-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Pj6oURRTImAcNzWJAqDT5Z/XZm14uhv7CSU8vij6VSVg0IceKyNg398wyzsObRIy 1GOWyMUu3HR/9ErfLrJPTg== 0000922423-97-000838.txt : 19971009 0000922423-97-000838.hdr.sgml : 19971009 ACCESSION NUMBER: 0000922423-97-000838 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970923 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971008 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: 3-D GEOPHYSICAL INC CENTRAL INDEX KEY: 0001003382 STANDARD INDUSTRIAL CLASSIFICATION: OIL AND GAS FIELD EXPLORATION SERVICES [1382] IRS NUMBER: 133841601 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-27564 FILM NUMBER: 97692419 BUSINESS ADDRESS: STREET 1: 8226 PARK MEADOWS DRIVE STREET 2: BUILDING H CITY: LITTLETON STATE: CO ZIP: 80124 BUSINESS PHONE: 3037413700 MAIL ADDRESS: STREET 1: 8226 PARK MEADOWS DRIVE STREET 2: BUILDING H CITY: LITTLETON STATE: CO ZIP: 80124 8-K 1 CURRENT REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) September 23, 1997 ------------------ 3-D GEOPHYSICAL, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 0-27564 13-3841601 - -------------------------------------------------------------------------------- (State or other Jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 8226 Park Meadows Drive, Littleton, Colorado 80124 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (303) 858-0500 -------------- 7076 South Alton Way, Building H, Englewood, Colorado 80112 - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report.) The Exhibit Index appears on Page 5 Page 1 of 14 pages. Item 5. Other Events. a) On September 23, 1997, the Registrant's wholly-owned Mexican subsidiary, Geoevaluaciones, S.A. de C.V. ("Geo") was served with notice of a lawsuit and a complaint (the "Complaint") filed in the 10th Federal District Court in Mexico City by Kelman Technologies, Inc., the successor to Capilano Geophysical Ltd. ("Capilano"), claiming damages of Cdn $11,215,714 (plus interest and expenses, including legal fees) based on Geo's alleged failure to reimburse Capilano for Capilano's outlays and expenditures under a letter of intent between Geo and Capilano entered into in June of 1991 (the "Letter of Intent"). The Complaint does not name the Registrant as a co- defendant, nor is the Registrant mentioned in the Complaint. On October 6, 1997, the law firm of Basham, Ringe Y Correa, on behalf of Geo, filed a timely answer to the Complaint (the "Answer"). The Answer denies in its entirety Capilano's right to any of the claimed damages, interest and expenses. The Answer (1) contests each of the numbered "facts" set forth in the Complaint as either not grounded in fact or as misconstructions of actual events, (2) points out that the last paragraph of the Letter of Intent expressly states that the letter is non-binding and "is intended to constitute a Letter of Intention only," and (3) states that the Letter of Intent was expressly superseded by a Technical Assistance Agreement duly executed by Geo and Capilano on June 1, 1992. While Geo currently is not able to estimate the effect, if any, on Geo's results of operations and financial position which may result from the resolution of this matter, the Registrant believes that (1) Geo has meritorious defenses to each of the allegations contained in the Complaint, (2) Geo should succeed in its defense of the Complaint, and (3) that the lawsuit will not have a material adverse effect on the Registrant's financial position. The former stockholders of Geo have pledged 60,000 shares of the Registrant's Common Stock to provide for any costs incurred by the Registrant in connection with this lawsuit. b) The Registrant intends to borrow up to $1,200,000 (the "Loans") from four persons (collectively, the Lenders"), including Joel Friedman, Chairman of the Board ($250,000), Wayne P. Widynowski ($250,000), Executive Vice President and a Director, and Ronald Koons ($100,000), Vice President and Chief Financial Officer. The Loans will mature in six months, or earlier upon the refinancing of the Registrant's existing loan facility with Wells Fargo Bank, N.A., will bear interest at 12% per year and will be subordinate to the Registrant's obligations to Wells Fargo Bank. To induce the Lenders to make the Loans, the Registrant will issue five year options to purchase, at $6.50 per share, 12,500 shares of Registrant's Common Stock for each $250,000 principal amount of the Loans. Page 2 of 14 pages. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (a) Financial Statements. Not required. (b) Pro Forma Financial Information. Not required. (c) Exhibits. 10.1 Form of Subordinated Promissory Note 10.2 Form of Non-Qualified Stock Option Agreement Page 3 of 14 pages. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. 3-D GEOPHYSICAL, INC. By: /s/ Joel Friedman --------------------------- Name: Joel Friedman Title: Chairman Date: October 8, 1997 Page 4 of 14 pages. EXHIBIT INDEX Exhibit Page - ------- ---- 10.1 Form of Subordinated Promissory Note 6 10.2 Form of Non-Qualified Stock Option Agreement 9 Page 5 of 14 pages. EX-10.1 2 FORM OF SUBORDINATED PROMISSORY NOTE 3-D GEOPHYSICAL, INC. FORM OF SUBORDINATED PROMISSORY NOTE US $250,000.00 October __, 1997 New York, New York FOR VALUE RECEIVED, 3-D GEOPHYSICAL, INC., a Delaware corporation (the "Maker"), hereby promises to pay to the order of __________________ (the "Holder") the principal sum of ________________________________ DOLLARS ($__________.00), together with accrued and unpaid interest thereon, on April __, 1998 (the "Payment Date"), provided that if such Payment Date is not a Business Day, as defined below, payment shall be made on the next succeeding Business Day. The payment of this Note is subordinated pursuant to the terms of a Subordination Agreement and Assignment, dated as of October __, 1997, by and among the Holder, the Maker and Wells Fargo Bank (Texas) N.A. (the "Subordination Agreement") and is subject to all of the terms and conditions of the Subordination Agreement. 1. Interest. Maker agrees to pay interest from the date hereof on the unpaid portion of the principal amount of this Note from time to time outstanding at the rate of 12% per annum through the Payment Date (but in no event higher than the maximum rate permitted by applicable law), compounded annually and payable on or before the Payment Date and thereafter until the principal amount of this Note is paid in full, subject to the provisions of Section 3 hereof. 2. Business Day. For the purposes of this Note, the phrase "Business Day" means any day that is not a Saturday or Sunday or a legal holiday on which banks are authorized or required by law to be closed in New York, New York. 3. Prepayment. Subject to its obligations under the Subordination Agreement, the Maker may, at its option, on five (5) Business Days notice to the Holder, prepay the principal amount of this Note at any time in whole, or from time to time in such part as the Maker shall specify in such notice, with accrued interest on the amount prepaid to the date of prepayment, in each case without penalty or premium therefor. The Maker shall, in the event the Maker refinances its existing credit facility with Wells Fargo Bank (Texas) N.A., dated May 29, 1996, as amended through the date hereof (the "Refinancing"), prepay the entire principal amount of this Note within ten (10) Business Days of the consummation of the Refinancing, together with accrued interest on the amount prepaid to the date of prepayment. 4. Method and Place of Payment. All payments of principal and interest on this Note shall be made by check or wire transfer in lawful money of the United States of America at such address as the Holder shall designate in writing to the Maker. 5. Defaults. Any of the following shall constitute an event of default (an "Event of Default") hereunder: (a) If the Maker shall fail to pay any principal or interest due hereunder, which failure shall remain uncured for a period of five (5) days; or (b) If any voluntary proceeding shall be commenced by the Maker under any chapter of the Federal Bankruptcy Code or other law relating to bankruptcy, bankruptcy reorganization, insolvency or relief of debtors, or any such proceeding is commenced against the Maker and such proceeding is not dismissed within sixty (60) days from the date on which it is filed or instituted; or (c) If the Maker becomes insolvent or is unable to pay its debts as they become due or makes an assignment for the benefit of creditors; or (d) The dissolution or other winding up of the Maker; or (e) In the event that the holders of any indebtedness of the Company in excess of $50,000 shall accelerate the maturity of any such indebtedness or shall declare such indebtedness to be due and payable prior to the stated maturity thereof. Upon the occurrence of any Event of Default the unpaid principal of this Note and any accrued and unpaid interest hereunder shall, at the sole option of the Holder, become immediately due and payable. Upon the occurrence of any Event of Default the Holder may exercise any and all rights and remedies available to the Holder at law or in equity; however the failure of the Holder to exercise the option described in the preceding sentence or any such right or remedy at any time shall not constitute a waiver of the Holder's right to exercise such optionor any such right or remedy at any other time, subject in any such case to the provisions of the Subordination Agreement. 6. Expenses. The Maker agrees to pay all reasonable expenses incurred by the Holder in connection with the collection and enforcement of this Note, including, without limitation, reasonable attorneys' fees and disbursements. 7. Waiver of Notice, etc. The Maker hereby waives presentment, notice of demand for payment, protest, notice of dishonor and any other notice of any kind with respect to this Note. 8. Successors and Assigns. This Note shall be binding upon the Maker and its successors and assigns and shall inure to the benefit of the Holder, its personal representatives and successors and assigns. -2- 9. Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York, without regard to the principles of conflict of laws thereof. IN WITNESS WHEREOF, the Maker has caused this instrument to be duly executed this ___ day of October, 1997. 3-D GEOPHYSICAL, INC. By: -------------------------------- Name: Title: -3- EX-10.2 3 FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT 3-D GEOPHYSICAL, INC. FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT NON-QUALIFIED STOCK OPTION AGREEMENT (this "Agreement"), dated as of October __, 1997, between 3-D GEOPHYSICAL, INC., a Delaware corporation (the"Company"), and _______________ (the "Optionee"). The Company's Board of Directors (the "Board") has determined that the objectives of the Company will be furthered by granting to the Optionee a stock option in partial consideration of the Optionee's making a loan to the Company in the principal amount of $250,000 (the "Loan") pursuant to a Subordinated Promissory Note of the Company in that principal payable to the order of the Optionee, dated the date hereof. In consideration of the foregoing and of the mutual undertakings set forth in this Agreement, the Company and the Optionee hereby agree as follows: SECTION 1. Grant of Option. 1.1 The Company hereby grants to the Optionee a stock option (the "Option") to purchase 12,500 shares, par value $.01 per share (the "Shares"), of common stock of the Company ("Common Stock") at a purchase price of $6.50 per share (the "Exercise Price"). It is intended that the Option shall not qualify as an "incentive stock option" as defined in section 422 of the Internal Revenue Code of 1986, as amended. 1.2 In the event of any change in the outstanding shares Common Stock by reason of a stock dividend, split-up, recapitalization, combination, exchange of shares or similar transaction, the type and number of shares or securities subject to the Option, and the exercise price therefor, shall be adjusted appropriately, and proper provision shall be made in the agreements governing such transaction, so that Optionee shall receive upon exercise of the Option the same class and number of outstanding shares or other securities or property that Optionee would have received in respect of Common Stock if the Option had been exercised immediately prior to such event, or the record date therefor, as applicable. After any such adjustment, the number of shares subject to the Option shall be rounded to the nearest whole number. 1.3 In the event that Company shall enter into an agreement (i) to consolidate with or merge into any person, other than one of its subsidiaries, and shall not be the continuing or surviving corporation of such consolidation or merger, (ii) to permit any person, other than one of its subsidiaries, to merge into the Company and the Company shall be the continuing or surviving corporation, but, in connection with such merger, the then outstanding shares of Common Stock shall be changed into or exchanged for stock or other securities of the Company or any other person or cash or any other property or the shares of Common Stock outstanding immediately before such merger shall after such merger represent less than 50% of the outstanding common shares and common share equivalents of the Company, or (iii) to sell or otherwise transfer all or substantially all of its assets to any person, other than one of its subsidiaries, then, and in each such case, the Option shall, upon the consummation of any such transaction and upon the terms and conditions set forth herein, be converted into, or exchanged for, an option to purchase the number and kind of shares of stock or other securities, cash or any other property that the Optionee would have been entitled to receive as a result of such merger or sale of assets had the Optionee fully exercised the Option and been a stockholder of record prior to such merger or sale of assets, and the agreement governing such transaction shall make proper provisions to so provide. SECTION 2. Exercisability. The Option shall become exercisable in full on the date the Company receives the principal amount of the Loan. The unexercised portion of the Option shall expire and cease to be exercisable at 12:01 a.m. on the 5th anniversary of the date of this Agreement. SECTION 3. Method of Exercise. The Option or any part thereof may be exercised only by the giving of written notice to the Company on such form and in such manner as the Board shall prescribe. Such written notice must be accompanied by payment of the full purchase price for the number of shares being purchased. Such payment may be made by one or a combination of the following methods: (a) by certified or official bank check (or the equivalent thereof acceptable to the Company); or (b) by such other method as the Company may authorize. The date of exercise of the Option shall be the date on which: (a) written notice of exercise shall have been duly given as provided in Section 7 of this Agreement; and (b) the Company shall have received payment of the full purchase price for the number of shares being purchased. SECTION 4. Death. If the Optionee dies during the period in which the Option is exercisable the Option shall be exercisable until the earlier of the expiration date of the Option (specified in Section 2 of this Agreement) and the first anniversary of the date of the Optionee's death. SECTION 5. Investment Representations. The Optionee hereby represents and warrants to and agrees with the Company as follows: 5.1 Acquisition of Shares for Own Account. The Optionee will acquire the Shares, if at all, pursuant to this Agreement with the Optionee's own funds, and not with the funds of anyone else. The Shares will be acquired, if at all, for the Optionee's own account, not as a nominee or agent and not for the account of any other person or firm, and for investment and without any view to the distribution thereof or of any portion thereof or interest therein. No one else has or will have on any exercise of the Option or any portion thereof any interest, beneficial or otherwise, in any of the Shares to be acquired on such -2- exercise. The Optionee is not, and prior to any exercise of the Option will not be, obligated to transfer any of the Shares or any portion thereof or any interest therein to anyone else and the Optionee does not and will not have any agreement or understandings to do so. The Optionee does not, and on any exercise of the Option will not, intend to subdivide the Optionee's acquisition of any Shares with anyone. 5.2 Agreement to Refrain from Resales. The Optionee agrees that, notwithstanding any provision of this Agreement to the contrary, the Optionee shall in no event make any disposition of all or any part of or interest in the Shares and that such Shares shall not be encumbered, pledged, hypothecated, sold or transferred by the Optionee nor shall the Optionee receive any consideration for such Shares or for any interest therein from any person, unless and until prior to any proposed transfer, encumbrance, disposition, pledge, hypothecation or sale of any Shares, either: (1) a registration statement on Form S-1 or S-8 (or any other form replacing such form or appropriate for the purpose) under the Securities Act of 1933, as amended (the "Act"), with respect to such shares proposed to be transferred or otherwise disposed of shall be then effective; or (2) (i) the Optionee shall have notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, (ii) the Optionee shall have furnished the Company with an opinion of counsel in form and substance satisfactory to the Company to the effect that such disposition will not require registration of any such Shares under the Act or qualification of any such Shares under any other securities law, (iii) such opinion of counsel shall have been concurred in by counsel for the Company and (iv) the Company shall have advised the Optionee of such concurrence. 5.3 Shares May Be "Restricted Securities"; Certificates Representing Shares May Be Legended. The Optionee understands and agrees that: 5.3.1 the Shares, if and when issued, may be "restricted securities," as that term is defined in Rule 144 under the Act and, accordingly, the Optionee may be required to hold the Shares indefinitely unless they are registered under the Act or an exemption from such registration is available; 5.3.2 the Company is not under any obligation to register the Shares under the Act or to comply with any exemption thereunder; and 5.3.3 certificates representing any Shares received by the Optionee on exercise of the Option may bear a legend on the face thereof (or on the reverse thereof with a reference to such legend on the face thereof) substantially in the form set forth below, which legend restricts the sale, transfer or disposition of the Shares otherwise than in accordance with this Agreement: THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE -3- ENCUMBERED, PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND CONCURRED IN BY THE COMPANY'S COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR SUCH TRANSACTION COMPLIES WITH RULES PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION UNDER SAID ACT. SECTION 6. Nonassignability. The Option shall not be assignable or transferable, voluntarily or involuntarily, other than by will or by the laws of descent and distribution. The Option shall be exercisable during the life of the Optionee only by the Optionee or the Optionee's legal representative. SECTION 7. Notices. Any notice to be given to the Company hereunder shall be in writing by either express delivery, registered or certified mail or confirmed facsimile transmission and shall be addressed to 3-D Geophysical, Inc., 8226 Park Meadows Drive, Littleton, CO 80124, Attn: Secretary (Facsimile Number: 303-708-8941), or at such other address, facsimile number or person's attention as the Company may hereafter designate to the Optionee by notice as provided in this Section 7. Any notice to be given to the Optionee hereunder shall be addressed to the Optionee at the address or facsimile number set forth beneath his signature hereto, or at such other address or facsimile number as the Optionee may hereafter designate to the Company by notice as provided herein. A notice shall be deemed to have been duly given when personally delivered or, if mailed, five days after the date the notice was so mailed. Notices which are delivered by confirmed facsimile transmission shall be deemed to have been duly given on the date of delivery. SECTION 8. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and the successors and assigns of the Company and the heirs and personal representatives of the Optionee. SECTION 9. Governing Law. This Agreement shall be interpreted, construed and administered in accordance with the laws of the State of Delaware as they apply to contracts made, delivered and performed entirely within such state. -4- SECTION 10. Severability. If any provision of this Agreement shall hereafter be held to be invalid, unen- forceable or illegal in whole or in part, in any jurisdiction under any circumstances for any reason, (i) such provision shall be reformed to the minimum extent necessary to cause such provision to be valid, enforceable and legal while preserving the intent of the parties as expressed in, and the benefits to the parties provided by, this Agreement or (ii) if such provision cannot be so reformed, such provision shall be severed from this Agreement and an equitable adjustment shall be made to this Agreement (including, without limitation, addition of necessary further provisions to this Agreement) so as to give effect to the intent as so expressed and the benefits so provided. Such holding shall not affect or impair the validity, enforceability or legality of such provision in any other jurisdiction or under any other circumstances. Neither such holding nor such reformation or severance shall affect or impair the legality, validity or enforceability of any other provision of this Agreement. SECTION 11. Authority. This Agreement has been duly authorized on behalf of the Company by the Board of Directors. The Optionee represents that he is free to enter into this Agreement and that his entering into this Agreement does not violate any obligation that he has to any other person or legal entity. SECTION 12. Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall be deemed one original. SECTION 13. Specific Performance. The Optionee agrees that, without prejudice to the rights and remedies otherwise available to the parties hereunder, the Company shall be entitled to specific performance or equitable relief by way of injunction of all of the Optionee's obligations hereunder, without posting any bond and without proving that damages would be inadequate. SECTION 14. Entire Agreement. This Agreement sets forth the entire understanding of the Company and the Optionee with respect to the subject matter hereof and cannot be amended or modified, nor can any provision hereof be waived by the Company, except by a writing signed by both parties. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.] -5- IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first written above. 3-D GEOPHYSICAL, INC. ATTEST: By: ------------------------------------- Name: - ----------------------- Title: OPTIONEE: By ------------------------------------- Address: Facsimile Number: Social Security Number: -6- -----END PRIVACY-ENHANCED MESSAGE-----