Subsequent Events

6 Months Ended

Jun. 30, 2011

Subsequent Events

Subsequent Events

NOTE 15:   Subsequent Events

Execution of Amended and Restated Credit Agreement - Whitebox Revolving Credit Facility

On May 16, 2011, the Company received a commitment and summary of principal terms from the New Lenders for a $50.0 million senior secured revolving credit facility.  On May 24, 2011, the Company consented to the assignment of the rights and obligations under the RBC Revolving Credit Facility to the New Lenders and contemporaneously entered into a Forbearance Agreement and Amendment No. 5 with the New Lenders and Whitebox Advisors.  The amended and restated credit agreement facility was executed among the Company and the New Lenders on August 12, 2011.  In connection with the execution of this agreement, the Company paid a fee of $1.7 million in cash.  In addition, the Company will pay a $4.0 million advisory fee by issuing shares of Geokinetics common stock valued at 95% of the volume weighted average price of the common stock over the trailing 10-day period following the execution of the amended and restated credit agreement.  The number of shares of common stock and their value per share will be computed as of August 26, 2011.  The issuance of these shares will impact the conversion and exercise prices of the Series B-1 Preferred Stock, the 2008 Warrants and the 2010 Warrants, which are subject to an anti-dilution adjustment in the event the Company issues shares of common stock for a consideration less than the applicable conversion or exercise price. The conversion price of the Series B-1 Preferred Stock and the exercise price of the 2008 Warrants will be reduced in accordance with an anti-dilution formula and the exercise price of the 2010 Warrants will be reduced to the issue price of such common stock.

Borrowings outstanding under the facility bear interest at 11.125%; amounts in excess of the amount outstanding and the total amount available of $50.0 million are subject to an unused commitment fee of 11.125%.  The facility does not provide for the issuance of letters of credit and will mature on September 1, 2014.  Borrowings under the facility are secured by certain of the Company’s and its subsidiaries’ US assets and the pledge of a portion of the stock of certain of its foreign subsidiaries.  There are no scheduled amortization or commitment reductions prior to maturity but the Company is required to prepay the facility with proceeds from certain asset sales.  The Company has the option to prepay the facility upon the issuance of certain equity securities or after the first year, subject to a reduction fee schedule.  The facility has no financial maintenance covenants.