EXHIBIT 99
RESTRUCTURE AGREEMENT
THIS RESTRUCTURE AGREEMENT ("Agreement") is entered into this 1st day of
October, 1999, by and between GEOKINETICS INC., a Delaware corporation, and its
subsidiaries, SIGNATURE GEOPHYSICAL SERVICES, INC. (a Michigan corporation) and
QUANTUM GEOPHYSICAL, INC. (a Texas corporation), collectively the "Geokinetics
Entities," and INPUT/OUTPUT, INC. (a Delaware corporation) and its subsidiary
Global Charter Corporation (a Delaware corporation), collectively the "I/O
Entities."
RECITALS:
WHEREAS, Geokinetics Inc. ("Geokinetics") and Input/Output, Inc. ("I/O")
are parties to that certain Conditional Sales Agreement No. 970915 executed by
Geokinetics and I/O on or about September 26, 1997 and September 29, 1997,
respectively ("CSA I"), whereby I/O agreed to sell certain equipment to
Geokinetics;
WHEREAS, Signature Geophysical Services, Inc. ("Signature"), and I/O are
parties to that certain Conditional Sales Agreement No. 970916 executed by
Signature and I/O on or about September 26, 1997 and September 29, 1997,
respectively ("CSA II"), whereby I/O agreed to sell certain equipment to
Signature;
WHEREAS, I/O is the owner and holder of that certain Promissory Note dated
November 11, 1998 in the principal sum of $1,621,782.02 between Quantum
Geophysical, Inc. ("Quantum"), and Geokinetics, as makers, and I/O, as payee
("Note");
WHEREAS, I/O has assigned to Global Charter Corporation ("Global"), all of
its rights, title and interest to the Sales Price and any interest payable under
CSA I and CSA II and has thereafter assigned to Global all of I/O's right, title
and interest in CSA I, CSA II, the Note and any related security and other
documents signed herewith;
WHEREAS, subsidiaries or affiliated companies of Geokinetics, Signature or
Quantum may have used equipment that is the subject of or represents collateral
under CSA I, CSA II or the Note;
WHEREAS, the Geokinetics Entities, being in default and unable to perform
under CSA I, CSA II and the Note, have requested I/O to restructure their
obligations thereunder;
WHEREAS, I/O has agreed to such restructure with Geokinetics, Signature
and Quantum whereby the parties, among other things, will enter
contemporaneously herewith into an assignment in lieu of foreclosure and a
leaseback transaction involving equipment subject to, covered by or pledged to
I/O as collateral under CSA I, CSA II or the Note (defined below as the
"Equipment".)
WHEREAS, the parties hereto agree and acknowledge that the principal
outstanding as of the date hereof on CSA I, CSA II and the Note is
$2,127,323.85, $6,174,430.47 and $1,621,782.02, respectively; and
WHEREAS, the parties to this Restructure Agreement have contemporaneously
herewith entered into or will enter into various agreements, including but not
limited to a Lease Agreement between I/O and Geokinetics of this same date, to
accommodate and effect the restructure described above (collectively, all such
agreements including this Agreement are referred to as the "Transaction
Documents");
NOW, THEREFORE, for and in consideration of the premises herein set forth
and the warranties, representations, covenants and agreements herein contained,
the parties to this Agreement hereby warrant, represent, covenant and agree as
follows:
ARTICLE 1
ASSIGNMENT IN LIEU OF FORECLOSURE
1.1 ASSIGNMENT IN LIEU OF FORECLOSURE. On the terms and conditions
contained in this Agreement, the Geokinetics Entities shall assign, convey and
transfer to I/O at the Closing all of the Geokinetics Entities' right, title and
interest in and to the assets more particularly described in CSA I, CSA II, the
Note and the related documents signed therewith (collectively, the "Equipment")
in lieu of I/O's exercising its rights of foreclosure on the Equipment.
ARTICLE 2
ADDITIONAL CONSIDERATION
2.1 ADDITIONAL CONSIDERATION. As additional consideration to I/O,
Geokinetics, for itself and the other Geokinetics Entities, agrees to pay to the
I/O Entities at Closing all non-default interest accrued to date under CSA I,
CSA II and the Note, and all attorney's fees (and expenses) incurred by I/O
negotiating, documenting and otherwise accomplishing this restructuring
transaction, which payments are conditions precedent to I/O's commitment to
lease the Equipment back to Geokinetics.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF THE GEOKINETICS ENTITIES
The Geokinetics Entities represent and warrant to I/O as follows:
3.1 AUTHORITY. The Geokinetics Entities have the full right and power to
execute, deliver and perform this Agreement. This Agreement is a valid and
legally binding obligation of the Geokinetics Entities enforceable against them
in accordance with its terms, subject, however, to bankruptcy, insolvency,
reorganization, and other laws affecting creditors' rights generally and, with
regard to any equitable remedies, to the discretion of the court before which
proceedings to obtain such remedies may be pending. The Geokinetics Entities
have obtained all requisite director approval and have performed all other
corporate action required in connection with the execution and delivery of this
Agreement and the consummation of transactions contemplated hereby.
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3.2 DUE INCORPORATION AND GOOD STANDING. Each Geokinetics Entity is duly
organized, validly existing and in good standing under the laws of its State of
incorporation.
3.3 EQUIPMENT. The Geokinetics Entities own and hold title to the
Equipment, free and clear of any and all liens, security interests,
encumbrances, options, charges or assessments, except liens in favor of
Input/Out, Inc. The Equipment is in good repair and working condition and has
been designed, installed and maintained in accordance with good industry
standards and all applicable legal requirements, subject to ordinary wear and
tear.
3.4 NO DEFAULTS OR OTHER VIOLATIONS. The execution and delivery of this
Agreement by the Geokinetics Entities and the consummation of the restructuring
transaction contemplated by this Agreement will not result in the breach of or
default under (i) any of the Geokinetics Entities' certificates of
incorporation, bylaws or other constituent documents and (ii) any indenture,
mortgage, material agreement, law, rule, regulation or any order, judgment or
decree to which any of the Geokinetics Entities is a party or to which any of
the Geokinetics Entities may be subject.
3.5 LITIGATION AND CLAIMS. No claim, demand, filing, cause of action,
administrative proceeding, lawsuit or other litigation is pending or, to the
best knowledge of the Geokinetics Entities, threatened that could now or
hereafter affect the ownership or operation of any of the Equipment.
3.6 COMPLIANCE WITH LAWS. The Equipment has been operated in accordance
with all laws, orders, rules and regulations of all governmental authorities
having or asserting jurisdiction relating to the ownership and operation
thereof. All necessary governmental certificates, consents, permits, licenses or
other authorizations with regard to the ownership or operation of the Equipment
have been obtained and no violations exist or have been recorded in respect of
such licenses, permits or authorizations.
3.7 ENVIRONMENTAL. The Geokinetics Entities warrant that the Geokinetics
Entities have not, and to the Geokinetics Entities' knowledge and belief no
third party operator has received notice of, and the Geokinetics Entities do not
know of, any violation of or investigation relating to any federal, state or
local laws with respect to pollution or protection of the environment relating
to the Equipment. The Geokinetics Entities have furnished I/O copies of any and
all environmental studies and reports prepared or obtained by the Geokinetics
Entities relating to the Equipment.
3.8 BROKERS. No broker or finder is entitled to any brokerage or finder's
fee, or to any commission, based in any way on agreements, arrangements or
understandings made by or on behalf of the Geokinetics Entities for which I/O
has or will have any liabilities or obligations (contingent or otherwise).
ARTICLE 4
CONDITIONS TO OBLIGATIONS OF I/O
The obligations of I/O to consummate the transactions provided for herein
are subject to the fulfillment on or prior to the Closing Date of each of the
following conditions, unless waived by I/O:
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4.1 ACCURACY OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE
GEOKINETICS ENTITIES. All representations and warranties of the Geokinetics
Entities contained herein or in any document delivered pursuant hereto shall be
true and correct in all material respects.
4.2 PERFORMANCE. The Geokinetics Entities shall have performed all
material obligations, covenants and agreements contained in this Agreement to be
performed or complied with by any of them at or prior to the Closing.
4.3 PENDING MATTERS. No suit, action or other proceeding shall be pending
or threatened that seeks to restrain, enjoin or otherwise prohibit the
consummation of the transactions contemplated by this Agreement.
ARTICLE 5
REPRESENTATIONS OF I/O
5.1 AUTHORITY. I/O has the full right and power to execute, deliver and
perform this Agreement. This Agreement is a valid and legally binding obligation
of I/O enforceable against it in accordance with its terms, subject, however, to
bankruptcy, insolvency, reorganization, and other laws affecting creditors'
rights generally and, with regard to any equitable remedies, to the discretion
of the court before which proceedings to obtain such remedies may be pending.
I/O has obtained all requisite director approval to execute this Agreement and
perform its obligations hereunder and has performed all other corporate action
required in connection with the execution and delivery of this Agreement and the
consummation of transactions contemplated hereby.
5.2 DUE INCORPORATION AND GOOD STANDING. I/O is duly organized, validly
existing and in good standing under the laws of the State of Delaware.
5.3 NO DEFAULTS OR OTHER VIOLATIONS. The execution and delivery of this
Agreement by I/O and the consummation of the transaction contemplated by this
Agreement will not result in the breach of or default under (i) I/O's articles
of incorporation, bylaws or other constituent documents and (ii) any indenture,
mortgage, material agreement, law, rule, regulation or any order, judgment or
decree to which I/O is a party or to which I/O may be subject.
5.4 BROKERS. No broker or finder is entitled to any brokerage or finder's
fee, or to any commission, based in any way on agreements, arrangements or
understandings made by or on behalf of I/O for which the Geokinetics Entities
have or will have any liabilities or obligations (contingent or otherwise).
ARTICLE 6
CONDITIONS TO OBLIGATIONS OF THE GEOKINETICS ENTITIES
The obligations of the Geokinetics Entities to consummate the transaction
provided for herein are subject to the fulfillment on or prior to the Closing
Date of each of the following conditions, unless waived by the Geokinetics
Entities:
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6.1 REPRESENTATIONS. The covenants and representations of I/O herein
contained shall be true and correct in all material respects.
6.2 PERFORMANCE. The Geokinetics Entities shall have performed all
material obligations, covenants and agreements contained in this Agreement to be
performed or complied with by it at or prior to the Closing.
6.3 PENDING MATTERS. No suit, action or other proceeding shall be pending
or threatened that seeks to restrain, enjoin, or otherwise prohibit the
consummation of the transactions contemplated by this Agreement.
ARTICLE 7
CLOSING DOCUMENTS AND DELIVERIES
7.1 TIME AND PLACE OF CLOSING. The transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Xxxxxx & Xxxxxx
L.L.P., by September 24, 1999 (the "Closing Date").
7.2 DELIVERY. At the Closing, the Geokinetics Entities shall deliver to
I/O a Xxxx of Assignment in substantially the form of Exhibit "B" attached
hereto executed by the Geokinetics Entities conveying the Equipment to I/O. At
the Closing, the Geokinetics Entities shall deliver to I/O by wire transfer to
an account designated by I/O to the Geokinetics Entities in writing, the sums of
money due at closing under any of the Transaction Documents.
ARTICLE 8
SURVIVAL, INDEMNITIES
8.1 SURVIVAL. The representations, warranties, covenants and agreements
contained herein shall survive the Closing and the consummation of the
assignment and leaseback of the Equipment as herein provided.
8.2 INDEMNIFICATION BY I/O. I/O agrees to indemnify, release, defend and
hold harmless the Geokinetics Entities, its officers, directors, employees,
owners, agents, representatives, affiliates, subsidiaries, successors and
assigns (collectively, the "Geokinetics Entities Indemnitees") from and against
any and all Claims (as hereinafter defined) (including, without limitation,
damage to property, or injury to persons or death, and court costs and
reasonable attorneys' fees) caused by, arising from, or attributable to (1) the
ownership of the Equipment, from and after the Closing Date, subject, however to
the certain Lease Agreement between Input/Output, Inc. and Geokinetics Inc.
dated as of this same date, or (2) the breach by I/O of any of its
representations, warranties, covenants or agreements hereunder. The term
"Claims" as used in this Agreement shall mean all claims, liabilities, losses,
damages, costs and expenses.
8.3 INDEMNIFICATION BY THE GEOKINETICS ENTITIES. The Geokinetics Entities
agree to indemnify, release, defend and hold harmless I/O, its officers,
directors, employees, owners, agents,
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representatives, affiliates, subsidiaries and successors from and against any
and all Claims (including, without limitation, damage to property or injury to
persons or death, and court costs and reasonable attorneys' fees) caused by,
arising from or attributable to (1) the ownership and operation of the Equipment
prior to the Closing Date, or (2) the breach by any of the Geokinetics Entities
of any of their representations, warranties, covenants or agreements hereunder.
8.4 EXCLUSIVE REMEDY. Each of the parties hereto acknowledges and agrees
that its sole and exclusive remedy with respect to (i) any and all Claims, (ii)
any other claims pursuant to or in connection with this Agreement or the
transactions contemplated thereby, or (iii) any other claims relating to the
Equipment and the assignment of same by I/O and the Geokinetics Entities,
respectively, shall be limited to the provisions set forth in this Agreement and
the Transaction Documents.
8.5 NEGLIGENCE AND FAULT. AN INDEMNIFIED PARTY SHALL BE ENTITLED TO
INDEMNIFICATION HEREUNDER IN ACCORDANCE WITH THE TERMS HEREOF WITH RESPECT TO
THE EQUIPMENT, REGARDLESS OF WHETHER THE LOSS OR CLAIM GIVING RISE TO SUCH
INDEMNIFICATION OBLIGATION IS THE RESULT OF THE SOLE, CONCURRENT OR COMPARATIVE
NEGLIGENCE, STRICT LIABILITY OR VIOLATION OF ANY LAW OF OR BY SUCH INDEMNIFIED
PARTY. THE PARTIES AGREE THAT THIS PARAGRAPH CONSTITUTES A CONSPICUOUS LEGEND.
ARTICLE 9
RELEASES
9.1 RELEASE OF I/O AND GLOBAL. In consideration for I/O entering into the
restructure as evidenced by the Transaction Documents and hereby agreeing to the
restructure and the release granted herein, the Geokinetics Entities do hereby
release, remise, relinquish and forever discharge I/O and Global and their
respective beneficiaries, employees, agents, representatives, attorneys,
directors, officers, owners, successors and assigns from any and all claims,
rights, demands, debts, liabilities, controversies, or causes of action, known
or unknown, asserted or unasserted, liquidated or unliquidated, fixed or
contingent, of any nature whatsoever arising out of or in connection with (i)
the transactions evidenced by CSA I, CSA II or the Note and this restructuring
thereof or (ii) the use by any entity of the Equipment, which claims, causes of
action, etc., any of the Geokinetics Entities, their affiliates, subsidiaries,
successors or assigns, or any person, firm, agency, body, entity, company, or
corporation claiming by, through or under any of them, directly or indirectly,
presently have or have ever owned, claimed, or may be entitled to the benefit
of, but excepted from this release of I/O and Global, are the obligations
created under the Transaction Documents.
9.2 RELEASE OF GEOKINETICS, SIGNATURE AND QUANTUM. Subject to the
following provisions of this Section 9.2, I/O and Global hereby do release,
remise, relinquish, and forever discharge Geokinetics, Signature and Quantum and
their respective beneficiaries, employees, agents, representatives, attorneys,
directors, officers, owners, successors and assigns, from any and all claims,
rights, demands, debts, liabilities, controversies or causes of action, known or
unknown, asserted or unasserted, liquidated or unliquidated, fixed or
contingent, of any nature whatsoever arising out of CSA I, CSA II or the Note.
The parties hereto agree and acknowledge that, pursuant to the Transaction
Documents, the Equipment will be assigned to I/O encumbered by and subject to
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the liens and security interests securing the amounts and obligations owed under
CSA I, CSA II and the Note, and under any security documents creating or
perfecting such liens and security interests; thus, the preceding provision of
this Section 9.2 shall not constitute termination of such liens, security
interests, or security documents. The obligations of any of the Geokinetics
Entities under the Transaction Documents shall be excepted from the release
granted herein.
ARTICLE 10
MISCELLANEOUS
10.1 OWNERSHIP OF CLAIMS. By execution hereof, each of the parties hereby
represents, covenants, and warrants that no claim released herein has previously
been conveyed, assigned, or in any manner transferred, in whole or in part, to
any individual or entity that is not a party to this Restructure Agreement.
10.2 EXPENSES. Each of the parties hereto shall bear and pay all costs,
expenses and fees incurred by him or it or on his or its behalf in the
preparation and execution of this Agreement and compliance herewith, whether or
not the transaction herein provided for shall, in fact, be effectuated,
including, without limiting the generality of the foregoing, fees and expenses
of financial consultants, accountants, and counsel, unless otherwise expressly
provided herein.
10.3 NOTICES. All notices, requests, demands or other communications
pursuant to this Agreement shall be in writing, and shall be deemed to have been
duly given if delivered personally or sent by registered or certified mail,
postage prepaid, to the parties as follows:
IF TO THE I/O ENTITIES:
Input/Output, Inc.
00000 X. Xxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxx 00000
Attention: Xxx Xxxxxx
WITH A COPY TO:
D. Xxxxxxx Xxxx, Jr.
Xxxxxx & Xxxxxx L.L.P.
0000 Xxxxxx Xxxxxx
0000 Xxxxx Xxxx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
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IF TO THE GEOKINETICS ENTITIES:
Geokinetics Inc.
Marathon Oil Tower
0000 Xxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
WITH A COPY TO:
Chamberlain, Hrdlicka, White, Xxxxxxxx & Xxxxxx
1400 Two Xxxxx Center
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxx X. Spring, III
or to such other addresses as may have been furnished in writing by such party
to the other parties to this Agreement.
10.4 PRIOR AGREEMENTS, MODIFICATIONS AND WAIVERS. This Agreement shall
supersede any and all other prior negotiations, agreements, documents or other
instruments with respect to the restructure matters covered hereby. This
Agreement may be amended or modified at any time only by agreement in writing
signed by the parties hereto. No waiver of any provision of this Agreement shall
be deemed to be a continuing waiver of such provision in the event the same or
similar conditions giving rise to such waiver thereafter occur.
10.5 BINDING EFFECT. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective legal representatives,
successors and assigns.
10.6 GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Texas.
10.7 ATTORNEY FEES. If either party breaches this Agreement as determined
by a court of competent jurisdiction, the breaching party shall be obligated to
reimburse the non-breaching party for the reasonable attorney fees incurred as a
result of such breach.
10.8 FURTHER COOPERATION. After the Closing Date, each Party at the
request of the other and without additional consideration, shall execute and
deliver, or shall cause to be executed and delivered from time to time such
further instruments of conveyance and transfer and shall take such other action
as the other Party may reasonably request to convey and deliver the Equipment to
I/O and to accomplish the orderly transfer of the Equipment to I/O in the manner
contemplated by this Agreement.
10.9 CONFIDENTIALITY. Except as required by law, regulation, financial
accounting or reporting requirements, or order of a court or other governmental
authority, or upon written consent of the other parties hereto, each party and
its respective agents, employees, affiliates, officers,
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directors, and attorneys shall keep and maintain this Restructure Agreement and
the Lease Agreement referenced herein, and the terms and provisions thereof, in
strict confidence, and shall not transmit, reveal, disclose or otherwise
communicate any of the terms or provisions of this Restructure Agreement and the
Lease Agreement referenced herein to any person or otherwise publish same. This
subsection 10.9 shall not be construed to prevent the parties from disclosing to
any court or otherwise as necessary in any litigation or resolution of disputes
under this Restructure Agreement or the Lease Agreement referenced herein.
IN WITNESS WHEREOF, each of the parties to this Agreement has caused this
Agreement to be executed as of the date set forth in the first sentence hereof.
"THE GEOKINETICS ENTITIES"
GEOKINETICS INC.
By: /s/ XXXXXX X. XXXXXXXXX
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
SIGNATURE GEOPHYSICAL
SERVICES, INC.
By: /s/ XXXXXX X. XXXXXXXXX
Name: Xxxxxx X. Xxxxxxxxx
Title: Treasurer
QUANTUM GEOPHYSICAL, INC.
By: /s/ XXXX X. XXXXXX
Name: Xxxx X. Xxxxxx
Title: President
"THE I/O ENTITIES"
INPUT/OUTPUT, INC.
By: /s/ XXX X. XXXXXX
Name: Xxx X. Xxxxxx
Title: V-P Land Division
GLOBAL CHARTER CORPORATION
By: /s/ AXEL M. SIGMAR
Name: Axel M. Sigmar
Title: Director
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