles

  	
   

  	
  45

  	
   

  
	
  Narciso Chiquillo

  	
   

  	
  21

  	
   

  
	
  Scott McCurdy

  	
   

  	
  18

  	
   

  
	
  Lee Parker

  	
   

  	
  18

  	
   

  
	
  Richard Dunlop

  	
   

  	
  18

  	
   

  
	
  Darci Matos

  	
   

  	
  18

  	
   

  
	
  Jose Tamayo

  	
   

  	
  12

  	
   

  
	
  Robert Neill

  	
   

  	
  12

  	
   

  
	
  Craig Walker

  	
   

  	
  6

  	
   

  
	
  Gregory Dunlop

  	
   

  	
  6

  	
   

  
	
  Guillermo Melo

  	
   

  	
  3

  	
   

  
	
  Ramero Rosso

  	
   

  	
  3

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TOTAL:

  	
   

  	
  180

  	
   

  

 

Section 2.6            Closing.  The closing of the transactions contemplated
by this Agreement (the “Closing”) shall take place at the offices of
Chamberlain Hrdlicka White Williams & Martin, 1200 Smith Street, Suite
1400, Houston, Texas 77002 commencing at 9:00 a.m. Houston, Texas time on the
earlier of: (i) the day that is three (3) business days following the
satisfaction or waiver of all conditions to the obligations of the Parties to
consummate the transactions contemplated hereby (other than conditions with
respect to actions the respective Parties will take at the Closing itself) or
(ii) September 8, 2006; or on such other date as the Parties may mutually determine
(the “Closing Date”).

Section 2.7            Deliveries at the
Closing.  At the Closing, (i) the
Sellers will deliver to Buyer the various certificates, instruments, and
documents referred to in Section 7.1 below, (ii) Buyer will deliver to the
Sellers the various certificates, instruments, and documents referred to in
Section 7.2 below, (iii) each of the Sellers will deliver to Buyer stock
certificates representing all of its Grant Common Stock, endorsed in blank or
accompanied by duly executed assignment documents, which shall effect the
transfer and assignment of such Grant Common Stock to the Buyer as of the
Closing Date, and (iv) the Buyer will deliver to each of the Sellers the
consideration specified in Section 2.2 above.

 15

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES CONCERNING THE TRANSACTION

Section 3.1            Representations and
Warranties of the Sellers.  Each of the Sellers severally and not jointly
represents and warrants to the Buyer with respect to itself the following, except
as set forth in Schedule 3.1:

(a)           Power and Authority.  The Seller has the capacity and requisite
partnership power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby.  This Agreement constitutes the valid and
legally binding obligation of the Seller, enforceable in accordance with its
terms and conditions.  The Seller is not
required to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in
order to consummate the transactions contemplated by this Agreement.

(b)           Noncontravention.  Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Seller is subject or (ii) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which the Seller is a party or by
which it is bound or to which any, of its assets is subject.

(c)           Brokers’ Fees.  Except for The Evolution Group, PLC or Energy
Capital Solutions, L.P., whose fees and expenses shall be paid in accordance
with Section 2.3 hereof, the Sellers have no Liability or obligation to pay,
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Buyer could become
liable or obligated.

(d)           Grant Common Stock.  The Seller holds of record and owns
beneficially the number of Grant Common Stock set forth next to its name in
Schedule 4.22(a), free and clear of any restrictions on transfer (other than
any restrictions under the Securities Act and state or foreign securities
laws), Taxes, Encumbrances, options, warrants, purchase rights, contracts,
commitments, equities and demands.  The
Seller is not a party to any option, warrant, purchase right, or other contract
or commitment that could require the Seller to sell, transfer, or otherwise
dispose of any capital stock of the Corporation (other than this
Agreement).  The Seller is not a party to
any voting trust, proxy, or other agreement or understanding with respect to
the voting of any of the Grant Common Stock.

(e)           RPHC Status.  The Corporation is not and has never been a
United States real property holding corporation (as defined in Section
897(c)(2) of the Code) and the Sellers will deliver a Statement from the
Corporation to that effect to Buyer at the Closing.

Section 3.2            Representations and Warranties
of the Buyer.  The Buyer
represents and warrants to the Sellers the following, except as set forth in
Schedule 3.2:

 16
 

 

(a)           Organization.  The Buyer is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction of
its incorporation.

(b)           Authorization of Transaction.  The Buyer has the requisite corporate power
and authority to execute and deliver this Agreement and to perform its
obligations hereunder.  This Agreement
constitutes the valid and legally binding obligation of the Buyer, enforceable
in accordance with its terms and conditions. 
The Buyer is not required to give any notice to, make any filing with,
or obtain any authorization, consent, or approval of any government or
governmental agency in order to consummate the transactions contemplated by
this Agreement.

(c)           Noncontravention.  Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Buyer is subject or any
provision of its charter or bylaws or (ii) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which the Buyer is a party or by which it is bound or to which
any of its assets is subject.

(d)           Brokers’ Fees.  Except for RBC Capital Markets Corporation,
whose fees and expenses shall be paid by the Buyer, the Buyer does not have any
Liability or obligation to pay any fees or commissions to any broker, finder,
or agent with respect to the transactions contemplated by this Agreement for
which any Seller could become liable or obligated.

(e)           Investment.  The Buyer is not acquiring Grant Common Stock
with a view to or for sale in connection with any distribution thereof within
the meaning of the Securities Act.  The
Buyer acknowledges that the sale of the Grant Common Stock has not been
registered under applicable law (including the Securities Act and any state,
local or foreign securities law) and that such stock may not be transferred
without registration under, pursuant to an exemption from or in a transaction
not subject to, all applicable laws.

(f)            Acquired Corporation Review.  The Buyer:

(i) has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of its
investment in the shares of Grant Common Stock contemplated hereby, and that
the Buyer is able to bear the economic risk of such investment indefinitely;

(ii) has (A) had the opportunity to meet with
representative officers and other representatives of the Corporation and each
Acquired Subsidiary to discuss its business, assets, liabilities, financial
condition, cash flow, and operations, and (B) received all materials, documents
and other information that it deems necessary or advisable to evaluate the
shares of Grant Common Stock and the transactions contemplated by this
Agreement;

(iii) has made its own independent examination,
investigation, analysis and evaluation of the shares of Grant Common Stock,
including its own estimate of the value of the shares of Grant Common Stock;
and

 17
 

 

(iv) has undertaken such due diligence (including an
inspection, investigation and review of the Acquired Entities’ assets, properties,
liabilities, books, records, contracts and operations) as it deems adequate,
including that described above.

Nothing in this Section 3.2(f) will preclude
the Buyer from relying on the representations, warranties, covenants, and
agreements of the Sellers herein or from pursuing their remedies under Article
VIII hereof with respect to a Breach thereof.

(g)           Financing.  As of the
Closing Time, the Buyer will have sufficient cash, available lines of credit or
other sources of immediately available funds to enable the Buyer to make
payment of the Purchase Price (inclusive of the Debt, the Transaction Costs and
the Initial Phantom Stock Costs) and any other amounts to be paid by it
hereunder.

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES CONCERNING THE ACQUIRED ENTITIES

Each of the Sellers represents and warrants to the
Buyer, jointly and not severally, as set forth below.  The representations and warranties set forth
in Article IV are generally subject to the exceptions set forth in Schedules
4.1 to 4.31 (it is acknowledged and agreed that it is unnecessary for a
disclosure made in one such Schedule to expressly qualify a particular
representation made in Article IV), as specifically identified in Schedules 4.1
to 4.31 and as may be supplemented or amended pursuant to Section 5.6.

Section 4.1            Corporate
Organization; Etc.  The
Corporation is a corporation duly organized, validly existing and in good
standing under its jurisdiction of incorporation. The Corporation has requisite
corporate power and authority to carry on its business as it is now being
conducted and to own the properties and assets it now owns.  The Corporation is duly qualified or licensed
to do business and is in good standing in each jurisdiction listed on Schedule
4.1.  There is no other jurisdiction in
which the character or location of the properties owned or leased by the
Corporation or the nature of the business conducted by the Corporation makes
such qualification or licensing necessary, except as set forth on Schedule 4.1
or where the failure to be so qualified or licensed would not cause a material
adverse effect.

Section 4.2            Authorization, Etc.  The Acquired Entities have taken all action
required by applicable Legal Requirements, the Acquired Entities’ Governing
Documents or otherwise to authorize the transactions contemplated in this
Agreement.

Section 4.3            No Violation.  The Acquired Entities are not subject to, nor
a party to, any contract, instrument or other commitment that would prevent the
consummation of the transactions contemplated in this Agreement.  Except as set forth in Schedule 4.3, neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will, directly or indirectly (with or without
notice or lapse of time), (a) breach (i) any provision of any of the Governing
Documents of the Acquired Entities or (ii) any resolution adopted by the board
of directors (or comparable applicable governing body) or the stockholders (or
comparable holders of the equity interests) of the Acquired Entities; (b) give
any Governmental Body or other Person the right (i) to challenge any of the
transactions contemplated hereby or (ii) to exercise any remedy or obtain any
relief under any Legal

 18
 

 

Requirement or
any Order to which any of the Acquired Entities or any of their respective
assets, may be subject; (c) contravene, conflict with or result in a violation
or breach of any of the terms or requirements of, or give any Governmental Body
the right to revoke, withdraw, suspend, cancel, terminate or modify, any
Governmental Authorization that is held by any Acquired Entity or that
otherwise relates to any Acquired Entity’s assets or to the business of any
Acquired Entity; (d) cause the Buyer to become subject to, or to become liable
for the payment of, any Tax payable by the Acquired Entities not accrued for or
reflected in the Financial Statements; (e) breach any provision of, or give any
Person the right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or payment under, or to cancel,
terminate or modify, any contract to which an Acquired Entity is a party; or
(f) result in the imposition or creation of any Encumbrance, other than a
Permitted Encumbrance, upon or with respect to any of the Acquired Entities’
assets.

Section 4.4            Consents.  Except as set forth in Schedule 4.4, no
Acquired Entity is required to give any notice to or obtain any consent from
any Person in connection with the execution and delivery of this Agreement or
the consummation or performance of any of the transactions contemplated hereby.

Section 4.5            Accounts Receivable.  All Accounts Receivable that are reflected on
the Interim Balance Sheet or on the accounting records of the Acquired Entities
as of the Closing Date represent or will represent valid obligations arising
from sales actually made or services actually performed by the Acquired
Entities in the Ordinary Course of Business. 
The Acquired Entities will take reasonable steps in the Ordinary Course
of Business to collect the Accounts Receivable prior to the Closing Date.  Except to the extent paid prior to the
Closing Date, such Accounts Receivable are or will be as of the Closing Date
current and collectible net of the respective reserves shown on the Interim
Balance Sheet (which reserves are adequate and calculated consistent with past
practice).  There is no contest, claim,
defense or right of setoff, other than returns in the Ordinary Course of
Business of the Acquired Entities, under any Contract with any account debtor
of an Account Receivable relating to the amount or validity of such Account
Receivable.  Schedule 4.5 contains a
complete and accurate list of all Accounts Receivable as of the date of the
Interim Balance Sheet, which list sets forth the aging of each such Account
Receivable.

Section 4.6            Financial Statements.

(a)           Schedule
4.6 contains a true and correct copy of (i) an unaudited and reviewed balance
sheet of the Acquired Entities at June 30, 2005 and June 30, 2006 (“Interim
Balance Sheet”), and the related unaudited and reviewed statements of income,
shareholders’ equity and cash flows for the period then ended and (ii) audited
financial statements of the Acquired Entities as of December 31 of each of
2003, 2004 and 2005 the (the financial statements described in clauses (i) and
(ii) above are collectively referred to as the “Financial Statements”).  Except as noted on Schedule 4.6 or in the
Financial Statements and except for normal year-end adjustments, the Financial
Statements were prepared in accordance with GAAP and present fairly, in all
material respects, the financial position, results of operations, and cash
flows of the Acquired Entities at the respective dates thereof and the
operating income of the Acquired Entities for the respective periods then ended.

 19
 

 

(b)           As
of June 30, 2006, the Acquired Entities have no Debt, except as set forth in
the Interim Balance Sheet.

(c)           As
of the date hereof, the Acquired Entities have no off-balance sheet financing
statements as determined in accordance with GAAP, except as set forth on
Schedule 4.6.

Section 4.7            Inventories.  Except as noted on Schedule 4.7, all items
included in the Inventories consist of a quality and quantity usable or
consumable in the provision of the Acquired Entities’ services in the Ordinary
Course of Business except for obsolete items and items of below-standard
quality, all of which have been written off or written down to net realizable
value in the Financial Statements or on the accounting records of the Acquired
Entities as of the Closing Date, as the case may be.  The Acquired Entities do not have any
Inventories classified as finished goods for sale or raw materials or
work-in-process for the production of such finished goods.  The Acquired Entities are not in possession
of any Inventory not owned by the Acquired Entities.  All of the Inventories have been valued at
the lower of cost or net realizable value. 
Inventories now on hand that were purchased after the date of the
Interim Balance Sheet were purchased in the Ordinary Course of Business at a
cost not substantially exceeding market prices prevailing at the time of
purchase.  The quantities of each item of
Inventories are reasonable in the present circumstances of the Acquired
Entities.

Section 4.8            Real Property.  Except as set forth on Schedule 4.8, none of
the Acquired Entities own any fee simple interest in real property.  Schedule 4.8 lists and describes briefly all
real property leased or subleased to an Acquired Entity.  The Corporation has made available to the
Buyer correct and complete copies of the leases and subleases listed in
Schedule 4.8, each as amended to date. 
With respect to each lease and sublease listed in Schedule 4.8, and any
amendment thereto:

(a)           the
lease or sublease, and any amendment thereto, is legal, valid, binding,
enforceable, and in full force and effect;

(b)           the
lease or sublease will continue to be legal, valid, binding, enforceable, and
in full force and effect on the same terms immediately following the Closing,
except to the extent that enforceability may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium or other laws affecting the
enforcement of creditors’ rights in general and except that the availability of
equitable remedies, including specific performance, is subject to the discretion
of the court before which any proceeding therefor may be brought;

(c)           no
Acquired Entity and, to the Knowledge of the Sellers, no other party to the
lease or sublease is in breach or default, and no event has occurred which,
with notice or lapse of time, would constitute a breach or default or permit
termination, modification, or acceleration thereunder;

(d)           no
Acquired Entity and, to the Knowledge of the Sellers, no other party to the
lease or sublease has repudiated any provision thereof;

(e)           to
the Knowledge of the Sellers, there are no disputes, oral agreements, or
forbearance programs in effect as to the lease or sublease;

 20
 

 

(f)            with
respect to each sublease, neither the Acquired Entities nor the Sellers have
taken any action that would cause the representations and warranties set forth
in Sections 4.8(a) through 4.8(e) above to be untrue or incorrect with respect
to the underlying lease;

(g)           the
Acquired Entities have not assigned, transferred, conveyed, mortgaged, deeded
in trust, or encumbered any interest in the leasehold or subleasehold; and

(h)           all
facilities leased or subleased thereunder are supplied with utilities and other
services necessary for the operation of said facilities as currently operated
by the Acquired Entities.

Section 4.9            Absence of Certain
Changes.  Except as and to the
extent set forth in Schedule 4.9, since December 31, 2005, the Acquired
Entities have conducted their business only in the Ordinary Course of Business
and there has not been any:

(a)           change
in the Acquired Entities’ authorized or issued capital stock or other equity
interests, grant of any stock option or right to purchase shares of capital
stock or other equity interests of the Acquired Entities or issuance of any
security convertible into such capital stock or other equity interests;

(b)           amendment
to the Governing Documents of the Acquired Entities;

(c)           payment
(except in the Ordinary Course of Business) by an Acquired Entity of any
bonuses, salaries or other compensation to any shareholder, director, officer
or employee or entry into any employment, severance or similar Contract with
any director, officer or employee providing for an annual rate of compensation
exceeding $50,000.00 and that is not cancelable upon 90 days or less notice;

(d)           adoption
of, amendment to or increase in the payments to or benefits under, any Employee
Plan;

(e)           damage
to or destruction or loss in excess of $25,000.00 to any asset of the Acquired
Entities, whether or not covered by insurance;

(f)            except
as disclosed in Schedule 4.13, entry into, termination of or receipt of notice
of termination of (i) any license, distributorship, dealer, sales
representative, joint venture or similar Contract to which any Acquired Entity
is a party, or (ii) any Contract or transaction (other than any Contract or
transaction involving the performance of services or delivery of goods or
materials by any Acquired Entity or to any Acquired Entity which terminated
after completion of performance by such Acquired Entity) involving a total
remaining commitment by the Acquired Entities as of the date of this Agreement
of at least $25,000.00;

(g)           sale
(other than sales of Inventories or services in the Ordinary Course of
Business), lease or other disposition of any asset or property of any Acquired
Entity (including the Intellectual Property assets) where the proceeds from
such disposition exceeded $25,000.00 or the creation of any Encumbrance on any
asset with a book value greater than $25,000.00, other Permitted Encumbrances;

 21
 

 

(h)           cancellation
or waiver of any claims or rights with a value to the Acquired Entities in
excess of $20,000.00;

(i)            material
change in the accounting methods used by any Acquired Entity; or

(j)            Contract
by an Acquired Entity to do any of the foregoing.

Section 4.10         No Material Adverse
Change.  Except as set forth in
Schedule 4.10 or, as may be shown in the Adjusted Purchase Price Notice (as it
may be revised pursuant to Section 2.4), since the date of the Interim Balance
Sheet, there has not been any material adverse change in the business, assets,
liabilities (contingent or otherwise), results of operations or financial
condition, of the Acquired Entities.

Section 4.11         Litigation.

(a)           Except
as set forth in Schedule 4.11, there is no pending or, to the Sellers’
Knowledge, threatened Proceeding:

(i)            that
has been commenced by or against any Acquired Entity or that otherwise relates
to or would reasonably be expected to materially adversely affect the business
of, or the assets owned or used by, an Acquired Entity; or

(ii)           that
challenges, or that may have the effect of preventing, delaying, making illegal
or otherwise interfering with, any of the transactions contemplated herein.

To the Sellers’ Knowledge, no event has occurred or
circumstance exists that is reasonably likely to give rise to or serve as a
basis for the commencement of any such Proceeding.  The Corporation has made available to the
Buyer copies of all pleadings, correspondence and other documents relating to
each Proceeding listed in Schedule 4.11.

(b)           Except
as set forth in Schedule 4.11:

(i)            there
is no Order to which the Acquired Entities, their business or any of the
Acquired Entities’ assets is subject; and

(ii)           to
the Sellers’ Knowledge, no officer, director, agent or employee of an Acquired
Entity is subject to any Order that prohibits such officer, director, agent or
employee from engaging in or continuing any conduct, activity or practice
relating to the business of the Acquired Entities.

(c)           Except
as set forth in Schedule 4.11:

(i)            the
Acquired Entities are, and, at all times since December 31, 2001, have been in
compliance with all of the terms and requirements of each Order to which it or
any of the Acquired Entities’ assets is or has been subject;

 22
 

 

(ii)           to
the Sellers’ Knowledge, no event has occurred or circumstance exists that is
reasonably likely to constitute or result in (with or without notice or lapse
of time) a violation of or failure to comply with any term or requirement of
any Order to which the Acquired Entities or any of their assets are subject; and

(iii)          none
of the Acquired Entities has received, at any time since December 31, 2001, any
notice or other communication (whether oral or written) from any Governmental
Body or any other Person regarding any actual or alleged violation of, or
failure to comply with, any Order to which any of the Acquired Entities or any
of the Acquired Entities’ assets is or has been subject.

Section 4.12         Intellectual Property.

(a)           Except
as set forth on Schedule 4.12(a), all of the Acquired Entities’ Intellectual
Property is vested in and beneficially owned by the Acquired Entities free and
clear of any Encumbrances.  Except as
disclosed in Schedule 4.12(a), the Acquired Entities have no Intellectual
Property registered with any Governmental Body.

(b)           Except
as set forth in Schedule 4.12(b), the Acquired Entities have not granted any
license under any of the Intellectual Property to any other Person.

(c)           Except
as set forth in Schedule 4.12(c), the Acquired Entities do not require a
license or right under or in respect of any Intellectual Property of any other
Person to conduct their business as it is conducted as of the date hereof and
no substantial part of the business is carried on under the agreement or
consent of any other Person nor is there any agreement with any other Person
which significantly restricts the fields in which the Acquired Entities’
business may be carried on.

(d)           No
disclosure has been made to any Person of the know-how or financial or trade
secrets of the Acquired Entities, except in the Ordinary Course of Business and
on the expectation that such disclosure is to be treated as being of a
confidential nature.

(e)           Except
as set forth on Schedule 4.12(e): (i) none of the processes currently used by
the Acquired Entities or any of the properties, products or services currently
sold by the Acquired Entities or any Intellectual Property infringes the
intellectual property rights of any other Person; and (ii) neither the Acquired
Entities nor any Seller has received any notice of adverse claim or threat of adverse
claim by any Person with respect thereto, and, to the Knowledge of the Sellers,
no basis exists for any such claim.

Section 4.13         Contracts.

(a)           Schedule
4.13(a) contains an accurate and complete list, and the Acquired Entities have
made available to Buyer accurate and complete summaries or copies, of:

(i)                                     each
Contract between an Acquired Entity and a Related Person;

 23
 

 

(ii)                                 each
Contract that involves performance of services or delivery of goods or
materials by an Acquired Entity or to an Acquired Entity, as the case may be,
(A) of an amount or value in excess of $75,000.00 and (B) that is not
cancelable upon 90 days or less notice;

(iii)                              each
Contract that was not entered into in the Ordinary Course of Business and that
involves expenditures or receipts of the Acquired Entities in excess of
$25,000.00;

(iv)                             each
Contract affecting the ownership of, leasing of, title to, use of, or any
leasehold or other interest in any real or personal property (except personal
property leases and installment and conditional sales agreements having a value
per item or aggregate payments of less than $25,000.00 and with a term of less
than one year);

(v)                                each
Contract of an Acquired Entity with any labor union or other employee
representative of a group of employees relating to wages, hours and other
conditions of employment;

(vi)                             each
Contract (however named) involving a provision for the sharing of profits,
losses, costs or liabilities by an Acquired Entity with any other Person, other
than direct payments for goods or services;

(vii)                          each
Contract containing covenants that restrict an Acquired Entity’s business
activity or limit the freedom of an Acquired Entity to engage in any line of
business or to compete with any Person;

(viii)                     each
Contract providing for payments to or by an Acquired Entity based on sales,
purchases or profits, other than direct payments for goods or services;

(ix)                             each
power of attorney of an Acquired Entity that is currently effective and
outstanding;

(x)                                each
Contract entered into other than in the Ordinary Course of Business that
contains or provides for an express undertaking by an Acquired Entity to be
responsible for consequential damages;

(xi)                             each
Contract for capital expenditures by an Acquired Entity in excess of
$25,000.00;

(xii)                          each
written guaranty and/or other similar undertaking with respect to contractual
performance of any Person (other than an Acquired Entity) extended by an
Acquired Entity, other than in the Ordinary Course of Business; and

(xiii)                     each
legally binding agreement of an Acquired Entity made orally by such Acquired
Entity that has not been terminated or has not expired; and

 24
 

 

(xiv)        each
effective amendment, supplement and modification made in writing in respect of
any of the foregoing.

(b)           Except
as set forth in Schedule 4.13(b), no Seller has, or has a right to acquire, any
rights under any Contract of an Acquired Entity or in any of the Acquired
Entities’ assets.

(c)           Except
as set forth in Schedule 4.13(c):

(i)            unless
completed in the Ordinary Course of Business or discharged due to the
bankruptcy of a party thereto, each Contract identified or required to be
identified in Schedule 4.13(a) is in full force and effect and is valid and
enforceable in accordance with its terms; and

(ii)           no
Contract identified or required to be identified in Schedule 4.13(a) is subject
to cancellation or termination as a result of the transactions contemplated
herein.

(d)           Except
as set forth in Schedule 4.13(d):

(i)            the
Acquired Entities have, and at all times since December 31, 2001, have been, in
compliance in all material respects with all applicable terms and requirements
of each Contract to which an Acquired Entity is a party;

(ii)           to
the Sellers’ Knowledge, each other Person that has or had any obligation or
liability under any Contract to which an Acquired Entity is a party is, and at
all times since December 31, 2001, has been, in compliance with all applicable
terms and requirements of such Contract;

(iii)          to
the Sellers’ Knowledge, no event has occurred or circumstance exists that (with
or without notice or lapse of time) may contravene, conflict with or result in
a breach of, or give an Acquired Entity or other Person the right to declare a
default or exercise any remedy under, or to accelerate the maturity or
performance of, or payment under, or to cancel, terminate or modify, any
Contract to which an Acquired Entity is a Party;

(iv)          to
the Sellers’ Knowledge, no event has occurred or circumstance exists under or
by virtue of any Contract that (with or without notice or lapse of time) would
cause the creation of any Encumbrance affecting the Acquired Entities’ assets,
other than a Permitted Encumbrance; and

(v)           the
Acquired Entities have not given to or received from any other Person, at any
time since December 31, 2001, any written notice or, to the Sellers’ Knowledge,
other communication (whether oral or written) regarding any actual, alleged,
possible or potential violation or breach of, or default under, any Contract to
which an Acquired Entity is a Party.

(e)           There
are no renegotiations of, attempts to renegotiate or outstanding rights to
renegotiate any amounts paid or payable to any Acquired Entity under current or
completed

 25
 

 

Contracts with
any Person having the contractual or statutory right to demand or require such
renegotiation and no such Person has made written demand for such
renegotiation.

Section 4.14         Customers and Suppliers.  Except as set forth in Schedule 4.14, since December 31, 2005, no supplier,
customer, distributor or third party sales representative has canceled or
otherwise terminated, or given notice of intent to cancel or otherwise
terminate, for any reason, its relationship with an Acquired Entity.

Section 4.15         Employee Benefit Plans.

(a)           Set
forth in Schedule 4.15(a) is a complete and correct list of all “employee
benefit plans” (foreign or domestic) as defined by Section 3(3) of ERISA, all
specified fringe benefit plans as defined in Section 6039D of the Code, and all
other bonus, incentive-compensation, deferred-compensation, profit-sharing,
stock-option, stock-appreciation-right, stock-bonus, stock-purchase,
employee-stock-ownership, savings, savings plans (registered or non-registered)
severance, change-in-control, supplemental-unemployment, layoff,
salary-continuation, retirement, pension, health, life-insurance, disability,
accident, group-insurance, vacation, holiday, sick-leave, fringe-benefit or
welfare plan, and any other employee compensation or benefit plan, agreement,
policy, practice, commitment, contract or understanding (whether qualified or nonqualified,
currently effective or terminated, written or unwritten) and any trust, escrow
or other agreement related thereto that (i) is maintained or contributed to by
the Corporation or any other corporation or trade or business controlled by,
controlling or under common control with the Corporation (within the meaning of
Section 414 of the Code or Section 4001(a)(14) or 4001(b) of ERISA) (“ERISA
Affiliate”) or has been maintained or contributed to in the last six (6) years
by the Corporation or any ERISA Affiliate, or with respect to which the
Corporation or any ERISA Affiliate has or may have any liability, and (ii)
provides benefits, or describes policies or procedures applicable to any
current or former director, officer, employee or service provider of the
Corporation or any ERISA Affiliate, or the dependents of any thereof,
regardless of how (or whether) liabilities for the provision of benefits are
accrued or assets are acquired or dedicated with respect to the funding thereof
(collectively the “Employee Plans”).  The
Acquired Entities do not maintain or contribute to any Employee Plan that is
(w) a “Defined Benefit Plan” (as defined in Section 414(l) of the Code); (x) a
plan intended to meet the requirements of Section 401(a) of the Code; (y) a “Multiemployer
Plan” (as defined in Section 3(37) of ERISA); or (z) a plan subject to Title IV
of ERISA, other than a Multiemployer Plan. 
Also set forth on Schedule 4.15(a) is a complete and correct list of all
ERISA Affiliates of the Corporation during the last six (6) years.

(b)           The
Corporation has made available to the Buyer true, accurate and complete copies
of (i) the documents comprising each Employee Plan (or, with respect to any
Employee Plan which is unwritten, a detailed written description of eligibility,
participation, benefits, funding arrangements, assets and any other matters
which relate to the obligations of each of the Corporation or any ERISA
Affiliate); (ii) all trust agreements, insurance contracts or any other funding
instruments related to the Employee Plans; (iii) all rulings, determination
letters, no-action letters or advisory opinions from the U.S. Internal Revenue
Service (“IRS”), the U.S. Department of Labor, the Pension Benefit Guaranty
Corporation (“PBGC”) or any other Governmental Body that pertain to each
Employee Plan and any open requests therefor; (iv) the most recent actuarial
and financial reports (audited and/or unaudited) and the annual reports filed
with any Government Body with respect to the Employee Plans during the current
year and each

 26
 

 

of the three
preceding years; (v) all securities registration statements filed with respect
to any Employee Plan; (vi) all contracts with third-party administrators,
actuaries, investment managers, consultants and other independent contractors
that relate to any Employee Plan, (vii) with respect to Employee Plans that are
subject to Title IV of ERISA, other than a Multiemployer Plan, the Form PBGC-1
filed for each of the three most recent plan years; and (viii) all summary plan
descriptions, summaries of material modifications and memoranda, employee
handbooks and other written communications regarding the Employee Plans.

(c)           Except
as disclosed in Schedule 4.15(c), full payment has been made of all amounts
that are required under the terms of each Employee Plan to be paid by the
Acquired Entities as contributions with respect to all periods prior to and
including the last day of the most recent fiscal year of such Employee Plan
ended on or before the date of this Agreement and all periods thereafter prior
to the Closing Date.  The Corporation has
paid in full all required insurance premiums, subject only to normal
retrospective adjustments in the ordinary course, with regard to the Employee
Plans for all policy years or other applicable policy periods ending on or
before the Closing Date.

(d)           Neither
the Corporation nor any ERISA Affiliate has any liability or has Knowledge of
any facts or circumstances that might give rise to any liability of the
Acquired Entities for, or the imposition of a lien on any of their assets or
with respect to any of their assets, and the transactions contemplated hereby
will not result in any liability, (i) for the termination of or withdrawal from
any Employee Plan under Sections 4062, 4063 or 4064 of ERISA, (ii) for any lien
imposed under Section 302(f) of ERISA or Section 412(n) of the Code, (iii) for
any interest payments required under Section 302(e) of ERISA or Section 412(m)
of the Code, (iv) for any excise tax imposed by Section 4971 of the Code, (v)
for any minimum funding contributions under Section 302(c)(11) of ERISA or
Section 412(c)(11) of the Code or (vi) for withdrawal from any Multiemployer
Plan under Section 4201 of ERISA.

(e)           The
Corporation has, at all times, complied, and currently complies, in all
material respects with the applicable continuation requirements for its group
health benefit plans, including (1) Section 4980B of the Code (as well as its
predecessor provision, Section 162(k) of the Code) and Sections 601 through
608, inclusive, of ERISA, which provisions are hereinafter referred to
collectively as “COBRA” and (2) any applicable state statutes mandating health
insurance continuation coverage for employees.

(f)            The
form of all Employee Plans is in compliance with the applicable terms of ERISA,
the Code, and any other applicable Legal Requirements, and such plans have been
operated in compliance with such laws and the written Employee Plan
documents.  All required reports and
descriptions of the Employee Plans (including Internal Revenue Service Form
5500 Annual Reports, Summary Annual Reports and Summary Plan Descriptions and
Summaries of Material Modifications) have been (when required) timely filed
with the IRS, the U.S. Department of Labor or other Governmental Body or
distributed as required, and all notices required by ERISA or the Code or any
other Legal Requirement with respect to the Employee Plans have been
appropriately given.

(g)           Each
Employee Plan that is intended to be qualified under Section 401(a) of the Code
has received a favorable determination letter from the IRS or is a prototype
plan entitled to rely on the opinion letter issued by the IRS, and to the
Sellers’ Knowledge, there are no

 27
 

 

circumstances
that will or would reasonably be expected to result in revocation of any such
favorable determination letter.

(h)           Other
than routine claims for benefits in the ordinary course, there is no material
pending or threatened Proceeding relating to any Employee Plan, nor is there
any basis for any such Proceeding. 
Neither the Corporation nor any Fiduciary of an Employee Plan has
engaged in a transaction with respect to any Employee Plan that, assuming the
taxable period of such transaction expired as of the date hereof, would
reasonably be expected to subject the Corporation or Buyer to a Tax or penalty
imposed by either Section 4975 of the Code or Section 502(l) of ERISA or a
violation of Section 406 of ERISA.  The
transactions contemplated hereby will not result in the potential assessment of
a Tax or penalty under Section 4975 of the Code or Section 502(l) of ERISA nor
result in a violation of Section 406 of ERISA.

(i)            The
Corporation has maintained workers’ compensation coverage as required by
applicable state, provincial, or territorial law through purchase of insurance
and not by self-insurance or otherwise except as disclosed to Buyer on Schedule
4.15(i).

(j)            Except
as set forth on Schedule 4.15(j) or as required by Legal Requirements, the
consummation of the transactions contemplated hereby will not accelerate the
time of vesting or the time of payment, or increase the amount, of compensation
due to any director, employee, officer, former employee or former officer of
the Acquired Entities.

(k)           Except
for the continuation coverage requirements of COBRA, the Acquired Entities have
no obligations or potential liability for benefits to employees, former
employees or their respective dependents following termination of employment or
retirement under any of the Employee Plans that are Employee Welfare Benefit
Plans.

(l)            Except
as set forth on Schedule 4.15(l), none of the transactions contemplated hereby
will result in an amendment, modification or termination of any of the Employee
Plans.  No written or oral
representations have been made to any employee or former employee of the Acquired
Entities promising or guaranteeing any employer payment or funding for the
continuation of medical, dental, life or disability coverage for any period of
time beyond the end of the current plan year (except to the extent of coverage
required under COBRA).  No written or
oral representations have been made by the Acquired Entities to any employee or
former employee of the Acquired Entities concerning the employee benefits of
the Buyer.

(m)          All
Employee Plans of the Acquired Entities have been duly registered, where
required, maintained in compliance with and are in good standing under all
applicable legislation (foreign or domestic) and all required employer
contributions under any such plan(s) or policies have been made and no past
service funding liabilities exist thereunder.

(n)           Notwithstanding
any provision to the contrary above, any representation that is made concerning
an Employee Plan and its compliance with ERISA, the Code or any applicable
Legal Requirements under U.S. law, or where the IRS, PBGC, ERISA, the Code or
any applicable Legal Requirement under U.S. law is referred to in the context
of such Employee Plan, such representation is hereby limited to Employee Plans
that are sponsored, contributed to or maintained by the Acquired Entities in
the United States on behalf of employees employed by

 28
 

 

such entities
in the United States (“US Plans”) and no representation is made in such regard
concerning any Employee Plans that are not US Plans.

(o)           Notwithstanding
anything to the contrary in this Article IV, representations and warranties as
to Employee Plans shall be exclusively covered by the provisions of this
Section 4.15.

Section 4.16         Compliance with Law.

(a)           Except
as set forth in Schedule 4.16(a),

(i)            the
Acquired Entities are, and at all times since December 31, 2001, have been, in
compliance with each Legal Requirement (including Legal Requirements related to
occupational health and safety matters) that is or was applicable to them or to
the conduct or operation of its business or the ownership or use of any of its
assets;

(ii)           since
December 31, 2001, no event has occurred or circumstance exists that (with or
without notice or lapse of time) would reasonably be expected to (A) constitute
or result in a violation by an Acquired Entity of, or a failure on the part of
an Acquired Entity to comply with, any Legal Requirement or (B) give rise to
any obligation on the part of an Acquired Entity to undertake, or to bear all
or any portion of the cost of, any remedial action of any nature; and

(iii)          no
Acquired Entity has received, at any time since December 31, 2001, any written
notice or, to the Sellers’ Knowledge, other communication (whether oral or
written) from any Governmental Body or any other Person regarding (A) any
actual or alleged violation of, or failure to comply with, any Legal
Requirement or (B) any actual or alleged obligation on the part of an Acquired
Entity to undertake, or to bear all or any portion of the cost of, any remedial
action of any nature.

(b)           Schedule
4.16(b) contains a complete and accurate list of each material Governmental
Authorization that is held by an Acquired Entity or that otherwise relates to
an Acquired Entity’s business or its assets. 
To the Sellers’ Knowledge, each Governmental Authorization identified in
Schedule 4.16(b) is valid and in full force and effect.  Except as set forth in Schedule 4.16(b):

(i)            each
Acquired Entity is, and at all times since December 31, 2001, has been, in
compliance with all of the terms and requirements of each Governmental Authorization
identified or required to be identified in Schedule 4.16(b);

(ii)           to
the Sellers’ Knowledge, since December 31, 2001 no event has occurred or
circumstance exists that may (A) constitute or result directly or indirectly in
a violation of or a failure to comply with any term or requirement of any
Governmental Authorization or (B) result directly or

 29
 

 

indirectly in the revocation, withdrawal,
suspension, cancellation or termination of, or any significant modification to,
any Governmental Authorization needed by an Acquired Entity for the conduct of
its business as presently conducted;

(iii)          no
Acquired Entity has received, at any time since December 31, 2001, any written
notice or, to the Sellers’ Knowledge, other communication (whether oral or
written) from any Governmental Body or any other Person regarding (A) any
actual or alleged violation of or failure to comply with any term or
requirement of any Governmental Authorization or (B) any actual or proposed
revocation, withdrawal, suspension, cancellation, termination of or
modification to any Governmental Authorization; and

(iv)          since
December 31, 2003, all applications required to have been filed for the renewal
of the Governmental Authorizations necessary for the conduct of the Acquired
Entities’ business have been duly filed on a timely basis with the appropriate
Governmental Bodies, and all other filings required to have been made with
respect to such Governmental Authorizations have been duly made on a timely
basis with the appropriate Governmental Bodies.

(c)           except
for contract- or project-specific Governmental Authorizations, the Governmental
Authorizations listed in Schedule 4.16(b) collectively constitute all of the
Governmental Authorizations necessary to permit the Acquired Entities to lawfully
conduct and operate their business in the manner in which it is currently
conducted and operated and to permit the Acquired Entities to own and use their
assets in the manner in which they currently own and use such assets.

Section 4.17         Taxes.

(a)           Tax Returns Filed and Taxes Paid.  The Acquired Entities have filed or caused to
be filed on a timely basis all Tax Returns and all reports with respect to
Taxes that are or were required to be filed pursuant to applicable Legal
Requirements.  All Tax Returns and
reports filed by the Acquired Entities are true, correct and complete.  Each of the Sellers and the Acquired
Entities, as the case may be, has paid, or made provision for the payment of,
all Taxes for which they are responsible that have or may have become due for
all periods covered by the Tax Returns or otherwise, or pursuant to any
assessment received by the Acquired Entities, except such Taxes, if any, as are
listed in Schedule 4.17(a) and are being contested in good faith and as to
which adequate reserves (determined in accordance with GAAP) have been provided
in the Interim Balance Sheet and the Financial Statements.  Except as provided in Schedule 4.17(a), none
of the Acquired Entities are currently the beneficiary of any extension of time
within which to file any Tax Return.  No
claim has ever been made or is expected to be made by any Governmental Body in
a jurisdiction where an Acquired Entity does not file Tax Returns that it is or
may be subject to taxation by that jurisdiction.  There are no Encumbrances on any of the
assets of the Acquired Entities that arose in connection with any failure to
pay any Tax (other than Taxes not yet due and payable), and the Sellers have no
Knowledge of any claims attributable to Taxes which, if adversely determined,
would result in any such Encumbrance.

 30

 

(b)           Delivery of Tax Returns and Information Regarding
Audits and Potential Audits. 
The Corporation has delivered or made available to Buyer complete and
accurate copies of, all federal, state, provincial, territorial, local, and
foreign income Tax Returns of the Acquired Entities (other than Tax Returns for
sales and use taxes) filed since December 31, 2000.  Schedule 4.17(b) contains a complete and
accurate list of all pending audits and Tax disputes.  Neither the Acquired Entities nor the Sellers
expects any undisclosed deficiencies in the payment of Tax to be asserted with
respect to any such audit.  Any such
deficiencies proposed as a result of such audits have been paid, reserved
against, settled or are being contested in good faith.  The Sellers have delivered, or made available
to Buyer, copies of any examination reports, statements or deficiencies or
similar items with respect to such audits in any Acquired Entity’s
possession.  Except as provided in
Schedule 4.17(b), the Sellers have no Knowledge that any Governmental Body is
likely to assess any additional taxes for any period for which Tax Returns have
been filed.  Except as provided in
Schedule 4.17(b), there is no dispute or claim concerning any Taxes of the
Acquired Entities either (i) claimed or raised by any Governmental Body in
writing or (ii) as to which the Sellers have Knowledge.  Except as described in Schedule 4.17(a), no
Acquired Entity has been given or been requested to give waivers or extensions
(or is or would be subject to a waiver or extension given by any other Person)
of any statute of limitations relating to the payment of Taxes of an Acquired
Entity or for which an Acquired Entity may be liable.

(c)           Post-Closing Tax Liabilities.  The unpaid Taxes of the Acquired Entities do
not, as of the Closing Date, exceed the reserve for Tax Liability (rather than
any reserve for deferred Taxes established to reflect timing differences
between book and Tax income) set forth on the face of the Interim Balance
Sheet.  Except as disclosed in Schedule
4.17(c), since December 31, 2002, no Acquired Entity has received notice of any
proposed tax assessment or deficiency against any Acquired Entity.  Since the date of the Interim Balance Sheet,
the Acquired Entities have not incurred any liability for Taxes arising from
extraordinary gains or losses, as that term is used in GAAP, outside the
Ordinary Course of Business consistent with past custom and practice.

(d)           Transactions Affecting Post-Closing Tax Years.  The Acquired Entities will not be required to
include any item of income in, or exclude any item of deduction from, taxable
income for any taxable period (or portion thereof) ending after the Closing
Date as a result of any (i) change in method of accounting for a taxable period
ending on or prior to the Closing Date, (ii) “closing agreement” as described
in Code Section 7121 (or any corresponding provision or similar provision of
federal, state, local or foreign income Tax law) executed on or prior to the
Closing Date, (iii) installment sale or open transaction disposition made on or
prior to the Closing Date, or (iv) prepaid amount received on or prior to the
Closing Date.

(e)           Specific Potential Tax Liabilities and Tax Situations.

(i)            Withholding.  All Taxes that the Acquired Entities are or
were required by Legal Requirements to withhold, deduct or collect prior to the
Closing Time have been or will be duly withheld, deducted and collected and, to
the extent required, will be paid to the proper Governmental Body or other
Person.

(ii)           Tax
Sharing or Similar Agreements.  There
is no tax sharing agreement, tax allocation agreement, tax indemnity obligation
or similar written or

 31
 

 

unwritten agreement or practice with respect
to Taxes (including any advance pricing agreement, closing agreement or other arrangement
relating to Taxes) that will require any payment by any Acquired Entity after
the Closing.

(iii)          Consolidated
Group.  No Acquired Entity (i) has
been a member of an Affiliated Group (or any similar group defined under a
similar provision of federal, state, local or foreign law) (other than the
Affiliated Group of the Corporation) or (ii) has liability for Taxes of any
person (other than the other Acquired Entities) under §1.1502-6 of the Treasury
Regulations (or any similar provision of state, local or foreign law), as a
transferee or successor by contract or otherwise.

(iv)          Listed
Transactions.  In the past six years,
no Acquired Entity has participated in a transaction that has been specifically
identified by the IRS as a “listed” transaction for purposes of §1.6011-4(b) of
the Treasury Regulations or has disclosed any transactions to the IRS under any
penalty amnesty program.

(v)           Golden
Parachute Agreements.  Except with
respect to the Phantom Stock Agreements, no Acquired Entity is a party to any
agreement, contract or plan that, as a result of the Closing, could result,
separately or in the aggregate, in the payment of (i) any “excess parachute
payment” within the meaning of Code Section 280G (or any corresponding
provision of federal, state, local or foreign Tax law) or (ii) any amount that
will not be fully deductible as a result of Code Section 162(m) (or any
corresponding provision of state, local or foreign Tax law).

(vi)          Arrangement
Constituting a Partnership.  No
Acquired Entity is subject to any joint venture, partnership or other
arrangement or contract that is treated as a partnership for federal or
applicable state income tax purposes or for any other Tax purposes.

(vii)         Tax
Attributes.  Schedule 4.17(f)(vii)
sets forth the estimated amount of any net operating loss, net capital loss,
unused investment, foreign tax or other credit, or excess charitable
contribution allocable to any Acquired Entity as of December 31, 2005.

(viii)        Substantial
Understatement Penalty.  The Corporation has disclosed on its income
Tax Returns all positions taken therein that could give rise to a substantial
understatement of federal income Tax within the meaning of Code Section 6662.

Section 4.18         Insurance.

(a)           The
Corporation has made available to the Buyer:

 32
 

 

(i)            accurate
and complete copies of all policies of insurance (and correspondence relating
to coverage thereunder) to which any Acquired Entity is a party or under which
any Acquired Entity is or has been covered at any time since December 31, 2005,
a list of which is included in Schedule 4.18(a);

(ii)           accurate
and complete copies of all pending applications by the Acquired Entities for
policies of insurance; and

(iii)          any
written statement by the auditor of the Corporation’s Financial Statements or
any consultant or risk management advisor with regard to the inadequacy of the
Acquired Entities’ coverage or of the reserves for claims received by the
Acquired Entities since June 30, 2005.

(b)           Except
as set forth in Schedule 4.18(b), the Acquired Entities:

(i)            do
not have any self-insurance arrangement by or that expressly involves the
Acquired Entities, including any reserves established thereunder; and

(ii)           have
complied with all obligations of the Acquired Entities to provide insurance
coverage to third parties (for example, under leases or service agreements).

(c)           Except
as set forth in Schedule 4.18(c), to the Sellers’ Knowledge:

(i)            all
policies of insurance that provide coverage to any Acquired Entity and which
have been established by the Acquired Entities:

(A)          are
valid, outstanding and enforceable, subject to limitations on enforceability as
are applicable under applicable Legal Requirements; and

(B)           are
issued by an insurer that is reputable;

(ii)           With
respect to any policy of insurance described in Section 4.18(c), no Acquired
Entity has received (A) any refusal of coverage or any notice that a defense
will be afforded with reservation of rights or (B) any notice of cancellation
or any other indication that any policy of insurance is no longer in full force
or effect or that the issuer of any policy of insurance is not willing or able
to perform its obligations thereunder;

(iii)          With
respect to any policy of insurance described in Section 4.18(c)(i) that
involves any Acquired Entity, such Acquired Entity paid or caused to be paid,
all premiums due, and has otherwise performed all of its obligations; and

(iv)          With
respect to any policy of insurance described in Section 4.18(c)(i), the
Acquired Entities have given notice to the insurer of all known claims that may
be insured thereby.

 33
 

 

Section 4.19         Environmental Laws and
Regulations.  Except as set forth
in Schedule 4.19:

(a)           The
Acquired Entities are, and at all times since December 31, 2001, have been, in
compliance with Environmental Law.  Since
December 31, 2001, no Acquired Entity has received any order, notice or other
communication from (i) any Governmental Body or private citizen acting in the
public interest or (ii) the current or prior owner or operator of any
Facilities, of any actual or potential violation or failure to comply with any
Environmental Law, or of any actual or threatened obligation to undertake or
bear the cost of any Environmental Liabilities with respect to any Facility or
other property or asset (whether real, personal or mixed) in which the
Corporation has or had an interest, or with respect to any property or Facility
at or to which Hazardous Materials were generated, manufactured, refined,
transferred, imported, used or processed by the Corporation or any other Person
for whose conduct it is or may be held responsible, or from which Hazardous
Materials have been transported, treated, stored, handled, transferred,
disposed, recycled or received.

(b)           There
are no pending or, to the Knowledge of the Sellers, threatened claims against
the Acquired Entities due to any Environmental Liabilities or arising under or
pursuant to any Environmental Law.

(c)           No
Acquired Entity has any Environmental Liabilities with respect to any Facility
or, to the Sellers’ Knowledge, with respect to any other property or asset
(whether real, personal or mixed) adjoining any Facility.

(d)           To
the Sellers’ Knowledge, there has been no release, or threat of release, of any
Hazardous Materials at or from any Facility or at any other location where any
Hazardous Materials were generated, manufactured, refined, transferred,
produced, imported, used, or processed from or by any Facility, or from any
other property or asset (whether real, personal or mixed) for which any
Acquired Entity may be subject to any Environmental Liability.

(e)           The
Corporation has made available to Buyer copies and results of any reports,
studies, analyses, tests, or monitoring possessed by any Acquired Entity
pertaining to Hazardous Materials or Hazardous Activities in, on, or under the
Facilities, or concerning compliance, by an Acquired Entity or any other Person
for whose conduct it is or may be held responsible, with Environmental Laws.

(f)            Notwithstanding
anything to the contrary in this Article IV, representations and warranties as
to Environmental Law, Hazardous Materials and Hazardous Activities shall be
exclusively covered by the provisions of this Section 4.19.

Section 4.20         Products and Services.  Schedule 4.20 sets forth all claims
asserted or, to the Sellers’ Knowledge, threatened at any time during the past
two years against any Acquired Entity in respect of personal injury, wrongful
death or property damage alleged to have resulted from products or services
provided by an Acquired Entity in an amount in excess of $10,000, and all warranty
claims with respect to any single product with a value, individually or in the
aggregate, in excess of $10,000.

 34
 

 

Section 4.21         [Intentionally
left blank.]

Section 4.22         Capitalization; Acquired
Subsidiaries.

(a)           The
authorized capital stock of the Corporation consists of: (i) 5,000,000 shares
of preferred stock, $.001 par value per share, of which there are no shares
issued and outstanding, and (ii) 5,000,000 shares of common stock, $.001 par
value per share (the “Grant Common Stock”), of which 2,768.7424 shares are
issued and outstanding.  Other than the
Grant Phantom Stock, no phantom or notional shares of Grant Common Stock have
been awarded.  Except as set forth on
Schedule 4.22(a), no shares are reserved for issuance pursuant to the
Corporation’s stock option and purchase plans and no shares are reserved for
issuance pursuant to securities exercisable or exchangeable for, or convertible
into, shares (real or phantom) of Grant Common Stock.  The outstanding shares of Grant Common Stock
have been duly authorized and validly issued and are fully paid and
nonassessable, are owned beneficially and of record by the holders set forth on
Schedule 4.22(a) and in such amounts as set forth on Schedule 4.22(a).  The outstanding shares of Grant Common Stock
have been offered, issued, sold and delivered by the Corporation in compliance
with all applicable securities laws. 
Except as set forth on Schedule 4.22(a), there are no outstanding
rights, options, warrants, conversion rights, preemptive rights or other rights
to acquire securities of the Corporation. 
There are no outstanding obligations of the Corporation to repurchase,
redeem or otherwise acquire any capital stock of the Corporation.  Except as set forth on Schedule 4.22(a),
there are no agreements or restrictions (such as a right of first refusal,
co-sale, right of first offer, proxy, voting trust or voting agreements) with
respect to the sale or voting of any shares of the capital stock of the
Corporation.

(b)           Each
of the Corporation’s Subsidiaries (the “Acquired Subsidiaries”) and its
jurisdiction of organization is listed on Schedule 4.22(b).  The Sellers have provided to the Buyer true,
correct and complete copies of the organization or formation documents, as
amended (or English translations of such documents), of each of the Acquired
Subsidiaries, and each such document is in full force and effect.  The Acquired Subsidiaries are corporations,
limited liability companies, partnerships or other entities that are duly
organized, validly existing and in good standing under the laws of their
respective jurisdictions of organization and have the requisite corporate power
and authority (or comparable entity power and authority) to own and operate
their respective properties and to carry on their respective businesses as they
are now being conducted.  Each of the
Acquired Subsidiaries is duly qualified to do business or duly registered as a
foreign branch and is in good standing in each jurisdiction in which the nature
of its respective businesses or the ownership or leasing of its respective
properties makes such qualification or registration necessary.  All of the outstanding shares of capital
stock of the Acquired Subsidiaries, and all of the ownership interests in the Acquired
Subsidiaries that are not corporations, have been duly authorized and validly
issued and are fully paid and non-assessable and were not issued in violation
of any preemptive, preferential or other similar rights of any Person.  Except for the capital stock of, or ownership
interests in, the Acquired Subsidiaries, the Corporation does not own or
control, directly or indirectly, any interest or investment in any corporation,
partnership, association or other form of business entity.

Section 4.23         Brokers and Finders.  Except for The Evolution Group, PLC or
Energy Capital Solutions, L.P., whose fees and expenses shall be paid in
accordance with Section 2.3 hereof, no Acquired Entity nor any of the Acquired
Entities’ officers, directors or employees has employed any broker or finder or
incurred any liability for any brokerage fees, commissions or

 35
 

 

finders fees
in connection with the transactions contemplated by this Agreement, and the
Buyer shall not have any liability for any such fees or commissions.

Section 4.24         Disclosure.  To the Sellers’ Knowledge, no representation
or warranty or other statement made by the Sellers in this Agreement, the
certificates delivered by or on behalf of Sellers pursuant to Section 2.4 or
Section 7.1 of this Agreement contains any untrue statement of a material fact
or omits to state a material fact necessary to make any of them, in light of
the circumstances in which it was made, not misleading.

Section 4.25         Books and Records.  The books of account and other financial
records of the Acquired Entities, all of which have been made available to the
Buyer, are complete and correct in all material respects in respect of the
matters described therein, represent actual, bona fide transactions and have
been maintained in accordance with applicable Legal Requirements including,
since December 31, 2002, the maintenance of an adequate system of internal
controls.

Section 4.26         Condition of Facilities.

(a)           Use
of the real property for the various purposes for which it is presently being
used is permitted as of right under all applicable zoning legal requirements
and is not subject to “permitted nonconforming” use or structure
classifications.  All improvements to
real property leased by the Acquired Entities or otherwise used in the Ordinary
Course of Business by the Acquired Entities are in compliance with all
applicable Legal Requirements, including those pertaining to zoning and
building, and are accepted as is.  To the
Sellers’ Knowledge, no part of any improvement encroaches on any real property
not leased by an Acquired Entity.  To the
Sellers’ Knowledge, there is no existing or proposed plan to modify or realign
any street or highway or any existing or proposed eminent domain proceeding
that would result in the taking of all or any part of any Facility or that
would prevent or hinder the continued use of any Facility as heretofore used in
the conduct of the business of the Acquired Entities.

(b)           Each
item of Tangible Personal Property is accepted as is, where is.  All Tangible Personal Property used in the
Acquired Entities’ business is in the possession of the Acquired Entities,
except as set forth on Schedule 4.26.

Section 4.27         No Undisclosed
Liabilities.  To the Sellers’
Knowledge, except as set forth in Schedule 4.27, no Acquired Entity has any
Liabilities that, in accordance with GAAP, are of a nature as are required to
be described in the Interim Balance Sheet and are so described in such Interim
Balance Sheet and there are no additional Liabilities that, in accordance with
GAAP, are of a nature that are required to be disclosed, except as are incurred
in the Ordinary Course of Business of the Acquired Entities since the date of
the Interim Balance Sheet or as are otherwise accounted for in the Adjusted
Purchase Price.

Section 4.28         Employees.

(a)           Schedule
4.28(a) contains a complete and accurate list of the following information for
each current executive, administrative, office and operational management
employee of the Acquire Entities, including each such employee on leave of
absence or layoff status: name; job title; date of hire; current compensation
paid or payable and any change in

 36
 

 

compensation
since December 31, 2005 and sick and vacation leave that is accrued and unused
as of June 30, 2006.

(b)           The
Acquired Entities have no retired employees except as set forth on Schedule
4.28(b).

(c)           Schedule
4.28(c) contains a complete and accurate list of the following information for
each such employee of an Acquired Entity who has been terminated or laid off,
or whose hours of work have been reduced by more than fifty percent (50%) by
the Corporation, in the six (6) months prior to the date of this Agreement: (i)
the date of such termination, layoff or reduction in hours; (ii) a statement as
to whether it was a termination for cause, layoff or reduction in hours; and
(iii) the location to which the employee was assigned.

(d)           The
Acquired Entities have not violated the Worker Adjustment and Retraining
Notification Act (the “WARN Act”) or any similar state or local Legal
Requirement.

(e)           To
the Sellers’ Knowledge, no officer, director, employee or contractor of the
Acquired Entities is bound by any Contract that purports to limit the ability
of such officer, director, employee, or contractor to engage in or continue or
perform any conduct, activity, duties or practice.  To the Sellers’ Knowledge, no former or
current employee of an Acquired Entity is a party to, or is otherwise bound by,
any Contract that in any way adversely affected, affects, or will affect the
ability of an Acquired Entity or the Buyer to conduct the business as heretofore
carried on by the Acquired Entities.

(f)            The
employees of the Corporation are not entitled to payment for any accrued but
unused vacation time, except upon termination.

(g)           Except
as disclosed in Schedule 4.28(a) or Schedule 4.28(g), the Acquired Entities
have not, since December 31, 2005, directly or indirectly, made any increase in
the compensation or other benefits payable or to become payable to their
employees or any of them, other than general salary increases in the Ordinary
Course of Business, or any increase in the compensation or other benefits
payable or to become payable to any officer or director or any increase in the
benefits provided under any of its Employee Plans.

(h)           Except
as set out in Schedule 4.28(h) or as otherwise described in any manner in
Section 4.15, the Acquired Entities are not a party to and are not bound by
any:

(i)            written
contract or commitment for the employment of any employee, officer or agent,
whether contracts of service or contracts for services;

(ii)           oral
contract or commitment for the employment of any employee, officer or agent,
whether contracts of service or contracts for services, except for contracts of
indefinite hire, terminable by the respective Acquired Entity without cause or
reasonable notice;

(iii)          contract
or collective agreement with or commitment to any labor union or employee
association and the Acquired Entities have not conducted negotiations with
respect to any future such contracts or commitments and

 37
 

 

there are no current or threatened attempts
to organize or establish any labor union or employee association with respect
to the Acquired Entities, and no trade union, council of trade unions, employee
bargaining agency or affiliated bargaining agent:

(a)           holds
bargaining rights with respect to any of the employees of the Acquired Entities
by way of certification, interim certification, voluntary recognition,
designation or successor rights; or

(b)           has
applied to be certified as the bargaining agent of any of the employees of the
Acquired Entities.

(iv)          bonus,
pension, profit sharing, deferred compensation, retirement, hospitalization,
disability, insurance or similar plan or practice, formal or informal, or
policy with respect to any of their employees or others.

(i)            To
the Sellers’ Knowledge, there are no allegations with respect to any of the
Acquired Entities of unfair labor practices.

(j)            Except
as disclosed in Schedule 4.28(j), no employee of any Acquired Entity is on lay
off, leave of absence, maternity or disability leave.  Schedule 4.28(k) sets forth the terms of such
lay off, leave of absence, maternity or disability leave.

(k)           Except
as disclosed in Schedule 4.28(k), the Acquired Entities do not owe any
obligations to former directors, officers or employees.

(l)            Except
as disclosed in Schedule 4.28(l), there are no independent contractors engaged
by the Corporation.

(m)          Except
as otherwise described in Section 4.15, the amount of salaries, bonuses, and
other remuneration and fringe benefits of any nature, including vacation pay,
severance pay and unpaid earned wages of the directors, officers and employees
of the Acquired Entities as of the Closing Date have been paid in full or
accrued and there is no outstanding overdue assessment, order, certificate,
lien or judgment regarding employment of any jurisdiction (foreign or domestic)
in which any Acquired Entity carries on business or has employees.

(n)           All
employer obligations of the Acquired Entities with respect to the directors,
officers and employees of any Acquired Entity for withholding tax, workers’
compensation premiums, contributions or remittances of any kind in all material
respects which are then due, have been paid in full or accrued as of the
Closing Date.

(o)           There
are no written warnings or disciplinary action currently outstanding against
any employee of the Acquired Entities.

 38
 

 

Section 4.29         Compliance with the
Foreign Corrupt Practices Act and Export Control and Antiboycott Laws.

(a)           Except
as set forth in Schedule 4.29(a), the Acquired Entities have not, and the
Acquired Entities’ employees, agents and Representatives have not, used any
funds of the Acquired Entities for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity, (i)
made any direct or indirect unlawful payment to any foreign or domestic
governmental official or employee, political party, official of a political
party, candidate for political office, anyone else acting in an official
capacity, or any agent of any such individual or entity, in order to obtain,
retain or direct business or obtain any improper advantage, (ii) violated or is
in violation of any provision of the Foreign Corrupt Practices Act of 1977 or
(iii) made any illegal bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.

(b)           Except
as set forth in Schedule 4.29(b), the Acquired Entities have made all payments
to non-employee third parties by check, by credit card or by wire transfer to
such non-employee third parties in the country in which the work was performed.

(c)           Each
transaction is properly and accurately recorded on the books and records of the
Corporation in all material respects. 
The Corporation maintains no off the books accounts.

(d)           The
Acquired Entities have at all times been in compliance with all Legal Requirements
relating to export control and trade embargoes. 
No product sold or service provided by any Acquired Corporation during
the last five (5) years has been directly sold to or performed in or on behalf
of Cuba, Iraq, Iran, Ivory Coast, Libya, North Korea, Rwanda, Sudan, or Syria.

(e)           Except
as set forth in Schedule 4.29(e), the Acquired Entities have not violated the
antiboycott prohibitions contained in 50 U.S.C. § 2401 et seq. or taken any
action that can be penalized under Section 999 of the Code.  Except as set forth in Schedule 4.29(e),
during the last five (5) years, the Corporation has not been a party to, is not
a beneficiary under and has not performed any service or sold any product under
any Contract under which a product has been sold directly to customers in
Bahrain, Iraq, Kuwait, Lebanon, Libya, Oman, Qatar, Saudi Arabia, Syria, United
Arab Emirates or the Republic of Yemen.

Section 4.30         Relationships with
Related Persons.  No Seller or
Related Person of any Seller and, to the Sellers’ Knowledge, no other Related
Person of the Acquired Entities has, or since December 31, 2005, has had, any
interest in any property used by the Acquired Entities in the Acquired Entities’
business.  To the Sellers’ Knowledge, no
Acquired Entity nor any Related Person of the Acquired Entities owns, or since
December 31, 2005, has owned, of record or as a beneficial owner, an equity
interest or any other financial or profit interest in any Person (other than
the Acquired Entities themselves) that has (a) had significant business
dealings or a material financial interest in any transaction with an Acquired
Entity other than business dealings or transactions disclosed in Schedule 4.30,
each of which has been conducted in the Ordinary Course of Business with such
Acquired Entity at substantially prevailing market prices and on substantially
prevailing market terms or (b) engaged in competition with such Acquired Entity
with respect to any line of the products or services of such Acquired Entity (a
“Competing Business”) in any market presently served by such Acquired Entity,
except for ownership of less

 39
 

 

than one
percent (1%) of the outstanding capital stock of any Competing Business that is
publicly traded on any recognized exchange or in the over-the-counter
market.  Except as set forth on Schedule
4.30, no Seller or Related Person of any Seller, and, to the Sellers’
Knowledge, no other Related Person of an Acquired Entity (other than an
Acquired Entity) is a party to any Contract with, or has any claim or right
against, such Acquired Entity.

Section 4.31         Title to Assets.  The Acquired Entities have good and
marketable title to, or a valid leasehold or other interest in, the properties
and assets used by them, located on their premises, or shown on the Interim
Balance Sheet or acquired after the date thereof, free and clear of all
Encumbrances, except for Permitted Encumbrances or properties, assets or
interests disposed of in the Ordinary Course of Business since the date of the
Interim Balance Sheet or as otherwise permitted by this Agreement.

As used herein, the term “Permitted Encumbrances”
shall include the following:

(i)            liens
for taxes, assessments or governmental or quasi-governmental charges that are
not yet delinquent;

(ii)           Encumbrances
reflected in the Financial Statements or created in the Ordinary Course of
Business subsequent to the date of the Financial Statements;

(iii)          Encumbrances
disclosed in Schedule 4.31;

(iv)          zoning
ordinances, conservation restrictions, building codes and all other statutes,
regulations and administrative enactments of any federal, state or governmental
or public authority having jurisdiction over the property affected thereby;

(v)           any
matters to which a real property lease is subject or subordinate;

(vi)          Encumbrances
that will be released or satisfied at Closing, pursuant to the terms of this
Agreement; and

(vii)         Encumbrances
that do not, individually or in the aggregate, materially interfere with the
present use by the Acquired Entities of the real property subject thereto or
affected thereby.

ARTICLE V.

PRE-CLOSING COVENANTS

The Parties agree as follows with respect to the
period between the execution of this Agreement and the Closing.

Section 5.1            General.  Each of the Parties will use its commercially
reasonable efforts to take all action and to do all things necessary, proper,
or advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction, but not waiver, of the
closing conditions set forth in Article VII below).

 40
 

 

Section 5.2            Notices and Consents.  The Sellers will cause the Acquired Entities
to give any notices to third parties, and will cause the Acquired Entities to
use their commercially reasonable efforts to obtain any third-party consents,
that the Buyer reasonably may request in connection with the matters referred
to in Section 4.4 above.  Each of the
Parties will (and the Sellers will cause the Acquired Entities to) give any
notices to, make any filings with, and use its commercially reasonable efforts
to obtain any authorizations, consents, and approvals of governments and
governmental agencies in connection with the matters referred to in Section
3.1(b), Section 3.2(b), and Section 4.4 above. 
Between the date of this Agreement and the Closing Date, Sellers will, and
will cause each Acquired Entity to, (a) cooperate with the Buyer with respect
to all filings that the Buyer elects to make or is required by Legal
Requirements to make in connection with the transactions contemplated hereby,
and (b) cooperate with the Buyer in obtaining all consents identified in
Schedule 4.4.

Section 5.3            Operation of Business.

(a)           The
Sellers will not cause or permit the Acquired Entities to engage in any
practice, take any action, or enter into any transaction outside the Ordinary
Course of Business except:

(i)            to
the extent permitted or required by this Agreement; or

(ii)           as
consented to by the Buyer, such consent not to be unreasonably withheld.

(b)           From
the date of the execution of this Agreement until the Closing Date, Sellers
shall cause the Corporation to continue to operate in the Ordinary Course of
Business (including with respect to the billing of work in process, the
collection of accounts receivable, and the payment of accounts payable and
expenses), and shall cause the Corporation to refrain, without the prior
consent of Buyer, such consent not to be unreasonably withheld, from any
organizational or executive personnel changes, including but not limited to the
entering into of employment agreements, the modification of existing employment
agreements, or any compensation increases. 
In addition, without consulting with Buyer, the Sellers will not cause
or permit the Corporation to (i) make any purchase or sale of inventory,
machinery, equipment, vehicles, buildings or other physical assets outside of
the Ordinary Course of Business; (ii) pay any dividends, distributions, or
other fees to its shareholders, including directors’ fees or bonuses, and shall
permit no cash distributions for any purpose outside the Ordinary Course of Business;
(iii) enter into any contract which materially adversely affects its business,
sales volume or marketing methods; (iv) shall use its commercially reasonable
efforts to preserve the goodwill of its customers, employees, suppliers and
others with whom the Acquired Entities have business relations; (v) shall
maintain its cash management, accounts receivable collection and accounts
payable payment practices in accordance with past custom and practice; or (vi)
otherwise engage in any practice, take any action, or enter into any
transaction of the sort described in Section 4.9 above.

Section 5.4            Preservation of
Business.  The Sellers will cause
the Corporation to keep its business and properties substantially, intact,
including its present operations, physical facilities, working conditions, and
relationships with lessors, licensors, suppliers, customers and employees.

 41
 

 

Section 5.5            Full Access.  The Sellers will permit, and the Sellers will
cause the Corporation to permit, Representatives of the Buyer to have full
access at all reasonable times, and in a manner so as not to interfere with the
normal business operations of the Corporation and the performance of the
Sellers’ duties under this Agreement, to all premises, properties, personnel,
books, records (including Tax records), contracts, and documents of or
pertaining to the Corporation.

Section 5.6            Notice of
Developments; Supplements to Schedules.

(a)           Each
Party will give written notice within two days to the other Parties of any
development causing a Breach of any of the representations and warranties in
Article III or Article IV above.  A
written notice given pursuant to this Section 5.6(a) shall become an exhibit to
this Agreement and shall be incorporated herein if such notice is delivered
prior to the Closing.  If the Party to
whom the notice is addressed receives such notice prior to Closing and
thereafter participates in the Closing, such Party will be deemed to have
waived any claims relating to the matters specified in such notice; provided, however, that no waiver shall be
deemed to have been made with respect to any claims that arise from or are the
subject of matters that are not specifically stated in such notice.

(b)           From
time to time until the Closing, the Sellers shall promptly supplement or amend
the Schedules that it has delivered with respect to any matter first existing
or occurring following the date hereof that (a) if existing or occurring at or
prior to the date hereof, would have been required to be set forth or described
in the Schedules, or (b) is necessary to correct any information in the
Schedules that has been rendered inaccurate thereby.  A supplement or amendment to the Schedules
given to the Buyer pursuant to this Section 5.6(b) shall become part of the
Schedules to this Agreement and shall be incorporated herein if such supplement
or amendment is delivered prior to the Closing. 
If the Buyer receives such a supplement or amendment to the Schedules
prior to Closing and thereafter participates in the Closing, the Buyer will be
deemed to have waived any claims relating to the matters specified in such
supplement or amendment; provided, however,
that no waiver shall be deemed to have been made with respect to any claims
that arise from or are the subject of matters that are not specifically stated
in such supplement or amendment.

Section 5.7            Exclusivity.

(a)           The
Sellers will not (and will cause the Corporation to not) solicit, directly or
through any intermediary, offers for the Grant Common Stock and all or
substantially all of the assets of the Corporation, from any Person other than
the Buyer and its Affiliates; provided,
however, the Sellers and the Corporation may conduct meetings or
discussions from time to time with Representatives of the Corporation’s
nominated advisor and any broker that is a member of the Corporation’s
underwriting team concerning a possible AIM listing on the London Stock
Exchange, so long as (i) such nominated advisor and such broker(s) are bound by
a confidentiality agreement, (ii) such meetings and discussions are solely for
operational and financial updating purposes, (iii) no meetings, discussions or
other interfaces take place with potential investors in an effort to market the
public offering, and (iv) neither the Sellers nor the Corporation work on any
AIM Admission Document.  If the Sellers,
the Corporation or their respective Representatives receive an unsolicited bona
fide third-party offer to purchase or otherwise acquire the Grant Common Stock
or all or substantially all of the Corporation’s assets,

 42
 

 

the Buyer
shall be given immediate notice of such offer and the Sellers sole response
shall be to notify the Person making such offer of the provisions of this
Section 5.7.

(b)           The
obligation under this Section 5.7 will terminate, and the Sellers, the Acquired
Entities and their Representatives will be able to solicit any offer of any
kind for some or all of the Grant Common Stock or some or all of the assets of
the Acquired Entities without any restriction whatsoever, upon the receipt by
the Sellers of a proposal by the Buyer to reduce the amount of the Purchase
Price or otherwise alter the consideration that comprises the Purchase Price.

Section 5.8            Access and
Investigation.  Between the date
of this Agreement and the Closing Date, and upon reasonable advance notice
received from the Buyer, the Corporation shall (and the Sellers shall cause the
Corporation to) (a) afford the Buyer and its Representatives and prospective
lenders and their Representatives (collectively, “Buyer Group”) full and free
access, during regular business hours, to the Acquired Entities’ personnel,
properties, Contracts, Governmental Authorizations, books and records and other
documents and data and to allow the real property and Tangible Personal
Property to be inspected by Buyer Group, at Buyer’s sole cost and expense, such
rights of access and inspection to be exercised in a manner that does not
unreasonably interfere with the operations of the Acquired Entities, the
performance of the Acquired Entities’ or the Sellers’ duties under this
Agreement or the transactions contemplated hereby; (b) furnish Buyer Group with
copies of all such Contracts, Governmental Authorizations, books and records
and other existing documents and data of the Acquired Entities as Buyer Group
may reasonably request; (c) furnish Buyer Group with such additional financial,
operating and other relevant data and information regarding the Acquired
Entities as Buyer may reasonably request; and (d) otherwise cooperate and
assist, to the extent reasonably requested by Buyer, with Buyer’s investigation
of the properties, assets and financial condition related to the Acquired
Entities; provided, however, that
the Sellers and the Acquired Entities shall not be required to make any such
materials available or take any such action to the extent precluded by
applicable Legal Requirements.

Section 5.9            Confidential
Information.  The Parties
acknowledge and agree that the Confidentiality and Nondisclosure Agreement
dated June 7, 2006 by and between the Corporation and the Buyer (the “Confidentiality
Agreement”) will continue in full force and effect following the execution of
this Agreement until the Closing Time. 
Any information, data or other materials provided to the Buyer or its
Representatives pursuant to this Agreement shall be considered “Confidential
Information” under the Confidentiality Agreement and subject to its terms.

ARTICLE VI.

POST-CLOSING COVENANTS

The Parties agree as follows with respect to the
period following the Closing.

Section 6.1            General.  In case at any time after the Closing any
further action is necessary or desirable to carry out the purposes of this
Agreement (including compliance with any foreign or domestic regulatory
requirements), each of the Parties will take such further action (including the
execution and delivery of such further instruments and documents) as any other
Party reasonably may request, all at the sole cost and expense of the
requesting Party

 43
 

 

(unless the
requesting Party is entitled to indemnification therefor under Article VIII
below).  The Sellers acknowledge and
agree that from and after the Closing the Buyer will be entitled to possession
of all documents, books, records (including Tax records), agreements, and
financial data of any sort relating to the Acquired Entities.  After Closing, the Sellers shall have access
to all documents, books, records (including Tax records), agreements, and
financial data of any sort relating to the Acquired Entities at their sole cost
and expense, and such records shall not be destroyed prior to the expiration of
five years following the Closing Date, unless otherwise agreed to by the
Parties.

Section 6.2            Litigation Support.  In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand in connection with (i) any
transaction contemplated under this Agreement or (ii) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction occurring or existing, as the
case may be, on or prior to the Closing Date involving the Corporation, each of
the other Parties will cooperate with it and its counsel in the contest or
defense, make available their personnel upon reasonable notice, and provide
such testimony and access to their books and records upon reasonable notice as
shall be necessary in connection with the contest or defense, all at the sole
cost and expense of the contesting or defending Party (unless the contesting or
defending Party is entitled to indemnification therefor under Article VIII
below).

Section 6.3            Transition.  For a period of two years after the Closing,
none of the Sellers will take any action that is designed or intended to have
the effect of discouraging any lessor, licensor, customer, supplier, or other
business associate of the Acquired Entities from maintaining the same business
relationships with the Acquired Entities after the Closing as it maintained
with the Acquired Entities prior to the Closing, except to the extent that such
action (a) is taken by the Sellers in the course of exercising any of their
rights pursuant to this Agreement or defending any claim made against the
Sellers pursuant to this Agreement or (b) results from any activity undertaken
after the Closing Date, of the Sellers or any entity in which it has an
investment, including any business activities that compete directly with the
businesses of the Acquired Entities as constituted on the Closing Date or
anytime thereafter.  The Sellers will
refer all customer inquiries they receive relating to the business of the
Acquired Entities to the Buyer after the Closing.

Section 6.4            Confidentiality.

(a)           Each
of the Sellers will treat and hold as such all of the Confidential Information,
and refrain from using any of the Confidential Information except in connection
with this Agreement, and after the Closing Date deliver promptly to Buyer or
destroy, at the request and option of Buyer, all tangible embodiments (and all
copies) of the Confidential Information which are in its possession, except to
the extent that such Confidential Information is contained within other
documents that do not otherwise constitute Confidential Information or are
otherwise necessary to permit the Sellers to maintain their own records, as
they determine in their discretion, in order to assert their rights pursuant to
this Agreement or defend against any claim made by the Buyer pursuant to this
Agreement.

(b)           In
the event that any of the Sellers is requested or required (by oral question or
request for information or documents in any legal proceeding, interrogatory,
subpoena, civil

 44
 

 

investigative
demand, or similar process) to disclose any Confidential Information, that the
Sellers will notify the Buyer promptly of the request or requirement so that
the Buyer may seek an appropriate protective order or waive compliance with the
provisions of this Section 6.4.  If, in
the absence of a protective order or the receipt of a waiver hereunder, any of
the Sellers is, on the advice of counsel, compelled to disclose any
Confidential Information to any tribunal or else stand liable for contempt, the
Sellers may disclose the Confidential Information to the tribunal; provided, however, that the disclosing
Seller shall use its commercially reasonable efforts to obtain, at the
reasonable request of Buyer, an order or other assurance that confidential
treatment will be accorded to such portion of the Confidential Information
required to be disclosed as the Buyer shall designate.

(c)           For
the purposes of this Section 6.4, the term “Confidential Information” shall
mean all information acquired by the Sellers from the Acquired Entities or
their Representatives with respect to the business of the Acquired Entities
other than information generally available to the public immediately prior to
the time of disclosure (other than as a result of disclosure by the Sellers or
their Representatives in violation of this paragraph) and information that
becomes available to the Sellers on a non-confidential basis from a source
other than the Acquired Entities or their Representatives (provided that such
source is not known by the Sellers to be bound by a confidentiality agreement
with, or other obligation of secrecy to the Acquired Entities).

Section 6.5            Withholding Tax.
 Each
of the Sellers who is not a resident of the United States for purposes of the
Code or has not otherwise delivered a United States taxpayer identification
number to the Buyer prior to the Closing Date (each such Person referred to
herein as a “Non-Resident Seller”) in respect of the disposition of the
Non-Resident Seller’s Grant Common Stock, acknowledges that the Buyer shall be
entitled to deduct an amount from the allocated portion of the Purchase Price
payable by the Buyer to the Non-Resident Seller on the Closing Date up to 30%
of such allocated Purchase Price, provided that a corresponding amount of any
such deduction (the “Withheld Amount”) shall be remitted by the Buyer to the
IRS within 30 days of the Closing Date or such earlier time as may be required
by applicable Legal Requirements.  The
foregoing remittance of the Withheld Amount to the IRS shall satisfy the Buyer’s
payment obligation in respect of the corresponding portion of the Purchase
Price payable to the Non-Resident Seller.

ARTICLE VII.

CONDITIONS TO OBLIGATIONS TO CLOSE

Section 7.1            Conditions to
Obligations of the Buyer.  The
obligation of the Buyer to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the following
conditions:

(a)           all
of the representations and warranties of the Sellers made in this Agreement
shall be true and correct in all material respects (except with respect to any
such representations or warranties that include the word “material” or words of
similar import, as to which they shall be true and correct in all respects) as
of the Closing Time (unless such representation or warranty expressly refers to
an earlier time) with the same effect as if made at and as of the Closing Time,
except to the extent that any breach of such representations and warranties
arises from the actions of the Sellers or the Corporation which are required by
this Agreement or are consented to by the Buyer;

 45

 

(b)           the
Sellers shall have complied with and performed in all material respects all of
their obligations in this Agreement to be performed or complied with at or
before Closing, except to the extent that any breach of such obligations is
consented to by the Buyer;

(c)           since
the date of the Agreement, the business of the Corporation has been conducted
in the Ordinary Course of Business (except as otherwise permitted by this
Agreement) and in the absence of any material casualty or material adverse
change in the conduct of such business;

(d)           the
Buyer shall have completed its due diligence review of the Corporation to its
satisfaction in its absolute and sole discretion;

(e)           the
consummation of the transactions contemplated by this Agreement will not result
in the acceleration of a termination right (or the creation of a termination
right) or the actual termination of, any material Contract;

(f)            the
Sellers shall have entered into the Escrow Agreement;

(g)           the
Seller Consents and Approvals shall have been obtained with no conditions other
than those agreed to in writing by the Buyer, acting reasonably, or complied
with on or before the Closing.  The
Seller Consents and Approvals shall be in form and have terms satisfactory to
the Buyer, acting reasonably;

(h)           the
Sellers shall have delivered to the Buyer a certificate to the effect that each
of the conditions specified above in Section 7.1(a)-(g) is satisfied in all
respects;

(i)            the
final Schedules to Section 3.1 and Article IV of this Agreement shall have been
delivered to the Buyer by the Sellers not less than two business days prior to
the Closing, and such Schedules shall be satisfactory to the Buyer in its sole
discretion; and

(j)            the
Buyer shall have received the resignations, effective as of the Closing, of
each director and officer of the Corporation resigning his or her position as
an officer or director, as the case may be, other than those whom the Buyer
shall have specified in writing at least three business days prior to the
Closing.

The
Buyer may waive any condition specified in this Section 7.1 if it executes a
notice in writing so stating at or prior to the Closing; provided, however, that upon Closing the
Buyer shall be deemed to have waived any condition in this Section 7.1 that has
not been satisfied.  If any of the
conditions specified in Section 7.1 are not complied with (provided such
non-compliance did not arise from the acts or omissions of the Buyer) or waived
by the Buyer on or before the Closing Date, the Buyer may terminate this
Agreement by written notice to the Sellers.

Section 7.2            Conditions to
Obligation of the Sellers.  The obligation of the Sellers to consummate
the transactions to be performed by them in connection with the Closing is
subject to satisfaction of the following conditions:

(a)           all
of the representations and warranties of the Buyer made in this Agreement shall
be true and correct in all material respects (except with respect to any such
representations

 46
 

 

or warranties
that include the word “material” or words of similar import, as to which they
shall be true and correct in all respects) as of the Closing Time (unless such
representation or warranty expressly refers to an earlier time) with the same
effect as if made at and as of the Closing Time, except to the extent that any
breach of such representations and warranties arises from the actions of the
Buyer which are required by this Agreement or are consented to by Sellers;

(b)           the
Buyer shall have complied with and performed in all material respects all of
the terms and conditions in this Agreement on its part to be performed or
complied with at or before Closing, except to the extent that any breach of
such obligations is consented to by the Sellers;

(c)           the
Buyer shall have entered into the Escrow Agreement;

(d)           the
Buyer Consents and Approvals shall have been obtained with no conditions other
than those agreed to in writing by the Sellers, acting reasonably, or complied
with on or before the Closing.  The Buyer
Consents and Approvals shall be in form and have terms satisfactory to the
Sellers, acting reasonably; and

(e)           the
Buyer shall have delivered to the Sellers a certificate to the effect that each
of the conditions specified above in Section 7.2(a)-(d) is satisfied in all
respects.

The
Sellers may waive any condition specified in Section 7.2 if it executes a
notice in writing so stating at or prior to the Closing; provided, however, that upon Closing the
Sellers shall be deemed to have waived any condition in this Section 7.2 that
has not been satisfied.  If any of the
conditions specified in Section 7.2 are not complied with or waived by the
Sellers on or before the Closing Date (provided such non-compliance did not
arise from the acts or omissions of the Sellers), the Sellers may terminate
this Agreement by written notice to the Buyer.

ARTICLE VIII.

REMEDIES FOR BREACHES OF THIS AGREEMENT

Section 8.1            Survival of
Representations, Warranties, Covenants and Agreements.  All of the representations, warranties,
covenants and agreements of the Parties contained in this Agreement and any
certificates delivered at Closing shall survive the Closing hereunder (but not
if notice of a Breach is provided pursuant to Section 5.6) and continue in full
force and effect for, with respect to the covenants specified in Article VI,
the periods provided therein, and, with respect to all other representations,
warranties and agreements, a period of nineteen (19) months following the
Closing Date (or lesser period specified by any applicable statutes of
limitations).  The nineteen (19) month period
set forth in this Section 8.1 shall not apply with respect to any
representation or warranty set forth in Sections 3.1(d) and 4.17, which
representations and warranties shall survive the Closing until, with respect to
Section 3.1(d), for 48 months after the Closing, and, with respect to Section
4.17, the date of expiration of the applicable statutes of limitations for the
collection of the applicable Tax.

Section 8.2            Indemnification
Provisions for Benefit of the Buyer.

(a)           In
the event either Seller Breaches any of the representations, warranties,
covenants or agreements contained in this Agreement or in any certificate
delivered by the

 47
 

 

Sellers with
respect hereto in connection with the Closing, provided that an Acquiror Party
provides a Claim Notice to the Sellers pursuant to Section 8.5 below within the
applicable survival period specified in Section 8.1, then the Sellers shall
indemnify (individually as to a Seller’s Breach of any of the representations
or warranties set forth in Section 3.1 above, but jointly in the case of a
Breach of any other representations, warranties, covenants or agreements made
by the Sellers in this Agreement) from the Escrow Fund the Buyer and the
Corporation (each, an “Acquiror”) and each of Acquiror’s respective officers,
directors, employees, agents, Representatives, Affiliates, successors and
permitted assigns (collectively, “Acquiror Parties”) and hold each of them
harmless from and against and pay on behalf of or reimburse such Acquiror
Parties in respect of the entirety of any Adverse Consequences such Acquiror
Parties may suffer through and after the date of the claim for indemnification
resulting from, arising out of, relating to, in the nature of, or caused by the
Breach.

(b)           In
the event any Acquired Entity incurs any Adverse Consequences as a result of
the death of José Figueroa described on Schedule 4.11, then (i) prior to the
Claims Submission Deadline (as defined in the Escrow Agreement) the Sellers
shall jointly indemnify the Acquiror Parties from the Escrow Fund and hold each
of them harmless from and against and pay on behalf of or reimburse such
Acquiror Parties in respect of the entirety of any Adverse Consequences such
Acquiror Parties may suffer through and after the date of the claim for
indemnification resulting from, arising out of, relating to, in the nature of,
or caused by such death; provided, however,
that, to the extent any portion of a Claim for indemnification with respect to
such death has not been resolved by the Claims Submission Deadline, effective
upon the Claims Submission Deadline, the Buyer shall withdraw such pending
Claim or Claims from the Escrow Agent; and (ii) from and after the Claims
Submission Deadline, the Sellers shall jointly indemnify the Acquiror Parties
directly and hold each of them harmless from and against and pay on behalf of
or reimburse such Acquiror Parties in respect of the entirety of any Adverse
Consequences such Acquiror Parties may suffer through and after the date of the
claim for indemnification resulting from, arising out of, relating to, in the
nature of, or caused by the such death; provided,
however, that the Sellers shall not be obligated to indemnify the
Acquiror Parties after the Claims Submission Deadline from and against any
Adverse Consequences with respect to such death in excess of the amount of the
remaining Deposit (as defined in the Escrow Agreement) disbursed to the Sellers
plus any Phantom Stock Costs and Transaction Costs reimbursed to the Buyer or
the Corporation from the Escrow Fund pursuant to Section 2.5(c).

Section 8.3            Indemnification
Provisions for Benefit of the Sellers.  In the event the Buyer Breaches
any of its representations, warranties, and covenants contained herein,
provided that the Sellers provide a Claim Notice to the Buyer pursuant to
Section 8.5 below within the applicable survival period specified in Section
8.1, the Buyer shall indemnify each of the Sellers from and against the
entirety of any Adverse Consequences the Seller may suffer through and after
the date of the claim for indemnification resulting from, arising out of,
relating to, in the nature of, or caused by the Breach.

Section 8.4            Limitation of
Indemnities.

(a)           No
claims, demands, suits, actions, proceedings or remedies (“Claims”) with
respect to the indemnities provided by this Agreement shall be made or be
available unless a Claim Notice (as that term is defined in Section 8.5(b)) has
been given by the Party making the Claim to the other Parties hereto within
nineteen months of the Closing Date (or lesser period

 48
 

 

specified in
any applicable statute of limitations), except in the case of a claim for a
breach of the representations set forth in Section 4.17, which may be made up
until the applicable limitation period expires;

(b)           The
Sellers’ liability pursuant to this Article VIII shall be limited to the Escrow
Amount (including any interest thereon) and the Acquiror Party shall have no
remedy whatsoever against the Sellers or any other asset or interest of them in
respect of any such Claim, even in the event that the Escrow Amount is lost or
is not otherwise available, except as provided in Section 8.9;

(c)           The
Sellers shall have no obligation to provide any indemnity to the Acquiror
Parties unless and until the aggregate of all Adverse Consequences suffered by
the Acquiror Parties thereunder exceed $200,000, which amount shall be treated
as a deductible and such initial amount of $200,000 amount shall not be
indemnifiable by the Sellers pursuant to Section 8.2;

(d)           The
Buyer shall have no obligation to provide any indemnity to the Sellers unless
and until the aggregate of all Adverse Consequences suffered by the Sellers
thereunder exceeds $200,000, which amount shall be treated as a deductible and
such initial amount of $200,000 shall not be indemnifiable by the Buyer
pursuant to Section 8.3, and Buyer shall not be obligated to indemnify Sellers
from and against Adverse Consequences in excess of $5,000,000;

(e)           The
indemnification obligations of the Sellers and the Buyer hereunder with respect
to any Adverse Consequences suffered by an Indemnified Party shall be deemed
reduced by the amount of (i) any insurance proceeds received by such
Indemnified Party with respect to such Adverse Consequences and (ii) any
payments received by such Indemnified Party pursuant to Section 2.4 which would
otherwise result in an indemnification obligation under Section 8.2 or 8.3, as
applicable.  The Buyer agrees to use, and
to cause the Acquired Entities to use, all commercially reasonable efforts consistent
with past practice to pursue any and all available insurance recoveries and
indemnification or other claims against third parties with respect to the
subject matter of any claim for indemnification pursuant to this Article VIII;

(f)            No
Acquiror Party may make a claim pursuant to this Article VIII for any matter
arising from any circumstance, matter or thing actually known by the Buyer or
its Representatives on or before the Closing Time;

(g)           The
Sellers may not make a claim pursuant to this Article VIII for any matter
arising from any circumstance, matter or thing actually known by the Sellers or
its Representatives on or before the Closing Time; and

(h)           The
Acquiror Parties and the Sellers shall not be entitled to rely on the
provisions of this Article VIII in respect of any claim regarding the
obligations set forth in Section 2.4.

Section 8.5            Indemnification
Procedures.  The following
procedure shall apply to a claim for indemnity described in this Article VIII:

(a)           For
purposes of this Section, the term “Indemnifying Party” when used in connection
with a Claim shall mean the Person having an obligation to indemnify another
Person

 49
 

 

with respect
to such Claim pursuant to this Agreement and the term “Indemnified Party” when
used in connection with a particular Claim shall mean the Person having the
right to be indemnified with respect to such Claim by the Indemnifying Party
pursuant to this Agreement;

(b)           To
make claim for indemnification, an Indemnified Party shall notify the
Indemnifying Party of its Claim, including the specific details of and specific
basis under this Agreement for its Claim (the “Claim Notice”).  In the event that the claim for
indemnification is based upon a Claim by a third party against the Indemnified
Party (a “Third Party Claim”), the Indemnified Party shall provide its Claim
Notice promptly after the Indemnified Party has actual knowledge of the Third
Party Claim and shall enclose a copy of all papers (if any) served with respect
to the Third Party Claim; provided
that the failure of any Indemnified Party to give notice of a Third Party Claim
as provided herein shall not relieve the Indemnifying Party of its obligations
under this Agreement except to the extent such failure results in insufficient
time being available to permit the Indemnifying Party to effectively defend
against the Third Party Claim or otherwise materially prejudices the
Indemnifying Party’s ability to defend against the Third Party Claim or
increases the amount of liability or cost of defense.  In the event that the claim for
indemnification is based upon an Breach of a representation, warranty, covenant
or agreement, the Claim Notice shall specify the representation, warranty,
covenant or agreement which was Breached;

(c)           The
Indemnifying Party shall have the right, by notice to the Indemnified Party
given not later than 30 days after receipt of the Claim Notice, to assume the
control of the compromise, settlement and defense of the Third Party Claim,
provided that such assumption shall, by its terms, be without cost to the
Indemnified Party.  The Indemnified Party
is authorized, prior to and during such 30-day period, to file any motion,
answer or other pleading that it shall deem necessary or appropriate to protect
its interests or those of the Indemnifying Party and that is not prejudicial to
the Indemnifying Party;

(d)           Upon
the assumption of control of any Third Party Claim by the Indemnifying Party on
the basis provided herein, the Indemnifying Party shall diligently proceed with
the defense, compromise or settlement of the Third Party Claim, including, the
employment of counsel satisfactory to the Indemnifying Party and, in connection
therewith, the Indemnified Party shall: (i) cooperate fully and to make
available to the Indemnifying Party all pertinent information, documents and
witnesses under the Indemnified Party’s control; and (ii) make such assignments
and take such other steps as on the advice of counsel for the Indemnifying
Party are reasonably necessary to enable the Indemnifying Party to conduct such
defense;

(e)           Notwithstanding
any other provision contained herein, the Indemnified Party, at its sole
expense, shall have the right to participate in the negotiation, settlement and
defense of any Third Party Claim and the Indemnifying Party shall not
negotiate, settle, compromise or pay any Third Party Claim without the prior
written consent of the Indemnified Party; such consent not to be unreasonably
withheld or delayed;

(f)            Should
the Indemnifying Party fail to give notice to the Indemnified Party in
accordance with Section 8.5(d) above, the Indemnified Party shall diligently
proceed with the defense, compromise or settlement of the Third Party Claim,
and, in connection therewith, the Indemnifying Party shall, at its sole
expense, cooperate fully to make available to the Indemnified Party all
pertinent information and witnesses under the Indemnifying Party’s control

 50
 

 

and (ii) make
such assignments and take such other steps as on the advice of counsel for the
Indemnified Party are reasonably necessary to conduct such defense.  Notwithstanding any other provision contained
herein, the Indemnifying Party shall have the right to participate in the
negotiation, settlement and defense of any Third Party Claim, at its sole
expense, and under no circumstance shall the Indemnified Party negotiate, settle,
compromise or pay (except in the case of payment of a judgment) any Third Party
Claim without the prior written consent of the Indemnifying Party, such consent
not to be unreasonably withheld or delayed; and

(g)           In
the case of a claim for indemnification not based upon a Third Party Claim (a “Direct
Claim”), the Indemnifying Party shall have 30 days from its receipt of the
Claim Notice to (i) cure the Adverse Consequences that form the substance of
the Claim; (ii) admit its liability for such Adverse Consequences or (iii)
dispute the Claim for such Adverse Consequences.  If the Indemnifying Party does not notify the
Indemnified Party within such 30-day period that it has cured the Adverse
Consequences or that it disputes the Claim for such Adverse Consequences, the
amount of such Adverse Consequences shall conclusively be deemed a liability of
the Indemnifying Party hereunder.  The
Indemnified Party shall cooperate fully to make available to the Indemnifying
Party all pertinent information, documents and witnesses under the Indemnified
Party’s control.  The Indemnified Party
shall not be entitled to the payment of any of its expenses in this regard from
the Escrow Amount until the outcome of such proceedings is known and the
obligation of the Indemnifying Party is determined.

Section 8.6            Determination of
Adverse Consequences.  All
indemnification payments under this Article VIII shall be deemed adjustments to
the Purchase Price except as required by applicable Legal Requirements.

Section 8.7            Excluded Damages.  Notwithstanding any other provision of this
Agreement, no Indemnified Party shall be entitled to any consequential damages
including exemplary, punitive, incidental, indirect or special damages
(collectively, “Excluded Damages”) suffered by an Indemnified Party except to
the extent such Excluded Damages were incurred by a third party and are the
subject of a Third-Party Claim asserted by that third-party after the Closing
Date, and Buyer hereby releases Seller, and Seller hereby releases Buyer, in each
case to the fullest extend applicable law permits, from liabilities for all
Excluded Damages.

Section 8.8            Scope of
Representations and Warranties of Sellers. 
THE BUYER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY PROVIDED IN
THIS AGREEMENT, THE SELLERS HAVE NOT MADE AND THE SELLERS HEREBY EXPRESSLY
DISCLAIM ANY REPRESENTATION OR WARRANTY OF ANY NATURE, WHETHER EXPRESS,
IMPLIED, AT COMMON LAW, BY STATUTE OR OTHERWISE.  EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT,
THE SELLERS EXPRESSLY DISCLAIM AND NEGATE, AND THE BUYER HEREBY WAIVES, AS TO
PERSONAL PROPERTY, EQUIPMENT AND FIXTURES CONSTITUTING A PART OF THE ASSETS
OWNED OR OPERATED BY THE ACQUIRED ENTITIES: (A) ANY IMPLIED OR EXPRESS WARRANTY
OF MERCHANTABILITY; (B) ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A
PARTICULAR PURPOSE; AND (C) ANY AND ALL IMPLIED WARRANTIES EXISTING UNDER
APPLICABLE LEGAL REQUIREMENTS.  THE
SELLERS AND THE BUYER AGREE THAT, TO THE EXTENT REQUIRED BY APPLICABLE LEGAL
REQUIREMENTS TO BE EFFECTIVE, THE DISCLAIMERS OF THE WARRANTIES CONTAINED IN
THIS SECTION 8.8 ARE CONSPICUOUS.

 51
 

 

Section 8.9            Exclusive Remedy.  Except in respect of any claims based on
fraud involving a knowing and intentional misrepresentation of a material fact:
(a) the indemnities provided for in this Article VIII shall be the sole and
exclusive remedy of any Person after the Closing with respect to, matters
arising out of, or resulting from this Agreement (including, without
limitation, for any Breach of this Agreement or contribution, cost recovery or other
claim under any Environmental Law, whether such action is brought in tort,
contract or otherwise); (b) each Party covenants and agrees that following the
Closing it shall not seek or assert any other remedy hereunder; and (c) each
Party specifically waives and releases the other Parties from any Liability and
any rights it might otherwise have pursuant to law except as provided for in
this Article VIII.  Any claims by a party
for a breach by another Party of such second Party’s obligations under Section
2.4 above shall not be subject to the limitations set forth in this Article
VIII.

Section 8.10         Mitigation of Damages and
Minimization of Claims.  The
Buyer and the Sellers agree to use all reasonable commercial efforts to: (a)
resolve all Third Party Claims and Direct Claims for which indemnification is
sought under this Article VIII on the lowest cost basis that complies with the
requirements of Applicable Laws; and (b) mitigate the costs and expenses as
well as any Adverse Consequences arising out of any Third Party Claim or Direct
Claim.

ARTICLE IX.

TERMINATION

Section 9.1            Termination of
Agreement.  Certain of the
Parties may terminate this Agreement as provided below:

(a)           the
Buyer and the Sellers may terminate this Agreement by mutual written consent at
any time prior to the Closing;

(b)           the
Buyer terminate this Agreement by giving written notice to the Sellers on or
before the 30th day following the date of this Agreement if the Buyer is not
satisfied with the results of its continuing business, legal and accounting due
diligence regarding the Acquired Entities;

(c)           the
Buyer may terminate this Agreement by giving written notice to the Sellers at
any time prior to the Closing (i) in the event any of the Sellers has Breached
any representation, warranty or covenant contained in this Agreement in any
material respect, the Buyer has notified the Sellers of the Breach, and the
Breach has continued without cure for a period of 15 days after the notice of
Breach or (ii) if the Closing shall not have occurred on or before September 8,
2006 by reason of the failure of any condition precedent under Section 7.1
hereof (unless (A) the failure results primarily from the Buyer itself
breaching any representation, warranty or covenant contained in this Agreement
or (B) the Parties have previously agreed in writing to continue to complete
the transactions contemplated hereby and have further agreed in writing to
extend performance thereof to a later date mutually acceptable to the Parties);
and

(d)           the
Sellers may terminate this Agreement by giving written notice to the Buyer any
time prior to the Closing (i) in the event the Buyer has Breached any
representation, warranty, or covenant contained in this Agreement in any
material respect, the Sellers have

 52
 

 

notified the
Buyer of the Breach, and the Breach has continued without cure for a period of
10 days after the notice of Breach, or (ii) if the Closing shall not have
occurred on or before September 8, 2006 by reason of the failure of any
condition precedent under Section 7.2 hereof (unless (A) the failure results
primarily from any of the Sellers themselves breaching any representation,
warranty, or covenant contained in this Agreement or (B) the Parties have
previously agreed in writing to continue to complete the transactions
contemplated hereby and have further agreed in writing to extend performance
thereof to a later date mutually acceptable to the Parties).

Section 9.2            Effect of Termination.  If any Party terminates this Agreement
pursuant to Section 9.1 above, all rights and obligations of the Parties
hereunder shall terminate without any Liability of any Party to any other
Party.

ARTICLE X.

MISCELLANEOUS

Section 10.1         Press Releases and Public
Announcements.  No Party shall issue any press
release or make any public announcement relating to the subject matter of this
Agreement without the prior written approval of the Buyer and the Sellers; provided, however, that any Party may make
any public disclosure it believes in good faith is required by applicable law
or any listing or trading agreement concerning its publicly-traded securities
(in which case the disclosing Party will use its commercially reasonable
efforts to advise the other Parties prior to making the disclosure).

Section 10.2         No Third-Party
Beneficiaries.  This Agreement
shall not confer any rights or remedies upon any Person other than the Parties
and their respective successors and permitted assigns.

Section 10.3         Entire Agreement.  This Agreement (including the documents
referred to herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by or among
the Parties, written or oral, to the extent they related in any way to the
subject matter hereof.

Section 10.4         Succession and
Assignment.  This Agreement shall
be binding upon and inure to the benefit of the Parties named herein and their
respective successors and permitted assigns. 
No Party may assign either this Agreement or any of its rights,
interests, or obligations hereunder without the prior written approval of the
other Parties; provided, however, that
the Buyer may (i) assign any or all of its rights and interests hereunder to
one or more of its Affiliates, (ii) make a collateral assignment of such rights
and interests to one or more of its lenders and (iii) designate one or more of
its Affiliates to perform its obligations and exercise its rights hereunder (in
any or all of which cases Buyer shall nonetheless remain responsible for the
performance of all of its obligations hereunder).

Section 10.5         Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.

 53
 

 

Section 10.6         Headings.  The section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.

Section 10.7         Notices.  All notices, requests, demands, claims, and
other communications hereunder will be in writing.  Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given if (and then two business
days after) it is sent by, registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set
forth below:

Notices to Buyer:

Geokinetics Inc.

One Riverway, Suite 2100

Houston, Texas 77056

Attention:              David
A. Johnston

Phone:                    (713)
782-1234

Facsimile:             (713)
850-7330

with a copy to:

Chamberlain, Hrdlicka,
White, Williams & Martin

1200 Smith Street

Suite 1400

Houston, Texas  77002

Attention:              James
J. Spring, III

Phone:                    (713)
658-1818

Facsimile:             (713)
658-2553

Notices to the
Sellers:

Elliott International,
L.P.

Elliott Associates, L.P.

Cleveland House

33 King Street

London, SW1Y 6RJ (UK) Limited

Attention: Tullio
Salvatore

Phone:                    (44
0) 207-518-1819

Facsimile:             (44
0) 207-577-3719

 54
 

 

with a copy to:

Akin Gump Strauss Hauer
& Feld LLP

1111 Louisiana Street,
44th Floor

Houston, Texas 77002

Attention: James L. Rice,
III

Phone:                    (713)
220-8116

Facsimile:              (713)
236-0822

Any
Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any,
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been
duly given unless and until it actually is received by the intended recipient.  Any Party may change the address to which
notices, requests, demands, claims, and other communications hereunder are to
be delivered by giving the other Parties notice in the manner herein set forth.

Section 10.8         Governing Law.  This
Agreement shall be governed by and construed in accordance with the domestic
laws of the State of Texas without giving effect to any choice or conflict of
law provision or rule (whether of the State of Texas or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of Texas.

Section 10.9         Amendments and Waivers.  No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Seller.  No waiver by any
Party of any default, misrepresentation, or Breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any, prior
or subsequent default, misrepresentation, or Breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.

Section 10.10       Severability.  Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability, of the offending term or provision in
any other situation or in any other jurisdiction.

Section 10.11       Expenses.  Except as otherwise provided herein, each of
the Parties will bear its own costs and expenses (including legal fees and
expenses) incurred in connection with this Agreement and the transactions
contemplated hereby.  The Sellers agree
that, except as otherwise provided in this Agreement, the Corporation has not
borne or will bear any of the Sellers’ costs and expenses (including any of
their legal fees and expenses) in connection with this Agreement or any of the
transactions contemplated hereby.

Section 10.12       Construction.  The Parties have participated jointly in the
negotiation and drafting of this Agreement. 
In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the Parties
and no presumption or burden of proof shall arise favoring or disfavoring any
Party by virtue of the authorship of any of the provisions of this
Agreement.  Any reference to any federal,
state, local, or foreign statute or law shall be deemed also to refer to all
rules and regulations promulgated thereunder, unless

 55
 

 

the context
requires otherwise.  The word “including”
shall mean including without limitation. 
The Parties intend that each representation, warranty, and covenant
contained herein shall have independent significance.  The word “pending” shall mean, with respect
to a Proceeding, the receipt of a notice of a Proceeding by an Acquired
Entity.  If any Party has Breached any
representation, warranty, or covenant contained herein in any respect, the fact
that there exists another representa­tion, warranty, or covenant relating to
the same subject matter (regardless of the relative levels of specificity)
which the Party has not Breached shall not detract from or mitigate the fact
that the Party is in Breach of the first representation, warranty, or
covenant.  Matters disclosed by the
Sellers in any exhibit or schedule to this Agreement shall be deemed disclosed
as to all portions of this Agreement and shall qualify all such portions of the
Agreement, without being restricted to the express provisions that they are
identified as excepting.  Any waiver or
consent may be given subject to satisfaction of conditions stated therein and
any waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.

Section 10.13       Incorporation of Exhibits
and Schedules.  The Exhibits and
Schedules (as may be added, modified, supplemented or amended in accordance
with Section 5.6) identified in this Agreement are incorporated herein by
reference and made a part hereof.

Section 10.14       Specific Performance.  Each of the Parties acknowledges and agrees
that the other Parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are Breached. 
Accordingly, each of the Parties agrees that the other Parties shall be
entitled to an injunction or injunctions to prevent Breaches of the provisions
of this Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in any action instituted in any court of the United States or
any state thereof having jurisdiction over the Parties and the matter (subject
to the provisions set forth in Section 10.15 below), in addition to any other
remedy to which they may be entitled, at law or in equity.

Section 10.15       Submission to Jurisdiction.  Each of the Parties submits to the
jurisdiction of any state or federal court sitting in Harris County, Texas, in
any action or proceeding arising out of or relating to this Agreement and
agrees that all claims in respect of the action or proceeding may be heard and
determined in any such court.  Each of
the Parties waives any defense of inconvenient forum to the maintenance of any
action or proceeding so brought and waives any bond, surety, or other security
that might be required of any other Party with respect thereto.  Any Party may make service on any other Party
by sending or delivering a copy of the process to the Party to be served at the
address and in the manner provided for the giving of notices in Section 10.7
above.  Nothing in this Section 10.14,
however, shall affect the right of any Party to bring any action or proceeding
arising out of or relating to this Agreement in any other court or to serve
legal process in any other manner permitted by law or at equity.  Each Party agrees that a final judgment in
any action or proceeding so brought shall be conclusive and may be enforced by
suit on the judgment or in any other manner provided by law or at equity.

*****

 56
 

 

IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement on as of the
date first above written.

	
   

  	
  GEOKINETICS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ David A.
  Johnson

  	
   

  
	
   

  	
   

  	
   

  	
  David A. Johnson, President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ELLIOTT ASSOCIATES, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Elliott Capital Advisors, L.P., as General Partner

  
	
   

  	
   

  	
   

  	
  By:     Braxton Associates,
  Inc., as General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Elliot
  Greenberg

  	
   

  
	
   

  	
   

  	
   

  	
  Elliot Greenberg, Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ELLIOTT INTERNATIONAL, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Elliott International Capital Advisors, L.P.,

  
	
   

  	
   

  	
   

  	
  as Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Elliot
  Greenberg

  	
   

  
	
   

  	
   

  	
   

  	
  Elliot Greenberg, Vice President

  
					

 

 57Exhibit 10.4

 

ESCROW AGREEMENT

THIS ESCROW  AGREEMENT
(as the same may be amended or modified from time to time pursuant hereto, this
“Agreement”) is made and entered into
as of September 8, 2006, by and among Elliott Associates, L.P., a Delaware
limited partnership (“EALP”),
Elliott International, L.P., a Cayman Islands limited partnership (together
with EALP, “Sellers”), Geokinetics Inc.,
a Delaware corporation (“GEOK”), and
Zions First National Bank, a national bank with a Corporate Trust office in
Houston, Harris County, Texas (the “Bank”).
GEOK, Sellers and the Bank shall sometimes be referred to herein collectively
as the “Parties” and individually as
a “Party”. The term “Other Parties” shall herein mean
GEOK and Sellers, collectively.

WITNESSETH:

WHEREAS, pursuant to that
certain Stock Purchase Agreement dated as of September 8, 2006 by and
among GEOK and Sellers (the “Purchase Agreement”),
GEOK has agreed to purchase 100% of the issued and outstanding capital stock of
Grant Geophysical, Inc. (the “Grant Stock”)
from Sellers and Sellers have agreed to sell the Grant Stock to GEOK (the “Transaction”); and

WHEREAS, pursuant to Section
2.2(b) of the Purchase Agreement, GEOK is required to deposit $5,000,000.00
into an escrow account, subject to the terms and conditions set forth herein
and therein; and

WHEREAS, GEOK and Sellers have
requested the Bank to act in the capacity of escrow agent under this Agreement,
and the Bank, subject to the terms and conditions hereof, has agreed so to do.

NOW, THEREFORE, in consideration
of the premises and mutual covenants and agreements contained herein, the
Parties hereby agree as follows:

1.                                       Definitions.  All capitalized terms not defined herein and
defined in the Purchase Agreement shall have the meanings attributed to them in
the Purchase Agreement.  All references
in this Agreement to the Purchase Agreement or any other agreement are for the
convenience of the Other Parties, and Escrow Agent (as defined in Section 2
hereof) shall have no duties or obligations with respect thereto.

2.                                       Appointment of
Escrow Agent.  Each of GEOK and
Sellers hereby appoints the Bank as the escrow agent under this Agreement (the
Bank in such capacity, “Escrow
Agent”), and Escrow Agent hereby accepts such appointment.

3.                                       Deposit.  Upon execution of this Agreement, GEOK shall
deliver or cause to be delivered by wire transfer to Escrow Agent at Escrow
Agent’s designated account set forth in Schedule “A”, the sum of $5,000,000.00
in cash in immediately available funds (as may from time to time increase or
decrease as a result of the investment and reinvestment thereof and as may be
reduced by charges thereto and payments and setoffs therefrom to compensate or
reimburse Escrow Agent for amounts owing to it pursuant hereto, the “Deposit”) to be
held by

 1
 

 

Escrow Agent in
accordance with the terms hereof for the purpose of providing a source of funds
for the indemnification of GEOK pursuant to Article VIII of the Purchase
Agreement.  Subject to and in accordance
with the terms and conditions hereof, Escrow Agent agrees that it shall
receive, hold in escrow, invest and reinvest and release or distribute the
Deposit.  It is hereby expressly
stipulated and agreed that all interest and other earnings on the Deposit shall
become a part of the Deposit for all purposes, and that all losses resulting
from the investment or reinvestment thereof from time to time and all amounts
charged thereto to compensate or reimburse Escrow Agent from time to time for
amounts owing to it hereunder shall from the time of such loss or charge no
longer constitute part of the Deposit.

4.                                       Investment
of the Deposit.  Escrow Agent shall
invest and reinvest the Deposit in U.S. government Treasury bills, U.S.
government guaranteed securities or Aim STIT Prime Portfolio — Private Class
(the “Default Investments”) unless
and until directed jointly in writing by the Other Parties to invest in other
securities (the “Other Investments”). If at
the time the Other Investments expire and the Other Parties have not provided
joint written instruction as to reinvestment, Escrow Agent shall reinvest the
Deposit or any portion thereof (applicable to the foregoing) in the Default
Investments. Such written instructions with respect to Other Investments
referred to in the foregoing sentence shall specify the type and identity of
the investments to be purchased and/or sold and shall also include the name of
the broker-dealer, if any, which the Other Parties jointly direct Escrow Agent
to use in respect of such investment, any particular settlement procedures
required, if any (which settlement procedures shall be consistent with industry
standards and practices), and such other information as Escrow Agent may
require. Escrow Agent shall not be liable for failure to invest or reinvest
funds absent sufficient written direction. Unless Escrow Agent is otherwise
directed in such written instructions, Escrow Agent may use a broker-dealer of
its own selection, including a broker-dealer owned by or affiliated with Escrow
Agent or any of its affiliates. The Escrow Agent or any of its affiliates may
receive usual and customary compensation with respect to any investment
directed hereunder. It is expressly agreed and understood by the Other Parties
that Escrow Agent shall not in any way whatsoever be liable for losses on any
investments, reinvestments or liquidations made pursuant to this Agreement and
in accordance with this Section 4, other than as a result of bad faith, willful
misconduct or gross negligence.

Receipt, investment and reinvestment of the Deposit
shall be confirmed by Escrow Agent as soon as practicable by account statement
to each of the Other Parties, and any discrepancies in any such account
statement shall be noted by the Other Parties to Escrow Agent within 30
calendar days after receipt thereof. Failure to inform Escrow Agent in writing
of any discrepancies in any such account statement within said 30-day period
shall conclusively be deemed confirmation of such account statement in its
entirety. For purposes of this paragraph, each account statement shall be
deemed to have been received by the Party to whom directed on the earlier to
occur of (i) actual receipt thereof and (ii) three (3) “Business Days”
(hereinafter defined) after the deposit thereof in the United States mail,
postage prepaid. For the purposes of this Agreement, the term “Business Day”
shall mean any day of the year, excluding Saturday, Sunday and any other day on
which national banks are required or authorized to close in Houston, Texas.

 2
 

 

5.                                       Disbursement
of Deposit Pursuant to Purchase Agreement.

(a)                                  Escrow
Agent shall make disbursements of the Deposit in accordance with the terms of
this Agreement as follows:

(i)                                     GEOK
shall submit written claims (each a “Claim,”
and collectively, the “Claims”)
to Escrow Agent prior to 5:00 p.m. Houston, Texas time on April 8, 2008 (the “Claims Submission Deadline”)
containing the following information and/or statements:

(1)                                  that
GEOK is entitled to indemnification pursuant to the Purchase Agreement
described in this Agreement;

(2)                                  a
brief description in reasonable detail of the facts, circumstances or events
giving rise to GEOK’s Claim, including, without limitation, the identity and
address of any third party claimant and copies of any formal demand and
complaint, if applicable;

(3)                                  the
liquidated amount of GEOK’s Claim, or if not liquidated, GEOK’s good faith
estimate of the reasonably foreseeable maximum amount of GEOK’s Claim; and

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

(ii)                                  Escrow
Agent shall notify Sellers of Escrow Agent’s receipt of such Claim and the date
of such receipt.

(iii)                               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:

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

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

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

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

(iv)                              GEOK
and Grant Geophysical, Inc. and its subsidiaries shall provide Sellers with
reasonable access to its premises, books and records during such entity’s
regular business hours and shall furnish such information as Sellers shall
reasonably request from time to time, in each case to the extent reasonably
necessary in connection with the verification of a Claim.

 3
 

 

(v)                                 Escrow
Agent shall notify GEOK of Escrow Agent’s receipt of such Objection Notice and
the date of such receipt.

(vi)                              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.

(vii)                           Escrow
Agent shall notify GEOK of Escrow Agent’s receipt of a Consent and the date of
such receipt.

(viii)                        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 GEOK to the extent of any remaining
Deposit then available.

(ix)                                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 Escrow Agent has disbursed amounts from the Deposit to
GEOK to pay each such Claim, Escrow Agent shall disburse all of the remaining
Deposit 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 Escrow
Agent has not disbursed amounts from the Deposit to GEOK to pay each such
Claim(s), Escrow Agent shall disburse any of the remaining Deposit to the extent
that such amount exceeds the amount of the Claim or Claims pending as of the
Claims Submission Deadline.  Promptly
following the Claims Submission Deadline, GEOK shall submit a written
instruction authorizing the Escrow Agent to make the disbursement contemplated
by the preceding sentence.  To the extent
any amount of the Deposit remains after the Claims Submission Deadline with
respect to any pending Claim or Claims, promptly following the resolution of
such Claim or Claims, GEOK shall submit a written instruction authorizing the
Escrow Agent to disburse the amount of such remaining Deposit, if any, to
Sellers.

(x)                                   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.

(xi)                                Notwithstanding
any provision hereof to the contrary, Escrow Agent shall not disburse all or
any portion of the Deposit to GEOK with respect to any Claim until Escrow Agent
receives one of the following for such Claim:

 4
 

 

(1)                                  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 any remaining Deposit) to GEOK the amount of such undisputed
portion of such Claim only; or

(2)                                  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 any remaining Deposit) to GEOK the amount of such Claim; or

(3)                                  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 Deposit (to the extent of any remaining Deposit) in accordance
with such final decision.

6.                                       Disbursement
of Deposit Generally. 
Notwithstanding the terms of this Agreement, the Escrow Agent is
entitled to disburse the Deposit at any time as follows:

(a)                                  To
Escrow Agent as and to the extent expressly permitted by this Agreement;

(b)                                 Into
the registry of the court in accordance with Sections 10 or 18; or

(c)                                  Upon
receipt by Escrow Agent of a certified copy of a final, nonappealable judgment,
order or decree of a court of competent jurisdiction awarding all or any
portion of the Deposit to or between GEOK and Sellers, the Deposit (or the
portion thereof subject to such award) shall be disbursed in accordance with
such judgment, order or decree.

Notwithstanding anything contained herein or elsewhere
to the contrary, the Other Parties hereby expressly agree that Escrow Agent
shall be entitled to charge the Deposit for, and pay and set-off from the
Deposit, any and all amounts, if any, then owing to Escrow Agent pursuant to
this Agreement prior to the disbursement of the Deposit in accordance with this
Section 6.

7.                                       Tax
Matters.  Each of the Other Parties
shall provide Escrow Agent with its taxpayer identification number documented
by an appropriate Form W8 or Form W9 upon execution of this Agreement.  Failure to so provide such forms may prevent
or delay disbursements from the Deposit and may also result in the assessment
of a penalty and Escrow Agent’s being required to withhold tax on any interest
or other income earned on the Deposit. Any payments of income shall be subject
to applicable withholding regulations then in force in the United States or any
other jurisdiction, as applicable.

8.                                       Scope
of Undertaking.  Escrow Agent’s
duties and responsibilities in connection with this Agreement shall be purely
ministerial and shall be limited to those expressly set forth in this
Agreement.   Escrow Agent is not a principal,
participant or beneficiary in any transaction underlying this Agreement and
shall have no duty to inquire beyond the terms and provisions

 5
 

 

hereof. Escrow Agent
shall have no responsibility or obligation of any kind in connection with this
Agreement or the Deposit and shall not be required to deliver the Deposit or
any part thereof or take any action with respect to any matters that might
arise in connection therewith, other than to receive, hold, invest, reinvest
and deliver the Deposit as herein provided. Without limiting the generality of
the foregoing, it is hereby expressly agreed and stipulated by the Parties that
Escrow Agent shall not be required to exercise any discretion hereunder and
shall have no investment or management responsibility and, accordingly, shall
have no duty to, or liability for its failure to, provide investment
recommendations or investment advice to GEOK and Sellers or any of them.   Escrow Agent shall not be liable for any
error in judgment, any act or omission, any mistake of law or fact, or for
anything it may do or refrain from doing in connection herewith, except for,
subject to Section 9 hereinbelow, its own bad faith, willful misconduct or
gross negligence.  Except in the case of
Escrow Agent’s bad faith, willful misconduct or gross negligence, it is the
intention of the Parties that Escrow Agent shall never be required to use,
advance or risk its own funds or otherwise incur financial liability in the
performance of any of its duties in the exercise of any of its rights and
powers hereunder.

9.                                       Reliance;
Liability.  Escrow Agent may rely on,
and shall not be liable for acting or refraining from acting in accordance
with, any written notice, instruction or request or other paper furnished to it
hereunder or pursuant hereto and believed by it to have been signed or
presented by the proper party or parties. 
Escrow Agent shall be responsible for holding, investing, reinvesting
and disbursing the Deposit pursuant to this Agreement; provided, however, that
in no event shall Escrow Agent be liable for any lost profits, lost savings, or
other special exemplary, consequential or incidental damages in excess of
Escrow Agent’s fee hereunder and provided, further, that Escrow Agent shall
have no liability for any loss arising from any cause beyond its control,
including, but not limited to, the following: (a) acts of God, force majeure,
including, without limitation, war (whether or not declared or existing),
revolution, insurrection, riot, civil commotion, accident, fire, explosion,
stoppage of labor, strikes and other differences with employees; (b) the act;
failure or neglect of any Other Party or any agent or correspondent or any
other person selected by Escrow Agent; (c) any delay, error, omission or
default of any mail, courier, telegraph, cable or wireless agency or operator;
or (d) the acts or edicts of any government or governmental agency or other
group or entity exercising governmental powers over the parties hereto. Escrow
Agent is not responsible or liable to any manner whatsoever for the
sufficiency, correctness, genuineness or validity of the subject matter of this
Agreement or any part hereof or for the transaction or transactions requiring
or underlying the execution of this Agreement, the form or execution hereof or
for the identity or authority of any person executing this Agreement or any
part hereof or depositing the Deposit.

10.                                 Right
of Interpleader.  Should any
controversy arise involving the Parties or any of them or any other person,
firm or entity with respect to this Agreement, the Deposit or an Objection
Notice, or should a substitute escrow agent fail to be designated as provided
in Section 18 hereof, Escrow Agent shall have the right, but not the
obligation, either to (a) withhold delivery of the Deposit until the
controversy is resolved, the conflicting demands are withdrawn or its doubt is
resolved or (b) institute a petition for interpleader in any court of competent
jurisdiction to determine the rights of the Parties.  In the event Escrow Agent is a party to any
dispute, Escrow Agent shall have the additional right to refer such controversy
to binding arbitration provided that in such circumstances, Escrow Agent shall
institute a petition for interpleader. 
Should a petition for interpleader be instituted, or should Escrow Agent
be

 6
 

 

threatened with
litigation or become involved in litigation or binding arbitration in any
manner whatsoever in connection with this Agreement or the Deposit (other than
in the case of Escrow Agent’s bad faith, willful misconduct or gross
negligence), the Other Parties hereby jointly and severally agree to reimburse
Escrow Agent for its attorneys’ fees and any and all other expenses, losses,
costs and damages incurred by Escrow Agent in connection with or resulting from
such threatened or actual litigation or arbitration prior to any disbursement
hereunder.

11.                                 Indemnification.  GEOK and Sellers hereby jointly and severally
agree to indemnify and defend Escrow Agent, its officers, directors, partners,
employees and agents (each herein called an “Indemnified
Party”) against, and hold each Indemnified Party harmless from,
any and all expenses, including, but not limited to, fees and expenses of
outside counsel, court costs, costs, damages and claims, costs of
investigation, litigation and arbitration, tax liability (other than for income
taxes on fees earned hereunder) and loss on investments suffered or incurred by
any Indemnified Party in connection with or arising from or out of (i) the
execution, delivery or performance of this Agreement or (ii) the compliance or
attempted compliance by any Indemnified Party with any instruction or direction
upon which Escrow Agent is authorized to rely under this Agreement, except to
the extent that any such expense, costs, damages or liability may result from
the bad faith, willful misconduct or gross negligence of such Indemnified
Party.  IT IS THE
EXPRESS INTENT OF EACH OF GEOK AND SELLERS TO INDEMNIFY EACH OF THE INDEMNIFIED
PARTIES FOR, AND HOLD THEM HARMLESS AGAINST, THEIR OWN NEGLIGENT ACTS OR
OMISSIONS EXCEPT FOR SUCH ACTS OR OMISSIONS AS MAY RESULT FROM THE BAD FAITH,
WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF SUCH INDEMNIFIED PARTY.

12.                                 Compensation
and Reimbursement of Expenses.  Each
of GEOK and Sellers agree to bear and pay to Escrow Agent for its services
hereunder 50% of all fees in accordance with Escrow Agent’s fee schedule
attached hereto as Exhibit A and made a part hereof for all purposes and all
customary expenses incurred by Escrow Agent in connection with the performance
of its duties hereunder and otherwise in connection with the preparation,
operation and administration of this Agreement in the ordinary course,
including without limitation, attorneys’ fees, brokerage costs and related
expenses incurred by Escrow Agent (collectively, “Ordinary
Fees and Expenses”); provided that if Escrow Agent engages legal
counsel or exercises its rights under Section 10 or Section 11, then each of
the Other Parties shall be jointly and severally obligated to pay the fees and
expenses associated with such engagement or exercise of such rights.  In the event either GEOK or Sellers for any
reason fails to pay any Ordinary Fees and Expenses as and when the same are
due, such unpaid fees and expenses shall be charged to and set-off and paid
from the Deposit by Escrow Agent without any further notice.  If, pursuant to the immediately preceding
sentence hereof, either GEOK or Sellers bears, through a charge to or set-off
against the Deposit, such fees and expenses, the Party failing to pay its
portion of the Ordinary Fees and Expenses shall reimburse the other Party for
the amount paid within thirty (30) calendar days following written demand
therefor.

13.                                 Lien.  Each of GEOK and Sellers hereby grants to
Escrow Agent a lien upon, and security interest in, all its right, title and
interest in and to all of the Deposit as security for the payment and
performance of its obligations owing to Escrow Agent hereunder, including,
without limitation, its obligations of payment, indemnity and reimbursement provided
for

 7
 

 

hereunder, which lien and
security interest may be enforced by Escrow Agent after written notice by
charging and setting-off against, and paying from, the Deposit any and all
amounts then owing to it pursuant to this Agreement or by appropriate foreclosure
proceedings.

14.                                 Funds
Transfer.  In the event funds
transfer instructions are given (other than in writing at the time of execution
of the Agreement), whether in writing, by fax, or otherwise, Escrow Agent is
authorized to seek confirmation of such instructions by telephone call-back to
the person or persons designated on Exhibit B hereto, and Escrow Agent may rely
upon the confirmations of anyone purporting to be the person or persons so
designated. If Escrow Agent is unable to contact any of the authorized
representatives identified in Exhibit B, Escrow Agent is hereby authorized to
seek confirmation of such instructions by telephone call-back to any one or
more of your executive officers (each an “Executive Officer”),
which shall include the President and Vice President, as Escrow Agent may
select. Such “Executive Officer” shall deliver to Escrow Agent a fully executed
Incumbency Certificate, and Escrow Agent may rely upon the confirmation of
anyone purporting to be any such officer. The persons and telephone numbers for
call-backs may be changed only in writing actually received and acknowledged by
Escrow Agent. The Parties acknowledge that such security procedure is
commercially reasonable.

It is understood that Escrow Agent and the beneficiary’s
bank in any funds transfer may rely solely upon any account numbers or similar
identifying numbers provided by either of the Other Parties hereto to identify
(i) the beneficiary, (ii) the beneficiary’s bank, or (iii) an intermediary
bank. The Escrow Agent may apply any of the escrowed funds for any payment
order it executes using any such identifying number, even where its use may
result in a person other than the beneficiary being paid, or the transfer of
funds to a bank other than the beneficiary’s bank or an intermediary bank,
designated.

15.                                 Notices.  Any notice or other communication required or
permitted to be given under this Agreement by any Party to any other Party
shall be considered as properly given if in writing and (a) delivered against
receipt therefor, (b) mailed by registered or certified mail, return receipt
requested and postage prepaid or (c) sent by fax machine, in each case to the
address or fax number, as the case may be, set forth below:

If to Escrow
Agent:

Zions First National Bank
– Corporate Trust

c/o Amegy Bank N. A.

1801 Main Street, Suite
800

Houston, Texas 77002

Attention: Riley Salyer

Fax No.: (713) 561-0123

Telephone No.: (713)
232-6023

 8
 

 

If to Sellers:

Elliott Associates, L.P.

Elliott International,
L.P.

Cleveland House

33 King Street

London, SW1Y 6RJ (UK)
Limited

Attention: Jon Pollock,
Senior Portfolio Manager

Fax No.:
011-44-788-183-6662

Telephone No.: 011
-44-207-518-1806

 

With a copy to:

Akin Gump Strauss Hauer
& Feld LLP

1111 Louisiana St., 44th
Floor

Houston, TX 77002-5200

Attention: James L. Rice
III

Fax No.: (713) 236-0822

Telephone No.: (713)
220-8116

 

If to GEOK:

Geokinetics Inc.

One Riverway, Suite 2100

Houston, TX 77056

Attention: David A.
Johnson, President & CEO

Fax No.: (713) 850-7330

Telephone No.: (713)
850-7600

 

With a copy to:

Chamberlain, Hrdlicka,
White, Williams & Martin

1200 Smith Street, Suite
1400

Houston, TX 77002

Attention: James J.
Spring, III

Fax No.: (713) 658-2553

Telephone No.: (713)
658-2572

 

Except to the extent otherwise provided in the second
paragraph of Section 4 hereinabove, delivery of any communication given in
accordance herewith shall be effective only upon actual receipt thereof by the
Party or Parties to whom such communication is directed. Any Party may change
the address to which communications hereunder are to be directed by giving
written notice to the other Party or Parties in the manner provided in this
section. All signatures of the Parties may be transmitted by facsimile, and
such facsimile will, for all purposes, be deemed to be the original signature
of such Party whose signature it reproduces, and will be binding upon such
Party.

16.                                 Consultation
with Legal Counsel.  Escrow Agent may
consult with its counsel or other counsel satisfactory to it concerning any
question relating to its duties or responsibilities hereunder or otherwise in
connection herewith and shall not be liable for any action taken, suffered or
omitted by it in good faith upon the advice of such counsel.

 9
 

 

17.                                 Choice
of Laws; Cumulative Rights.  This
Agreement shall be construed under, and governed by, the laws of the State of
Texas, excluding, however its choice of law rules. All of Escrow Agent’s rights
hereunder are cumulative of any other rights it may have at law, in equity or
otherwise. The Parties agree that the forum for resolution of any dispute
arising under this Agreement shall be Harris County, Texas, and each of GEOK
and Sellers hereby consents, and submits itself, to the jurisdiction of any
state or federal court sitting in Harris County, Texas.

18.                                 Resignation.  Escrow Agent may resign hereunder upon twenty
(20) Business Days’ prior notice to the Other Parties.   Upon the effective date of such resignation,
Escrow Agent shall deliver the Deposit to any substitute escrow agent
designated jointly by the Other Parties in writing.  If the Other Parties fail jointly to
designate a substitute escrow agent within fifteen (15) Business Days after the
giving of such notice, Escrow Agent may institute a petition for interpleader.
Escrow Agent’s sole responsibility after such notice period expires shall be to
hold the Deposit (without any obligation to reinvest the same) and to deliver
the same to a designated substitute escrow agent, if any, or in accordance with
the directions of a final, nonappealable judgment, order or decree of a court
of competent jurisdiction, at which time of delivery Escrow Agent’s obligations
hereunder shall cease and terminate. The Escrow Agent shall, if requested in
writing by GEOK and Sellers, execute such agreements, assignments and other
documents (in form and substance reasonably acceptable to Escrow Agent) as
shall be necessary to transfer to the substitute escrow agent all duties and
obligations of Escrow Agent under this Agreement and in the investments made
pursuant to this Agreement.

19.                                 Assignment.  This Agreement shall not be assigned by any
Party without the prior written consent of the other Parties (including,
without limitation and for the avoidance of doubt, Escrow Agent) hereto (the
assigns of any Party for which such requisite consent is received being
hereinafter referred to collectively as “Permitted Assigns”).

20.                                 Severability.  If one or more of the provisions hereof shall
for any reason be held to be invalid, illegal or unenforceable in any respect
under applicable law, such invalidity, illegality or unenforceability shall not
affect any other provisions hereof, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein, and the remaining provisions hereof shall be given full force and
effect.

21.                                 Termination.  This Agreement shall terminate upon the
disbursement, in accordance with Sections 5, 6 or 18 hereof, of the Deposit in
full; provided, however, that in the event all fees, expenses, costs and other
amounts required to be paid to Escrow Agent hereunder are not fully and finally
paid prior to termination, the provisions of Section 12 hereof shall survive
the termination hereof and, provided further, that the last two sentences of
Section 10 hereof and the provisions of Section 11 hereof shall, in any event,
survive the termination hereof.

22.                                 General.  The section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. This Agreement and any affidavit,
certificate, instrument, agreement, written instructions or other document
required to be provided hereunder may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which taken together
shall constitute but one and the same instrument.   Unless the context shall otherwise require,
the singular shall include the plural and vice-versa, and each pronoun in any
gender shall include all other genders.

 10
 

 

The terms and provisions
of this Agreement constitute the entire agreement among the Parties in respect
of the subject matter hereof (except for the Purchase Agreement as between the
Other Parties), and neither of GEOK or Sellers nor Escrow Agent has relied on
any representations or agreements of the other, except as specifically set
forth in this Agreement.  This Agreement
or any provision hereof may be amended, modified, waived or terminated only by
written instrument duly signed by all the Parties. This Agreement shall inure
to the benefit of, and be binding upon, the Parties and their respective heirs,
devisees, executors, administrators, personal representatives, successors,
trustees, receivers and Permitted Assigns. 
This Agreement is for the sole and exclusive benefit of GEOK, Sellers
and Escrow Agent, and nothing in this Agreement, express or implied, is
intended to confer or shall be construed as conferring upon any other person
any rights remedies or any other type or types of benefits.

23.                                 Dispute
Expenses.  In the event of a dispute
between GEOK and Sellers with respect to the distribution of the Deposit, the
prevailing party shall be entitled to be reimbursed by the other party for all
reasonable costs, including attorneys fees, incurred as a result of such
dispute.

[Remainder of Page Intentionally Blank]

 11
 

 

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement to be effective as of the date first above written.

Tax Certification:  Taxpayer ID#:

 

NOTE:  The following certification shall be used by
and for a U.S. resident only. 
Non-residents must use and provide Form W8-BEN

 

Customer is a (check one):

 

	
  o
  Corporation

  	
   

  	
  o
  Municipality

  	
   

  	
  x
  Partnership

  	
   

  	
  o
  Non-profit or Charitable Org

  
	
  o
  Individual

  	
   

  	
  o
  REMIC

  	
   

  	
  o
  Trust

  	
   

  	
  o
  Other

  

 

Under the penalties of perjury,
the undersigned certifies that:

 

(1)             the entity is organized under the
laws of the United States

 

(2)             the number shown above is its correct
Taxpayer Identification Number (or it is wailing for a number to be issued to
it); and

 

(3)             it is not subject to backup withholding
because: (a) it is exempt from backup withholding or (b) it has not been
notified by the Internal Revenue Service (IRS) that it is subject to backup
withholding as a result of failure to report all interest or dividends, or (c)
the IRS has notified it that it is no longer subject to backup withholding.

 

(If the entity is subject to backup
withholding, cross out the words after the (3) above.)

 

Investors who do not supply a tax
identification number will be subject to backup withholding in accordance with
IRS regulations.

 

Note:
The IRS does not require your consent to any provision of this document other
than the certifications required to avoid backup withholding.

	
  

  	
  ELLIOTT ASSOCIATES, L.P.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Elliott Capital Advisors, L.P., as General Partner

  
	
   

  	
   

  	
  By:

  	
  Braxton Associates, Inc., as General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   /s/ Elliot
  Greenberg

  
	
   

  	
   

  	
   

  	
   

  	
          Elliot
  Greenberg, Vice President

  
	
   

  	
   

  	
   

  
	
  Non-U.S.
  resident - see Form W8-BEN

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

	
  

  	
  ELLIOTT INTERNATIONAL, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Elliott International Capital Advisors, L.P.,

  
	
   

  	
   

  	
  as Attorney-in-Fact

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ Elliot
  Greenberg

  
	
   

  	
   

  	
   

  	
       Elliot Greenberg, Vice
  President

  

 

 12
 

 

Tax Certification:  Taxpayer ID#:

 

NOTE:  The following certification shall be used by
and for a U.S. resident only. 
Non-residents must use and provide Form W8-BEN

 

Customer is a (check one):

 

	
  xCorporation

  	
   

  	
  oMunicipality

  	
   

  	
  oPartnership

  	
   

  	
  oNon-profit or Charitable Org

  
	
  oIndividual

  	
   

  	
  oREMIC

  	
   

  	
  oTrust

  	
   

  	
  oOther

  

 

Under the penalties of perjury,
the undersigned certifies that:

 

(1)             the entity is organized under the
laws of the United States

 

(2)             the number shown above is its correct
Taxpayer Identification Number (or it is wailing for a number to be issued to
it); and

 

(3)             it is not subject to backup withholding
because: (a) it is exempt from backup withholding or (b) it has not been
notified by the Internal Revenue Service (IRS) that it is subject to backup
withholding as a result of failure to report all interest or dividends, or (c)
the IRS has notified it that it is no longer subject to backup withholding.

 

(If the entity is subject to backup
withholding, cross out the words after the (3) above.)

 

Investors who do not supply a tax
identification number will be subject to backup withholding in accordance with
IRS regulations.

 

	
   

  	
  GEOKINETICS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ David A. Johnson

  
	
   

  	
  Name: David A.
  Johnson

  
	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ZIONS
  FIRST NATIONAL BANK,

  
	
   

  	
  as Escrow Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Riley A. Salyer

  
	
   

  	
  Name:

  	
  Riley A. Salyer

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

 13
 

 

EXHIBIT A

ZIONS FIRST NATIONAL
BANK.

Escrow Fee Schedule

RE: Elliott /
Geokinetics Purchase Agreement Escrow

$3,000.00 - annual
fee

$25 per
disbursement over 20 per annum

 14
 

 

EXHIBIT B

Account Name:  Elliott / Geokinetics Purchase Agreement
Escrow

Account Number: 

Certificate of

Authorized Persons

The following persons are authorized to direct Escrow
Agent regarding any transactions to this Agreement including, but not, limited
to, investment and/or disbursement of the Deposit.

	
  “Sellers”

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name: Jon
  Pollock

  	
   

  	
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name: Elliot
  Greenberg

  	
   

  	
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “GEOK”

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name: David A.
  Johnson

  	
   

  	
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name: Chin Yu

  	
   

  	
  Signature

  	
   

  	
   

  

 

 15

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