-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ij+DL3sgooXczxnfm3fPwKCLXpsyaW2Z4cwMdO7pVrXe37JFwRvVLKlwr24+oJvl 4199tGXPgBbAC1Wz7pxphA== 0000950136-03-001166.txt : 20030512 0000950136-03-001166.hdr.sgml : 20030512 20030512170224 ACCESSION NUMBER: 0000950136-03-001166 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20030512 GROUP MEMBERS: BLACKHAWK CAPITAL PARTNERS GROUP MEMBERS: BLACKHAWK INVESTORS, L.L.C. GROUP MEMBERS: SOMERSET CAPITAL PARTNERS GROUP MEMBERS: STEVEN A. WEBSTER GROUP MEMBERS: THOMAS H. O'NEILL, JR. GROUP MEMBERS: WILLIAM R. ZIEGLER FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BLACKHAWK INVESTORS II L L C CENTRAL INDEX KEY: 0001231659 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 230 PARK AVE. CITY: NEW YORK STATE: NY ZIP: 10169 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: GEOKINETICS INC CENTRAL INDEX KEY: 0000314606 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 941690082 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-32355 FILM NUMBER: 03693327 BUSINESS ADDRESS: STREET 1: 8401 WESTHEIMER STREET 2: SUITE 150 CITY: HOUSTON STATE: TX ZIP: 77063 BUSINESS PHONE: 7138507600 MAIL ADDRESS: STREET 1: 8401 WESTHEIMER STREET 2: SUITE 150 CITY: HOUSTON STATE: TX ZIP: 77063 SC 13D 1 file001.txt SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ------------- SCHEDULE 13D (RULE 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) (AMENDMENT NO. )(1) Geokinetics Inc. - -------------------------------------------------------------------------------- (Name of issuer) Common Stock, par value $0.01 per share - -------------------------------------------------------------------------------- (Title of class of securities) 372910 20 8 - -------------------------------------------------------------------------------- (CUSIP Number) c/o William R. Ziegler Satterlee Stephens Burke & Burke LLP 230 Park Avenue, 11th Floor New York, New York 10169; (212) 404-8775 - -------------------------------------------------------------------------------- (Name, address and telephone number of person authorized to receive notices and communications) May 02, 2003 - -------------------------------------------------------------------------------- (Date of event which requires filing of this statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1 (e), 13d-1 (f) or 13d-1 (g), check the following box [ ]. - --------------------- (1) The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). Page 1 of 69 Pages Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 (b) for other parties to whom copies are to be sent. (Continued on following pages) - ---------------------------- ----------------------- CUSIP No. 372910 20 8 13D PAGE 2 OF 69 PAGES - ---------------------------- ----------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS S.S OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS Blackhawk Investors II, L.L.C. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO (see Item 3) - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER See Item 5(b) NUMBER OF ------------------------------------------------------------ SHARES 8 SHARED VOTING POWER BENEFICIALLY See Item 5(b) OWNED BY ------------------------------------------------------------ EACH REPORTING 9 SOLE DISPOSITIVE POWER PERSON See Item 5(b) WITH ------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER See Item 5(b) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,317,804 shares of Common Stock (See Item 5 (a)) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 28.0% (See Item 5(a)) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO (Limited liability company) - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! Page 2 of 69 Pages - ---------------------------- ----------------------- CUSIP No. 372910 20 8 13D PAGE 3 OF 69 PAGES - ---------------------------- ----------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS S.S OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS Blackhawk Investors, L.L.C. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* N/A - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER See Item 5(b) NUMBER OF ------------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY See Item 5(b) OWNED BY ------------------------------------------------------- EACH REPORTING 9 SOLE DISPOSITIVE POWER PERSON See Item 5(b) WITH ------------------------------------------------------- 10 SHARED DISPOSITIVE POWER See Item 5(b) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 86,666 shares of Common Stock (See Item 5 (a)) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.46% (See Item 5(a)) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO (Limited liability company) - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! Page 3 of 69 Pages - ---------------------------- ----------------------- CUSIP No. 372910 20 8 13D PAGE 4 OF 69 PAGES - ---------------------------- ----------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS S.S OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS Blackhawk Capital Partners - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* N/A - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Texas - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER See Item 5(b) NUMBER OF ------------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY See Item 5(b) OWNED BY ------------------------------------------------------- EACH REPORTING 9 SOLE DISPOSITIVE POWER PERSON See Item 5(b) WITH ------------------------------------------------------- 10 SHARED DISPOSITIVE POWER See Item 5(b) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,404,470 shares of Common Stock (See Item 5 (a)) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 28.4% (See Item 5(a)) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! Page 4 of 69 Pages - ---------------------------- ----------------------- CUSIP No. 372910 20 8 13D PAGE 5 OF 69 PAGES - ---------------------------- ----------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS S.S OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS Somerset Capital Partners - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO; WK (see Item 3) - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER See Item 5(b) NUMBER OF ------------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY See Item 5(b) OWNED BY ------------------------------------------------------- EACH REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH See Item 5(b) ------------------------------------------------------- 10 SHARED DISPOSITIVE POWER See Item 5(b) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 339,374 shares of Common Stock (See Item 5 (a)) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.8% (See Item 5(a)) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! Page 5 of 69 Pages - ---------------------------- ----------------------- CUSIP No. 372910 20 8 13D PAGE 6 OF 69 PAGES - ---------------------------- ----------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS S.S OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS Thomas H. O'Neill, Jr. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* N/A - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER See Item 5(b) NUMBER OF ------------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY See Item 5(b) OWNED BY ------------------------------------------------------- EACH REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH See Item 5(b) ------------------------------------------------------- 10 SHARED DISPOSITIVE POWER See Item 5(b) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 339,374 shares of Common Stock (See Item 5 (a)) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.8% (See Item 5(a)) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! Page 6 of 69 Pages - ---------------------------- ----------------------- CUSIP No. 372910 20 8 13D PAGE 7 OF 69 PAGES - ---------------------------- ----------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS S.S OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS Steven A. Webster - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO; PF (See Item 3) - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER See Item 5(b) NUMBER OF ------------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY See Item 5(b) OWNED BY ------------------------------------------------------- EACH REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH See Item 5(b) ------------------------------------------------------- 10 SHARED DISPOSITIVE POWER See Item 5(b) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,819,900 shares of Common Stock (See Item 5 (a)) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 30.6% (See Item 5(a)) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! Page 7 of 69 Pages - ---------------------------- ----------------------- CUSIP No. 372910 20 8 13D PAGE 8 OF 69 PAGES - ---------------------------- ----------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS S.S OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS William R. Ziegler - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO; PF (see Item 3) - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER See Item 5(b) NUMBER OF ------------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY See Item 5(b) OWNED BY ------------------------------------------------------- EACH REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH See Item 5(b) ------------------------------------------------------- 10 SHARED DISPOSITIVE POWER See Item 5(b) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,819,900 shares of Common Stock (See Item 5 (a)) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 30.6% (See Item 5(a)) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! Page 8 of 69 Pages SCHEDULE 13D INTRODUCTION. The reporting persons named in Item 2 below are hereby jointly filing this Schedule 13D as a group solely because they may be deemed a "group" within the meaning of Rule 13d-5(b)(1) promulgated pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), by virtue of the fact that: (i) they may be deemed to have acted in concert in connection with their acquisition of certain securities of the issuer, pursuant to the terms and conditions of a certain Securities Purchase and Exchange Agreement dated as of May 2, 2003 among the Company (as hereinafter defined), some of the reporting persons, and certain other persons signatory thereto (the "Securities Purchase and Exchange Agreement"); (ii) most of the reporting persons are parties to a certain Shareholders Agreement dated as of May 2, 2003 among such reporting persons on the one hand, an unaffiliated third party shareholder on the other hand and the Company (the "Shareholders Agreement"); and (iii) due to certain affiliations and relationships among the reporting persons, some of the reporting persons may be deemed to beneficially own the same securities acquired from the Company by certain other reporting persons. In accordance with Rule 13d-1(f) promulgated pursuant to the Exchange Act, the persons named in Item 2 below have executed a written agreement relating to the joint filing of this Schedule 13D (the "Group Filing Agreement"), a copy of which is attached hereto as Exhibit I. Copies of the Securities Purchase and Exchange Agreement and the Shareholders Agreement are attached hereto as Exhibit II and Exhibit III, respectively. Blackhawk Investors, L.L.C., Blackhawk Capital Partners, Steven A. Webster and William R. Ziegler, four of the reporting persons named in Item 2 below, are also signatories to (i) a certain Schedule 13D which was jointly filed with Securities and Exchange Commission (the "Commission") on October 27, 1997 by such reporting persons (the "Initial Group Filing") because such persons may have been deemed to constitute a "group" within the meaning of Rule 13d-5(b)(1) promulgated pursuant to the Exchange Act by virtue of the fact that they may have acted in concert in connection with their acquisition of certain securities of the issuer and because of certain affiliations and relationships among such persons, and (ii) a certain Amendment No. 1 to the Initial Group Filing, which is being filed with the Commission contemporaneously with the filing of this Initial Statement of Beneficial Ownership, on Schedule 13D, to disclose a termination of such Initial Group Filing (the "Termination of Initial Group Filing") upon the filing of this Statement. ITEM 1. SECURITY AND ISSUER. This statement relates to the common stock, par value $0.01 per share (the "Common Stock") of Geokinetics Inc., a Delaware corporation (the "Company"). The address of the principal executive offices of the Company is One Riverway, Suite 2100, Houston, Texas 77056. ITEM 2. IDENTITY AND BACKGROUND. Blackhawk Investors II, L.L.C. is a Delaware limited liability company ("Blackhawk II"), that was formed recently to acquire, own and hold shares of Common Stock of the Company to Page 9 of 69 Pages be purchased in a private placement transaction pursuant to the Securities Purchase and Exchange Agreement. As Blackhawk II is a holding company that has no actual operations, it does not have a principal business or principal office address. Blackhawk II has a registered agent address in the State of Delaware and a mailing address of c/o William R. Ziegler, Satterlee Stephens Burke & Burke LLP, 230 Park Avenue, 11th Floor, New York, New York 10169. The sole managing member of Blackhawk II is BCP (as hereinafter defined). Blackhawk Investors, L.L.C. is a Delaware limited liability company ("Blackhawk I") that was formed in 1997 to acquire, own and hold the securities of the Company (inclusive of the shares of Common Stock) to be purchased by it pursuant to a prior securities purchase and exchange agreement among the Company, Blackhawk I and certain other purchasers named therein. As Blackhawk I is a holding company that has no actual operations, it does not have a principal business or principal office address. Blackhawk I has a registered agent address in the State of Delaware and a mailing address of c/o William R. Ziegler, Satterlee Stephens Burke & Burke LLP, 230 Park Avenue, 11th Floor, New York, New York 10169. The sole managing member of Blackhawk I is BCP. Blackhawk Capital Partners is a Texas general partnership ("BCP") that was formed in 1997 to serve as the sole managing member of Blackhawk I. BCP is also the sole managing member of Blackhawk II. The address of the principal business and the principal office of BCP is 14701 St. Mary's Lane, Suite 800, Houston, Texas 77079. The only partners of BCP are Steven A. Webster and William R. Ziegler. Somerset Capital Partners is a New York general partnership ("SCP"). The principal business of SCP is private investments and the address of its principal business and office is 50 Fountain Plaza, Suite 1220, Buffalo, New York 14202. The only partners of SCP are Thomas H. O'Neill, Jr., Steven A. Webster and William R. Ziegler. Thomas H. O'Neill, Jr. ("O'Neill") is a natural person and has a business address of 50 Fountain Plaza, Suite 1220, Buffalo, New York 14202. The present principal occupation or employment of O'Neill is as Chairman of Union Drilling, Inc., an oil and gas drilling company with operations in the Appalachian Basin and the Rocky Mountains, with its principal place of business located at South Pittsburgh Technology Park, 3117 Washington Pike Bridgeville, Pennsylvania 15017. O'Neill is a United States citizen. Steven A. Webster ("Webster") is a natural person and has a business address of c/o Carrizo Oil & Gas Inc., 14701 St. Mary's Lane, Suite 800, Houston, Texas 77079. The present principal occupation or employment of Webster is as Chairman of Carrizo Oil & Gas, Inc., an independent oil and gas company which is listed on the Nasdaq, with its principal place of business located at 14701 St. Mary's Lane, Suite 800, Houston, Texas 77079. Webster is a United States citizen. Webster is a director of the Company. William R. Ziegler ("Ziegler") is a natural person and has a business address of c/o Satterlee Stephens Burke & Burke LLP, 230 Park Avenue, 11th Floor, New York, New York 10169. The present principal occupation or employment of Ziegler is as counsel to Satterlee Stephens Page 10 of 69 Pages Burke & Burke LLP, a law firm with its principal place of business located at 230 Park Avenue, 11th Floor, New York, New York 10169. Ziegler is a United States citizen. Ziegler is a director of the Company. During the last five years, none of the Reporting Persons has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). During the last five years, none of the Reporting Persons was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Pursuant to the terms and conditions of the Securities Purchase and Exchange Agreement, on May 2, 2003, Blackhawk II purchased 5,317,804 shares of Common Stock from the Company in a private placement transaction, for an aggregate cash purchase price of $1,500,000. The source of funds for the $1,500,000 aggregate purchase price for the Common Stock of the Company purchased by Blackhawk II pursuant to the Securities Purchase and Exchange Agreement was the offering and sale of limited liability company interests in Blackhawk II in a private placement transaction. Pursuant to the terms and conditions of the Securities Purchase and Exchange Agreement, on May 2, 2003, SCP exchanged Senior Secured Notes Due 2003 of the Company, in the aggregate principal amount of $847,046.40, together with accrued interest thereon (collectively, the "SCP Notes"), and related detachable warrants (collectively, the "SCP Warrants") to purchase an aggregate of 2,760,814 shares of Common Stock (on a pre reverse stock split basis), for 339,374 shares (the "SCP Shares") of Common Stock (on a post reverse stock split basis). The purchase price for the SCP Notes and the SCP Warrants acquired by SCP in October of 1999 was $700,000 and the source of funds was working capital of SCP. Pursuant to the terms and conditions of the Securities Purchase and Exchange Agreement, on May 2, 2003, Webster exchanged Senior Secured Notes Due 2003 of the Company, in the aggregate principal amount of $181,509.94, together with accrued interest thereon (collectively, the "Webster Notes"), and related detachable warrants (collectively, the "Webster Warrants") to purchase an aggregate of 591,603 shares of Common Stock (on a pre reverse stock split basis), for 72,723 shares (the "Webster Shares") of Common Stock (on a post reverse stock split basis). The purchase price for the Webster Notes and the Webster Warrants acquired by Webster in October of 1999 was $150,000 and the source of funds was personal funds of Webster. Pursuant to the terms and conditions of the Securities Purchase and Exchange Agreement, on May 2, 2003, Ziegler exchanged Senior Secured Notes Due 2003 of the Company, in the aggregate principal amount of $181,509.94, together with accrued interest thereon (collectively, the "Ziegler Notes"), and related detachable warrants (collectively, the "Ziegler Warrants") to purchase an aggregate of 591,603 shares of Common Stock (on a pre reverse stock split basis), for 72,723 shares Page 11 of 69 Pages (the "Ziegler Shares") of Common Stock (on a post reverse stock split basis). The purchase price for the Ziegler Notes and the Ziegler Warrants acquired by Ziegler in October of 1999 was $150,000 and the source of funds was personal funds of Ziegler. ITEM 4. PURPOSE OF TRANSACTION. As disclosed in the Company's Proxy Statement for its 2002 Annual Meeting of Stockholders held March 18, 2003 (the "Proxy Statement"), the Company sought stockholder approval of a series of debt restructuring, recapitalization and private placement transactions with the Company's principal creditors (collectively, the "Restructuring"), as an alternative to a bankruptcy reorganization or liquidation. (see "THE RESTRUCTURING (Proposal 1) - Restructuring Alternative to Bankruptcy Reorganization or Liquidation" at page 8 of the Proxy Statement and "BACKGROUND OF THE RESTRUCTURING" at pages 16-21 of the Proxy Statement). The principal elements of the Restructuring included: (i) a 1:100 reverse stock split of the outstanding common stock (the "Reverse Stock Split"); (ii) a $3,500,000 private placement of shares of Common Stock representing 56% of the Company's outstanding Common Stock immediately following the Restructuring giving effect to the Reverse Stock Split (the "Private Placement"); (iii) the exchange of all of the indebtedness evidenced by the 2003 Notes of the Company and the 2003 Warrants of the Company for an aggregate of up to 15% of the Company's Common Stock outstanding after giving effect to the Reverse Stock Split and Private Placement or, at the election of the holders of the 2003 Notes, an aggregate of up to $135,000 cash paid at closing out of the proceeds of the Private Placement; (iv) the exchange of all of the indebtedness evidenced by the 2005 Notes of the Company and the 2005 Warrants of the Company for an aggregate of $15,000 cash paid at closing out of the proceeds of the Private Placement; (v) a restructuring of the Company's lease obligations under the equipment lease between the Company and GeoLease Partners, L.P. ("GeoLease"); (vi) the reduction of the percentage ownership of common stock of the Company by existing stockholders of the Company (including Blackhawk I, Webster and Ziegler) from 100% (pre-Restructuring) to 1% of the Common Stock outstanding after the Reverse Stock Split and the issuance of new shares of Common Stock to investors (including Blackhawk II) in the Private Placement (collectively, the "Cash Investors"), the holders of 2003 Notes electing to receive Common Stock in exchange for 2003 Notes and 2003 Warrants and GeoLease; and (vii) the grant by the Company of certain demand and piggyback registration rights to the Cash Investors and to GeoLease and the holders of 2003 Notes electing to receive Common Stock in the Restructuring. (see "THE RESTRUCTURING (Proposal 1) - Principal Elements of the Restructuring" at pages 5-7 of the Proxy Statement). A copy of the Proxy Statement is attached hereto as Exhibit IV. Under the terms of the Restructuring, it was a condition precedent to the obligations of the holders of the 2003 Notes and Warrants and the holders of the 2005 Notes and Warrants to exchange their notes and warrants for shares of Common Stock and/or cash (as the case may be), and to the obligation of GeoLease to restructure the lease obligations, that the Company shall have completed the Private Placement in the amount of not less than $3,500,000 and applied the proceeds thereof as described in the Proxy Statement. The Company therefore sought commitments from existing investors as well as new investors to invest cash in the Company and participate in the Private Placement. Ziegler and Webster, the partners of BCP, the sole managing member of Blackhawk I, which prior to the consummation of the Restructuring, was the largest stockholder of the Company, Page 12 of 69 Pages formed Blackhawk II and offered and sold membership interests in Blackhawk II primarily to existing debt and equity investors in the Company and their affiliates to raise $1,500,000 of the required Private Placement funds. The purchase by a new, nonaffiliated investor of the remaining $2,000,000 of Common Stock in the Private Placement was negotiated. Blackhawk II purchased 5,317,804 shares of Common Stock, or 28% of the outstanding Common Stock after giving effect to the consummation of the Restructuring transactions, for and aggregate purchase price of $1,500,000 and Valentis SB, L.P., the new investor ("Valentis") purchased 5,317,803 shares of Common Stock, or 28% of the outstanding Common Stock after giving effect to the consummation of the Restructuring transactions, for and aggregate purchase price of $2,000,000. As part of these Private Placement transactions, Blackhawk II, Blackhawk I, BCP, SCP, Webster and Ziegler (individually, a "Blackhawk Shareholder" and collectively, the "Blackhawk Shareholders") entered into a Shareholders Agreement (the "Shareholders Agreement") with Valentis and the Company, providing for, among other things, certain co-sale rights and obligations, restrictions on transfer of shares and certain agreements concerning the voting of shares. For a three year period following the execution of the Shareholders Agreement, (i) each Blackhawk Shareholder agreed to vote all shares of Common Stock owned or controlled by him or it to elect and maintain as a director of the Company an individual nominated by Valentis to serve as its director designee; (ii) Valentis agreed to vote all of the shares of Common Stock owned or controlled by it to elect and maintain as directors of the Company Messrs. Christopher Harte, Webster and Ziegler, the three incumbent directors of the Company as the Blackhawk designees; and (iii) the Company agreed to take all action deemed necessary, advisable or appropriate to facilitate the election and maintenance of the Valentis and Blackhawk director designees, including without limitation, causing the Board of Directors of the Company to adopt a resolution increasing the size of the Board by one member and electing the initial designee of Valentis as a director to fill the vacancy created by the new directorship. Pursuant to the Securities Purchase and Exchange Agreement, (i) the Cash Investors (including Blackhawk II), the holders of the 2003 Notes and 2003 Warrants that elected to receive Common Stock in lieu of cash upon exchange of their notes and warrants (including SCP, Webster and Ziegler), and GeoLease entered into a Registration Rights Agreement dated as of May 2, 2003 with the Company (the "Registration Rights Agreement"), pursuant to which (A) the Cash Investors are entitled to three demand registration rights following the first anniversary of the closing, plus immediately exercisable and unlimited piggyback registration rights, in each case, pari passu with the registration rights of the 2003 Noteholders and GeoLease and (B) GeoLease and the 2003 Noteholders electing to receive Common Stock for their 2003 Notes and 2003 Warrants in lieu of cash, acting together, are entitled to two demand registration rights following the first anniversary of the closing, plus immediately exercisable and unlimited piggyback registration rights, in each case, with priority over other holders of registration rights but without preference to or priority over the registration rights of the Cash Investors, and (ii) each of Blackhawk I, Blackhawk II, BCP, SCP, Webster and Ziegler (collectively, the "Blackhawk Partners") entered into a Co-Sale Agreement dated as of May 2, 2003 with GeoLease and each of the 2003 Noteholders electing to receive shares of Common Stock in lieu of cash for their notes and warrants (collectively, the "Investors") and the Company (the "Co-Sale Agreement"), pursuant to which, among other things, (A) the Blackhawk Partners agreed not to sell, assign, transfer or dispose of their shares of Common Stock without the consent of the Investors, except as otherwise provided in the Co-Sale Agreement (which includes a number of categories of exempt transfers) and Page 13 of 69 Pages (B) the Blackhawk Partners granted to the Investors certain co-sale rights to participate in any sale or transfer (other than exempt transfers) by any Blackhawk Partner(s) of at least 25% of the shares of Common Stock owned by such Blackhawk Partner(s). The Common Stock issued to the Reporting Persons pursuant to the terms and conditions of the Securities Purchase and Exchange Agreement, was acquired by such Reporting Persons not only for investment purposes, but also for the purpose of acquiring or maintaining, as the case may be, control of the Company and influencing management. As previously mentioned, the primary purpose of the Restructuring transactions (inclusive of the Reverse Stock Split, exchange of notes and warrants for Common Stock and Private Placement transactions) was to avoid a bankruptcy reorganization or liquidation of the Company. Although there is no present intention to do so, any of the Reporting Persons may decide to make additional purchases of Common Stock in the future either in the open market or in private transactions, subject to their evaluation of the Company's business, prospects and financial condition, the market for the Common Stock, other opportunities available to the Reporting Persons, prospects for the respective business' of the Reporting Persons, general economic conditions, money and stock market conditions and other future developments. Depending upon the results of the reviews and the other factors mentioned above, any of the Reporting Persons, at any time, may decide to change his or its intention with respect to the acquisition and/or retention of shares of Common Stock, including, without limitation, a determination to increase, decrease or entirely dispose of its holdings of Common Stock, although none of the Reporting Persons has any current intention to do so. Any of the Reporting Persons may also approach members of the Company's management in connection with the foregoing and/or any other matter enumerated in clauses (a) through (j) of Item 4 of Schedule 13D and/or Webster or Ziegler may seek to influence the management of the Company in his capacity as a director of the Company. The descriptions of the Securities Purchase and Exchange Agreement, the Shareholders Agreement, the Proxy Statement, the Registration Rights Agreement and the Co-Sale Agreement (in each case, inclusive of the other agreements which are exhibits thereto), contained in this Item 4 are summaries and are subject to and qualified in their entirety by reference to the detailed provisions of the Securities Purchase and Exchange Agreement, the Shareholders Agreement, the Proxy Statement, the Registration Rights Agreement and the Co-Sale Agreement, copies of which are attached hereto as Exhibits II, III, IV, V and VI, respectively, and incorporated herein by reference. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a) The aggregate number and percentage of shares of Common Stock beneficially owned by the Reporting Persons named in Item 2 above are as follows: Page 14 of 69 Pages The aggregate number and percentage of the Common Stock which are owned beneficially and of record by Blackhawk II on the date hereof are 5,317,804 shares of Common Stock, or approximately 28.0% of the estimated 18,992,156 shares of Common Stock that will be issued and outstanding after giving effect to the consummation of the Restructuring transactions (inclusive of the Reverse Stock Split), as set forth in the Proxy Statement (the exact number of shares after cash-out of fractional interests as part of the Reverse Stock Split is not yet available). If all of the Reporting Persons named in Item 2 hereof are deemed to constitute a "group" within the meaning of Rule 13d-5(b)(1) promulgated pursuant to the Exchange Act, whether by virtue of the voting agreements and co-sale rights contained in the Shareholders Agreement or otherwise, then Blackhawk II may be deemed to beneficially own all 5,895,956 shares, or approximately 31.0% of the estimated 18,992,156 shares of Common Stock that will be issued and outstanding after giving effect to the consummation of the Restructuring transactions, collectively owned of record by such Reporting Persons. Blackhawk II expressly disclaims beneficial ownership of any shares of Common Stock owned of record by the other Reporting Persons. The aggregate number and percentage of the Common Stock which are owned beneficially and of record by Blackhawk I on the date hereof are 86,666 shares of Common Stock, or approximately 0.46% of the estimated 18,992,156 shares of Common Stock that will be issued and outstanding after giving effect to the consummation of the Restructuring transactions, as set forth in the Proxy Statement. If all of the Reporting Persons named in Item 2 hereof are deemed to constitute a "group" within the meaning of Rule 13d-5(b)(1) promulgated pursuant to the Exchange Act, whether by virtue of the voting agreements and co-sale rights contained in the Shareholders Agreement or otherwise, then Blackhawk I may be deemed to beneficially own all 5,895,956 shares, or approximately 31.0% of the estimated 18,992,156 shares of Common Stock that will be issued and outstanding after giving effect to the consummation of the Restructuring transactions, collectively owned of record by such Reporting Persons. Blackhawk I expressly disclaims beneficial ownership of any shares of Common Stock owned of record by the other Reporting Persons. The aggregate number and percentage of the Common Stock which are owned beneficially by BCP on the date hereof are 5,404,470 shares of Common Stock, or approximately 28.4% of the estimated 18,992,156 shares of Common Stock that will be issued and outstanding after giving effect to the consummation of the Restructuring transactions, as set forth in the Proxy Statement, which number and percentage consist of the 86,666 shares owned of record by Blackhawk I and the 5,317,804 shares owned of record by Blackhawk II, since BCP is the managing member of both Blackhawk I and Blackhawk II. If all of the Reporting Persons named in Item 2 hereof are deemed to constitute a "group" within the meaning of Rule 13d-5(b)(1) promulgated pursuant to the Exchange Act, whether by virtue of the voting agreements and co-sale rights contained in the Shareholders Agreement or otherwise, then BCP may be deemed to beneficially own all 5,895,956 shares, or approximately 31.0% of the estimated 18,992,156 shares of Common Stock that will be issued and outstanding after giving effect to the consummation of the Restructuring transactions, collectively owned of record by such Reporting Persons. BCP expressly disclaims beneficial ownership of any shares of Common Stock owned of record by the other Reporting Persons (other than Blackhawk I or Blackhawk II). Page 15 of 69 Pages The aggregate number and percentage of the Common Stock which are owned beneficially and of record by SCP on the date hereof are 339,374 shares of Common Stock, or approximately 1.8% of the estimated 18,992,156 shares of Common Stock that will be issued and outstanding after giving effect to the consummation of the Restructuring transactions, as set forth in the Proxy Statement, which number and percentage consist solely of the of the 339,374 shares owned of record by SCP. If all of the Reporting Persons named in Item 2 hereof are deemed to constitute a "group" within the meaning of Rule 13d-5(b)(1) promulgated pursuant to the Exchange Act, whether by virtue of the voting agreements and co-sale rights contained in the Shareholders Agreement or otherwise, then SCP may be deemed to beneficially own all 5,895,956 shares, or approximately 31.0% of the estimated 18,992,156 shares of Common Stock that will be issued and outstanding after giving effect to the consummation of the Restructuring transactions, collectively owned of record by such Reporting Persons. SCP expressly disclaims beneficial ownership of any shares of Common Stock owned of record by the other Reporting Persons. The aggregate number and percentage of the Common Stock which are owned beneficially by O'Neill on the date hereof are 339,374 shares of Common Stock, or approximately 1.8% of the estimated 18,992,156 shares of Common Stock that will be issued and outstanding after giving effect to the consummation of the Restructuring transactions, as set forth in the Proxy Statement, which number and percentage consist solely of the 339,374 shares of Common Stock owned of record by SCP, since O'Neill is one of three general partners of SCP. If all of the Reporting Persons named in Item 2 hereof are deemed to constitute a "group" within the meaning of Rule 13d-5(b)(1) promulgated pursuant to the Exchange Act, whether by virtue of the voting agreements and co-sale rights contained in the Shareholders Agreement or otherwise, then O'Neill may be deemed to beneficially own all 5,895,956 shares, or approximately 1.8% of the estimated 18,992,156 shares of Common Stock that will be issued and outstanding after giving effect to the consummation of the Restructuring transactions, collectively owned of record by such Reporting Persons. O'Neill expressly disclaims beneficial ownership of any shares of Common Stock owned of record by the Reporting Persons other than SCP. The aggregate number and percentage of the Common Stock which are owned beneficially by Webster on the date hereof are 5,819,900 shares of Common Stock, or approximately 30.6% of the estimated 18,992,156 shares of Common Stock that will be issued and outstanding after giving effect to the consummation of the Restructuring transactions, as set forth in the Proxy Statement, which number and percentage consist of (i) the 76,056 shares of Common Stock owned of record by Webster, (ii) 339,374 shares of Common Stock owned of record by SCP, since Webster is one of three general partners of SCP, (iii) the 86,666 shares of Common Stock owned of record by Blackhawk I, as Webster is one of two partners of BCP, the managing member of Blackhawk I, and (iv) the 5,317,804 shares of Common Stock owned of record by Blackhawk II, as Webster is one of two partners of BCP, the managing member of Blackhawk II. If all of the Reporting Persons named in Item 2 hereof are deemed to constitute a "group" within the meaning of Rule 13d-5(b)(1) promulgated pursuant to the Exchange Act, whether by virtue of the voting agreements and co-sale rights contained in the Shareholders Agreement or otherwise, then Webster may be deemed to beneficially own all 5,895,956 shares, or approximately 31.0% of the estimated 18,992,156 shares of Common Stock that will be issued and outstanding after giving effect to the consummation of the Restructuring transactions, Page 16 of 69 Pages collectively owned of record by such Reporting Persons. Webster expressly disclaims beneficial ownership of any shares of Common Stock owned of record by Ziegler. The aggregate number and percentage of the Common Stock which are owned beneficially by Ziegler on the date hereof are 5,819,900 shares of Common Stock, or approximately 30.6% of the estimated 18,992,156 shares of Common Stock that will be issued and outstanding after giving effect to the consummation of the Restructuring transactions, as set forth in the Proxy Statement, which number and percentage consist of (i) the 76,056 shares of Common Stock owned of record by Ziegler, (ii) 339,374 shares of Common Stock owned of record by SCP, since Ziegler is one of three general partners of SCP, (iii) the 86,666 shares of Common Stock owned of record by Blackhawk I, as Ziegler is one of two partners of BCP, the managing member of Blackhawk I, and (iv) the 5,317,804 shares of Common Stock owned of record by Blackhawk II, as Ziegler is one of two partners of BCP, the managing member of Blackhawk II. If all of the Reporting Persons named in Item 2 hereof are deemed to constitute a "group" within the meaning of Rule 13d-5(b)(1) promulgated pursuant to the Exchange Act, whether by virtue of the voting agreements and co-sale rights contained in the Shareholders Agreement or otherwise, then Ziegler may be deemed to beneficially own all 5,895,956 shares, or approximately 31.0% of the estimated 18,992,156 shares of Common Stock that will be issued and outstanding after giving effect to the consummation of the Restructuring transactions, collectively owned of record by such Reporting Persons. Ziegler expressly disclaims beneficial ownership of any shares of Common Stock owned of record by Webster. In addition, and notwithstanding the foregoing, if all of the Reporting Persons named in Item 2 hereof and Valentis are deemed to constitute a "group" within the meaning of Rule 13d-5(b)(1) promulgated pursuant to the Exchange Act, by virtue of the voting agreements and co-sale rights contained in the Shareholders Agreement, then each of the Reporting Persons may be deemed to beneficially own all 11,213,759 shares, or approximately 59.0% of the estimated 18,992,156 shares of Common Stock that will be issued and outstanding after giving effect to the consummation of the Restructuring transactions, collectively owned of record by all of the Reporting Persons and Valentis. In addition to the other disclaimers of beneficial ownership of securities set forth above, each of the Reporting Persons expressly disclaims beneficial ownership of any and all shares of Common Stock owned of record by Valentis. (b) With respect to each person named in response to paragraph (a) of this Item 5 of Schedule 13D, set forth below are the number of shares of Common Stock, as to which there is sole power to vote or to direct the vote, shared power to vote or direct the vote, and sole or shared power to dispose or direct the disposition: Blackhawk II may be deemed to have the sole power to vote (and direct the vote of) and to dispose of (and direct the disposition of) the 5,317,804 shares of Common Stock owned of record by it. Notwithstanding the foregoing, BCP, as the sole managing member of Blackhawk II, and each of Webster and Ziegler, as the general partners of BCP, may be deemed to share the power to vote (and direct the vote of) and to dispose of (and direct the disposition of) the 5,317,804 shares of Common Stock owned of record by Blackhawk II. Page 17 of 69 Pages Blackhawk I may be deemed to have the sole power to vote (and direct the vote of) and to dispose of (and direct the disposition of) the 86,666 shares of Common Stock owned of record by it. Notwithstanding the foregoing, BCP, as the sole managing member of Blackhawk I, and each of Webster and Ziegler, as the general partners of BCP, may be deemed to share the power to vote (and direct the vote of) and to dispose of (and direct the disposition of) the 86,666 shares of Common Stock owned of record by Blackhawk I. BCP, as the sole managing member of each of Blackhawk I and Blackhawk II, may be deemed to share the power to vote (and direct the vote of) and to dispose of (and direct the disposition of) the 86,666 shares of Common Stock owned of record by Blackhawk I and the 5,317,804 shares of Common Stock owned of record by Blackhawk II. SCP may be deemed to have the sole power to vote (and direct the vote of) and to dispose of (and direct the disposition of) the 339,374 shares of Common Stock owned of record by it. Notwithstanding the foregoing, each of O'Neill, Webster and Ziegler, as the general partners of SCP, may be deemed to share the power to vote (and direct the vote of) and to dispose of (and direct the disposition of) the 339,374 shares of Common Stock owned of record by SCP. O'Neill, as one of the three partners of SCP, may be deemed to share the power to vote (and direct the vote of) and to dispose of (and direct the disposition of) the 339,374 shares of Common Stock owned of record by SCP. Webster has the sole power to vote (and direct the vote of) and to dispose of (and direct the disposition of) 76,056 shares of Common Stock owned of record by him. In addition, Webster, (i) as a general partner of BCP, the sole managing member of each of Blackhawk I and Blackhawk II, may be deemed to share the power to vote (and direct the vote of) and to dispose of (and direct the disposition of) the 86,666 shares of Common Stock owned beneficially and of record by Blackhawk I and the 5,317,804 shares of Common Stock owned beneficially and of record by Blackhawk II, and (ii) as a general partner of SCP, may be deemed to share the power to vote (and direct the vote of) and to dispose of (and direct the disposition of) the 339,374 shares of Common Stock owned beneficially and of record by SCP. Ziegler has the sole power to vote (and direct the vote of) and to dispose of (and direct the disposition of) 76,056 shares of Common Stock owned of record by him. In addition, Ziegler, (i) as a general partner of BCP, the sole managing member of each of Blackhawk I and Blackhawk II, may be deemed to share the power to vote (and direct the vote of) and to dispose of (and direct the disposition of) the 86,666 shares of Common Stock owned beneficially and of record by Blackhawk I and the 5,317,804 shares of Common Stock owned beneficially and of record by Blackhawk II, and (ii) as a general partner of SCP, may be deemed to share the power to vote (and direct the vote of) and to dispose of (and direct the disposition of) the 339,374 shares of Common Stock owned beneficially and of record by SCP. In addition, notwithstanding the foregoing: (i) if Blackhawk I, Blackhawk II, BCP, SCP, O'Neill, Webster and Ziegler are deemed to constitute a "group" within the meaning of Section Page 18 of 69 Pages 13(d)(3) and Rule 13d-5(b), then (A) Webster and O'Neill may be deemed to share with Ziegler the power to vote (and direct the vote of) and to dispose of (and direct the disposition of) the 76,056 shares of Common Stock owned of record by Ziegler, (B) Ziegler and O'Neill may be deemed to share with Webster the power to vote (and direct the vote of) and to dispose of (and direct the disposition of) the 76,056 shares of Common Stock owned of record by Webster, and (C) each of Blackhawk I, Blackhawk II, BCP and SCP may be deemed to share (x) with Webster, the power to vote (and direct the vote of) and to dispose of (and direct the disposition of) the 76,056 shares of Common Stock owned of record by Webster and (y) with Ziegler, the power to vote (and direct the vote of) and to dispose of (and direct the disposition of) the 76,056 shares of Common Stock owned of record by him; and (ii) by virtue of the voting agreements contained in the Shareholders Agreement, during the three year term of such voting agreements, (A) each of the Blackhawk Shareholders may be deemed to share with Valentis the power to vote (and direct the vote of) the 5,317,803 shares of Common Stock owned of record by Valentis, but only with respect to any vote on the election of directors, and (B) Valentis may be deemed to share with the Blackhawk Shareholders the power to vote (and direct the vote of) the 5,895,956 shares of Common Stock owned in the aggregate by the Blackhawk Shareholders, but only with respect to any vote on the election of directors. Each of Webster and Ziegler expressly disclaims beneficial ownership of the shares of Common Stock owned of record by the other. O'Neill expressly disclaims beneficial ownership of the shares of Common Stock owned of record by Webster, Ziegler, Blackhawk I and/or Blackhawk II. Each of Blackhawk I, Blackhawk II and SCP expressly disclaims beneficial ownership of the shares of Common Stock owned of record by the other Blackhawk Shareholders. BCP expressly disclaims beneficial ownership of the shares of Common Stock owned of record by SCP, Webster and/or Ziegler. Except to the extent of the voting agreement set forth in the Shareholders Agreement, each of the Blackhawk Shareholders expressly disclaims beneficial ownership of the 5,317,803 shares of Common Stock owned of record by Valentis. (c) Except for the acquisition of the shares of Common Stock pursuant to the terms of the Securities Purchase and Exchange Agreement, all as more fully disclosed in response to Items 3 and 4 above, during the past 60 days, none of the Reporting Persons has effected any transaction in the Common Stock. See Items 3 and 4 above for further details in connection with the acquisition of the shares of Common Stock pursuant to the Securities Purchase and Exchange Agreement. (d) Not applicable. (e) Not applicable. Page 19 of 69 Pages ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. As previously disclosed in Item 4 above, (i) Blackhawk II, SCP, Webster and Ziegler are parties to the Securities Purchase and Exchange Agreement, which provided for the sale and issuance of shares of Common Stock to such Reporting Persons, and (ii) Blackhawk I, Blackhawk II, BCP, SCP, Webster and Ziegler entered into the Shareholders Agreement with the Company and Valentis. See Item 4 above for further details with respect to the provisions of the Securities Purchase and Exchange Agreement and the Shareholders Agreement. In addition, contemporaneously with the execution and delivery of the Securities Purchase and Exchange Agreement, (i) Blackhawk II, SCP, Webster and Ziegler entered into the Registration Rights Agreement with the Company and the other Cash Investors, 2003 Noteholders electing to receive Common Stock for their notes and warrants and GeoLease, and (ii) Blackhawk I, Blackhawk II, BCP, SCP, Webster and Ziegler entered into the Co-Sale Agreement with the Company and the other Cash Investors, 2003 Noteholders electing to receive Common Stock for their notes and warrants and GeoLease. See Item 4 above for further details with respect to the provisions of the Registration Rights Agreement and the Co-Sale Agreement. As previously disclosed in the Initial Group Filing, (i) Blackhawk I, Webster and Ziegler are also parties to a another Registration Rights Agreement with the Company dated as of July 18, 1997, as amended by an Amendment thereto dated as of July 18, 1997 (the "Blackhawk I Registration Rights Agreement"), that requires the Company, upon the occurrence of certain events, to register for resale under the Securities Act of 1933, as amended (the "Securities Act"), the shares of Common Stock owned or to be owned by Blackhawk I, Webster or Ziegler, or their affiliates or permitted transferees and (ii) Webster and Ziegler are parties to another Registration Rights Agreement with the Company dated as of April 25, 1997 (the "Bridge Loan Registration Rights Agreement"), that requires the Company, upon the occurrence of certain events, to register for resale under the Securities Act, the shares of Common Stock owned or to be owned by Webster or Ziegler, their affiliates or permitted transferees. Copies of the Blackhawk I Registration Rights Agreement and the Bridge Loan Registration Rights Agreement are attached hereto as Exhibits VII and VIII, respectively. The descriptions of the Securities Purchase and Exchange Agreement, Shareholders Agreement, Registration Rights Agreement, Co-Sale Agreement, Blackhawk I Registration Rights Agreement and Bridge Loan Registration Rights Agreement contained in this Item 6 are summaries and are subject to and qualified in their entirety by reference to the detailed provisions of the Securities Purchase and Exchange Agreement, Shareholders Agreement, Registration Rights Agreement, Co-Sale Agreement, Blackhawk I Registration Rights Agreement and Bridge Loan Registration Rights Agreement, copies of which are attached hereto as Exhibits II, III, V , VI, VII and VIII, respectively, and incorporated herein by reference. Except as described above, none of the Reporting Persons is a party to any contracts, arrangements, understandings or relationships with respect to the securities of the issuer that are required to be disclosed under Item 6 of Schedule 13D. Page 20 of 69 Pages ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. I. Group Filing Agreement referred to in the Introduction. II. Securities Purchase and Exchange Agreement referred to in the Introduction and in Items 2, 3, 4, 5 and 6. III. Shareholders Agreement referred to in the Introduction and Items 4, 5 and 6. IV. Proxy Statement referred to in Items 4 and 5. V. Registration Rights Agreement referred to in Items 4 and 6. VI. Co-Sale Agreement referred to in Items 4 and 6. VII. Blackhawk I Registration Rights Agreement referred to in Item 6. VIII. Bridge Loan Registration Rights Agreement referred to in Item 6. Page 21 of 69 Pages SIGNATURE After reasonable inquiry and to the best knowledge and belief of the undersigned, each of the undersigned hereby certifies that the information set forth in this statement is true, complete and correct. Dated: May 12, 2003 BLACKHAWK INVESTORS II, L.L.C. By: Blackhawk Capital Partners, its Managing Member By: /s/ WILLIAM R. ZIEGLER ------------------------------------------ William R. Ziegler, Partner Dated: May 12, 2003 BLACKHAWK INVESTORS, L.L.C. By: Blackhawk Capital Partners, its Managing Member By: /s/ WILLIAM R. ZIEGLER ------------------------------------------ William R. Ziegler, Partner Dated: May 12, 2003 BLACKHAWK CAPITAL PARTNERS By: /s/ WILLIAM R. ZIEGLER ------------------------------------------ William R. Ziegler, Partner Dated: May 12, 2003 SOMERSET CAPITAL PARTNERS By: /s/ WILLIAM R. ZIEGLER ------------------------------------------ William R. Ziegler, Partner Dated: May 12, 2003 /s/ THOMAS H. O'NEILL, JR. ---------------------------------------------- Thomas H. O'Neill, Jr., Individually Page 22 of 69 Pages Dated: May 12, 2003 /s/ STEVEN A. WEBSTER ---------------------------------------------- Steven A. Webster, Individually Dated: May 12, 2003 /s/ WILLIAM R. ZIEGLER ---------------------------------------------- William R. Ziegler, Individually Page 23 of 69 Pages EXHIBIT INDEX -------------
Exhibit Number Description Page No. - ------ ----------- -------- I Schedule 13D Joint Filing Agreement dated May 12, 2003 among the 25 Reporting Persons II Securities Purchase and Exchange Agreement dated as of May 2, 2003 among the Company, the Cash Investors (including Blackhawk II), the 2003 Noteholders (including SCP, Webster and Ziegler), the 2005 Noteholders and GeoLease (Incorporated by reference to Form of Securities Purchase and Exchange Agreement attached as Appendix A to the Proxy Statement filed by the Company with the Commission on February 14, 2003 (File No. 000-09268)) III Shareholders Agreement dated as of May 2, 2003 among the Blackhawk 27 Shareholders, Valentis and the Company IV Proxy Statement of the Company for the 2002 Annual Meeting of Stockholders (Incorporated by reference to the Definitive Proxy Statement of the Company on Schedule 14A filed with the Commission on February 14, 2003 (File No. 000-09268)) V Registration Rights Agreement dated as of May 2, 2003 among the 46 Company, the Cash Investors (including Blackhawk II), the 2003 Noteholders (including SCP, Webster and Ziegler) and GeoLease VI Co-Sale Agreement dated as of May 2, 2003 among Blackhawk I, 61 Blackhawk II, BCP, SCP, Webster and Ziegler, the 2003 Noteholders, GeoLease and the Company VII Registration Rights Agreement dated as of July 18, 1997 among the Company, Blackhawk I, Webster and Ziegler, as amended by Amendment to Registration Rights Agreement dated as of July 18, 1997, among the Company, Blackhawk I, Webster and Ziegler (Incorporated by reference to Exhibit XI(a) and XI(b) to the Schedule 13D filed by Blackhawk I, BCP, Webster and Ziegler with the Commission on October 27, 1997) VIII Registration Rights Agreement dated as of April 25, 1997 among the Company, Webster and Ziegler (Incorporated by reference to Exhibit V to the Schedule 13D filed by Messrs. Webster and Ziegler with the Commission on May 5, 1997)
Page 24 of 69 Pages EX-99.I 3 file002.txt SCHEDULE 13D JOINT FILING AGREEMENT SCHEDULE 13D JOINT FILING AGREEMENT This Schedule 13D Joint Filing Agreement, dated as of May 12, 2003, is entered into by and among Blackhawk Investors II, L.L.C. ("Blackhawk II"), Blackhawk Investors, L.L.C. ("Blackhawk I"), Blackhawk Capital Partners ("BCP"), Somerset Capital Partners ("SCP"), Thomas H. O'Neill, Jr. ("O'Neill"), Steven A. Webster ("Webster") and William R. Ziegler ("Ziegler"). Each of Blackhawk II, Blackhawk I, BCP, SCP, O'Neill, Webster and Ziegler (sometimes hereinafter individually referred to as a "Reporting Person" and collectively referred to as the "Reporting Persons") hereby confirms and represents to each other Reporting Person that he, she or it (as the case may be) is eligible to use Schedule 13D for the disclosure and filing of information required by Schedule 13D with respect to the common stock, par value $0.01 per share (the "Common Stock") of Geokinetics Inc. (the "Company"). Pursuant to Rule 13d-1(k)(1) promulgated by the Securities and Exchange Commission (the "Commission") under the Securities Exchange Act of 1934, as amended, each of the Reporting Persons hereby agrees that the statement entitled Schedule 13D relating to the Common Stock of the Company, to which this Schedule 13D joint filing agreement is attached as an exhibit, is filed on behalf of each of the Reporting Persons, and that any subsequent amendments thereto will likewise be filed on behalf of each of them. Each of the Reporting Persons further agrees that he, she or it (as the case may be) will be responsible for the timely filing of the statement entitled Schedule 13D to which this Schedule 13D joint filing agreement is attached as an exhibit, and for any subsequent amendments thereto, and for the completeness and accuracy of the information concerning him, her or it (as the case may be) contained therein, provided that each such person is not responsible for the completeness or accuracy of the information concerning the other Reporting Persons making such filing, unless such person knows or has reason to believe that such information is inaccurate. BLACKHAWK INVESTORS II, L.L.C. By: Blackhawk Capital Partners, its Managing Member By: /s/ WILLIAM R. ZIEGLER ------------------------------------- William R. Ziegler, Partner BLACKHAWK INVESTORS, L.L.C. By: Blackhawk Capital Partners, its Managing Member By: /s/ WILLIAM R. ZIEGLER ------------------------------------- William R. Ziegler, Partner Page 25 of 69 Pages BLACKHAWK CAPITAL PARTNERS By: /s/ WILLIAM R. ZIEGLER ------------------------------------- William R. Ziegler, Partner SOMERSET CAPITAL PARTNERS By: /s/ WILLIAM R. ZIEGLER ------------------------------------- William R. Ziegler, Partner /s/ THOMAS H. O'NEILL, JR. ----------------------------------------- Thomas H. O'Neill, Jr. Individually /s/ STEVEN A. WEBSTER ----------------------------------------- Steven A. Webster, Individually /s/ WILLIAM R. ZIEGLER ----------------------------------------- William R. Ziegler, Individually Page 26 of 69 Pages EX-99.III 4 file003.txt SHAREHOLDERS AGREEMENT EXHIBIT III ----------- SHAREHOLDERS AGREEMENT ---------------------- SHAREHOLDERS AGREEMENT (this "Agreement") made as of this 2nd day of May, 2003, by and among Geokinetics, Inc., a Delaware corporation (the "Corporation"), Blackhawk Investors, L.L.C., a Delaware limited liability company ("Blackhawk I"), Blackhawk Investors II, L.L.C., a Delaware limited liability company ("Blackhawk II"), Blackhawk Capital Partners, a Texas general partnership ("BCP") and the managing member of Blackhawk I and Blackhawk II ("Blackhawk I and Blackhawk II being sometimes hereinafter collectively referred to as "Blackhawk"), Somerset Capital Partners, a New York general partnership ("SCP"), Steven A. Webster, an individual and one of the partners of each of BCP and SCP ("Webster") and William R. Ziegler, an individual and one of the partners of each of BCP and SCP ("Ziegler"; Ziegler, Webster, SCP, BCP, Blackhawk II and Blackhawk I being sometimes hereinafter individually referred to as a "Blackhawk Shareholder" and collectively as the "Blackhawk Shareholders") and Valentis SB, L.P., a Delaware limited partnership (the "Wexford Shareholder" )(each of the parties hereto, other than the Corporation, is hereinafter sometimes referred to individually as a "Shareholder" and collectively as the "Shareholders.") WHEREAS, after giving effect to a series of recapitalization and financing transactions (collectively, the "Restructuring") consummated by the Corporation with certain of its senior creditors and other investors (inclusive of a 1-for-100 reverse stock split of the Corporation's outstanding common stock immediately prior to the consummation of such Restructuring), the Corporation has authorized capital stock consisting of 100,000,000 shares of Common Stock, par value $0.01 per share (the "Common Stock"), of which 18,992,156 shares are issued and Page 27 of 69 Pages outstanding upon the consummation of the Restructuring (inclusive of the Private Placement described below), and 2,500,000 shares of Preferred Stock, par value $10.00 per share, none of which are currently outstanding; WHEREAS, as part of the Restructuring, the Corporation issued and sold an aggregate of 10,635,607 shares of Common Stock (the "Private Placement Shares"), at an aggregate purchase price of $3,500,000, in two concurrent private placement transactions (collectively, the "Private Placement"), which Private Placement Shares represents 56% of the issued and outstanding shares of Common Stock upon the consummation of the Restructuring; WHEREAS, as part of the Private Placement and pursuant to a certain Securities Purchase and Exchange Agreement dated the date hereof among the Corporation and the Investors named therein (the "Purchase Agreement"), (i) Blackhawk II purchased on the date hereof 5,317,804 shares of Common Stock and (ii) the Wexford Shareholder purchased on the date hereof 5,317,803 shares of Common Stock; WHEREAS, after giving effect to the consummation of the Restructuring (inclusive of the Private Placement and the reverse stock split), the Shareholders own the number of shares of Common Stock of the Corporation set forth on Schedule A attached hereto; WHEREAS, it is a material inducement and a precondition to the entering into of the Purchase Agreement by the Shareholders that the Corporation and the Shareholders enter into this Agreement contemporaneously therewith; NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises herein contained, the parties hereto, each intending to be legally bound, hereby agree as follows: Page 28 of 69 Pages 1. Certain Definitions. 1.1 Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Purchase Agreement. 1.2 As used herein, the following terms shall have the meanings set forth below: "Affiliate" means, with respect to any person, any other person that directly or indirectly controls or is controlled by or is under common control with such person. "control" as used herein means the power to exercise a controlling influence over such person, and a person shall be deemed to control another person if that person (i) owns beneficially, directly or indirectly, 10% or more of the voting securities or voting interests of such person, or (ii) creates, establishes or uses a trust, proxy, power of attorney, pooling arrangement or other device with the purpose or effect of divesting such person of beneficial ownership of such securities, or (iii) provides directly or indirectly the funds for the acquisition by such other person of any shares of the Corporation. "Disposition" means any direct or indirect transfer, assignment, sale, gift, pledge, hypothecation or other encumbrance, or any disposition of Common Stock (or any interest therein or right thereto) or of all or part of the voting power associated with the Common Stock (or any interest therein) whatsoever, or any other transfer of beneficial ownership of Common Stock whether voluntary or involuntary; provided, that: (i) the transfer of Common Stock by Blackhawk to its members shall not be deemed a Disposition hereunder; (ii) any public sale of Common Stock pursuant to Rule 144 under the Securities Act shall not be deemed a Disposition hereunder; (iii) no transfer by any Shareholder of less than 10% of its respective holdings of Common Stock in a single transaction or series of related transactions shall be deemed a Disposition hereunder; and (iv) the participation by any Shareholder in a proposed underwritten Page 29 of 69 Pages public offering of Common Stock (including the entering into of an underwriting agreement, a custody agreement or other agreements customarily executed by selling shareholders in connection therewith) or the participation by either Shareholder in any other registration pursuant to any demand or piggyback registration rights that any such Shareholder may have pursuant to any registration rights or similar agreement with the Corporation or the consummation thereof, shall not constitute a Disposition, it being understood that, if such proposed underwritten public offering is terminated or abandoned prior to consummation or is not consummated or such other registration is terminated or abandoned prior to consummation or is not consummated, the Common Stock held by the parties hereto shall remain subject to this Agreement. "Group" has the meaning as defined for purposes of Section 13(d)(3) of the Exchange Act and the rules and regulations. "party to this Agreement" as used herein shall mean any person signatory to this Agreement, any transferee of any Shareholder that is required to execute and deliver to the Corporation an Acknowledgment and Agreement pursuant to Section 16 hereof in connection with its acquisition of shares. "person" as used herein means any individual, corporation, company, partnership, joint venture, trust, association, unincorporated organization, or other entity or group. "shares" as used herein shall be deemed to refer to all the shares of the Common Stock of the Corporation owned by the Shareholders at the time of execution of this Agreement; any additional shares of the Common Stock of the Corporation hereafter acquired by any Shareholder; any shares of the Common Stock of the Corporation hereafter issued in exchange therefor by way of reclassification of shares, merger, consolidation, reorganization, recapitalization or otherwise; any additional shares issued to the respective Shareholders by Page 30 of 69 Pages reason of stock dividends, share distributions, increases in the outstanding shares; and (unless the context does not permit such interpretation) any shares of the Common Stock of the Corporation issuable to any Shareholder upon exercise of options, warrants, rights, and conversion rights or privileges. "Shareholder" as used herein shall include, in addition to the original parties signatory hereto (other than the Corporation), any transferee of any Shareholder that is required to execute and deliver to the Corporation an Acknowledgment pursuant to Section 16 hereof, in each respect only so long as such party holds shares. 2. Restrictions on Transfer. No Shareholder may effect a Disposition (whether with or without consideration), other than a Tag-Along Disposition permitted by and in compliance with the terms and conditions of this Agreement, unless the transferee, if not already a Shareholder, shall comply with the provisions of Section 16 hereof. Any sale, assignment, transfer or other disposition or encumbrance contrary to the provisions of this Agreement shall be null and void and of no effect. 3. Tag-Along Dispositions. If any Shareholder (hereinafter sometimes referred to as a "Selling Shareholder") desires to effect a Disposition (or a series of related Dispositions to a single transferee or Group) of more than 10% of the issued and outstanding shares of Common Stock owned by such Selling Shareholder to any transferee or Group (other than to an Affiliate or to another Shareholder) (hereinafter, a "Tag-Along Disposition"), such Selling Shareholder shall give written notice to the other Shareholders (hereinafter sometimes individually referred to as a "Tag-Along Shareholder" and collectively referred to as the "Tag-Along Shareholders") describing the material terms of the proposed Tag-Along Disposition and identifying the contemplated transferee or Group Page 31 of 69 Pages (hereinafter, a "Tag-Along Notice"). Any Tag-Along Shareholder may, by written notice to the Selling Shareholder delivered within 15 days following the date of the Tag-Along Notice, elect to participate in the Tag-Along Disposition, and require, as a condition to the closing of the Tag-Along Disposition, that the proposed transferee or Group purchase, at the same price per share and on the same terms and conditions as described in the Tag-Along Notice, a portion of the total number of shares of Common Stock then held by the Tag-Along Shareholder equal to a fraction thereof, the numerator of which is the total number of shares of Common Stock to be transferred by the Selling Shareholder in the Tag-Along Disposition and the denominator of which is the total number of shares of Common Stock then held by the Selling Shareholder (the "Tag-Along Shares"). If any Tag-Along Shareholder timely elects to have the Tag-Along Shares included in the Tag-Along Disposition, the Selling Shareholder shall not effect the Tag-Along Disposition described in the Tag-Along Notice unless the proposed transferee or Group agrees to purchase all of the Tag-Along Shares of each Tag-Along Shareholder at the same price and on the same terms and conditions described in the Tag-Along Notice. Upon the closing of any sale of Tag-Along Shares pursuant to this Section, each Tag-Along Shareholder shall deliver at such closing, against payment of the purchase price therefor, certificates representing the Tag-Along Shares to be sold, duly endorsed for transfer or accompanied by duly endorsed stock powers, and evidence of good title to the Tag-Along Shares to be sold and the absence of liens, encumbrances and adverse claims with respect thereto and such other matters as are deemed necessary or advisable by the Corporation for the proper transfer of such Tag-Along Shares on the books of the Corporation. Failure by any Tag-Along Shareholder to give any notice during said fifteen (15)-day period to the Selling Shareholder shall be deemed to be an election by such Tag-Along Shareholder not to have its Tag-Along Shares included in the Tag-Along Disposition. Page 32 of 69 Pages 4 Voting Agreements. The following provisions shall govern the management and operations of the Corporation: 4.1 Voting Agreement of Blackhawk Shareholder. 4.1.1 During the period commencing on the date hereof and ending on the third anniversary of the date hereof (the "Voting Agreement Period"), each Blackhawk Shareholder shall vote all shares owned or controlled by it to elect and maintain as a director of the Corporation, an individual nominated by the Wexford Shareholder to serve as its director designee (the "Wexford Nominee"). 4.1.2 During the Voting Agreement Period, no Blackhawk Shareholder shall vote any shares owned or controlled by it, or take any other action in connection with, the removal of any Wexford Nominee, unless the Wexford Shareholder desires to remove such Wexford Nominee, with or without cause. If the Wexford Shareholder desires to remove any Wexford Nominee pursuant to the preceding sentence, each Blackhawk Shareholder shall vote all shares owned by it in favor of such removal. In the event of a vacancy on the Board resulting from such removal or otherwise, including, without limitation, death or resignation of a director, each Blackhawk Shareholder shall vote all shares owned by it in favor of the appointment of a successor Wexford Nominee if the directorship was previously held by a Wexford Nominee, and each Blackhawk Shareholder shall vote all shares owned or controlled by it to elect and maintain any successor Wexford Nominee as a director of the Corporation (subject to removal as provided herein), and to take any action that may be taken by a Shareholder of the Corporation in accordance with the Certificate of Incorporation and By-laws of the Corporation and the Delaware General Corporation Law to ensure that any such individual is so elected. Page 33 of 69 Pages 4.1.3 During the Voting Agreement Period, the Corporation agrees to take any and all action deemed necessary, advisable or appropriate to facilitate the election and maintenance of the initial Wexford Nominee and/or any successor Wexford Nominee as a director of the Corporation, including, without limitation, causing the Board of Directors of the Corporation to adopt a resolution increasing the size of the Board by one member and electing the initial Wexford Nominee as a director to fill the vacancy created by the new directorship, and thereafter including the Wexford Nominee as part of the Corporation's slate of directors in the proxy materials of the Corporation. 4.2 Voting Agreement of Wexford Shareholder. 4.2.1 During the Voting Agreement Period, the Wexford Shareholder shall vote all shares owned or controlled by it to elect and maintain as directors of the Corporation, Messrs. Christopher Harte, Steven Webster and William Ziegler, the three incumbent directors of the Corporation (individually, a "Blackhawk Nominee" and collectively, the "Blackhawk Nominees"). 4.2.2 During the Voting Agreement Period, the Wexford Shareholder shall not vote any shares owned or controlled by it, or take any other action in connection with, the removal of any Blackhawk Nominee, unless BCP, on behalf of the Blackhawk Shareholders, desires to remove such Blackhawk Nominee, with or without cause. If BCP, on behalf of the Blackhawk Shareholders, desires to remove any Blackhawk Nominee pursuant to the preceding sentence, the Wexford Shareholder shall vote all shares owned by it in favor of such removal. In the event of a vacancy on the Board resulting from such removal or otherwise, including, without limitation, death or resignation of a director, the Wexford Shareholder shall vote all shares owned by it in favor of the appointment of a successor Blackhawk Nominee if the directorship was previously Page 34 of 69 Pages held by a Blackhawk Nominee, and the Wexford Shareholder shall vote all shares owned or controlled by it to elect and maintain any successor Blackhawk Nominee as a director of the Corporation (subject to removal as provided herein), and to take any action that may be taken by a Shareholder of the Corporation in accordance with the Certificate of Incorporation and By-laws of the Corporation and the Delaware General Corporation Law to ensure that any such individual is so elected. 4.2.3 During the Voting Agreement Period, the Corporation agrees to take any and all action deemed necessary, advisable or appropriate to facilitate the election and maintenance of any Blackhawk Nominee as a director of the Corporation, including, without limitation, including any Blackhawk Nominee as part of the Corporation's slate of directors in the proxy materials of the Corporation. 5. Stock Certificate Legend. There shall be forthwith placed conspicuously on every stock certificate representing shares now outstanding and owned by any party to this Agreement and on every such certificate which may hereafter be acquired by any party to this Agreement or by any successor or transferee thereof (other than a transferee pursuant to a Tag-Along Disposition or one or more transactions that do not constitute Dispositions hereunder), the following legend: "The shares of stock evidenced by this certificate or any certificate issued in exchange or transfer therefor are held subject to the provisions of a Shareholders Agreement dated as of May 2, 2003, which provides, among other things, for certain co-sale rights and obligations and restrictions on transfer of shares and certain agreements concerning the voting of such shares, a copy of which Shareholders Agreement is on file and may be examined at the principal office of the Corporation." Page 35 of 69 Pages 6. Deposit of Shareholders Agreement. A counterpart of this Agreement and all amendments thereto shall be deposited at the principal office of the Corporation and may be examined by any shareholder during normal business hours. 7. Certificate of Incorporation and Bylaws. In the event of any conflict between the provisions of the Certificate of Incorporation or Bylaws of the Corporation and this Agreement, the provisions of this Agreement shall control and the Shareholders shall use their best efforts to cause the Certificate of Incorporation or Bylaws of the Corporation, to the extent required by applicable law, to be amended to provide for terms and conditions substantially similar to those contained in this Agreement. 8. Consent to Specific Enforcement. The parties hereto agree that it is impossible to measure the monetary damages that would accrue to a Shareholder by reason of a failure by the other shareholder (a "Breaching Party") or other person to comply with the provisions of Sections 2, 3 and 4 hereof or to perform any of the obligations hereunder. Therefore, (i) the Corporation and any other non-breaching party shall be entitled, to the extent permitted by applicable law, to injunctive relief in the case of the violation, or attempted or threatened violation, by a Breaching Party or other person of any of the provisions of such Sections, or to a decree compelling specific performance by a Breaching Party or other person of any of such provisions, or to any other remedy legally allowed to them, and (ii) if any party shall institute any action or proceeding to enforce the provisions hereof, any party against whom such action or proceeding is brought hereby waives any claim or defense therein that the party seeking such relief has an adequate remedy at law. 9. Void Transfers. If any shares of Common Stock subject to the terms of this Agreement shall be transferred in a Disposition in violation of the terms and conditions of this Page 36 of 69 Pages Agreement, such Disposition shall be void. In addition to, and without prejudice to, any and all other rights or remedies which may be available to the parties hereto, the Shareholders agree that the Corporation may, but shall have no obligation to, hold and refuse to recognize a Disposition of any such securities (or any certificate therefor) tendered to it for transfer if the Disposition violates the provisions of this Agreement. 10. Agreements by Corporation. The Corporation, insofar as is proper or required, consents to this Agreement. It shall not issue, transfer or reissue any of its shares in violation of this Agreement or without requiring proof of compliance with this Agreement. 11. Effectiveness; Termination. This Agreement shall become effective at such time as it is executed by the Corporation, the Blackhawk Shareholder and the Wexford Shareholder. This Agreement shall terminate upon the first to occur of any of one of the following events: (i) the mutual agreement in writing of the Shareholders; or (ii) liquidation or dissolution of the Corporation; or (iii) the date that either (A) none of the Blackhawk Shareholders or (B) the Wexford Shareholder owns any shares of Common Stock, whether pursuant to a Tag-Along Disposition or otherwise pursuant to one or more transactions that do not constitute Dispositions hereunder; or (iv) the date on which the Shareholders, in the aggregate, hold less than 25% of the number of shares of Common Stock owned by them on the date hereof; or (v) 5:00 P.M. New York City time on the tenth (10th) anniversary of the date of this Agreement; provided, however, that with respect to the voting agreements contained in Sections 4.1 and 4.2, such provisions shall terminate at 5:00 P.M. New York City time on the last day of the Voting Agreement Period; and provided further, that this Agreement shall terminate as to any Shareholder on the date that such Shareholder no longer owns any shares of Common Stock, Page 37 of 69 Pages whether pursuant to a Tag-Along Disposition or otherwise pursuant to one or more transactions that do not constitute Dispositions hereunder. 12. Further Assurances. The parties agree to make, execute and deliver any and all agreements, instruments and documents, and to do any and all other acts, deeds and things, which may be necessary or advisable to carry out the provisions of this Agreement or to effectuate the intent and purpose thereof. 13. Notices. Any and all notices, designations, consents, offers, requests, acceptances or other communications provided for herein shall be given in writing by certified or registered mail, telecopier, Federal Express, Express Mail, or personal delivery against written receipt addressed, transmitted or delivered, to the parties as follows: (i) if to the Corporation, One Riverway, Suite 2100, Houston, Texas 77056; Attention: Chief Financial Officer; (ii) if to any Blackhawk Shareholder other than Webster, c/o William R. Ziegler, Satterlee Stephens, Burke & Burke LLP, 230 Park Avenue, 11th Floor, New York, New York 10169; (ii) if to Webster, c/o Carrizo Oil & Gas Inc., 14701 St. Mary's Lane, Suite 800, Houston, TX 77079; (iii) if to the Wexford Shareholder, 411 West Putnam Avenue, Suite 125, Greenwich, CT 06830, Attn: Paul Jacobi; and (iv) if to any successor Shareholder, to the address last shown on the stock books of the Corporation. Any such notice shall be effective and deemed received three (3) days after proper deposit in the mails, but actual notice shall be effective however and whenever received. Any party may Page 38 of 69 Pages effect a change of address for purposes of this Agreement by giving notice of such change to the other parties, with specific reference to this Section. 14. Amendment, Severability; Waiver. Except as expressly provided herein, neither this Agreement nor any term hereof may be amended, modified, waived, discharged or terminated other than by a written instrument signed by the Corporation, each Blackhawk Shareholder and the Wexford Shareholder. In the event that any provision of this Agreement is held to be invalid, illegal or against public policy, the remaining provisions hereof shall not be affected thereby, and this Agreement shall be construed in all respects as if any invalid or unenforceable provisions were omitted. In addition, in such event, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible with respect to those provisions which were held to be invalid, illegal or against public policy. Any failure by a party hereto to comply with any obligation, agreement or condition herein may be expressly waived in writing by each of the other parties hereto, but such waiver or failure to insist upon strict compliance with such obligation, agreement or condition shall not operate as a wavier of, or estoppel with respect to, any such subsequent or other failure. 15. Benefit and Binding Obligation; Merger. This Agreement shall inure to the benefit of and shall bind the respective personal representatives, successors and permitted assigns of the parties. All of the provisions of this Agreement shall apply to all of the shares. In the event of the merger of the Corporation into any corporation, this Agreement shall continue in effect and thereafter any references in this Agreement to the Corporation shall refer to the surviving corporation pursuant to such merger. 16. Binding on Transferees. The provisions of this Agreement shall be binding upon transferees of Shareholders, other than transferees in a Tag-Along Disposition and transferees Page 39 of 69 Pages pursuant to one or more transactions that do not constitute Dispositions hereunder. No Shareholder shall transfer capital stock of the Corporation to any person not a party hereto, unless said person shall execute and deliver to the Corporation an Acknowledgment and Agreement in the form annexed as Exhibit A hereto, provided, however, that (i) transferees in a Tag-Along Disposition pursuant to Section 3 hereof and (ii) transferees pursuant to one or more transactions that do not constitute Dispositions hereunder, need not execute and deliver an Acknowledgment and Agreement, as the shares acquired by them will not be subject to the terms and conditions of this Agreement. Subject to the exceptions contained in the preceding proviso, the due execution and delivery to the Corporation of such Acknowledgment and Agreement shall be a condition precedent to the registration of said transfer on the books of the Corporation and to the exercise of all rights pertaining to the transferred shares. Upon due execution and delivery to the Corporation of such Acknowledgment and Agreement, the transferee shall be deemed to be a party hereto and shall be subject to the obligations created hereby. 17. Construction. Each party to this Agreement has had the opportunity to review this Agreement with legal counsel. This Agreement shall not be construed or interpreted against any party on the basis that such party drafted or authored a particular provision, parts of or the entirety of this Agreement. 18. Integration; Governing Law; Counterparts. This Agreement supersedes and cancels all prior agreements and understandings among the parties hereto, and contains all of the terms and conditions agreed upon by the parties with respect to the subject matter hereof, and none of the parties shall be bound by any representations, warranties, covenants or conditions with respect thereto not expressly set forth herein. This Agreement may be executed in two or more counterparts, all of which taken together shall constitute one instrument. This Agreement Page 40 of 69 Pages shall be governed by and construed in accordance with the law of the State of Delaware (without giving effect to its conflict of law provisions). The captions in this Agreement are for convenience of reference only and shall not affect its interpretation in any respect. [Remainder of page intentionally left blank] Page 41 of 69 Pages IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of the date and year first above written. ADDRESS PARTY One Riverway, Suite 2100 GEOKINETICS INC. Houston, TX 77056 Attn: Chief Financial Officer By: /s/ THOMAS J. CONCANNON ----------------------------- Thomas J. Concannon Vice President c/o William R. Ziegler BLACKHAWK INVESTORS, L.L.C. Satterlee Stephens Burke & Burke LLP 230 Park Avenue, 11th Floor By: Blackhawk Capital Partners, New York, NY 10169 Managing Member By: /s/ WILLIAM R. ZIEGLER ----------------------------- William R. Ziegler, Partner c/o William R. Ziegler BLACKHAWK INVESTORS II, L.L.C. Satterlee Stephens Burke & Burke LLP 230 Park Avenue, 11th Floor By: Blackhawk Capital Partners, New York, NY 10169 Managing Member By: /s/ WILLIAM R. ZIEGLER ----------------------------- William R. Ziegler, Partner c/o William R. Ziegler BLACKHAWK CAPITAL PARTNERS Satterlee Stephens Burke & Burke LLP 230 Park Avenue, 11th Floor New York, NY 10169 By: /s/ WILLIAM R. ZIEGLER ----------------------------- William R. Ziegler, Partner Page 42 of 69 Pages c/o William R. Ziegler SOMERSET CAPITAL PARTNERS Satterlee Stephens Burke & Burke LLP 230 Park Avenue, 11th Floor New York, NY 10169 By: /s/ WIILIAM R. ZIEGLER ----------------------------- William R. Ziegler, Partner c/o Carrizo Oil & Gas Inc. 14701 St. Mary's Lane, Suite 800 Houston, TX 77079 /s/ STEVEN A. WEBSTER --------------------------------- STEVEN A. WEBSTER, Individually c/o Satterlee Stephens Burke & Burke LLP 230 Park Avenue, 11th Floor New York, NY 10169 /s/ WILLIAM R. ZIEGLER --------------------------------- WILLIAM R. ZIEGLER, Individually 411 West Putnam Avenue, Suite 125 VALENTIS SB, L.P. Greenwich, CT 06830 Attn: Paul Jacobi By: /s/ PAUL JACOBI ----------------------------- Name: Paul Jacobi Title: Vice President Page 43 of 69 Pages Schedule A Shareholders; Stock Ownership ----------------------------- Shareholder Common Stock Owned - ----------- ------------------ Blackhawk Investors II, L.L.C. 5,317,804 Blackhawk Investors, L.L.C. 86,666 Blackhawk Capital Partners 0 (1) Somerset Capital Partners 339,374 Steven A. Webster 76,056 (2) William R. Ziegler 76,056 (3) Valentis SB, L.P. 5,317,803 (1) Excludes shares of Common Stock deemed beneficially owned in its capacity as managing member of each of Blackhawk Investors, L.L.C. and Blackhawk Investors II, L.L.C. (2) Excludes shares of Common Stock deemed beneficially owned but owned of record by Blackhawk I, Blackhawk II or SCP (3) Excludes shares of Common Stock deemed beneficially owned but owned of record by Blackhawk I, Blackhawk II or SCP Page 44 of 69 Pages Exhibit A ACKNOWLEDGMENT AND AGREEMENT The undersigned wishes to receive from _________________________________ ("Transferor") certain shares (the "Shares") of the Common Stock, par value $0.01 per share, of Geokinetics Inc., a Delaware corporation (the "Corporation"); The Shares are subject to that certain Shareholders Agreement, dated as of April 30, 2003 (the "Agreement"); The undersigned has been given a copy of the Agreement and afforded ample opportunity in which to read it, and the undersigned is thoroughly familiar with its terms; Pursuant to the Agreement, the Corporation is prohibited from issuing certificates evidencing ownership of the Shares to certain persons unless and until such persons first acknowledge the terms thereof and agree to be bound thereby; and The undersigned wishes to receive such a certificate; NOW, THEREFORE, in consideration of the premises and to induce the Corporation to issue such a certificate to the undersigned, the undersigned does hereby acknowledge and agree that (i) he has been given a copy of the Agreement and ample opportunity in which to read it, and the undersigned is thoroughly familiar with its terms, (ii) the Shares are subject to the Agreement, and (iii) the undersigned does hereby agree fully to be bound thereby. This ________ day of _______________, 20__. -------------------------------- [Name of Transferee] Page 45 of 69 Pages EX-99.V 5 file004.txt REGISTRATION RIGHTS AGREEMENT EXHIBIT V REGISTRATION RIGHTS AGREEMENT AMONG GEOKINETICS INC. AND THE PARTIES NAMED HEREIN DATED AS OF MAY 2, 2003 Page 46 of 69 Pages REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT (the "Registration Rights Agreement" or this "Agreement") dated as of May 2, 2003 among Geokinetics Inc., a Delaware corporation (the "Company"), the Cash Investors, the 2003 Noteholders and GeoLease, L.P., a Delaware limited partnership ("GeoLease") (together with their respective successors and assigns, the "Holders"). Terms defined in that certain Securities Purchase and Exchange Agreement (the "Restructure Agreement") dated as of May 2, 2003 between the Company and the Investors named therein, unless defined herein, are used as therein defined. WHEREAS, pursuant to the Restructure Agreement, the Company proposes to issue an aggregate of 18,802,234 shares (the "Shares") of its Common Stock of which (i) 10,635,607 shares will be issued to the Cash Investors, up to (ii) 2,848,823 shares will be issued to the 2003 Noteholders, and (iii) up to 8,166,627 shares will be issued to GeoLease; WHEREAS, certain obligations of the Company, the Cash Investors, the 2003 Noteholders and GeoLease are conditioned upon the execution and delivery of this Agreement; NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereto agree as follows: SECTION 1. REGISTRATION RIGHTS. (a) Demand Registration. (1) Request for Registration. At any time on or after the first anniversary of the Date of Closing, (i) the Cash Investors constituting a Holder or Holders of in excess of 25% of the Registrable Securities held by all of the Cash Investors or (ii) the 2003 Noteholders and GeoLease constituting a Holder or Holders of in excess of 25% of the Registrable Securities held by all of the 2003 Noteholders and GeoLease, may make a written request for registration under the Securities Act ("Demand Registration") of all or part of its or their Registrable Securities; provided that the Company shall not be obligated to effect more than three Demand Registrations in respect of the Registrable Securities held by the Cash Investors and shall not be obligated to effect more than two Demand Registrations in respect of the Registrable Securities held by the 2003 Noteholders and GeoLease. Such request will specify the number of Registrable Securities proposed to be sold and will also specify the intended method of disposition thereof. Within 10 Business Days after receipt of such request, the Company will give written notice of such registration request to all other Holders of Common Shares, use all commercially reasonable efforts to effect, as soon as practicable, the registration under the Securities Act, and include in such registration all Registrable Securities with respect to which the Company has received written requests for inclusion therein from the Holders thereof within 15 Business Days after receipt by the applicable Holder of the Company's notice. Each such request will also specify the aggregate number of Registrable Securities to be registered and the intended method of disposition thereof. Page 47 of 69 Pages Unless the Holder or Holders of a majority in aggregate number of the Registrable Securities to be registered in such Demand Registration shall consent in writing, no party other than the Holders initially requesting the Demand Registration and those providing subsequent written request for inclusion in the Demand Registration pursuant to this Section, including the Company (but excluding another Holder of Common Shares), shall be permitted to offer securities under any such Demand Registration. (2) Effective Registration and Expenses. A registration will not count as a Demand Registration until it has become effective (unless the Holders demanding such registration withdraw the Registrable Securities, in which case such demand will count as a Demand Registration unless the Holders of such Registrable Securities agree to pay all Registration Expenses (as hereinafter defined) relating to such registration). Except as provided above, the Company will pay all Registration Expenses in connection with any registration initiated as a Demand Registration, whether or not it becomes effective. (3) Priority on Demand Registrations. If the Holders of a majority of the Registrable Securities to be registered in a Demand Registration so elect, the offering of such Registrable Securities pursuant to such Demand Registration shall be in the form of an underwritten offering. In such event, if the managing underwriter or underwriters (the "Underwriters") of such offering advise the Company and the Holders in writing that in their opinion the Registrable Securities requested to be included in such offering is sufficiently large to materially and adversely affect the success of such offering, then (i) the Holders of Registrable Securities held by the Cash Investors, the 2003 Noteholders and GeoLease purchasing or acquiring Registrable Securities pursuant to the Restructure Agreement (collectively, the "Purchasers") shall be entitled to participate in such Demand Registration (pro rata on the basis of the amount of Registrable Securities requested to be included in such registration by each such Purchaser) first; and (ii) the Company and other equity security holders of the Company entitled to participate will be entitled to participate in such registration (with the holders of such securities being entitled to participate in accordance with the relative priorities, if any, as shall exist among them), in each case with further pro rata allocations to the extent any such person has requested registration of fewer securities than such person is entitled to have registered so that the number of securities to be included in such registration will not exceed that amount that can, in the opinion of such Underwriters, be sold without any such material adverse effect. To the extent Registrable Securities so requested to be registered are excluded from the offering, the Purchasers who shall have initiated the Demand Registration, as a group, shall have the right to one additional Demand Registration under this section with respect to Registrable Securities for the number of securities so excluded (but in no event shall such additional Demand Registration relate to less than a majority of the shares in the aggregate of Registrable Securities held by such initiating Holders and so excluded). (4) Selection of Underwriters. If any Demand Registration is in the form of an underwritten offering, the Holders of a majority of the aggregate number of the outstanding Registrable Securities shall designate the Underwriter or a group of Underwriters to be utilized in connection with the public offering of such Registrable Securities, which selection shall be reasonably acceptable to the Company. The Company shall enter into an underwriting agreement in customary form with such Page 48 of 69 Pages Underwriter or Underwriters, which shall include, among other provisions, indemnities to the effect and to the extent provided in Section 1(d) hereof. The holders of Registrable Securities to be distributed by such Underwriters shall be parties to such underwriting agreement and may, at their option, require that any or all of the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such Underwriters also be made to and for their benefit and that any and all of the conditions precedent to the obligations of such Underwriters under such underwriting agreement also be conditions precedent to their obligations. No holder of Registrable Securities shall be required to make any representations or warranties to or agreements with the Company or the Underwriters other than representations, warranties or agreements regarding such holder and its ownership of the Registrable Securities being registered on its behalf and such holder's intended method of distribution and any other representation required by law. (5) Deferral. Notwithstanding anything to the contrary contained herein, the Company shall not be obligated to prepare and file, or cause to become effective, any registration statement pursuant to this Section 1(a) hereof at any time when, in the good faith judgment of its Board of Directors, the filing thereof at the time requested or the effectiveness thereof after filing should be delayed to permit the Company to include in the registration statement the Company's financial statements (and any required audit opinion thereon) for the then immediately preceding fiscal year or fiscal quarter, as the case may be. The filing of a registration statement by the Company cannot be deferred pursuant to the provisions of the immediately preceding sentence beyond the time that such financial statements (or any required audit opinion thereon) would be required to be filed with the Commission as part of the Company's Annual Report on Form 10-KSB or Quarterly Report on Form 10-QSB, as the case may be, if the Company were then obligated to file such reports. Notwithstanding anything to the contrary contained herein, the Company shall not be obligated to cause a registration statement previously filed pursuant to this Section 1(a) to become effective, and may suspend sales by the Holders of Registrable Securities under any registration that has previously become effective, at any time when, in the good faith judgment of its Board of Directors, it reasonably believes that the effectiveness of such registration statement or the offering of securities pursuant thereto would materially adversely affect a pending or proposed acquisition, merger, recapitalization, consolidation, reorganization or similar transaction or negotiations, discussions or pending proposals with respect thereto; provided that deferrals pursuant to this sentence shall not exceed, in the aggregate, 90 days in any calendar year. The filing of a registration statement, or any amendment or supplement thereto, by the Company cannot be deferred, and the rights of Holders of Registrable Securities to make sales pursuant to an effective registration statement cannot be suspended, pursuant to the provisions of the immediately preceding sentence for more than 15 days after the abandonment or 30 days after the consummation of any of the foregoing proposals or transactions or, in any event, for more than 30 days after the date of the Board's determination pursuant to the immediately preceding sentence of this Section 1(a)(5). (6) The Company agrees that after the Closing, it shall not grant any person registration rights of the type set forth in Section 1(a) hereof with respect to any class of Page 49 of 69 Pages equity or debt security of the Company without the consent of the Purchasers holding a majority of the Registrable Securities held by all of the Purchasers, which consent shall not be unreasonably withheld. The Company and each of the Purchasers agree that the Purchasers shall be entitled to the consent right set forth in the immediately preceding sentence so long as the Purchasers continue to hold 25% of the Registrable Securities acquired by them on the Date of Closing. (b) Piggy-Back Registration. (1) If the Company proposes to file a registration statement under the Securities Act with respect to an offering by the Company for its own account or for the account of any of its security holders of any class of equity security excluding registration statements relating to any registration (i) on Form S-4 or S-8 or any successor or similar form, (ii) filed pursuant to Rule 145 under the Securities Act or any successor or similar form, (iii) related solely to any employee benefit plan or interests therein, (iv) related solely to debt securities of the Company, then the Company shall give written notice of such proposed filing to the Holders of Registrable Securities as soon as practicable (but in no event less than 20 business days before the anticipated filing date), and such notice shall offer such Holders the opportunity to register such number of Registrable Securities as each such Holder may request (a "Piggy-Back Registration"). (2) The Company shall use its best efforts to cause the managing Underwriter or Underwriters of a proposed underwritten offering to permit the Registrable Securities requested to be included in the registration statement for such offering to be included on the same terms and conditions as any similar securities of the Company or of such other security holders included therein. Notwithstanding the foregoing, if the Underwriters of such offering deliver a written opinion to the Company that either because of (i) the kind or combination of securities which the Holders, the Company and any other persons or entities intend to include in such offering or (ii) the size of the offering which the Holders, the Company and such other persons intend to make, are such that the success of the offering would be materially and adversely affected by inclusion of the Registrable Securities requested to be included, then (a) in the event that the size of the offering is the basis of such Underwriter's opinion, the amount of securities to be offered for the accounts of the Holders shall be reduced pro rata (according to the Registrable Securities and other securities proposed for registration by Holders) to the extent necessary to reduce the total amount of securities to be included in such offering to the amount recommended by such Underwriters; and (b) in the event that the kind (or combination) of securities to be offered is the basis of such Underwriter's opinion, (x) the Registrable Securities to be included in such offering shall be reduced as described in clause (a) above or (y) if the actions described in clause (x) would, in the judgment of the Underwriter, be insufficient to substantially eliminate the adverse effect that inclusion of the Registrable Securities requested to be included would have on such offering, such Registrable Securities will be excluded from such offering. The Company will pay all Registration Expenses (as defined herein) in connection with each registration of Registrable Securities. Page 50 of 69 Pages (c) Registration Procedures. If and whenever the Company is required to use its reasonable commercial efforts to effect the registration of any Registrable Securities under the Securities Act, the Company will promptly: (1) prepare and file with the Securities and Exchange Commission a registration statement with respect to such securities, make all required filings with the NASD and use commercially reasonable efforts to cause such registration statement to become effective; (2) prepare and file with the Securities and Exchange Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement until such time as all of such securities have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof set forth in such registration statement, but in no event for a period of more than one year after such registration statement becomes effective; (3) furnish to counsel (if any) elected by holders of a majority (by aggregate principal amount) of the Registrable Securities covered by such registration statement copies of all documents proposed to be filed with the Securities and Exchange Commission in connection with such registration, which documents will be subject to the review of such counsel; (4) furnish to each seller of such securities such number of conformed copies of such registration statement and of each such amendment and supplement thereto (in each case including all exhibits, except that the Company shall not be obligated to furnish any seller of securities with more than two copies of such exhibits), such number of copies of the prospectus included in such registration statement (including such preliminary prospectus and any summary prospectus), in conformity with the requirements of the Securities Act, and such other documents, as such seller may reasonably request in order to facilitate the disposition of the securities owned by such seller; (5) use its commercially reasonable efforts to register or qualify such securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions as each seller shall request, and do any and all other acts and things which may be necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the securities owned by such seller, except that the Company shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction wherein it is not so qualified, or to consent to general service of process in any such jurisdiction; (6) furnish to each seller a signed counterpart, addressed to the sellers, of Page 51 of 69 Pages (i) an opinion of counsel for the Company, dated the effective date of the registration statement, reasonably satisfactory in form and substance to such holders' counsel referred to in Section 1(c)(3), and (ii) subject to the accountants obtaining the necessary representations as specified in Statement on Auditing Standards No. 72, a "comfort" letter signed by the independent public accountants who have certified the Company's financial statements included in the registration statement, covering substantially the same matters with respect to the registration statement (and the prospectus included therein) and, in the case of such accountants' letter, with respect to changes subsequent to the date of such financial statements, as are customarily covered in opinions of issuer's counsel and in accountants' letters delivered to the Underwriters in underwritten public offerings of securities; (7) notify each seller of any securities covered by such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and at the request of any such seller prepare and furnish to such seller a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing; (8) otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Securities and Exchange Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve months, but not more than eighteen months, beginning with the first month after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act; (9) use its best efforts to list such securities on any securities exchange on which the Common Stock is then listed, if such securities are not already so listed and if such listing is then permitted under the rules of such exchange, and to provide a trustee, transfer agent and registrar and paying agent for such Registrable Securities not later than the effective date of such registration statement; (10) in any underwritten offering, use its best efforts to cause the indemnity and contribution terms between the sellers and the Underwriters to be no more burdensome to the sellers than the indemnity and contribution terms between the sellers and the Company set forth in Section 1(d) hereof; and (11) promptly notify each Holder and the Underwriter or Underwriters, if any: Page 52 of 69 Pages (i) when such registration statement or any prospectus used in connection therewith, or any amendment or supplement thereto, has been filed and, with respect to such registration statement or any post-effective amendment thereto, when the same has become effective; (ii) of any written comments from the Securities and Exchange Commission with respect to any filing referred to in clause (i) and of any written request by the Securities and Exchange Commission for amendments or supplements to such registration statement or prospectus; (iii) of the notification to the Company by the Securities and Exchange Commission of its initiation of any proceeding with respect to the issuance by the Securities and Exchange Commission of any stop order suspending the effectiveness of such registration statement; and (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the applicable securities or blue sky laws of any jurisdiction. The Company may require each seller of any securities as to which any registration is being effected to furnish to the Company such information regarding such seller and the distribution of such securities as the Company may from time to time reasonably request in writing and as shall be required by law in connection therewith. Each such holder agrees to furnish promptly to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such holder not materially misleading. By acquisition of Registrable Securities, each holder of such Registrable Securities shall be deemed to have agreed that upon receipt of any notice from the Company of the happening of any event of the kind described in Section 1(c)(7) hereof, such holder will promptly discontinue such holder's disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until such holder's receipt of the copies of the supplemented or amended prospectus contemplated by Section 1(c)(7) hereof. If so directed by the Company, each holder of Registrable Securities will deliver to the Company (at the Company's expense) all copies, other than permanent file copies, then in such holder's possession of the prospectus covering such Registrable Securities current at the time of receipt of such notice. In the event the Company shall give any such notice, the period mentioned in Section 1(c)(2) hereof shall be extended by the number of days during the period from and including the date of the giving of such notice to and including the date when each seller of any Registrable Securities covered by such registration statement shall have received the copies of the supplemented or amended prospectus contemplated by Section 1(c)(7) hereof. In connection with any underwritten offering, all Registrable Securities to be included in such registration shall be subject to the related underwriting agreement and no person may participate in such registration unless such person agrees to sell such person's securities on the basis provided in the underwriting arrangement approved by the persons for whose account such underwritten registration is initially filed and completes and executes all customary Page 53 of 69 Pages questionnaires, indemnities, underwriting agreements and other reasonable documents which must be executed under the terms of such underwriting arrangements. (d) Indemnification and Contribution. (1) Indemnification by Company. The Company agrees to indemnify and hold harmless each Holder of Registrable Securities, its officers, directors, employees and agents and each person who controls such Holder within the meaning of either Section 15 of the Securities Act or Section 20(a) of the Exchange Act, from and against all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation and legal expenses) arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any registration statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages, liabilities or expenses arise out of or are based upon any such untrue statement or omission or allegation thereof based upon information relating to such indemnified Holder and furnished in writing to the Company by such indemnified Holder expressly for use therein. This indemnity will be in addition to any liability which the Company may otherwise have. (2) Indemnification by Selling Holders. Each selling Holder will severally, not jointly and severally, indemnify and hold harmless the Company, each of its directors, each of its officers who have signed the registration statement, each person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20(a) of the Exchange Act, any underwriter and any other Holder selling securities under such registration statement or any of such other Holder's officers directors, employees or agents or any person who controls such Holder within the meaning of either Section 15 of the Securities Act or Section 20(a) of the Exchange Act, from and against all losses, claims, liabilities and expenses (including reasonable costs of investigation and legal expenses), arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any registration statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent (and only to the extent) that such untrue statement or omission or allegation thereof is made in reliance on and in conformity with the information relating to such Holder and furnished in writing to the Company by such Holder expressly for use in connection with such registration; provided, however, that the total amounts payable in indemnity by a Holder under this Section 1(d) shall not exceed the net proceeds received by such Holder in the registered offering out of which such event giving rise to the indemnity arises. (3) Notice. If any action or proceeding (including any governmental investigation or inquiry) shall be brought or asserted against an indemnified party in Page 54 of 69 Pages respect of which indemnity may be sought from indemnifying party, such indemnified party shall promptly notify the indemnifying party in writing, and the indemnifying party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such indemnified party and the payment of all expenses. Such indemnified party shall have the right to employ separate counsel in any such action and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such indemnified party except that the indemnifying party shall be responsible for the reasonable fees and expenses of such counsel if (but only if) (a) the indemnifying party has agreed to pay such fees and expenses or (b) the indemnifying party shall have failed to assume the defense of such action or proceeding and has failed to employ counsel reasonably satisfactory to such indemnified party in any such action or proceeding or (c) the named parties to any such action or proceeding (including any impleaded parties) include both such indemnified party and the indemnifying party, and there are one or more legal defenses available to such indemnified party which are different from or additional to those available to the indemnifying party (in which case, if such indemnified party notifies the indemnifying party in writing that it elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such action or proceeding on behalf of such indemnified party, it being understood, however, that the indemnifying party shall not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys at any time for such indemnified party and any other indemnified parties, which firm shall be designated in writing by such indemnified parties). The indemnifying party shall not be liable for any settlement of any such action or proceeding effected without its written consent, but if settled with its written consent, or if there be a final judgment for the plaintiff in any such action or proceeding, the indemnifying party agrees to indemnify and hold harmless such indemnified parties from and against any loss or liability by reason of such settlement or judgment. (4) Contribution. If (a) the indemnification provided for in Section 1(d)(1) is unavailable to an indemnified Holder in respect of any losses, claims, damages, liabilities or expenses referred to therein or (b) contribution under the Securities Act may be required on the part of such indemnified Holder, then the Company, in lieu of indemnifying such Holder, shall contribute to the amount paid or payable by such Holder as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the Company on the one hand and of the Holder on the other in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of the Holder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Holder and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in the second paragraph of Section 1(d)(1), any Page 55 of 69 Pages legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. The Company and each Holder of Registrable Securities agree that it would not be just and equitable if contribution pursuant to this Section 1(d)(4) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 1(d)(4), a Holder shall not be required to contribute any amount in excess of the amount by which the total net proceeds received by such Holder or its affiliated Holders from the sale to the public of Registrable Securities exceeds the amount of any damages which such Holder, or its affiliated Holders, has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (5) Certain Definitions. (i) The term "Registrable Securities" shall mean the Common Shares issued pursuant to the Restructure Agreement. As to any particular Registrable Securities, once issued such securities shall cease to be Registrable Securities when (A) a registration statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, (B) they shall have been distributed to the public pursuant to Rule 144 (or any successor provision) under the Securities Act, (C) they shall have been otherwise transferred, new certificates for them not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent disposition of them shall not require registration or qualification of them under the Securities Act or any similar state law then in force, or (D) they shall have ceased to be outstanding. (ii) The term "Registration Expenses" shall mean all expenses incident to the Company's performance of or compliance with Section 1 hereof, including, without limitation, all registration and filing fees, all fees and expenses of complying with securities or blue sky laws, fees and other expenses associated with filings with the National Association of Securities Dealers, Inc. (including, if required, the reasonable fees and expenses of any "qualified independent underwriter" and its counsel), all printing expenses, the fees and disbursements of counsel for the Company and of its independent public accountants, the fees and disbursements of one counsel retained by the holders of Registrable Securities, the expenses of any special audits made by such accountants required by or incident to such performance and compliance, but not including (a) fees and disbursements of more than one counsel retained by the holders of Registrable Securities, or (b) such holders' proportionate share of underwriting discounts and commissions. Page 56 of 69 Pages SECTION 2. NOTICES TO COMPANY AND HOLDERS. Any notice or demand authorized by this Agreement to be given or made by the Holders to or on the Company shall be sufficiently given or made when and if deposited in the mail, first class or registered, postage prepaid, addressed to the office of the Company expressly designated by the Company at its office for purposes of this Agreement (until the Holders are otherwise notified in accordance with this Section by the Company), as follows: Geokinetics Inc. One Riverway, Suite 2100 Houston, Texas 77056 Attention: President Any notice pursuant to this Agreement to be given by the Company to any Holder shall be sufficiently given when and if deposited in the mail, first class or registered, postage prepaid, addressed (until the Company is otherwise notified in accordance with this Section by such Holder) to such Holder at the address appearing in the stock records of the Company. SECTION 3. SUPPLEMENTS AND AMENDMENTS. This Agreement may not be amended without the consent of the Company and the Holders of a majority of the Registrable Securities then outstanding and entitled to the registration rights set forth herein. SECTION 4. SUCCESSORS. All the covenants and provisions of this Agreement by or for the benefit of the Company shall bind and inure to the benefit of its respective successors and assigns hereunder. SECTION 5. TERMINATION. This Agreement (except for Section 1(d)) shall terminate at 5:00 p.m., New York City time, on May 2, 2009. SECTION 6. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF SAID STATE. SECTION 7. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be construed to give to any person or corporation other than the Company and the registered holders of the Shares any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company and the registered holders of the Shares. Nothing herein shall prohibit or limit the Company from entering into an agreement providing holders of securities which may hereafter be issued by the Company with such registration rights exercisable at such time or times and in such manner as the Board of Directors shall deem in the best interests of the Company so long as the performance by the Company of its obligations under such other agreement will not cause the Company to breach its obligations hereunder to the Holders. SECTION 8. COUNTERPARTS. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and Page 57 of 69 Pages all such counterparts shall together constitute but one and the same instrument. [Signature Page Follows] Page 58 of 69 Pages [Signature Page of Registration Rights Agreement] IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, as of the day and year first above written. COMPANY GEOKINETICS INC. By: /s/ THOMAS J. CONCANNON --------------------------------- Name: Thomas J. Concannon Title: Vice President and CFO HOLDERS All those Holders whose signature pages, substantially in the form of page 14 hereto, attached hereto Page 59 of 69 Pages FORM OF HOLDER SIGNATURE PAGE NAME OF HOLDER: By: --------------------------------- Name: ------------------------------- Title: ------------------------------ Address: ------------------------------------ (Street Address) ------------------------------------ (City, State and Zip Code) ------------------------------------ (Telefax Number) Page 60 of 69 Pages EX-99.VI 6 file005.txt CO-SALE AGREEMENT EXHIBIT VI ---------- CO-SALE AGREEMENT This CO-SALE AGREEMENT (this "Agreement") is made and entered into as of May 2, 2003, among Geokinetics Inc., a Delaware corporation (the "Company"), Blackhawk Capital Partners, a Texas general partnership ("BPC"), Blackhawk Investors, L.L.C., a Delaware limited liability company ("Blackhawk I"), Blackhawk Investors II, L.L.C., A Delaware limited liability company ("Blackhawk II"), Somerset Capital Partners, a general partnership ("SCP"), William R. Ziegler ("Ziegler") and Steven A. Webster ("Webster") (BCP, Blackhawk I, Blackhawk II, SCP, Ziegler and Webster being sometimes referred to collectively as the "Blackhawk Partners") and the undersigned Investors (as defined below). WHEREAS, each of the Investors is a party to the Securities Purchase and Exchange Agreement by and among, among others, the Company, the Blackhawk Partners and the Investors (the "Restructure Agreement"); and WHEREAS, certain of the obligations of the Company and the Investors are conditioned upon the execution and delivery of this Agreement; and WHEREAS, the parties hereto desire to have this Agreement govern certain transfers of shares of the Company by the Blackhawk Partners; NOW, THEREFORE, in consideration of the premises, and the mutual agreements set forth herein, the parties hereto agree as follows: SECTION 1. CERTAIN DEFINITIONS. (a) Capitalized terms not otherwise defined herein, shall have the meanings assigned to them in the Restructure Agreement. (b) As used herein: "Common Stock" means (i) the Company's Common Stock, $0.01 par value per share, (ii) shares of Common Stock issuable upon exercise of outstanding options or warrants and (iii) shares of Common Stock issuable upon conversion of any outstanding convertible securities. "Investors" shall mean each of the persons identified as Investors on the signature pages hereof and any other persons or entities who become parties to this Agreement as "Investors" pursuant to the terms of this Agreement, and their respective heirs, legal representatives, administrators and successors. SECTION 2. RESTRICTIONS ON TRANSFER BY BLACKHAWK PARTNERS. Except as provided in this Agreement, the Blackhawk Partners will not sell, assign, pledge, hypothecate or otherwise encumber or dispose of in any way, all or part of or any interest in the Common Stock. Any sale, assignment, transfer, pledge, hypothecation or other encumbrance or disposition of the Common Stock not made in conformance with this Agreement shall be null and void, shall not be recorded Page 61 of 69 Pages on the books of the Company and shall not be recognized by the Company without the written consent of all of the Investors. SECTION 3. CO-SALE RIGHTS. (a) Co-Sale Right. If any Blackhawk Partners (the "Blackhawk Seller") desires to effect a sale or transfer (pursuant to a single transaction or a series of related transactions to a single transferee or group of transferees) of at least 25% of the shares of Common Stock owned by the Blackhawk Seller to any transferee or group of transferees (a "Co-Sale Disposition"), the Blackhawk Seller shall give 15 days prior written notice to the Investors describing the material terms of the proposed Co-Sale Disposition and identifying the contemplated transferee or group of transferees (a "Co-Sale Notice"). To the extent any Investor holds shares of Common Stock, each such Investor may, by written notice to the Blackhawk Seller delivered within 15 days following the date of the Co-Sale Notice (each such Investor delivering such notice being a "Co-Sale Investor"), elect to participate in the Co-Sale Disposition, and require, as a condition to the closing of the Co-Sale Disposition, that the proposed transferee or group of transferees purchase, at the same price per share and on the same terms and conditions as are described in the Co-Sale Notice, a number of shares of Common Stock held by such Investor that is equal to the product obtained by multiplying (i) the aggregate number of shares of Common Stock to be transferred as set forth in the Co-Sale Notice by (ii) a fraction, the numerator of which is the number of shares of Common Stock owned by the Investor on an as-if converted or exchanged basis at the time of the sale or transfer and the denominator of which is the combined number of such shares of Common Stock and securities convertible or exchangeable for Common Stock owned by the Blackhawk Partners and the Co-Sale Investors on an as-if converted or exchanged basis (the "Co-Sale Shares"). If any Investor receiving the Co-Sale Notice timely elects to be a Co-Sale Investor, the Blackhawk Seller shall not effect the Co-Sale Disposition described in the Co-Sale Notice unless the proposed transferee or group of transferees agrees to purchase all of the Co-Sale Shares of all of the Co-Sale Investors at the same price and on the same terms and conditions described in the Co-Sale Notice, except that to the extent the transferee or group purchases any warrant or option, the exercise price thereof shall be deducted from the price payable for such warrant or option. (b) Closing of Co-Sale Disposition. Upon the closing of the Co-Sale Disposition pursuant to this Section, each Co-Sale Investor shall deliver at such closing, against payment of the purchase price therefor, certificates representing the Common Stock to be sold, duly endorsed for transfer or accompanied by duly endorsed stock powers, and evidence of good title to the Common Stock to be sold and the absence of liens, encumbrances and adverse claims with respect thereto and such other matters set forth in the Co-Sale Notice or as are otherwise deemed necessary by the Company for the proper transfer of such Common Stock on the books of the Company. SECTION 4. NON-EXERCISE OF RIGHTS. To the extent the Investors do not elect to participate in the sale of Common Stock in the time periods and on the terms and conditions specified in Section 3, the Blackhawk Seller may, not later than 120 days following delivery of the Co-Sale Notice, complete a transfer of such Common Stock on terms and conditions not more favorable to the transferor than those described in the Co-Sale Notice. Any proposed transfer on terms and conditions more favorable than those described in the Co-Sale Notice, as Page 62 of 69 Pages well as any subsequent proposed transfer of any Common Stock by the Blackhawk Seller, shall again be subject to the co-sale rights of the Investors and shall require compliance by the Blackhawk Seller with the procedures described in Section 3. SECTION 5. EXEMPT TRANSFERS. Nothwithstanding anything in this Agreement to the contrary, the co-sale rights of the Investors shall not apply to: (i) (A) any transfer of Common Stock by Blackhawk I or Blackhawk II to its partners or members, (B) any pledge of Common Stock made pursuant to a bona fide loan transaction that creates a mere security interest, (C) any transfer to the ancestors, descendants or spouse or to trusts for the benefit of such persons or the Blackhawk Partners, or (D) any bona fide gift; provided that (x) the transferring Blackhawk Partner shall inform the Company and the Investors of such pledge, transfer or gift prior to effecting it and (y) the pledgee, transferee or donee shall furnish to the Company and the Investors a written agreement to be bound by and comply with all provisions of this Agreement, and such transferred Common Stock shall remain "Common Stock" hereunder and such pledgee, transferee or donee shall be treated as a Blackhawk Partner for all purposes of this Agreement; (ii) any public sale properly conducted by any of the Blackhawk Partners pursuant to Rule 144 or Rule 144A under the Securities Act of 1933, as amended; (iii) any transfer by a Blackhawk Partner of less than 25% of its respective holdings of Common Stock in a single transaction or series of related transactions; and (iv) the participation by any of the Blackhawk Partners in a proposed public offering of Common Stock (including the entering into of an underwriting agreement, a custody agreement and other agreements customarily executed by selling shareholders in connection therewith) or the participation by any Blackhawk Partner in any other registration pursuant to any demand or piggyback registration rights that any of them may have pursuant to any registration rights or similar agreement with the Company and the consummation thereof. SECTION 6. LEGEND ON CERTIFICATES. (a) Each certificate representing shares of Common Stock now or hereafter owned by a Blackhawk Partner or issued to any person in connection with a transfer pursuant to Section 5(i) hereof shall be endorsed with the following legend: "THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITION OF A CERTAIN CO-SALE AGREEMENT BY AND BETWEEN THE STOCKHOLDER, THE CORPORATION AND CERTAIN HOLDERS OF THE SECURITIES OF THE CORPORATION. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION." Page 63 of 69 Pages (b) Each Blackhawk Partner and each Investor agrees that the Company may instruct its transfer agent to impose transfer restrictions on the shares represented by certificates bearing the legend referred to in Section 6(a) above to enforce the provisions of this Agreement and the Company agrees to promptly do so. The legend shall be removed upon termination of this Agreement or in connection with an exempt transfer under Section 5(ii) through 5(iv) above. SECTION 7. SPECIFIC ENFORCEMENT. In view of the inadequacy of money damages, if any Blackhawk Partner or any Investor (a "Breaching Party") or other person shall fail to comply with the provisions of this Agreement, the Company and the other non-breaching parties shall be entitled, to the extent permitted by applicable law, to injunctive relief in the case of the violation, or attempted or threatened violation, by a Breaching Party or other person of any of the provisions of such Sections, or to a decree compelling specific performance by a Breaching Party or other person of any such provisions, or to any other remedy legally allowed to them. SECTION 8. NOTICES. Except as may be otherwise provided herein, all notices, requests, waivers and other communications required or permitted to be given or made under this Agreement shall be given or made in writing and shall be deemed to have been duly given or made (i) when hand delivered to the other party, (ii) when received and sent by facsimile at the address and facsimile number set forth below, (iii) three business days after deposit in the U.S. Mail with first class or certified mail return receipt requested, postage prepaid and addressed to the other party as set forth below; or (iv) the next business day after deposit with a national overnight delivery service, postage prepaid, addressed to the parties as set forth below with next-business day delivery guaranteed, provided that the sending party receives a confirmation of delivery from the delivery service provider. (a) if to the Company, One Riverway, Suite 2100, Houston, Texas 77056, Facsimile No. (713) 850-7660, Attention: President; and (b) if to any Blackhawk Partner, c/o Blackhawk Capital Partners, 50 Fountain Plaza, Suite 12201, Buffalo, New York 14202, Facsimile No. (716) 842-2514, Attention: William R. Ziegler; and (c) if to any Investor, to the address and facsimile number shown on the signature page of such Investor or as last shown on the stock record books of the Company. Each person making a communication hereunder by facsimile shall promptly confirm by telephone to the person to whom such communication was addressed each communication made by it by facsimile pursuant hereto, but the absence of such confirmation shall not affect the validity of any such communication. A party may change or supplement the addresses given above, or designate additional addresses, for purposes of this Section 8, by giving the other party written notice of the new address in the manner set forth above. SECTION 9. AMENDMENT; ASSIGNMENT OF RIGHTS; SEVERABILITY (a) Any provision may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the Page 64 of 69 Pages written consent of (i) as to the Company, only by the Company, (ii) as to the Investors, by persons or entities holding more than a majority in interest of the Common Stock held by the Investors and their assignees pursuant to Section 9(c) hereof; provided, that any Investor may waive any of its rights hereunder without obtaining the consent of any other Investor; and (iii) as to a Blackhawk Partner, by such Blackhawk Partner or its respective assignee pursuant to Section 9(c) hereof. Any amendment or waiver effected in accordance with clauses (i), (ii) and (iii) of this Section shall be binding upon each Investor, its successors and assigns, the Company and the Blackhawk Partner. (b) This Agreement and the rights and obligations of the parties hereunder shall inure to the benefit of, and be binding upon, their respective successors, assigns and legal representatives. (c) In the event that any provisions hereof are held to be invalid, illegal or against public policy, the remaining provisions hereof shall not be affected thereby. In such event, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible with respect to those provisions which were held to be invalid, illegal or against public policy. SECTION 10. AGREEMENTS BY COMPANY. The Company, insofar as is proper or required, consents to this Agreement. It shall not issue, transfer or reissue any of its shares of stock, warrants or other securities in violation of this Agreement or without requiring proof of compliance with this Agreement. SECTION 11. EFFECTIVENESS; TERMINATION. This Agreement shall become effective at such time as it is executed by the Company, the Blackhawk Partners and, with respect to an Investor, by such Investor. Except as otherwise provided herein, this Agreement shall terminate upon the earlier to occur of (i) the closing of the Company's sale of all or substantially all of its assets or the acquisition of the Company by another entity by means of a merger or consolidation resulting in the exchange of the outstanding shares of the Company's capital stock for securities issued or other consideration paid, or caused to be issued or paid, by the acquiring entity or its subsidiary in which the stockholders of the Company prior to such event do not own a majority of the voting securities in the surviving entity; (ii) the execution by the Company of a general assignment for the benefit of creditors or the appointment of a receiver or trustee to take possession of the property or assets of the Company, (iii) the dissolution of the Company; (iv) the written approval of the Company, the Blackhawk Partners and the holders of a majority of the shares of Common Stock held by the Investors; (v) the date on which the Investors, in the aggregate, hold less than 25% of the number of shares of Common Stock originally purchased under the Restructure Agreement; (vi) the date on which none of the Blackhawk Partners owns any shares of Common Stock; (vii) the first date on which the Common Stock is traded on the NASDAQ National Market System or any nationally registered securities exchange, or (viii) 5:00 P.M. New York City time on May 2, 2009. Any Investor who disposes of more than 75% of the number of shares of Common Stock originally purchased under the Restructure Agreement in conformity with the terms of this Agreement or otherwise shall cease to be a party to this Agreement and shall have no further rights hereunder. Page 65 of 69 Pages SECTION 12. CONSTRUCTION. Each party to this Agreement has had the opportunity to review this Agreement with legal counsel. This Agreement shall not be construed or interpreted against any party on the basis that such party drafted or authored a particular provision, parts of or the entirety of this Agreement. SECTION 13. MISCELLANEOUS. This Agreement (a) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof, (b) may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same instrument, (c) shall inure to the benefit of and be binding upon, the successors, assigns, legatees, distributees, legal representatives and heirs of each party and is not intended to confer upon any person, other than the parties and their permitted successors and assigns, any rights or remedies hereunder, and (d) shall be governed in all respects, including validity, interpretation and effect, by the laws of the State of New York, without regard to conflict of laws principles. The captions in this Agreement are for convenience of reference only and shall not affect its interpretation in any respect. All references to numbers of shares in this Agreement shall be appropriately adjusted to reflect any stock dividend, split, combination or other recapitalization of shares by the Company occurring after the date of this Agreement. [SIGNATURES BEGIN ON THE FOLLOWING PAGE] Page 66 of 69 Pages IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the day and year first above written. COMPANY: GEOKINETICS INC. By: /s/ THOMAS J. CONCANNON ----------------------------------------- Name: Thomas J. Concannon ---------------------------------------- Title: Vice President and CFO --------------------------------------- BLACKHAWK PARTNERS: BLACKHAWK CAPITAL PARTNERS By: /s/ WILLIAM R. ZIEGLER ----------------------------------------- William R. Ziegler, General Partner BLACKHAWK INVESTORS, L.L.C. By: Blackhawk Capital Partners, Managing Member By: /s/ WILLIAM R. ZIEGLER ------------------------------------ William R. Ziegler, General Partner BLACKHAWK INVESTORS II, L.L.C. By: Blackhawk Capital Partners, Managing Member By: /s/ WILLIAM R. ZIEGLER ------------------------------------- William R. Ziegler, General Partner SOMERSET CAPITAL PARTNERS By: /s/ WILLIAM R. ZIEGLER ----------------------------------------- William R. Ziegler, General Partner Page 67 of 69 Pages /s/ WILLIAM R. ZIEGLER --------------------------------------------- William R. Ziegler, Individually /s/ STEVEN A. WEBSTER --------------------------------------------- Steven A. Webster, Individually INVESTORS: All those Investors whose signature pages, substantially in the form of page 9 hereto, are attached hereto Page 68 of 69 Pages FORM OF INVESTOR SIGNATURE PAGE NAME OF INVESTOR: By: --------------------------------- Name: ------------------------------- Title: ------------------------------ Address: ------------------------------------ (Street Address) ------------------------------------ (City, State and Zip Code) ------------------------------------ (Telefax Number) Page 69 of 69 Pages -----END PRIVACY-ENHANCED MESSAGE-----