EXHIBIT VI
Xx. Xxxxxxx X. Xxxxxxx
c/x Xxxxxx & Xxxxx
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
April 25, 1997
Geokinetics Inc.
Marathon Oil Tower
0000 Xxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxx X. Xxxxx, President
Dear Xx. Xxxxx:
This letter is to confirm the understanding between Geokinetics Inc.
("GEOK") and me with respect to my involvement with the ongoing affairs of GEOK
in connection with the $500,000 bridge loan financing provided to GEOK by me and
certain other persons pursuant to the Securities Purchase Agreement of even date
herewith among GEOK and the purchasers signatory thereto (the "Securities
Purchase Agreement"). Capitalized terms used herein without definition shall
have the respective meanings ascribed to them in the Securities Purchase
Agreement.
The following provisions are to govern our relationship:
1. Upon my request, GEOK and Xxx X. Xxxxx shall use their best efforts
to cause me to be elected as a director of GEOK so long as I and/or any person
or entity controlled by or affiliated with me shall hold at least 3% (on a fully
diluted basis, including holdings of debt which may be converted into equity
securities and warrants to purchase equity securities) of the equity securities
of GEOK.
2. I shall hold myself available to perform strategic planning and
other consulting services to GEOK and its subsidiaries as determined from time
to time by me and the President of GEOK (including, but not limited to, advice
as to the financial structure of GEOK and its subsidiaries and the refinancing
of the indebtedness of GEOK and its subsidiaries), such services to be rendered
upon the request of the President of GEOK and at such times and for such periods
as we shall mutually agree. In consideration for such services, GEOK and its
subsidiaries hereby agree to pay to me a quarterly consulting fee
(the "Consulting Fee") equal to one half of 1% of the total investment made by
me and the other purchasers of debt and equity securities of GEOK identified or
introduced by me on or before July 31, 1997 that is outstanding as of the end of
each quarter for the full quarter or pro rata portion thereof during the term
hereof. Such total investment shall include (i) the principal amount of any
senior notes issued pursuant to the
Geokinetics Inc. -2- April 25, 19972
Securities Purchase Agreement, (ii) the purchase price of any shares of Common
Stock of GEOK acquired pursuant to any exercise of Warrants issued pursuant to
the Securities Purchase Agreement, (iii) the Conversion Price Per Share (as
defined in the Senior Notes) of any shares of Common Stock of GEOK issued as PIK
Stock Interest pursuant to the Senior Notes or upon conversion of the Senior
Notes and (iv) and the purchase price of any securities of GEOK that may be
purchased by me or any affiliate of mine or any investor identified by me on or
before July 31, 1997, as part of any private placement of securities of GEOK.
The Consulting Fee will be paid quarterly in arrears on the last business day of
March, June, September and December, commencing on September 30, 1997.
3. GEOK agrees to reimburse me for such reasonable out-of-pocket fees
and expenses that may be incurred by me in connection with or arising out of the
consulting services to be rendered by me hereunder, including, but not limited
to, telephone, telex, courier services, accommodations, and travel and
secretarial costs, and other similar costs (collectively, the "Expenses"). The
Expenses shall be reimbursed to me within thirty days after presentation by me
to GEOK of an invoice setting forth in reasonable detail the Expenses or such
other evidence of same as reasonably may be requested by GEOK.
4. The services to be rendered by me hereunder shall be rendered by me
as an independent consultant and not an employee of GEOK or any of its
subsidiaries.
5. GEOK agrees to indemnify me and my heirs and personal
representatives and my employees and each person, if any, who controls me within
the meaning of Section 20 of the Securities Exchange Act of 1934 or Section 15
of the Securities Act of 1933 (any and all of such persons are herein referred
to as an "indemnified party"), from and against all losses, claims, damages and
liabilities, joint or several (including all legal or other expenses reasonably
incurred by an indemnified party, as incurred, in connection with the
preparation for defense of any claim, action or proceeding, whether or not
resulting in any liability), to which such indemnified party becomes subject
under any applicable federal or state law or otherwise and arising out of the
relationship created hereunder, including, without limitation, any such
liability that is (i) caused by or arising out of any untrue statement or
alleged untrue statement by GEOK of a material fact or the omission or the
alleged omission by GEOK to state a material fact necessary in order to make the
statements made by GEOK not misleading in light of the circumstances under which
they were made, or (ii) caused by or arising out of any act or failure to act by
GEOK, or (iii) caused by or arising out of my rendering the services pursuant to
this consulting agreement; provided, however, that GEOK shall not be liable
under clause (iii) of this paragraph for any losses, claims, damages or
liabilities of any kind which result from or arise out of the bad faith, willful
misconduct, recklessness or gross negligence of any indemnified party. The
parties hereto acknowledge that such indemnification is in addition to and
separate from any indemnification that may be available to me under the
certificate of incorporation or by-laws of GEOK in the event that I become a
director of GEOK.
Geokinetics Inc. -3- April 25, 1997
If any action or proceedings shall be brought or asserted against any
indemnified party in respect of which indemnity is to be sought from GEOK, the
indemnified party shall promptly notify GEOK in writing, and GEOK shall assume
the defense thereof, including the employment of counsel and the payment of all
expenses. The 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 the expense of the indemnified party. GEOK
shall not be liable for any settlement of any action or proceeding effected
without the written consent of GEOK, but if settled with such written consent,
or if there be a final judgment for the plaintiff in any such action or
proceeding, GEOK agrees to indemnify and hold harmless the indemnified party
from and against any loss or liability by reason of any such settlement or
judgment. Any obligations pursuant to the indemnification included in this
paragraph and the preceding paragraph shall survive the termination or
expiration of this consulting agreement.
6. As additional compensation for the services to be provided by me as
an independent, outside director of GEOK, GEOK shall grant to me non-qualified
stock options to purchase an aggregate of 50,000 shares of Common Stock of GEOK,
which stock options (i) shall not (A) be subject to any vesting requirements or
other conditions or (B) expire on my ceasing to serve as a director of GEOK or a
consultant hereunder, and (ii) shall (A) be freely transferable (subject to
applicable federal and state securities laws), (B) have a five year exercise
period, (C) have an exercise price of $0.75 and (D) otherwise be on such terms
and conditions reasonably satisfactory to me.
7. The initial term of my consulting arrangement shall be three years
from the date hereof, at which time GEOK and I will review the continuation or
expansion of the scope of and compensation under this consulting agreement.
If the foregoing correctly sets forth your understanding and agreement
as to the consulting arrangements between GEOK and me, please so indicate by
signing and returning to me the enclosed duplicate of this letter.
Sincerely,
/s/ XXXXXXX X. XXXXXXX
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Xxxxxxx X. Xxxxxxx
Geokinetics Inc. -4- April 25, 1997
The foregoing correctly sets forth our understanding as of the date of this
letter.
GEOKINETICS INC.
By: /s/ XXXXXX X. XXXXXXXXX
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Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
The undersigned agrees and consents as to paragraph 1 of this letter.
/s/ XXX X. XXXXX
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Xxx X. Xxxxx
