|
DE
|
76-0025431
|
|
|
(State or other jurisdiction of
|
(IRS Employer
|
|
|
incorporation)
|
Identification No.)
|
The description set forth above of certain of the terms of the Advisory Agreement does not purport to be complete and is qualified in its entirety by the full text of the Advisory Agreement, which is attached to this Current Report as Exhibit 10.1 and which is incorporated herein by reference.
Securities Holders Agreement
The description set forth above of certain of the terms of the Securities Holders Agreement does not purport to be complete and is qualified in its entirety by the full text of the Securities Holders Agreement, which is attached to this Current Report as Exhibit 10.2 and which is incorporated herein by reference.
The description set forth above of certain of the terms of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by the full text of the Registration Rights Agreement, which is attached to this Current Report as Exhibit 10.3 and which is incorporated herein by reference.
Amended and Restated Advisory Agreement
The information provided in Item 1.01 of this Report is hereby incorporated by reference into this Item 5.02.
|
SEITEL INC
|
||||||||
|
Date: May 23, 2011
|
By:
|
/s/ Robert D. Monson
|
||||||
|
Robert D. Monson
|
||||||||
|
President and Chief Executive Officer
|
||||||||
|
Exhibit No.
|
Description
|
|
|
EX-10.1
|
Advisory Agreement
|
|
|
EX-10.2
|
Restated Securities Holders Agreement
|
|
|
EX-10.3
|
Registered Rights Agreement
|
amended and restated ADVISORY AGREEMENT
This Amended and Restated Advisory Agreement (this "Agreement"), dated as of May 23, 2011, is made and entered into by and among Seitel, Inc., a Delaware corporation ("Seitel"), Seitel Holdings, Inc., a Delaware corporation ("Parent" and, together with Seitel, the "Companies" and each a "Company"), ValueAct Capital Management, L.P., a Delaware limited partnership ("ValueAct Capital"), and Centerbridge Advisors II, L.L.C., a Delaware limited liability company ("Centerbridge Advisors" and, together with ValueAct Capital, the "Advisors" and each an "Advisor").
BACKGROUND
A. This Agreement is being entered into concurrently with the consummation of the transactions contemplated by the Stock Purchase Agreement, dated as of May 21, 2011 (the "Stock Purchase Agreement), by and between Parent, Centerbridge Capital Partners II, L.P., a Delaware limited partnership ("Centerbridge Capital") and Centerbridge Capital Partners SBS II, L.P., a Delaware limited partnership ("Centerbridge SBS" and, together with Centerbridge Capital, "Centerbridge").
B. Pursuant to the terms of the Stock Purchase Agreement, Centerbridge is acquiring 483,803 shares of common stock, par value $0.001, of Parent for an aggregate purchase price of $125,000,000 (the "Investment").
C. Concurrently with the closing of the Investment, Parent, ValueAct Capital, Centerbridge and certain management stockholders of Parent are entering into an Amended and Restated Securities Holders Agreement (the "Securities Holders Agreement"), dated as of the date hereof;
D. ValueAct Capital and the Companies are currently party to an Advisory Agreement, dated as of January 30, 2007, by and among the Companies and ValueAct Capital (the "Original Agreement").
E. In connection with the Investment, the Companies and ValueAct Capital wish to amend and restate in its entirety the Original Agreement in order to set forth herein certain agreements regarding the future relationships among the Companies and the Advisors, which agreements shall be effective from and after the closing of the Investment in accordance with the terms of the Stock Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:
1. Term. This Agreement shall be in effect for an initial term of ten (10) years commencing on the effective date hereof (the "Term"), and shall be automatically extended thereafter on a year to year basis. Ninety days prior to the expiration of the Term or any extension thereof, an Advisor may provide written notice to the other parties of its desire to terminate this Agreement, in which case the Agreement shall terminate with respect to that Advisor only. This Agreement shall automatically terminate (i) in its entirety upon the consummation by Parent of its initial Public Offering (as defined in the Securities Holders Agreement), (ii) as to Centerbridge Advisors, on the date Centerbridge's Ownership Percentage (as defined in the Securities Holders Agreement) is less than 5%, and (iii) as to ValueAct Capital, on the date ValueAct Capital's Ownership Percentage is less than 5%.
2. Services. Each Advisor shall perform or cause to be performed consulting, advisory, oversight and other services for the Companies and/or their subsidiaries in cooperation with the Company's executive officers and/or board of directors, and Parent shall perform or cause to be performed such services for Seitel and/or its subsidiaries as directed by Seitel's board of directors, which may include, without limitation, the following:
(a) identification, support and analysis of acquisitions and divestitures;
(b) support and analysis of financing alternatives, including, without limitation, in connection with acquisitions, capital expenditures and refinancing of existing indebtedness;
(c) finance functions, including assistance in the preparation of financial projections, and monitoring of compliance with financing agreements;
(d) human resource functions, including searching and hiring of executives; and
(e) other services upon the mutual agreement of applicable parties.
Notwithstanding any provision in this Agreement to the contrary, each of the parties hereto acknowledges and agrees that there are no minimum levels of services required to be provided to the Companies pursuant to this Agreement.
3. Expenses.
(a) Seitel hereby agrees to pay to Parent, each Advisor or their respective affiliates the reasonable out-of-pocket expenses (including fees and disbursements of attorneys, accountants and other professionals and consultants retained by each Advisor, Parent or their respective affiliates) incurred by such Advisor, Parent or their respective affiliates and their respective personnel in connection with the performance of the services contemplated by this Agreement. Parent hereby agrees to pay to each Advisor or their respective affiliates the reasonable out-of-pocket expenses (including fees and disbursements of attorneys, accountants and other professionals and consultants retained by such Advisor or their respective affiliates) incurred by such Advisor, their respective affiliates and their respective personnel in connection with the performance for Parent of the services contemplated by this Agreement.
(b) Delivery of Expenses. All expenses payable or otherwise reimbursable to an Advisor, Parent or their respective affiliates shall be payable promptly by wire transfer to an account designated in writing by such Advisor or Parent, as the case may be, or in such other manner as such Advisor or Parent shall specify.
4. Personnel. Each Advisor shall provide and devote to the performance of this Agreement such partners, employees and agents of such Advisor as such Advisor shall deem appropriate to the furnishing of the services requested. Parent shall provide and devote to the performance of this Agreement such partners, employees and agents of Parent as Parent shall deem appropriate to the furnishing of the services requested.
5. Liability. None of the Advisors, Parent nor any other Indemnitee (as defined in Section 6 below) shall be liable to any of the Companies or any of their subsidiaries or affiliates for any loss, liability, damage or expense arising out of or in connection with the performance of services contemplated by this Agreement, unless such loss, liability, damage or expense shall be proven to result directly from gross negligence, willful misconduct or bad faith on the part of such Indemnitee acting within the scope of such person's employment or authority. None of the Advisors nor Parent makes any representations or warranties, express or implied, in respect of the services to be provided by the Advisors, Parent or any of the other Indemnitees. Except as an Advisor or Parent may otherwise agree in writing as to such Advisor, after the date hereof: (i) each Advisor shall have the right to, and shall have no duty (contractual or otherwise) not to, directly or indirectly: (A) engage in the same or similar business activities or lines of business as any of the Companies or any of their subsidiaries, including those competing with any of the Companies or any of their subsidiaries and (B) do business with any client or customer of any of the Companies or any of their subsidiaries; (ii) neither the Advisors nor any officer, director, employee, member, partner, affiliate or associated entity thereof shall be liable to any of the Companies or any of their subsidiaries or affiliates for breach of any duty (contractual or otherwise) by reason of any such activities of or of such person's participation therein; and (iii) in the event that an Advisor acquires knowledge of a potential transaction or matter that may be a corporate opportunity for the Companies or any of their subsidiaries, on the one hand, and such Advisor, on the other hand, or any other person, neither of the Advisors shall have a duty (contractual or otherwise) to communicate or present such corporate opportunity to the Companies or any of their subsidiaries and, notwithstanding any provision of this Agreement to the contrary, shall not be liable to the Companies or any of their affiliates for breach of any duty (contractual or otherwise) by reasons of the fact that such Advisor directly or indirectly pursues or acquires such opportunity for itself, directs such opportunity to another person, or does not present such opportunity to the Companies. In no event will any of the parties hereto be liable to any other party hereto for any indirect, special, incidental or consequential damages, including lost profits or savings, whether or not such damages are foreseeable, or in respect of any liabilities relating to any third party claims (whether based in contract, tort or otherwise) other than indemnification for the Liabilities (as defined in Section 6 below) relating to the services to be provided by the Advisors or Parent hereunder.
6. Indemnity.
(a) Each of the Companies and their subsidiaries shall defend, indemnify and hold harmless each of the Advisors, their respective affiliates, members, partners, directors, employees and agents (collectively, the "Indemnitees") from and against any and all loss, liability, damage or expenses (i) arising from any claim by any person with respect to, or (ii) in any way related to, the performance of services contemplated by this Agreement (including attorneys' fees) (collectively, "Liabilities") other than, with respect to an Indemnitee, for Liabilities which shall be proven to be the direct result of gross negligence, bad faith or willful misconduct by such Indemnitee. Each of the Companies and their subsidiaries shall defend at its own cost and expense any and all suits or actions (just or unjust) which may be brought against any such Company, any of its subsidiaries or any of the Indemnitees or in which any of the Indemnitees may be impleaded with others upon any Liabilities, or upon any matter, directly or indirectly, related to or arising out of this Agreement or the performance hereof by any of the Indemnitees, except that if such damage shall be proven to be the direct result of gross negligence, bad faith or willful misconduct by an Indemnitee, then the applicable Advisor shall reimburse the Companies and their subsidiaries for the costs of defense and other costs incurred by the Companies and their subsidiaries to the extent due to such gross negligence, bad faith or willful misconduct. The Company agrees that it will not, without the prior written consent of the applicable Indemnitee, settle, compromise or consent to the entry of any judgment in any pending claim unless such settlement, compromise or consent includes unconditional releases of the applicable Indemnitee and each other Indemnitee from all Liabilities arising or that may arise out of such claim.
(b) Without limiting the generality of the foregoing, any Indemnitee entitled to indemnification, advancement of expenses and/or insurance, pursuant to this Agreement, the certificates of incorporation of the Companies or the bylaws of the Companies and that is an officer, employee, partner or advisor of either of the Advisors or their respective affiliates (each such person, a "Company Indemnitee"), may have certain rights to indemnification, advancement of expenses and/or insurance provided by or on behalf of the Advisors and/or their respective affiliates (collectively, the "Indemnitors"). Notwithstanding anything to the contrary in this Agreement, the certificates of incorporation of the Companies or the bylaws of the Companies or otherwise: (i) the Companies are the indemnitor of first resort (i.e., the Companies's obligations to each Company Indemnitee are primary and any obligation of the Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by each Indemnitee are secondary), (ii) the Companies will be required to advance the full amount of expenses incurred by each Company Indemnitee and will be liable for the full amount of all liabilities, expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by this Agreement, without regard to any rights each Company Indemnitee may have against the Indemnitors, and (iii) the Companies irrevocably waive, relinquish and release the Indemnitors from any and all claims against the Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. Notwithstanding anything to the contrary in this Agreement, the certificates of incorporation of the Companies or the bylaws of the Companies or otherwise, no advancement or payment by the Indemnitors on behalf of a Company Indemnitee with respect to any claim for which such Company Indemnitee has sought indemnification or advancement of expenses from the Companies will affect the foregoing and the Indemnitors will have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Company Indemnitee against the Companies. The Indemnitors are express third party beneficiaries of the terms of this Section 6(b).
7. Notices. All notices hereunder shall be in writing by hand-delivery, registered or certified first-class mail, fax or reputable courier guaranteeing overnight delivery to the other parties at the following addresses (or at such other address as shall be given in writing by any party to the others):
To the Companies as appropriate:
c/o Seitel, Inc.
10811 S. Westview Circle Drive
Building C, Suite 100
Houston, TX 77043
Facsimile: (713) 881-8901
Attention: Robert D. Monson
with a required copy to:
Centerbridge Capital Partners II, L.P.
375 Park Avenue
12th Floor
New York, NY 10152
Facsimile: (212) 672-5001
Attention: Kyle Cruz
To ValueAct Capital:
ValueAct Capital Management, L.P.
435 Pacific Avenue, 4th Floor
San Francisco, CA 94133
Facsimile: (415) 362-5727
Attention: Allison Bennington, General Counsel
with a required copy to:
Dechert LLP
Cira Centre
2929 Arch Street
Philadelphia, PA 19104
Facsimile: (215) 994-2222
Attention: Christopher G. Karras
To Centerbridge Advisors:
Centerbridge Capital Partners II, L.P.
375 Park Avenue
12th Floor
New York, NY 10152
Facsimile: (212) 672-5001
Attention: Kyle Cruz
with a required copy to:
Latham & Watkins LLP
885 Third Avenue
New York, NY 10022
Facsimile: (212) 751-4864
Attention: Howard Sobel and Jennifer Perkins
8. Assignment. No party hereto may assign any rights or obligations hereunder to any other person without the prior written consent of the other parties hereto; provided, that neither of the Companies shall unreasonably withhold its consent to any assignment by an Advisor hereunder and an Advisor may, without consent of the Companies, assign its rights and obligations under this Agreement to any Permitted Transferee (as defined in the Securities Holders Agreement).
9. Successors. This Agreement and all the obligations and benefits hereunder shall inure to the successors and assigns of the parties.
10. Counterparts. This Agreement may be executed and delivered by each party hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original and all of which taken together shall constitute but one and the same agreement.
11. Entire Agreement; Modification; Governing Law. The terms and conditions hereof constitute the entire agreement between the parties hereto with respect to the subject matter of this Agreement and supersede all previous communications, either oral or written, representations or warranties of any kind whatsoever, except as expressly set forth herein. No modifications of this Agreement nor waiver of the terms or conditions thereof shall be binding upon either party unless approved in writing by an authorized representative of such party. All issues concerning this Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the law of any jurisdiction other than the State of New York.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have executed this Amended and Restated Advisory Agreement as of the date first written above.
SEITEL HOLDINGS, INC.
By: /s/ Gregory P. Spivy
Name: Gregory P. Spivy
Title:
SEITEL INC.
By: /s/ Marcia H. Kendrick
Name: Marcia H. Kendrick
Title:
VALUEACT CAPITAL MANAGEMENT, L.P.
By: ValueAct Capital Management, LLC, its General Partner
By: /s/ George F. Hamel, Jr.
Name: George F. Hamel, Jr.
Title:
CENTERBRIDGE ADVISORS II, L.L.C.
By: /s/ Jeffrey Gelfand
Name: Jeffrey Gelfand
Title: Authorized Person
AMENDED AND RESTATED SECURITIES HOLDERS AGREEMENT
by and among
SEITEL Holdings, INC.
ValueAct Capital Master Fund, L.P.
CENTERBRIDGE CAPITAL PARTNERS II, L.P.
CENTERBRIDGE CAPITAL PARTNERS SBS II, L.P.
AND
THE MANAGEMENT INVESTORS IDENTIFIED HEREIN
Dated as of May 23, 2011
TABLE OF CONTENTS
ARTICLE I. Restrictions On Transfer Of Securities *
1.1. Restrictions on Transfers of Securities *
1.2. Legend *
1.3. Notation *
1.4. Transfer of Rights. *
1.5. Change in Ownership Percentage *
ARTICLE II. Other Covenants and Representations *
2.1. Inspection and Access *
2.2. Public Offering or Sale of the Company *
2.3. Corporate Opportunity *
2.4. Right of First Offer *
2.5. Tag-Along Rights *
2.6. Preemptive Rights *
ARTICLE III. Corporate Actions *
3.1. Directors and Voting Agreements *
3.2. Right to Remove Certain of the Company's Directors *
3.3. Right to Fill Certain Vacancies on the Board of Directors *
3.4. Committees; Directors of Subsidiaries *
3.5. Amendment of Certificate and Bylaws *
3.6. Centerbridge Approval *
3.7. Management and Information Rights *
ARTICLE IV. Additional Restrictions On Securities Held By Management Investors *
4.1. Repurchase and Put Options *
4.2. Repurchase Price *
4.3. Certain Obligations of the Company *
4.4. Repurchase by ValueAct Capital and Centerbridge *
4.5. Repurchase by the Company *
4.6. Repurchase by ValueAct Capital and Centerbridge at the Option of the Holder *
4.7. Closing *
4.8. Fair Market Value *
ARTICLE V. Miscellaneous *
5.1. Effective Time *
5.2. Amendment and Modification *
5.3. Successors and Assigns *
5.4. Separability *
5.5. Notices *
5.6. Governing Law *
5.7. Headings; Definitions *
5.8. Counterparts *
5.9. Further Assurances *
5.10. Termination *
5.11. Indemnification of Centerbridge and ValueAct Capital *
5.12. Exhibits and Supplement and Disclosure Letter *
5.13. Confidentiality *
5.14. Remedies *
5.15. Party No Longer Owning Securities *
5.16. No Effect on Employment *
5.17. Pronouns *
5.18. Future Individual Investors *
5.19. Entire Agreement *
Defined Terms
EXHIBITS
exhibit a form of amended and restated certificate of incorporation
EXHIBIT B FORM OF MANAGEMENT RIGHTS LETTER
Amended And Restated Securities Holders Agreement
THIS IS AN AMENDED AND RESTATED SECURITIES HOLDERS AGREEMENT, dated as of May 23, 2011 (the "Agreement"), by and among Seitel Holdings, Inc., a Delaware corporation (the "Company"), ValueAct Capital Master Fund, L.P., a British Virgin Islands limited partnership ("ValueAct Capital"), Centerbridge Capital Partners II, L.P., a Delaware limited partnership (the "Centerbridge Fund" or "Centerbridge"), Centerbridge Capital Partners SBS II, L.P., a Delaware limited partnership (the "Centerbridge Coinvest Fund") and the individuals listed on the signature pages hereto as "Management Investors" (such individuals, the "Management Investors," and each such individual, a "Management Investor"). ValueAct Capital, the Centerbridge Fund, the Centerbridge Coinvest Fund and each of the Management Investors and any other investor in the Company who becomes a party to or agrees to be bound by this Agreement are sometimes referred to herein individually as an "Investor" and collectively as the "Investors." ValueAct Capital and Centerbridge are together referred to as the "Major Stockholders" and each individually as a "Major Stockholder."
Background
A. This Agreement is being entered into concurrently with the consummation of the transactions contemplated by the Stock Purchase Agreement, dated as of May 21, 2011 (the "Stock Purchase Agreement"), by and between the Company, the Centerbridge Fund and the Centerbridge Coinvest Fund.
B. Pursuant to the terms of the Stock Purchase Agreement, the Centerbridge Fund and the Centerbridge Coinvest Fund are acquiring 483,803 shares of common stock, par value $0.001 of the Company (the "Common Stock") for an aggregate purchase price of $125,000,000 (the "Investment").
C. ValueAct Capital and the Management Investors currently own Common Stock and are party to that certain Security Holders Agreement, dated as of January 8, 2007, by and among the Company, ValueAct Capital and the Management Investors (the "Original Agreement").
D. In connection with the Investment, the Company, ValueAct Capital and the Management Investors wish to amend and restate in its entirety the Original Agreement, and the Investors, including the Centerbridge Fund, the Centerbridge Coinvest Fund, and the Company wish to set forth herein certain agreements regarding their future relationships and their rights and obligations with respect to Securities (as defined below) of the Company, which agreements shall be effective from and after the closing of the Investment in accordance with the terms of the Stock Purchase Agreement.
E. As used herein, the term "Securities" shall mean Common Stock (including but not limited to any shares of Common Stock issued in connection with the exercise of options issued pursuant to the Seitel Holdings, Inc. 2007 Non-Qualified Stock Option Plan and the Seitel Holdings, Inc. 2008 Restricted Stock and Restricted Stock Unit Plan, which shares of Common Stock are referred to herein as "Incentive Securities") and any other shares of capital stock of the Company, and any securities convertible into or exchangeable for such capital stock, and any options (including, but not limited to, any options now or hereafter issued to Investors and options issued pursuant to the Seitel Holdings, Inc. 2007 Non-Qualified Stock Option Plan and the Seitel Holdings, Inc. 2008 Restricted Stock and Restricted Stock Unit Plan), warrants or other rights to acquire such capital stock or securities, now or hereafter held by any party hereto, including all other securities of the Company (or a successor to the Company) received on account of ownership of Common Stock, including all securities issued in connection with any merger, consolidation, stock dividend, stock distribution, stock split, reverse stock split, stock combination, recapitalization, reclassification, subdivision, conversion or similar transaction in respect thereof and the provisions of this Agreement shall apply, to the full extent set forth herein, with respect to any of such Securities and shall be appropriately adjusted for any dividends, splits, reverse splits, combinations, recapitalizations and the like occurring after the date hereof.
Terms
In consideration of the mutual covenants contained herein and intending to be legally bound hereby, the parties agree to amend and restate the Original Agreement in its entirety to read as follows:
. The following restrictions on Transfer (as defined in Section 1.1(a) below) shall apply to all Securities owned by any Investor:
(ii). Prior to any proposed Transfer of any Securities, the holder thereof shall give written notice to the Company describing the manner and circumstances of the proposed Transfer, together with, if requested by the Company, a written opinion of legal counsel, addressed to the Company and the transfer agent for the Company's equity securities, if other than the Company, and reasonably satisfactory in form and substance to the Company, to the effect that the proposed Transfer of the Securities may be effected without registration under the Securities Act of 1933, as amended (the "Securities Act"). Each certificate evidencing the Securities transferred shall bear the legends set forth in Section 1.2 hereof, except that such certificate shall not bear the legend contained in the first paragraph of Section 1.2 hereof if the opinion of counsel referred to above is to the further effect that such legend is not required in order to establish compliance with any provision of the Securities Act.
(iii). Nothing in this Section 1.1(a) shall prevent the Transfer of Securities by an Investor to one or more of its Permitted Transferees or to the Company; provided, however, that each such Permitted Transferee (except a Permitted Transferee by virtue of Section 1.1(b)(iv) hereof) shall take such Securities subject to and be fully bound by the terms of this Agreement applicable to it with the same effect as if it was an Investor (or if the Permitted Transferee was a Management Investor, a Management Investor) hereunder; and provided further, however, that (x) no Person (other than a Permitted Transferee by virtue of Section 1.1(b)(iv) hereof) shall be a Permitted Transferee unless such transferee executes and delivers a joinder to this Agreement reasonably satisfactory in form and substance to the Company which joinder states that such Person agrees to be fully bound by this Agreement as if it were an Investor and shall be deemed an Investor for all purposes hereunder (or if the transferor to the Permitted Transferee is a Management Investor hereunder, as a Management Investor and shall be deemed a Management Investor for all purposes hereunder) (a "Joinder"), and (y) no Transfer shall be effected except in compliance with the registration requirements of the Securities Act and any applicable state securities laws or pursuant to an available exemption therefrom. Other than a Transfer (x) pursuant to an Approved Sale or a Requested Sale, (y) pursuant to Rule 144 promulgated under the Securities Act that is otherwise in compliance with this Agreement, or (z) pursuant to a sale in connection with a Public Offering, it shall be a condition to any Transfer hereunder that such transferee executes and delivers a Joinder.
(iv). Nothing in this Section 1.1(a) shall prevent the Transfer by ValueAct Capital, Centerbridge or either of their respective Affiliates who have obtained Securities from ValueAct Capital, Centerbridge or either of their respective Affiliates in compliance with this Agreement to make an in-kind distribution effected in accordance with the fund and/or governing documents of such Person (an "In-Kind Distribution") to its limited partners (the "Limited Transferees"), who shall not be entitled to any of the rights or benefits of an Investor or a Major Stockholder under this Agreement other than those of a Tag Offeree under Section 2.5 and shall at all times be obligated to comply with the provisions of Section 2.2 in connection with an Approved Sale or a Requested Sale, as the case may be. As a condition to the right to distribute Securities pursuant to an In-Kind Distribution, the transferor shall require each Limited Transferee to execute and deliver a Joinder. Centerbridge and ValueAct Capital acknowledge and agree that the right to effect an In-Kind Distribution may be exercised solely by ValueAct Capital, Centerbridge or either of their respective Affiliates and only to the extent permitted by the fund or other governing documents of ValueAct Capital, Centerbridge or their respective Affiliates, as applicable.
. Any certificates representing Securities (other than Securities transferred pursuant to (i) an Approved Sale or a Requested Sale (with respect to the second legend), (ii) Rule 144 promulgated under the Securities Act or (iii) a sale in connection with a Public Offering), shall bear the following legends (in addition to any other legend required under applicable law):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR THE DELIVERY TO THE CORPORATION OF AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE CORPORATION, THAT SUCH REGISTRATION IS NOT REQUIRED.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO THE TERMS AND CONDITIONS OF A SECURITIES HOLDERS AGREEMENT BY AND AMONG THE CORPORATION AND THE HOLDERS SPECIFIED THEREIN, AS AMENDED FROM TIME TO TIME (THE "SECURITIES HOLDERS AGREEMENT"), A COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION. THE SALE, TRANSFER, ASSIGNMENT OR OTHER DISPOSITION OF THE SECURITIES IS SUBJECT TO THE TERMS OF SUCH AGREEMENT AND THE SECURITIES ARE TRANSFERABLE OR OTHERWISE DISPOSABLE ONLY UPON PROOF OF COMPLIANCE THEREWITH.
. A notation will be made in the appropriate transfer records of the Company with respect to the restrictions on transfer of the Securities referred to in this Agreement.
.
. If (i) Centerbridge's Ownership Percentage is greater than 50%, Centerbridge shall be entitled to the majority rights granted to ValueAct Capital under this Agreement (including Section 2.2 and Section 3 hereof) and/or (ii) ValueAct Capital's Ownership Percentage is less than 50%, ValueAct Capital shall be entitled to the minority rights granted to Centerbridge under this Agreement (including Section 2.2 and Section 3 hereof) (provided that Centerbridge shall also continue to be entitled to such rights in accordance with the terms of this Agreement).
. The Company shall provide the Centerbridge Fund and each of the Major Stockholders with the following information for so long as such party owns Securities:
Additionally, (x) the Company shall permit any authorized representatives designated by the Centerbridge Fund or a Major Stockholder reasonable access to visit and inspect any of the properties of the Company or any of its Subsidiaries, including its and their books of account, and to discuss its and their affairs, finances and accounts with its and their officers, all at such times as the Centerbridge Fund or a Major Stockholder may reasonably request, and (y) the Centerbridge Fund and the Major Stockholders shall have the right to consult with and advise the management of the Company and its Subsidiaries, upon reasonable prior notice at reasonable times from time to time, on all matters relating to the operation of the Company and its Subsidiaries.
. After compliance with the requirements of Section 2.4, the following provisions shall apply:
. To the fullest extent permitted by any applicable law, the doctrine of corporate opportunity, or any other analogous doctrine, shall not apply with respect to the Major Stockholders or their Affiliates or representatives thereof (including any directors of the Company designated by such Persons). In particular, (a) the Major Stockholders and their Affiliates shall have the right to engage in business activities, whether or not in competition with the Company or any of its Subsidiaries or the Company's or any of its Subsidiaries' business activities, without consulting any other Investor, and (b) the Major Stockholders and their Affiliates shall not have any obligation to any other Investor with respect to any opportunity to acquire property or make investments at any time.
.
. After the first anniversary of the closing of the Investment, after giving effect to the provisions of Section 2.4, the following provisions shall apply:
.
A Preemptive Investor may exercise the preemptive right by delivery to the Company and the other Preemptive Investor, within twenty (20) days of the date the Company mailed or caused to be mailed the Preemptive Escrow Notice, of a written notice specifying the number of shares of Newly Issued Securities such Preemptive Investor proposes to purchase of the number of shares of Newly Issued Securities such Preemptive Investor is entitled to purchase (the "Preemptive Election"). If there is a Non-Electing Preemptive Investor, the other Electing Preemptive Investor shall be entitled to purchase the Excess Shares and shall deliver written notice thereof to the Company within five (5) days after the earlier of (i) the delivery of the Non-Electing Preemptive Investor's Preemptive Election and (ii) the end of such twenty (20) day period referred to above.
Promptly after the expiration of the twentieth (20th) day after the Company has given the Preemptive Escrow Notice, (A) the Company shall sell to each Preemptive Investor that number of shares of Newly Issued Securities that each such Preemptive Investor proposed to purchase pursuant to its Preemptive Election and (B) when such shares have been issued to such Preemptive Investors, all remaining Newly Issued Securities which Preemptive Investors were entitled to purchase but for which they did not deliver a Preemptive Election may be sold to the original proposed investors upon the terms and conditions set forth in the Preemptive Escrow Notice for a period not exceeding six (6) months after the original issuance of Newly Issued Securities to such investors.
In the event of a Delayed Issuance, the Company shall not make any dividend or distribution on the Newly Issued Securities or otherwise effect any transaction involving the Newly Issued Securities until after the Company has complied in full with this Section 2.6(d).
.
. Each Investor agrees that it will not vote any of its Common Stock or any other voting capital stock of the Company now or hereafter owned or controlled by it in favor of the removal of any Director who shall have been designated or nominated in accordance with Section 3.1, unless the Investor or Investors entitled to designate or nominate such director shall have consented to such removal in writing; provided that if the Investor or Investors entitled to designate or nominate any director pursuant to Section 3.1 shall request in writing the removal, with or without cause, of such director, each Investor shall vote its Common Stock in favor of such removal.
. In the event that a vacancy is created on the Board of Directors at any time by the death, disability, retirement, resignation or removal (with or without cause) or if otherwise there shall exist or occur any vacancy on the Board of Directors (including without limitation immediately after the Closing as a result of Centerbridge having only designated two directors), such vacancy shall not be filled by the remaining members of the Board of Directors, but each Investor hereby agrees promptly to consent in writing or vote or cause to be voted all shares of Common Stock entitled to vote thereon or any other voting capital stock of the Company now or hereafter owned or controlled by it to elect that individual designated to fill such vacancy and serve as a director, as shall be designated by the Investor or Investors (or, if applicable, holders of Common Stock) then entitled to designate such director pursuant to Section 3.1.
. The composition of any committee of the Board of Directors, and any committee of the board of directors (or equivalent governing body) of Seitel, shall consist of directors designated by the Investors in proportion to the Investors' right to designate board members pursuant to Section 3.1. Each of the Investors or group of Investors with the right to designate a director pursuant to Section 3.1 (other than the Management Investors) shall have the option of appointing its designated director(s) to any committee of the board of directors (or equivalent governing body) of any of the Company's Subsidiaries (other than Seitel) in proportion to such Investor(s)' right to designate board members pursuant to Section 3.1. "Subsidiary" as used herein shall mean "a corporation, partnership, limited liability company or other business entity with respect to which the Company and/or any direct or indirect subsidiary of the Company individually or collectively own 50% or more of the total combined voting power of all classes of stock (or other voting interests)"). At any time that Centerbridge is entitled to designate for nomination directors in accordance with Section 3.1 hereof, one director nominated by Centerbridge will be entitled to serve as a member of each committee of the Board of Directors. Centerbridge will have the right to designate which director serves on which committee or committees of the Board of Directors.
. Each Investor agrees that it shall not consent in writing or vote or cause to be voted any shares of Common Stock now or hereafter owned or controlled by it in favor of any amendment, repeal, modification, alteration or rescission of, or the adoption of any provision in the Company's certificate of incorporation or bylaws inconsistent with Article III of this Agreement unless the Board of Directors (including at least one director designated by Centerbridge) consent in writing thereto.
. Notwithstanding anything to the contrary contained herein, so long as Centerbridge has an Ownership Percentage equal to at least 15%, the Company shall not and, if applicable, shall not permit any of its Subsidiaries to, without the prior written consent of Centerbridge, such consent not to be unreasonably withheld, conditioned or delayed:
. As of the date hereof, the Company shall cause Seitel to enter into a letter agreement with the Centerbridge Fund and ValueAct Capital in substantially the form attached hereto as Exhibit B, which shall provide the Centerbridge Fund and ValueAct Capital with substantially identical rights with respect to Seitel, Inc. as the Centerbridge Fund and ValueAct Capital have with respect to the Company pursuant to Sections 2.1 and 3.1 hereof. The parties acknowledge and agree that the rights provided to the Centerbridge Fund pursuant to Sections 2.1, 3.1 and this Section 3.7 are intended to satisfy the requirement of management rights for purposes of qualifying the Investment by the Centerbridge Fund as a "venture capital investment" for purposes of the Department of Labor "plan assets" regulation, 29 C.F.R. Section 2510.3-101. In the event modifications are made to such regulations or interpretations thereof subsequent to the date hereof that would result in the aforementioned rights not being satisfactory for such purposes, the parties shall evaluate in good faith whether modification of the rights provided to the Centerbridge Fund can be made that would satisfy such regulations as modified and that would not adversely affect the terms, conditions or purposes of this Agreement.
. If a Management Investor is no longer an employee or director, as applicable, of the Company or any of its Subsidiaries for any reason (the "Termination"), all of the Securities (including but not limited to Incentive Securities) held by that Management Investor (whether held directly by the Management Investor or by one or more of his or her Affiliates or Permitted Transferees, other than the Company, ValueAct Capital, Centerbridge, a ValueAct Capital Affiliate or a Centerbridge Affiliate) will be subject to repurchase by ValueAct Capital and Centerbridge , in the first instance, and the Company, in the second instance, at their option, pursuant to the terms and conditions set forth in this Article IV (the "Repurchase Option"). If the Repurchase Option is not exercised with regard to all applicable Securities consisting of Common Stock or other shares of capital stock of the Company following a Termination, then all, but not less than all, of such remaining Securities consisting of Common Stock or other shares of capital stock of the Company held by such holder will be subject to repurchase by ValueAct Capital and Centerbridge, on a pro rata basis (based upon their respective Ownership Percentages at the time of repurchase), at the option of such holder (which option may only be exercised with respect to all such Securities held by the holder), pursuant to the terms and conditions set forth in this Article IV (the "Put Option").
. At any time on or after the date of Termination ("Termination Date"), ValueAct Capital and Centerbridge, in the first instance, and the Company, in the second instance, may elect to repurchase all or a portion of the Securities held by the Management Investor, and the Management Investor and his or her Affiliates or Permitted Transferees may elect to require ValueAct Capital or Centerbridge to repurchase any Common Stock or other shares of capital stock of the Company, in each case at the Fair Market Value (as defined below) in accordance with Sections 4.4, 4.5, 4.6 or 4.7 of this Agreement, as applicable.
. In addition to any other obligation of the Company set forth herein, in the event of any Termination, the Company shall give ValueAct Capital and Centerbridge prompt written notice of any Termination, which notice of Termination shall in any event be given to ValueAct Capital and Centerbridge by the Company within two (2) business days of the Termination Date (as defined below). The Company also shall be required to inform ValueAct Capital and Centerbridge, as applicable, in writing promptly following the request of ValueAct Capital or Centerbridge at any time and from time to time of (i) the total number of Securities held by any Management Investor, such Management Investor's Affiliates and such Management Investor's Permitted Transferees (collectively, the "Available Shares") and (ii) the price for each Available Share.
. ValueAct Capital, Centerbridge or their designated Affiliate(s) may elect to purchase their pro rata share of the Available Shares held by any Management Investor by delivery of written notice (the "Repurchase Notice") to the Management Investor and to the Company (and/or his or her Affiliates and transferees, as appropriate) within 60 days after the Termination Date. The Repurchase Notice shall set forth the number and type of Securities to be acquired from the Management Investor and his or her Affiliates and Permitted Transferees, the aggregate consideration to be paid for such Securities and the time and place for the closing of the transaction. The number of Securities to be repurchased by ValueAct Capital, Centerbridge or their designated Affiliate(s) (who shall sign a Joinder) shall first be satisfied to the extent possible from the Common Stock held by the Management Investor at the time of delivery of the Repurchase Notice. If the number of Securities then held by the Management Investor is less than the total number of Securities ValueAct Capital, Centerbridge or their designated Affiliate(s) has elected to repurchase, then ValueAct Capital, Centerbridge or their designated Affiliate(s) shall repurchase the remaining shares elected to be repurchased first from the Management Investor's Affiliates, and then from the Management Investor's Permitted Transferees.
. If for any reason ValueAct Capital or its designated Affiliates or Centerbridge or its designated Affiliates does not elect to purchase its pro rata share of all Available Shares, the Company shall promptly deliver written notice thereof to ValueAct Capital or Centerbridge, as the case may be, and ValueAct Capital or Centerbridge, as the case may be, shall be entitled to purchase the other party's pro rata portion of Available Shares in accordance with the terms hereof within 60 days after the Termination Date. If for any reason ValueAct Capital, Centerbridge or their designated Affiliate(s) do not elect to repurchase all of the Securities pursuant to the Repurchase Option, then the Company shall be entitled to exercise the Repurchase Option in the manner set forth in Section 4.4 to purchase all of the Securities not purchased by ValueAct Capital, Centerbridge or their designated Affiliate(s) (the "Remaining Available Shares"). As soon as practicable after the Company has determined that there shall be Remaining Available Shares, but in any event within 10 days after the delivery of a Repurchase Notice or 10 days after the date which is 90 days after the Termination Date, whichever is earlier, the Company shall notify the Management Investor and his or her Affiliates and Permitted Transferees as to whether the Company will be purchasing the Securities from the Management Investor or his or her Affiliates and Permitted Transferees (the "Company Repurchase Notice"), which Company Repurchase Notice shall set forth the number and type of Securities to be acquired from the Management Investor or his or her Affiliates and Permitted Transferees, the aggregate consideration to be paid for such Securities and the time and place for the closing of the transaction.
.
. The closing of the transactions contemplated by this Article IV will take place on the date designated in the applicable Repurchase Notice, Company Repurchase Notice or Holder Notice, which date, in the case of a repurchase pursuant to Section 4.4 or 4.5 above, will not be more than 10 days after the expiration of the 60 day period referred to in Section 4.4 above, and in the case of a repurchase pursuant to Section 4.6 above, will not be more than 10 days after the expiration of the 30 day period referred to in Section 4.6 above. ValueAct Capital, Centerbridge or their designated Affiliate(s), will pay for the Securities to be purchased by it by delivery of a check payable to the holder of such Securities. The Company will pay for the Securities to be purchased by it by first offsetting amounts outstanding under any bona fide debts owing by the Management Investor to the Company or any of its Subsidiaries, now existing or hereinafter arising (irrespective as to whether such amounts are owing by the holder of such Securities), and will pay the remainder of the purchase price by delivery of a bank check payable to the holder of such Securities. Notwithstanding anything to the contrary contained in this Agreement, all repurchases of Securities by the Company will be subject to applicable restrictions contained in the General Corporation Law of the State of Delaware and in the Company's and its Subsidiaries' debt and equity financing agreements. If any such restrictions prohibit the repurchase of Securities hereunder which the Company is otherwise entitled to make, the Company may make such repurchases as soon as it is permitted to do so under such restrictions (and, prior thereto, there shall be no breach of the terms hereof by the Company). The party or parties exercising the Repurchase Option, whether ValueAct Capital, Centerbridge or their designated Affiliate(s) or the Company, as the case may be, will receive customary representations and warranties from each seller regarding the sale of the Securities, including, but not limited to, representations that such seller has good and marketable title to the Securities to be transferred free and clear of all liens, claims or other encumbrances.
. As used herein, "Fair Market Value" has the meaning indicated below:
"Fair Market Value" for each share of Securities means, as of the date the Repurchase Notice or the Company Repurchase Notice is given, the relevant fair market value price as determined in good faith by the Board of Directors. If the Management Investor or current holder of the Management Investor's Securities disagrees with such determination, the Board of Directors and the Management Investor will negotiate in good faith to agree on such Fair Market Value. If such agreement is not reached within 10 days after the delivery of notice to the Board of Directors of such Management Investor's disagreement, the Fair Market Value shall be determined by an independent and nationally recognized appraiser selected by the Board of Directors (subject to the approval of the Management Investor, not to be unreasonably withheld), which appraiser shall be instructed to submit to the Board of Directors and the Management Investor a report within 30 days of its engagement setting forth such determination. The costs and expenses of such appraiser shall be borne 50% by the Company and 50% by the Management Investor, unless (i) the appraiser's valuation is not less than 25% greater than the amount determined by the Board of Directors, in which case 100% of the costs and expenses of the appraiser shall be borne by the Company or (ii) the appraiser's valuation is not more than 10% greater than, or is less than or equal to, the amount determined by the Board of Directors, in which case 100% of the costs and expenses of the appraiser shall be borne by the Management Investor. The determination of such appraiser shall be final and binding upon all parties. Notwithstanding the foregoing, if any appraisal under this subparagraph (b) has been completed within the six month period prior to the determination of the Board of Directors, at the option of the Company, such appraised value shall be the final and binding Fair Market Value for purposes hereof. The termination of the exercise period of the Repurchase Option set forth in Section 4.4 and of the Put Option set forth in Section 4.6, as applicable, shall be tolled during the pendency of and until ten (10) days following the conclusion of any negotiation or arbitration of the Fair Market Value. Further, in the event of any such negotiation or arbitration, the Company and/or ValueAct Capital or Centerbridge, as applicable, shall have the right to revoke any notice of exercise of the Repurchase Option previously given by such party and the applicable holder(s) shall have the right to revoke any notice of exercise of the Put Option previously given by such party, as applicable (provided that, in either case, no closing with respect thereto has occurred).
. The provisions of this Agreement shall be effective from and after the date hereof.
. This Agreement may be amended or modified, or any provision hereof may be waived, provided that such amendment, modification or waiver is set forth in a writing executed by the Company and the Major Stockholders; provided, however, that any amendment of this Agreement which materially adversely affects any Investor in a manner materially different from other Investors (other than due to any difference in the number of shares or other Securities owned by any such Investor) shall require the prior written consent of such Investor. No course of dealing between or among any Persons having any interest in this Agreement will be deemed effective to modify, amend or discharge any part of this Agreement or any rights or obligations of any Person under or by reason of this Agreement.
. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the successors and permitted assigns and executors, administrators and heirs of each party hereto. Except as contemplated hereby within this Section 5.3 or in connection with Transfers of Securities permitted by this Agreement and as permitted by Section 1.4 and Section 1.5 of this Agreement, this Agreement, and any rights or obligations existing hereunder, may not be assigned or otherwise transferred by any party without the prior written consent of the other parties hereto.
. In the event that any provision of this Agreement or the application of any provision hereof is declared to be illegal, invalid or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall remain in full force and effect unless deletion of such provision causes this Agreement to become materially adverse to any party, in which event the parties shall use reasonable efforts to arrive at an accommodation which best preserves for the parties the benefits and obligations of the offending provision.
. All notices provided for or permitted hereunder shall be made in writing by hand-delivery, registered or certified first-class mail, fax or reputable courier guaranteeing overnight delivery to the other party at the following addresses (or at such other address as shall be given in writing by any party to the others):
If to the Company:
Seitel Holdings, Inc.
c/o Seitel, Inc.
10811 S. Westview Circle Drive
Building C, Suite 100
Houston, TX 77043
Facsimile: (713) 881-8901
Attention: Robert D. Monson
with a required copy to:
Dechert LLP
Cira Centre
2929 Arch Street
Philadelphia, PA 19104
Facsimile: (215) 994-2222
Attention: Christopher G. Karras
If to ValueAct Capital, to:
ValueAct Capital Master Fund, L.P.
435 Pacific Avenue, 4th Floor
San Francisco, CA 94133
Facsimile: (415) 362-5727
Attention: Allison Bennington, General Counsel
with a required copy to:
Dechert LLP
Cira Centre
2929 Arch Street
Philadelphia, PA 19104
Facsimile: (215) 994-2222
Attention: Christopher G. Karras
If to Centerbridge or any of its Affiliates:
Centerbridge Capital Partners, L.P.
375 Park Avenue
12th Floor
New York, NY 10152
Facsimile: (212) 672-5001
Attention: Kyle Cruz
with a required copy to:
Latham & Watkins LLP
885 Third Avenue
New York, NY 10022
Facsimile: (212) 751-4864
Attention: Howard Sobel and Jennifer Perkins
if to any of the Management Investors, to such Management Investor's address as set forth on the signature page hereto or such other address as may be specified from time to time in writing to the Company by such Management Investor.
All such notices and other communications hereunder shall be in writing and shall be deemed to have been duly given or delivered if delivered personally, sent by telecopier (subject to electronic confirmation of such facsimile transmission and the sending (on the date of such facsimile transmission) of a confirmation copy of such facsimile by nationally recognized overnight courier service or by certified or registered mail, postage prepaid) or on the second business day after being sent by nationally recognized overnight courier service or on the fifth business day after being sent by registered or certified mail (postage prepaid, return receipt requested) to the respective party.
. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to principles of conflicts of law.
. The headings preceding the text of the sections and subsections of this Agreement are for convenience of reference only and shall not constitute a part of this Agreement, nor shall they affect its meaning, construction or effect. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms.
. This Agreement may be executed in two or more counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original, and all of which taken together shall constitute one and the same instrument.
. Each party shall cooperate and take such action as may be reasonably requested by another party in order to carry out the provisions and purposes of this Agreement and the transactions contemplated hereby.
. This Agreement shall terminate (a) on the written agreement of the Investors who are parties hereto or when all the Investors except any one Investor no longer hold any Securities or (b) upon the date of the consummation of the Company's initial Public Offering; provided, however, that the provisions of Sections 3.1, 3.2, 3.3, 3.4 and 3.5 shall survive the Company's initial Public Offering, with appropriate modifications to be reasonably agreed by the Major Stockholders to reflect the size of the Company's Board of Directors following its initial Public Offering.
. Any director, officer, employee or agent of the Company entitled to indemnification, advancement of expenses and/or insurance, pursuant to this Agreement, the certificate of incorporation of the Company or the bylaws of the Company and that is an officer, employee, partner or advisor of Centerbridge, ValueAct Capital or their respective Affiliates (each such Person, an "Indemnitee"), may have certain rights to indemnification, advancement of expenses and/or insurance provided by or on behalf of Centerbridge, ValueAct and/or their respective Affiliates (collectively, the "Indemnitors"). Notwithstanding anything to the contrary in this Agreement, the certificate of incorporation of the Company or the bylaws of the Company or otherwise: (i) the Company is the indemnitor of first resort (i.e., the Company's obligations to each Indemnitee are primary and any obligation of the Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by each Indemnitee are secondary), (ii) the Company will be required to advance the full amount of expenses incurred by each Indemnitee and will be liable for the full amount of all liabilities, expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by this Agreement, without regard to any rights each Indemnitee may have against the Indemnitors, and (iii) the Company irrevocably waives, relinquishes and releases the Indemnitors from any and all claims against the Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. Notwithstanding anything to the contrary in this Agreement, the certificate of incorporation of the Company or the bylaws of the Company or otherwise, no advancement or payment by the Indemnitors on behalf of an Indemnitee with respect to any claim for which such Indemnitee has sought indemnification or advancement of expenses from the Company will affect the foregoing and the Indemnitors will have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Indemnitee against the Company. The Indemnitors are express third party beneficiaries of the terms of this Section 5.11. The Company's certificate of incorporation shall at all times include language that reflects the substance of this Section 5.11.
. For so long as an Investor is party to this Agreement and such Investor has an Ownership Percentage greater than 15%, such Investor shall comply with the covenant set forth in Schedule 5.12 of the Disclosure Letter. All Exhibits attached hereto and the Supplement and Disclosure Letter are hereby incorporated herein by reference and made a part hereof.
. All information disclosed by the Company to any Investor pursuant to this Agreement shall be confidential information of the Company (other than information which is publicly available) and, unless as otherwise provided in this Agreement or consented to by each Major Stockholder in writing in advance, shall not be used by the recipients thereof for any purpose other than to monitor and manage their investment in the Company, and shall not be disclosed to any third party other than (i) any Person who is an Affiliate, member, partner, officer, director, investor, potential investor, employee, accountant, attorney or advisor of such Investor who has a need to know such information, (ii) any proposed transferee of such Investor to the extent that such proposed transferee is bound by similarly restrictive confidentiality obligations with respect to such information or (iii) as otherwise permitted pursuant to any other written agreement by and between the Company and the recipient of such confidential information. The obligations of the parties hereunder shall not apply to the extent that the disclosure of information otherwise determined to be confidential is required by applicable law, regulations, subpoena, civil investigative demand or other process or compulsion, provided, that: (x) prior to disclosing such confidential information, a party shall notify the Company thereof, which notice shall include the basis upon which such party believes the information is required to be disclosed; and (y) such party shall, if requested by the Company and at the sole cost and expense of the Company, provide reasonable cooperation with the Company to protect the continued confidentiality thereof.
. In the event of a breach or a threatened breach by any party to this Agreement of its obligations under this Agreement, any party injured or to be injured by such breach, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The parties agree that the provisions of this Agreement shall be specifically enforceable, it being agreed by the parties that the remedy at law, including monetary damages, for breach of such provision will be inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at law would be adequate is waived.
. If a party hereto ceases to own any Securities following the consummation of a transaction permitted under this Agreement, such party will no longer be deemed to be a Major Stockholder, Investor or Management Investor for purposes of this Agreement and shall no longer be a party to this Agreement.
. Nothing herein contained shall confer on any Management Investor the right to be employed by or remain in the employ or service of the Company or any of its Subsidiaries or Affiliates.
. Whenever the context may require, any pronouns used herein shall be deemed also to include the corresponding neuter, masculine or feminine forms.
. The parties hereto agree that any current or future employee of the Company or any of its Subsidiaries or other Person who agrees to purchase Securities from the Company subsequent to the date hereof may become a signatory to this Agreement by executing a written instrument setting forth that such Person agrees to be bound by the terms and conditions of this Agreement and this Agreement will be deemed to be amended to include such Person as a Management Investor (or Investor, as determined by the Company) and the number of Securities purchased by him or her. Without limiting the generality of the foregoing, any Person who has received an award of options to purchase Common Stock under the Seitel Holdings, Inc. 2007 Non-Qualified Stock Option Plan and the Seitel Holdings, Inc. 2008 Restricted Stock and Restricted Stock Unit Plan shall be bound by the terms and conditions of the Agreement as a Management Investor.
. This Agreement, together with the Stock Purchase Agreement and the Registration Rights Agreement, sets forth the entire agreement and understanding among the parties and supersedes all prior agreements and understandings, written or oral, relating to the subject matter of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Securities Holders Agreement the day and year first above written.
|
COMPANY |
SEITEL HOLDINGS, INC. By: /s/ Gregory P. Spivy Name: Gregory P. Spivy Title: |
|
VALUEACT CAPITAL |
VALUEACT CAPITAL MASTER FUND, L.P. By: VA Partners I, LLC, its General Partner By: /s/ George F. Hamel, Jr. Name: George J. Hamel, Jr. Title: Managing Member |
|
CENTERBRIDGE |
CENTERBRIDGE CAPITAL PARTNERS II, L.P. By: Centerbridge Associates II, L.P., its general partner By: /s/ Vivek Melwani Name: Vivek Melwani Title: Authorized Person CENTERBRIDGE CAPITAL PARTNERS SBS II, L.P. By: Centerbridge Associates II, L.P., its general partner By: /s/ Vivek Melwani Name: Vivek Melwani Title: Authorized Person |
|
MANAGEMENT INVESTORS |
/s/ Robert D. Monson Robert D. Monson |
|
MANAGEMENT INVESTORS (continued) |
/s/ William J. Restrepo William J. Restrepo |
|
MANAGEMENT INVESTORS (continued) |
/s/ Kevin P. Callaghan Kevin P. Callaghan |
|
MANAGEMENT INVESTORS (continued) |
/s/ Marcia H. Kendrick Marcia H. Kendrick |
|
MANAGEMENT INVESTORS (continued) |
/s/ Robert J. Simon Robert J. Simon |
|
MANAGEMENT INVESTORS (continued) |
/s/ Randall Sides Randall Sides |
|
MANAGEMENT INVESTORS (continued) |
/s/ Richard Kelvin Richard Kelvin |
|
MANAGEMENT INVESTORS (continued) |
/s/ Philip B. Livingston Philip B. Livingston |
|
MANAGEMENT INVESTORS (continued) |
/s/ John E. Jackson John E. Jackson |
|
MANAGEMENT INVESTORS (continued) |
Golding Brothers 1996 Partners, Ltd. By: /s/ Jay H. Golding Name: Jay H. Golding Title: |
|
MANAGEMENT INVESTORS (continued) |
/s/ Robert E. Pharr Robert E. Pharr |
|
MANAGEMENT INVESTORS (continued) |
/s/ William R. Leakey William R. Leakey |
|
MANAGEMENT INVESTORS (continued) |
/s/ Mark Sweeney Mark Sweeney |
|
MANAGEMENT INVESTORS (continued) |
/s/ Steve Sahinen Steve Sahinen |
|
MANAGEMENT INVESTORS (continued) |
/s/ Jude Affonso Jude Affonso |
|
MANAGEMENT INVESTORS (continued) |
/s/ Chynna Winter Williams Chynna Winter Williams |
|
MANAGEMENT INVESTORS (continued) |
/s/ Donna Anderson Donna Anderson |
______________________________________________________________________________
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
by and among
SEITEL HOLDINGS, INC.,
VALUEACT CAPITAL MASTER FUND, L.P.,
CENTERBRIDGE CAPITAL PARTNERS II, L.P.,
CENTERBRIDGE CAPITAL PARTNERS SBS II, L.P.
AND
THE MANAGEMENT INVESTORS IDENTIFIED HEREIN
Dated as of May 23, 2011
______________________________________________________________________________
DEFINED TERMS
REGISTRATION RIGHTS AGREEMENT
This is aN AMENDED AND RESTATED Registration Rights Agreement, dated as of May 23, 2011 (the "Agreement"), by and among Seitel Holdings, Inc., a Delaware corporation (the "Company"), ValueAct Capital Master Fund, L.P., a British Virgin Islands limited partnership ("ValueAct Capital"), Centerbridge Capital Partners II, L.P., a Delaware limited partnership "Centerbridge Capital"), Centerbridge Capital Partners SBS II, L.P., a Delaware limited partnership ("Centerbridge SBS" and, together with Centerbridge Capital, "Centerbridge" and the individuals listed on the signature pages hereto as "Management Investors" (such individuals, the "Management Investors," and each such individual, a "Management Investor"). ValueAct Capital, Centerbridge and each of the Management Investors and any other investor in the Company who becomes a party to or agrees to be bound by this Agreement are sometimes referred to herein individually as an "Investor" and collectively as the "Investors." ValueAct Capital and Centerbridge are together referred to as the "Major Stockholders" and each individually as a "Major Stockholder."
A. This Agreement is being entered into concurrently with the consummation of the transactions contemplated by the Stock Purchase Agreement, dated as of May 21, 2011 (the "Stock Purchase Agreement"), by and between the Company and Centerbridge.
B. Pursuant to the terms of the Stock Purchase Agreement, Centerbridge is acquiring 483,803 shares of common stock, par value $0.001 of the Company (the "Common Stock"), for an aggregate purchase price of $125,000,000 (the "Investment").
C. ValueAct Capital and the Management Investors currently own Common Stock and are party to the Registration Rights Agreement, dated as of January 8, 2007, by and among the Company, ValueAct Capital and the Management Investors (the "Original Agreement").
D. In connection with the Investment, the Company, ValueAct and the Management Investors wish to amend and restate in its entirety the Original Agreement, and the Company has agreed to provide the registration rights to the Investors, including Centerbridge, set forth in this Agreement from and after the closing of the Investment.
Terms
In consideration of the mutual covenants contained herein and intending to be legally bound hereby, the parties agree to amend and restate the Original Agreement in its entirety to read as follows:
.
As used in this Agreement, the following capitalized terms shall have the following meanings:
"Affiliate" has the meaning set forth in Rule 12b-2 of the Rules promulgated under the Exchange Act.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Common Stock, par value $.001 per share, of the Company, as adjusted for any stock dividend or distribution payable thereon or stock split, reverse stock split, recapitalization, reclassification, reorganization, exchange, subdivision or combination thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time.
"Holder Expenses" shall mean costs and expenses of any holder of Registrable Securities whose Registrable Securities are to be registered pursuant to this Agreement comprising underwriters' commissions, brokerage fees, transfer taxes or the fees and expenses of any accountants, counsel (other than the one counsel referenced in the definition of Registration Expenses below) or other representatives retained by any such holder.
"Other Securities" means securities of the Company sought to be included in a registration other than Registrable Securities.
"Person" means an individual, partnership, limited liability company, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof or any other entity of any kind.
"Prospectus" means the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference in such Prospectus.
"Public Offering" means a successfully completed firm commitment underwritten public offering pursuant to an effective registration statement under the Securities Act (other than a Special Registration Statement) in respect of the offer and sale of shares of Common Stock for the account of the Company resulting in aggregate net proceeds to the Company and any stockholder selling shares of Common Stock in such offering of not less than $50,000,000.
"Registration Expenses" means all costs and expenses in connection with all registrations and qualifications under the Securities Act, and of all other actions the Company is required to take in order to effect the registration of Registrable Securities under the Securities Act pursuant to this Agreement (including without limitation all federal and state registration and filing fees, printing expenses, fees and disbursements of counsel for the Company and the fees and expenses of the Company's independent public accountants (including the expenses of any special audit and "cold comfort" letters required by or incident to such registration)) and to otherwise comply with this Agreement, and the fees and disbursements of one counsel for the holders of Registrable Securities whose shares are included in a Registration Statement, which counsel shall be selected by the holder(s) of a majority of the Registrable Securities whose shares are included in a Registration Statement, whether or not any Registration Statement is filed or becomes effective, other than Holder Expenses.
"Registration Statement" means any registration statement of the Company which covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.
"Registrable Securities" has the meaning set forth in Section 2 of this Agreement.
"Securities Act" means the Securities Act of 1933, as amended from time to time.
"Securities Holders Agreement" means the Amended and Restated Securities Holders Agreement, dated as of the date hereof, among the Company, ValueAct Capital, Centerbridge and the Management Investors.
"Special Registration Statement" means a registration statement on Form S-8 or S-4 or any similar or successor form or any other registration statement relating to an exchange offer or an offering of securities solely to the Company's or a direct or indirect subsidiary's employees or security holders or to security holders of a corporation or other entity being acquired by, or merged with, the Company or used to offer or sell a combination of debt and equity securities of the Company in which (i) not more than 10% of the gross proceeds from such offering is attributable to the equity securities and (ii) after giving effect to such offering, the Company does not have a class of equity securities required to be registered under the Exchange Act.
"Underwritten Registration" or "Underwritten Offering" means a registration in which securities of the Company are sold to an underwriter for reoffering to the public.
. The securities entitled to the benefits of this Agreement are the Registrable Securities. As used herein, "Registrable Securities" means the shares of Common Stock owned by the Investors or their Permitted Transferees (as defined in the Securities Holders Agreement) that are issued and outstanding on the date hereof and the shares of Common Stock that become issued and outstanding after the date hereof that are owned by the Investors or their Permitted Transferees; provided, however, that any share of Common Stock shall cease to be a Registrable Security when (a) it has been effectively registered under the Securities Act and disposed of in accordance with the registration statement covering such Common Stock; (b) it is distributed to the public pursuant to Rule 144 (or any similar provisions then in force) under the Securities Act; or (c) from and after such time as the holder thereof may resell such Common Stock without manner or volume restrictions under Rule 144 (or any other similar provisions then in force) under the Securities Act.
.
For the purposes of this Section 4(f), "Material Disclosure Event" means, as of any date of determination, any pending or imminent event relating to the Company or any of its subsidiaries that the board of directors (or other similar governing body) of the Company reasonably determines in good faith, after consultation with outside counsel to the Company, (i) would require disclosure of material, non-public information relating to such event in any registration statement or related prospectus including Registrable Securities (including documents incorporated by reference therein) so that such registration statement would not be materially misleading, (ii) would not otherwise be required to be publicly disclosed by the Company at that time in a periodic report to be filed with or furnished to the Commission under the Exchange Act but for the filing of such registration statement or related prospectus and (iii) if publicly disclosed at the time of such event, could reasonably be expected to have a material adverse effect on the business, financial condition, prospects or results of operations of the Company and its subsidiaries or would materially adversely affect a pending or proposed material acquisition, merger, recapitalization, consolidation, reorganization, financing or similar transaction, or negotiations with respect thereto.
. If and whenever the Company is required to use its best efforts to effect or cause the registration of any Registrable Securities under the Securities Act as provided in this Agreement, the Company will, as expeditiously as reasonably possible:
Each holder of Registrable Securities agrees by acquisition of such Registrable Securities that, upon receipt of any notice from the Company of the happening of any event of the kind described in clause (e) of this Section 7, such holder will forthwith discontinue disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until such holder's receipt of the supplemented or amended prospectus contemplated by clause (e) of this Section 7, and, if so directed by the Company, such holder 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 the Company's notice. In the event the Company shall give any such notice, the period mentioned in clause (b) of this Section 7 shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to clause (e) of this Section 7 and including the date when each seller of Registrable Securities covered by such registration statement shall have received the copies of the supplemented or amended prospectus contemplated by clause (f) of this Section 7.
.
. Each holder of Registrable Securities whose Registrable Securities are eligible for inclusion in a Registration Statement filed pursuant to Section 3, 4 or 5 agrees, if requested by the managing underwriter or underwriters in an Underwritten Offering of any Registrable Securities, not to effect any public sale or distribution of Registrable Securities, including a sale pursuant to Rule 144 (or any similar provision then in force) under the Securities Act (except as part of such Underwritten Registration), during the 10-day period prior to, and for a period (which period shall be the same for each Major Stockholder and its Affiliates) of up to 180 days (in the case of the Company's initial Public Offering) or 90 days (in the case of an offering after the Company's initial Public Offering) (as required by the managing underwriter in its reasonable discretion) beginning on the effective date of such Registration Statement, to the extent timely notified of such offering in writing by the Company or the managing underwriter or underwriters.
. If any of the Registrable Securities covered by any Incidental Registration or a Demand Registration are to be sold in an Underwritten Offering, the investment banker or investment bankers (including a Shelf Registration) and manager or managers that will administer and underwrite the offering will be selected by (i) the Company, in the case of an Incidental Registration or (ii) by the Demanding Holder, in the case of a Demand Registration (provided that the selection of underwriters shall be reasonably satisfactory to the Company).
Notwithstanding anything herein to the contrary, no Person may participate in any Underwritten Registration hereunder unless such Person (a) agrees to sell such Person's securities on the basis provided in any underwritten arrangements approved by the Persons entitled hereunder to approve such arrangement and (b) accurately completes and executes all questionnaires, powers of attorney, indemnities, custody agreements, underwriting agreements and other customary documents required under the terms of such underwriting arrangements; provided, however, that no holder of Registrable Securities will be required to provide representations and warranties or indemnities or otherwise become subject to liabilities or obligations in any such underwriting agreement that are not customary for investors of its type in such transaction.
If requested by the underwriters for any underwritten offering of Registrable Securities pursuant to a registration requested under this Agreement, the Company shall enter into an underwriting agreement with such underwriters for such offering, which agreement will contain such representations and warranties by the Company and such other terms and provisions as are customarily contained in underwriting agreements generally with respect to secondary distributions to the extent relevant, including, without limitation, indemnification and contribution provisions substantially to the effect and to the extent provided in Section 8, and agreements as to the provision of opinions of counsel and accountants' letters to the effect and to the extent provided in Section 7. The Selling Holders on whose behalf the Registrable Securities are to be distributed by such underwriters shall be parties to any such underwriting agreement, and the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters, shall also be made to and for the benefit of such Selling Holders and the conditions precedent to the obligations of such underwriters under such underwriting agreement shall also be conditions precedent to the obligations of such Selling Holders to the extent applicable. Subject to the following sentence, such underwriting agreement shall also contain such representations and warranties by such Selling Holders and such other terms and provisions as are customarily contained in underwriting agreements with respect to secondary distributions, when relevant. No Selling Holder shall be required in any such underwriting agreement or related documents to make any representations or warranties to or agreements with the Company or the underwriters other than customary representations, warranties or agreements regarding such Selling Holder's title to Registrable Securities and any written information provided by the Selling Holder to the Company expressly for inclusion in the related registration statement.
In connection with the preparation and filing of each registration statement registering Registrable Securities under the Securities Act pursuant to this Agreement, the Company shall (x) make available upon reasonable notice at reasonable times and for reasonable periods for inspection by each Selling Holder, by any managing underwriter or underwriters participating in any disposition to be effected pursuant to such registration statement, and by any attorney, accountant or other agent retained by any Selling Holder or any managing underwriter, all pertinent financial and other records, pertinent corporate documents and properties of the Company, and (y) cause all of the Company's officers, directors and employees and the independent public accountants who have certified the Company's financial statements to make themselves reasonably available to discuss the business of the Company and to supply all information reasonably requested by any such Selling Holders, managing underwriters, attorneys, accountants or agents in connection with such registration statement, in the case of each of clauses (x) and (y), as shall be necessary to enable them to exercise their due diligence responsibilities (subject to entry by each party referred to in this paragraph into customary confidentiality agreements in a form reasonably acceptable to the Company).
In the case of an underwritten offering requested by a Demanding Holder pursuant to Section 4 or Section 5, the price, underwriting discount and other financial terms for the Registrable Securities of the related underwriting agreement shall be determined by the applicable Demanding Holder. In the case of any underwritten offering of securities by the Company pursuant to Section 3, such price, discount and other terms shall be determined by the Company, subject to the right of Selling Holders to withdraw their Registrable Securities from the registration pursuant to Section 6.
If to the Company:
Seitel Holdings, Inc.
c/o Seitel, Inc.
10811 S. Westview Circle Drive
Building C, Suite 100
Houston, TX 77043
Telecopier: (713) 881-8901
Attention: Robert D. Monson
with a required copy to:
Dechert LLP
Cira Centre
2929 Arch Street
Philadelphia, PA 19104
Facsimile: (215) 994-2222
Attention: Christopher G. Karras
If to ValueAct Capital, to:
ValueAct Capital Master Fund, L.P.
435 Pacific Avenue, 4th Floor
San Francisco, CA 94133
Facsimile: (415) 362-5727
Attention: Allison Bennington, General Counsel
with a required copy to:
Dechert LLP
Cira Centre
2929 Arch Street
Philadelphia, PA 19104
Facsimile: (215) 994-2222
Attention: Christopher G. Karras
If to Centerbridge:
Centerbridge Capital Partners, L.P.
375 Park Avenue
12th Floor
New York, NY 10152
Facsimile: (212) 672-5001
Attention: Kyle Cruz
with a required copy to:
Latham & Watkins LLP
885 Third Avenue
New York, NY 10022
Facsimile: (212) 751-4864
Attention: Howard Sobel and Jennifer Perkins
if to any of the other Investors, to such Investor's address as set forth on the signature page hereto or such other address as may be specified from time to time in writing to the Company by such Investor.
All such notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered personally, sent by telecopier (subject to electronic confirmation of such facsimile transmission and the sending (on the date of such facsimile transmission) of a confirmation copy of such facsimile by nationally recognized overnight courier service or by certified or registered mail, postage prepaid) or on the second business day after being sent by nationally recognized overnight courier service or on the fifth business day after being sent by registered or certified mail (postage prepaid, return receipt requested) to the respective party.
IN WITNESS WHEREOF, the parties have executed this Amended and Restated Registration Rights Agreement as of the date first written above.
|
COMPANY |
SEITEL HOLDINGS, INC. By: /s/ Gregory P. Spivy Name: Gregory P. Spivy |
|
VALUEACT CAPITAL |
VALUEACT CAPITAL MASTER FUND, L.P. By: VA Partners I, LLC, its General Partner By: /s/ George F. Hamel, Jr. Name: George F. Hamel, Jr. Title: Managing Member |
|
CENTERBRIDGE |
CENTERBRIDGE CAPITAL PARTNERS II, L.P. By: Centerbridge Associates II, L.P., its general partner By: /s/ Vivek Melwani Name: Vivek Melwani Title: Authorized Person CENTERBRIDGE CAPITAL PARTNERS SBS II, L.P. By: Centerbridge Associates II, L.P., its general partner By: /s/ Vivek Melwani Name: Vivek Melwani Title: Authorized Person |
|
MANAGEMENT INVESTORS |
/s/ Robert D. Monson Robert D. Monson |
|
MANAGEMENT INVESTORS (continued) |
/s/ William J. Restrepo William J. Restrepo |
|
MANAGEMENT INVESTORS (continued) |
/s/ Kevin P. Callaghan Kevin P. Callaghan |
|
MANAGEMENT INVESTORS (continued) |
/s/ Marcia H. Kendrick Marcia H. Kendrick |
|
MANAGEMENT INVESTORS (continued) |
/s/ Robert J. Simon Robert J. Simon |
|
MANAGEMENT INVESTORS (continued) |
/s/ Randall Sides Randall Sides |
|
MANAGEMENT INVESTORS (continued) |
/s/ Richard Kelvin Richard Kelvin |
|
MANAGEMENT INVESTORS (continued) |
/s/ Philip B. Livingston Philip B. Livingston |
|
MANAGEMENT INVESTORS (continued) |
/s/ John E. Jackson John E. Jackson |
|
MANAGEMENT INVESTORS (continued) |
Golding Brothers 1996 Partners, Ltd. By: /s/ Jay H. Golding Name: Jay H. Golding |
|
MANAGEMENT INVESTORS (continued) |
/s/ Robert E. Pharr Robert E. Pharr |
|
MANAGEMENT INVESTORS (continued) |
/s/ William R. Leakey William R. Leakey |
|
MANAGEMENT INVESTORS (continued) |
/s/ Mark Sweeney Mark Sweeney |
|
MANAGEMENT INVESTORS (continued) |
/s/ Steve Sahinen Steve Sahinen |
|
MANAGEMENT INVESTORS (continued) |
/s/ Jude Affonso Jude Affonso |
|
MANAGEMENT INVESTORS (continued) |
/s/ Chynna Winter Williams Chynna Winter Williams |
|
MANAGEMENT INVESTORS (continued) |
/s/ Donna Anderson Donna Anderson |
FOR IMMEDIATE RELEASE
Contact: Marcia Kendrick
713-881-8900
SEITEL HOLDINGS, INC. ANNOUNCES SALE OF MINORITY INTEREST TO
AFFILIATES OF CENTERBRIDGE PARTNERS, L.P.
HOUSTON, May 23, 2011 - Seitel, Inc., a leading provider of seismic data to the oil and gas industry, announced today that its parent, Seitel Holdings, Inc. ("Holdings"), sold a minority equity interest to affiliates of Centerbridge Partners, L.P. ("Centerbridge") for $125 million in cash. The proceeds will be used by Holdings to strengthen Seitel's balance sheet and better position Seitel to accelerate additional investment in high growth shale plays.
"I am very pleased to have Centerbridge as a partner to support Seitel as we continue to execute on our strategy to expand our growing data library," stated Rob Monson, Seitel's president and chief executive officer. "We continue to be presented with numerous opportunities to expand our library in the shale basins in both the U.S. and Canada. I am very confident that the resulting stronger balance sheet will put the company in an even better position to expand our backlog of new acquisition surveys in the Niobrara, Marcellus, Eagle Ford, Haynesville, Montney and Horn River basins, as well as other emerging unconventional plays."
"ValueAct Capital shares management's vision of the future data acquisition opportunities in the North American shale basins and looks forward to working with our new partner, Centerbridge, in order to further develop Seitel's positioning as the dominant North American 3D land seismic provider," commented Peter Kamin, a Partner of ValueAct Capital. "We have enjoyed a long association with the Seitel management team and believe that the company's enhanced capital position will enable the business to increase its focus on growth opportunities in both new and existing oil and gas basins."
"With its portfolio of more than 43,000 square miles of 3D seismic data, Seitel is uniquely positioned to expand its existing library in support of its clients as they migrate hydrocarbon production onshore to new resource-rich plays," stated Kyle Cruz, a Managing Director at Centerbridge. "We look forward to working with Rob and the Seitel management team, as well as with our partners at ValueAct, to continue to position the company for long-term success."
ABOUT SEITEL
Seitel is a leading provider of onshore seismic data to the oil and gas industry in North America. Seitel's data products and services are critical for oil and gas exploration and the development and management of hydrocarbon reserves by E&P companies. Seitel owns an extensive library of proprietary onshore and offshore seismic data that it licenses to a wide range of oil and gas companies. Seitel believes that its library of onshore seismic data is the largest available for licensing in North America. Seitel's seismic data library includes both onshore and offshore 3D and 2D data. Seitel owns over 43,000 square miles of 3D and approximately 1.1 million linear miles of 2D seismic data concentrated in the major active North American oil and gas producing regions. Seitel serves a market which includes over 1,600 companies in the oil and gas industry.
ABOUT VALUEACT CAPITAL
ValueAct Capital®, with offices in San Francisco and Boston and approximately $6.5 billion in investments, seeks to make active strategic-block value investments in a limited number of companies. The Principals have demonstrated expertise in sourcing investments in companies they believe to be fundamentally undervalued, and then working with management and/or the company's board to implement strategies that generate superior returns on invested capital. ValueAct Capital concentrates primarily on acquiring significant ownership stakes in publicly traded companies, and a select number of control investments, through both open-market purchases and negotiated transactions.
ABOUT CENTERBRIDGE
Centerbridge Partners, L.P. is a private investment firm based in New York City and currently has approximately $17 billion in capital under management. The firm focuses on private equity and credit investments. The firm is dedicated to partnering with world-class management teams across targeted industry sectors to help companies achieve their operating and financial objectives.