THE SECURITIES REPRESENTED HEREBY MAY NOT BE
TRANSFERRED UNLESS (I) SUCH SECURITIES HAVE BEEN REGISTERED FOR
SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, (II) SUCH
SECURITIES ARE SOLD PURSUANT TO RULE 144 UNDER THE SECURITIES ACT
OF 1993, AS AMENDED, OR ANY RULE PROMULGATED UNDER SUCH ACT WHICH
IS A SUCCESSOR TO RULE 144, OR (III) THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER
MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY THE
SECURITIES.
SUBJECT TO THE
PROVISIONS OF SECTION 10 HEREOF, THIS WARRANT SHALL BE VOID AFTER
5:00 P.M. EASTERN TIME ON JULY 28, 2013 [FIFTH ANNIVERSARY OF THE
CLOSING DATE] (THE “EXPIRATION DATE”).
GEOKINETICS
INC. WARRANT TO PURCHASE 50,080 SHARES OF COMMON STOCK, PAR VALUE
$0.01 PER SHARE
For VALUE
RECEIVED, Avista Capital Partners (Offshore), L.P.
(“Warrantholder”), is entitled to purchase, subject to
the provisions of this Warrant, from Geokinetics Inc., a Delaware
corporation (“Company”), at any time from and after the
Initial Exercise Date (as defined below) and not later than 5:00
P.M., Eastern time, on the Expiration Date (as defined above), at
an exercise price per share equal to $20.00 (the exercise price in
effect being herein called the “Warrant Price”), 50,080
shares (“Warrant Shares”) of the Company’s Common
Stock, par value $0.01 per share (“Common
Stock”). The number of Warrant Shares purchasable
upon exercise of this Warrant and the Warrant Price shall be
subject to adjustment from time to time as described
herein.
This Warrant is
one of a series of Warrants of like tenor issued by the Company
pursuant to that certain Series B-2 and Warrant Purchase Agreement
dated July 28, 2008, among the Company and the Investors named
therein (the “Purchase Agreement”), and initially
covering an aggregate of up to 240,000 shares of Common Stock
(collectively, the “2008 Warrants”).
As used herein,
“Initial Exercise Date” shall mean July 29,
2008.
Section
1.
Registration . The Company shall maintain books
for the transfer and registration of the Warrant. Upon
the initial issuance of this Warrant, the Company shall issue and
register the Warrant in the name of the Warrantholder.
Section
2.
Transfers . As provided herein, this Warrant may
be transferred only pursuant to a registration statement filed
under the Securities Act of 1933, as amended (the “Securities
Act”), or an exemption from such
registration. Subject to such restrictions, the Company
shall transfer this Warrant from time to time upon the books to be
maintained by the Company for that purpose, upon surrender hereof
for transfer, properly endorsed or accompanied by appropriate
instructions for transfer and such other documents as may be
reasonably required by the Company, including, if required by the
Company, an opinion of its counsel to the effect that such transfer
is exempt from the registration requirements of the Securities Act,
to establish that such transfer is being made in accordance with
the terms hereof, and a new Warrant shall be issued to the
transferee and the surrendered Warrant shall be canceled by the
Company.
Section
3.
Exercise of Warrant . Subject to the provisions
hereof, the Warrantholder may exercise this Warrant, in whole or in
part, at any time after the Initial Exercise Date and prior to its
expiration upon surrender of the Warrant, together with delivery of
a duly executed Warrant exercise form, in the form attached hereto
as Appendix A (the “Exercise Agreement”) and payment by
cash, certified check or wire transfer of funds (or, in certain
circumstances, by cashless exercise as provided below) of the
aggregate Warrant Price for that number of Warrant Shares then
being purchased, to the Company during normal business hours on any
business day at the Company’s principal executive offices (or
such other office or agency of the Company as it may designate by
notice to the Warrantholder). The Warrant Shares so
purchased shall be deemed to be issued to the Warrantholder or the
Warrantholder’s designee, as the record owner of such shares,
as of the close of business on the date on which this Warrant shall
have been surrendered (or the date evidence of loss, theft or
destruction thereof and security or indemnity satisfactory to the
Company has been provided to the Company), the Warrant Price shall
have been paid and the completed Exercise Agreement shall have been
delivered. Certificates for the Warrant Shares so
purchased shall be delivered to the Warrantholder within a
reasonable time, not exceeding three (3) business days, after this
Warrant shall have been so exercised. The certificates
so delivered shall be in such denominations as may be requested by
the Warrantholder and shall be registered in the name of the
Warrantholder or such other name as shall be designated by the
Warrantholder, as specified in the Exercise
Agreement. If this Warrant shall have been exercised
only in part, then, unless this Warrant has expired, the Company
shall, at its expense, at the time of delivery of such
certificates, deliver to the Warrantholder a new Warrant
representing the right to purchase the number of shares with
respect to which this Warrant shall not then have been
exercised. As used herein, “business day”
means a day, other than a Saturday or Sunday, on which banks in New
York City are open for the general transaction of
business. Each exercise hereof shall constitute the
re-affirmation by the Warrantholder that the representations and
warranties contained in Section 5 of the Purchase Agreement are
true and correct in all material respects with respect to the
Warrantholder as of the time of such
exercise. Notwithstanding the foregoing, to effect the
exercise of the Warrant hereunder, the Warrantholder shall not be
required to physically surrender this Warrant to the Company unless
the entire Warrant is exercised. The Warrantholder and
the Company shall maintain records showing the amount exercised and
the dates of such exercise. The Warrantholder and any
assignee, by acceptance of this Warrant, acknowledge and agree
that, by reason of the provision of the paragraph, following
exercise of a portion of the Warrant, the number of Warrant Shares
of this Warrant may be less than the amount stated on the face
hereof.
Section
4.
Compliance with the Securities Act of 1933 . Except as
provided in the Purchase Agreement, the Company may cause the
legend set forth on the first page of this
Warrant to be
set forth on each Warrant, and a similar legend on any security
issued or issuable upon exercise of this Warrant, unless counsel
for the Company is of the opinion as to any such security that such
legend is unnecessary.
Section
5.
Payment of Taxes . The Company will pay any
documentary stamp taxes attributable to the initial issuance of
Warrant Shares issuable upon the exercise of the Warrant; provided,
however, that the Company shall not be required to pay any tax or
taxes which may be payable in respect of any transfer involved in
the issuance or delivery of any certificates for Warrant Shares in
a name other than that of the Warrantholder in respect of which
such shares are issued, and in such case, the Company shall not be
required to issue or deliver any certificate for Warrant Shares or
any Warrant until the person requesting the same has paid to the
Company the amount of such tax or has established to the
Company’s reasonable satisfaction that such tax has been
paid. The Warrantholder shall be responsible for income
taxes due under federal, state or other law, if any such tax is
due.
Section
6.
Mutilated or Missing Warrants . In case this
Warrant shall be mutilated, lost, stolen, or destroyed, the Company
shall issue in exchange and substitution of and upon surrender and
cancellation of the mutilated Warrant, or in lieu of and
substitution for the Warrant lost, stolen or destroyed, a new
Warrant of like tenor and for the purchase of a like number of
Warrant Shares, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction of
the Warrant, and with respect to a lost, stolen or destroyed
Warrant, reasonable indemnity or bond with respect thereto, if
requested by the Company.
Section
7.
Reservation of Common Stock . At any time when
this Warrant is exercisable, the Company shall at all applicable
times keep reserved until issued (if necessary) as contemplated by
this Section 7, out of the authorized and unissued shares of Common
Stock, sufficient shares to provide for the exercise of the rights
of purchase represented by this Warrant. The Company
agrees that all Warrant Shares issued upon due exercise of the
Warrant shall be, at the time of delivery of the certificates for
such Warrant Shares, duly authorized, validly issued, fully paid
and non-assessable shares of Common Stock of the
Company.
Section
8.
Adjustments . Subject and pursuant to the
provisions of this Section 8, the Warrant Price and number of
Warrant Shares subject to this Warrant shall be subject to
adjustment from time to time as set forth hereinafter.
A.
Warrant Price Adjustment .
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If the Company
shall issue, on or after the Initial Exercise Date, any Additional
Stock (as defined below) for a consideration per share less than
the Warrant Price in effect immediately prior to the issuance of
such Additional Stock, and if the aggregate dollar amount of all
previous issuances of Additional Stock since the Initial Exercise
Date is less than $50,000,000 (determined by aggregating all
previous issuances of Additional Stock made after the Initial
Exercise Date) the Warrant Price for the Series B Preferred Stock
in effect immediately prior to each such issuance shall forthwith
be adjusted to a price equal to the per share consideration paid or
given for such Additional Stock; provided , however ,
if the Company shall issue, on or after the Initial Exercise Date,
any Additional Stock after the aggregate amount of previous
issuances made after the Initial Exercise Date are in excess of
$50,000,000 (determined
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by aggregating
all previous issuances of Additional Stock made after the Initial
Exercise Date) for a consideration per share less than the Warrant
Price in effect immediately prior to the issuance of such
Additional Stock, the Warrant Price in effect immediately prior to
each such issuance shall forthwith be adjusted to a price
determined by multiplying such Warrant Price by a fraction, the
numerator of which shall be the number of shares of Common Stock
Outstanding (as defined below) immediately prior to such issuance
plus the number of shares of Common Stock that the aggregate
consideration received by the Company for such issuance would
purchase at such Warrant Price; and the denominator of which shall
be the number of shares of Common Stock Outstanding (as defined
below) immediately prior to such issuance plus the number of shares
of such Additional Stock. For purposes of this Section
8(A), the term “ Common Stock Outstanding ”
shall mean and include the following: (1) outstanding Common Stock,
(2) Common Stock issuable upon exercise of outstanding stock
options, (3) Common Stock issuable upon exercise of outstanding
warrants to purchase Common Stock, (4) Common Stock issuable upon
conversion of the Series B Preferred Stock, and (5) Common Stock
issuable upon the conversion of any other series or class of equity
securities issued after the date hereof which is convertible into
shares of Common Stock. Shares described in (1) through
(3) above shall be included whether vested or unvested, whether
contingent or non-contingent and whether exercisable or not yet
exercisable.
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No adjustment
of the Warrant Price shall be made in an amount less than one cent
per share, provided that any adjustments that are not required to
be made by reason of this sentence shall be carried forward and
shall be either taken into account in any subsequent adjustment
made prior to three (3) years from the date of the event giving
rise to the adjustment being carried forward, or shall be made at
the end of three (3) years from the date of the event giving rise
to the adjustment being carried forward. Except to the limited
extent provided for in subsections 8(A)(5)(c) and (5)(d), no
adjustment of such Warrant Price pursuant to this subsection
8(A)(2) shall have the effect of increasing the Warrant Price above
the Warrant Price in effect immediately prior to such
adjustment.
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In the case of
the issuance of Additional Stock for cash, the consideration shall
be deemed to be the amount of cash paid therefore before deducting
any reasonable discounts, commission or other expenses allowed,
paid or incurred by the Company for any underwriting or otherwise
in connection with the issuance and sale thereof.
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In the case of
the issuance of the Additional Stock for a consideration in whole
or in part other than cash, the consideration other than cash shall
be deemed to be the fair market value thereof as determined by the
Board of Directors irrespective of any accounting
treatment. In the event that the Warrantholder disagrees
with the determination of the fair market value of any
consideration and the Board of Directors of the Company and the
Warrantholder are unable to agree upon such fair market value, the
Company and the Warrantholder shall jointly select an appraiser,
who is experienced in such matters. The decision of such
appraiser shall be final and conclusive, and the cost of such
appraiser shall be borne equally by the Company and the
Warrantholder.
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5. In
the case of the issuance of options to purchase or rights to
subscribe for Common Stock, securities by their terms convertible
into or exchangeable for Common Stock or options to purchase or
rights to subscribe for such convertible or exchangeable
securities, the following provisions shall apply for purposes of
d
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