EXHIBIT VI
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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"), Xxxxxxx X.
Xxxxxxx ("Xxxxxxx") and Xxxxxx X. Xxxxxxx ("Xxxxxxx") (BCP, Blackhawk I,
Blackhawk II, SCP, Xxxxxxx and Xxxxxxx 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
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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
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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."
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(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, Xxx Xxxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000,
Facsimile No. (000) 000-0000, Attention: President; and
(b) if to any Blackhawk Partner, c/o Blackhawk Capital Partners, 00
Xxxxxxxx Xxxxx, Xxxxx 00000, Xxxxxxx, Xxx Xxxx 00000, Facsimile No. (716)
842-2514, Attention: Xxxxxxx X. Xxxxxxx; 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
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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.
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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]
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IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the
day and year first above written.
COMPANY:
GEOKINETICS INC.
By: /s/ XXXXXX X. XXXXXXXXX
-----------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
----------------------------------------
Title: Vice President and CFO
---------------------------------------
BLACKHAWK PARTNERS:
BLACKHAWK CAPITAL PARTNERS
By: /s/ XXXXXXX X. XXXXXXX
-----------------------------------------
Xxxxxxx X. Xxxxxxx, General Partner
BLACKHAWK INVESTORS, L.L.C.
By: Blackhawk Capital Partners,
Managing Member
By: /s/ XXXXXXX X. XXXXXXX
------------------------------------
Xxxxxxx X. Xxxxxxx, General Partner
BLACKHAWK INVESTORS II, L.L.C.
By: Blackhawk Capital Partners,
Managing Member
By: /s/ XXXXXXX X. XXXXXXX
-------------------------------------
Xxxxxxx X. Xxxxxxx, General Partner
SOMERSET CAPITAL PARTNERS
By: /s/ XXXXXXX X. XXXXXXX
-----------------------------------------
Xxxxxxx X. Xxxxxxx, General Partner
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/s/ XXXXXXX X. XXXXXXX
---------------------------------------------
Xxxxxxx X. Xxxxxxx, Individually
/s/ XXXXXX X. XXXXXXX
---------------------------------------------
Xxxxxx X. Xxxxxxx, Individually
INVESTORS:
All those Investors whose signature pages,
substantially in the form of page 9 hereto,
are attached hereto
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FORM OF INVESTOR SIGNATURE PAGE
NAME OF INVESTOR:
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Address:
------------------------------------
(Street Address)
------------------------------------
(City, State and Zip Code)
------------------------------------
(Telefax Number)
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